No need to change jeans for airplanes, where is the new engine made intelligently in China?

Author | Chen Fashan

Edit the | Xing Yun

"100 million pairs of jeans for a Boeing plane" was once a typical feature of Made in China, representing an inspirational story of China's use of comparative advantages to integrate into globalization, and also reflected the reality that China's industry is at the low end of the global value chain.

In the past, China's manufacturing was mostly concentrated in the middle of the "smile curve", which is also the area with the lowest added value, how to get out of the bottom of this curve and extend to the two ends of the industrial chain with more added value in technology, research and development, brand, and service is a must-answer question that Chinese enterprises have been exploring.

Nowadays, the international situation is changing, whether it is the world pattern or the development of the technology industry, it is in a major change unprecedented in a century, and China is facing considerable internal and external challenges. Solving this must-answer question will not only help China's economy move towards high-quality development, but also the key to whether Chinese enterprises can overtake on curves.

In August 2022, the domestic large aircraft C919 completed its certification test flight, and it was only a foot away from the final commercial operation, and the story of "jeans for aircraft" is being rewritten. In China, a number of new types of entity enterprises spawned by the deep integration of digital technology and the real economy have promoted China's manufacturing towards China's intelligent manufacturing with practical assistance and data, and achieved catch-up in the extended battle of the smile curve.

Whether it is consumer electronics, new energy vehicles, innovative drug research and development, home appliance manufacturing, software services, these new entity enterprises have become the accelerator of the transformation and upgrading of thousands of industries. The dismantling of these enterprises, as well as the power change, efficiency change and quality change brought about by the integration of data and reality, will provide reference and guidance for the development of more Chinese enterprises.

1. The new engine of China's intelligent manufacturing

Overtaking in Chinese corners requires a new engine, and this new engine is now roughly in shape.

A number of new entity enterprises characterized by the integration of "number" and "reality" have seized the opportunity in the new round of industrial transformation. According to the "2022 Top 100 New Entity Enterprises Development Report" released at the end of last year, the top 100 new entity enterprises in China on the list have total assets of 33 trillion yuan, operating income of 26.5 trillion yuan, and a total net profit of 1.1 trillion yuan, an average operating income growth rate of 28%, and a market value/valuation increase of 1.1 trillion yuan in the past three years.

These enterprises use digital technology to optimize the allocation of all production factors, not only promote their own digital transformation, but also help the industry reduce costs, increase efficiency, and improve quality and upgrading.

The so-called new type of entity enterprise, as the name implies, needs to be rooted in the real economy, and at the same time has the characteristics of digitalization and intelligence of the new economy. Among the top 100 new entity enterprises in China, manufacturing is the main (60) and information service industry is supplemented (27), and manufacturing is still the main position of new entity enterprises. Among them, Beijing has 34 enterprises on the list, ranking first in the country in terms of quantity, and is at the forefront of a new round of industrial competition.

On January 10, the China Enterprise Evaluation Association released the "Evaluation Standards for New Entity Enterprises" at the seminar, and the "2022 Beijing Top 100 New Entity Enterprises" (hereinafter referred to as "Beijing Top 100") was released, with State Grid, JD.com, and BOE ranking the top three, along with Xiaomi, Baidu, China Electronics, BAIC, AsiaInfo Technology, Shutai Shen and other enterprises.

Data show that in 2021, the top 100 in Beijing will have a total revenue of 21 trillion yuan, an average income increase of 24%, a net profit of 600 billion yuan, and total assets of 38 trillion yuan, which has a strong scale effect and plays a role in hedging the downward trend of economic growth.

Compared with traditional industries, new entity enterprises have stronger radiation driving capabilities. The top 100 enterprises in Beijing mainly focus on industries such as intelligent manufacturing and Internet of Things and IoT, and most of them are related to multiple industrial chains, which have obvious external export and pulling effects, helping to improve the resilience of the supply chain. In 2021, the Beijing Top 100 invested a total of 280 billion yuan in R&D and added 29,000 new invention patents, showing the characteristics of "double high" in scientific and technological innovation and output. There are 37 companies that assume the role of supply chain digital service providers.

Gao Yanmin, former director of the Department of Consumer Goods Industry of the Ministry of Industry and Information Technology, said at the seminar that new entity enterprises have the genes of real industries and adopt digital information technology, which has become an important driving force for economic growth. "Through digital intelligent manufacturing technology, higher quality products are manufactured, so that products are continuously upgraded, so that new entity enterprises can obtain higher added value and wider influence, and further enhance the core competitiveness of new entity enterprises."

At the same time, new types of physical enterprises also create huge social value due to the characteristics of ecological inclusiveness. In 2021, the Beijing Top 100 employed a total of 8.61 million people nationwide, paid a total of 1.44 trillion yuan in salaries and paid a total of 620 billion yuan in taxes, which exceeded its total net profit of 600 billion yuan.

According to Hou Yunchun, president of the China Enterprise Evaluation Association, the digital transformation of real enterprises may not always be successful, but if they do not engage in digital transformation, they will definitely be eliminated. How to go about the integration of data and reality? The top 100 companies on the list offer their own experience.

2. "From 10 to 100" requires dynamic change

As a representative of innovative biological drug new entity enterprises, Shutai Shen has always attached importance to data management and application from R&D, production, to marketing. New drug research and development usually requires 10 years of continuous exploration, and the data during this period is a valuable data asset for the company and the domestic pharmaceutical industry.

Cheng Jianghong, deputy general manager of Shutaishen, said, "The competition of innovative drugs is the competition of international pharmaceutical companies. It is difficult to compete with multinational giants by relying on domestic single companies. Domestic scientific research institutions, universities, pharmaceutical enterprises, etc. that carry out innovative drugs have not formed a mechanism and platform to share basic data. Many biopharmaceutical companies are repeating the work from 0 to 10, and when huge investment is required from 10 to 20, 20 to 100, not all pharmaceutical companies have the strength to undertake and continue. But their valuable experimental data of 0 to 10 in the early stage was buried and not passed on, resulting in a huge waste of R&D resources for the entire industry. ”

"Previously, we did not have an overall plan for data, but now we can use technical means to achieve digitalization and dataization, not only for ourselves to enjoy, but also for the universities, research institutes, and CRO companies we cooperate with can also be conditionally shared, so that they can avoid detours." Cheng Jianghong said that he hereby calls for the establishment of a shared data platform for the innovative drug industry, forming a joint force in the industry, and jointly improving the overall technical level and R&D efficiency of China's innovative drug industry. Only with the improvement of the overall efficiency and cost reduction of the domestic bioinnovative drug industry chain can it be possible to stand on the same starting line with international giants and participate in international competition, which is the driving force for the innovation of new entity enterprises and the direction of efforts.

In the past, Shutai Shen preferred to develop prescription drugs, mainly serving B-end users such as various medical institutions. Since the establishment of Caiye Health, its subsidiary specializing in women's anti-aging nutritional health products, it has cooperated with JD.com to further expand its insights into the consumer market. The company focuses on the unmet needs of consumers in the R&D project establishment stage, avoiding entering the red sea and effectively bringing value to consumers.

The peak of infection at the end of the year and the beginning of the year has made "Yang Guo" and "Yang Kang" pay more attention to health problems, and vitamin C supplementation has become the direction of self-healing for many people. On Weibo, the topic of vitamin supplementation attracted nearly 150,000 people and received more than 130 million views. The number of consumers searching for vitamin C and constipation on various e-commerce companies such as JD.com has exploded.

Before that, Caiye Health paid attention to the problems of constipated people when supplementing vitamin C to improve immunity through Jingdong big data, and targeted it with the help of consumption data in advance, and finally a vitamin C oral liquid with the ability to clean up intestinal waste was born, accurately capturing the market segment in the red sea and recognized by consumers.

"JD.com's insight into consumer demand has become a window for us to understand consumer needs and purchase preferences," Cheng Jianghong, adding that this integration of online and offline makes digital a driving force for the industry and forms the competitiveness of enterprises. It has effectively helped real enterprises reduce costs and increase efficiency, driven the formation of economic value based on innovation, and promoted the rapid development of the data economy.

3. Efficiency change in 100,000 units sold

Pharmaceutical companies have tried to obtain the direction of C-end products with the help of JD.com, which has actually been the key to brand competition in the red sea of home appliances. The new entity enterprises represented by TCL and Cobos have completed the catch-up with multinational giants with the help of digitalization and intelligence.

According to the Xinmin Evening News, Shanghai's per capita monthly income in 1990 was 168 yuan, when a 29-inch Japanese color TV sold for nearly 10,000 yuan. This price was enough to replace several square meters of houses in downtown Shanghai at that time. But nowadays, more and more consumers prefer domestic home appliances with higher cost performance.

Domestic household electric energy runs out, one of which is to better understand consumers. The strong alliance between new entity enterprises has opened up manufacturing, circulation and service links, and jointly found a new growth curve for the increasingly saturated home appliance market.

Taking televisions as an example, increments are hard to find in a highly saturated market. Based on JD.com's insight into consumer demand, TCL gave the answer: large-screen, intelligent, and high-quality are the development trends of TV. In March 2022, the game TV V8EMAX, jointly developed by JD.com and TCL through the C2M model, quickly became popular as soon as it was launched, selling more than 100,000 units throughout the year.

Chu Jifa, director of TCL's e-commerce product marketing department, told "Leopard Change" that the channel knows consumers better than the brand side, and the product demand for game TV is discovered by JD.com after a large number of data sample analysis, and the final product is born after polishing both sides.

In Chu Jifa's view, the core of C2M is to do the product right, based on consumer demand product research and development efficiency is high, the market wins greatly. When there is no C2M reverse customization, the manufacturer's new products are mainly based on a limited number of samples, and the judgment basis is prone to errors, which is equivalent to relying on guesswork to make products to a certain extent.

Not only TV, the epidemic has made people pay more attention to the cleanliness and hygiene of the living environment, the post-80s, post-90s and other current main consumers expect to truly free their hands to engage in hygiene, and they pay more attention to the technological attributes and intelligence of home appliances, Jingdong and Cobos jointly developed the full-function base station product DEEBOT X1 OMNI once launched, it has become the top seller at a price of 5,000 yuan.

Through C2M reverse customization, JD.com has empowered traditional manufacturing industries with remarkable effects, helping manufacturing plants save an average of 75% of product demand research time and shorten the new product launch cycle by 67%. TCL plans to further increase the proportion of C2M business from the current 30% to about 40%.

In addition to the application of big data in R&D and manufacturing, Internet enterprises deeply participate in the operation of physical enterprises, improve the efficiency of supply chain turnover with digital capabilities, and maximize the role of new physical enterprises.

In the home appliance industry, in order to ensure that goods reach consumers more quickly, brands often send goods to retailers' logistics centers scattered around the world in advance. Brands need to pay logistics fees, storage fees, and huge inventory will crowd out the company's cash flow. Therefore, whether the goods sell well is particularly critical, because once slow-moving, logistics and warehousing costs, and frozen cash flow can become the last straw that crushes the company.

Through real-time visual invoicing, sales and inventory data, JD.com helps brands better control the inventory cost of enterprises, and under the coordination of intelligent supply chain, the inventory turnover rate of home appliance enterprises is improved, and cash flow is further optimized. At present, the inventory turnover of Jingdong home appliances is 30-40 days, and the shortest upstream account period is only 40 days, compared with the so-called "golden decade" of the domestic home appliance industry more than ten years ago in 2006, the inventory turnover days of the offline home appliance industry are 87 days, and the upstream account period is up to 180 days.

"Sometimes we have a lot of internal assessment pressure and want to send 1 million units a month to JD.com's warehouse, but JD.com's supply chain team has calculated and suggested that we only send 800,000 units. In the end, it was found that it was more appropriate to send 800,000 units. Chu Jifa said. Jingdong logistics and after-sales also play a great role in improving conversion. ”

At the end of sales, 15,000 Jingdong home appliance stores across the country have helped manufacturers bring business to consumers' doorsteps, greatly reducing business costs while expanding brand sales. In Jingdong home appliance stores, consumers watch prototypes, select products, place orders, and JD.com provides warehousing, logistics, and installation services. Even in a remote city like Lhasa, Tibet, it can basically achieve next-day or even same-day delivery like first-tier cities, enjoying lower prices and feeling better service.

For store operators, the new model only needs to pay a small amount of prototype costs, no need to advance funds to stock, no need to worry about after-sales, installation and inventory, and the efficiency of store operation has been greatly improved. The data shows that the channel expense ratio of JD home appliances has been reduced from 15% below pure offline to about 6% at present, and intelligent logistics has also greatly improved supply chain efficiency.

In the process of the old tree of home appliances sprouting, TCL, Cobos and JD.com are actually two sides of the integration of digital and real things. Relying on the digital technology efficiency of JD.com, TCL, Cobos and other home appliance companies have improved the product research and development accuracy, innovation ability of the industrial chain, operational efficiency, and user experience in an all-round way. Just like the concept of "let robots serve everyone" played by Cobos, it is a footnote for physical enterprises to use digital technology to serve consumption upgrades.

Relying on TCL and Cobos, JD.com has maximized its intelligent manufacturing capabilities, linked upstream and downstream to achieve supply chain optimization and improvement, accumulated more data and users for itself, and enabled new entity enterprises to achieve development far beyond the growth rate of the industry in the red sea.

4. Leave work two hours early, a quality change

If the new growth brought by JD.com to home appliance companies is a typical example of SI enterprises reshaping the engine of real economic development, then some companies play the role of new infrastructure of SI enterprises by assuming the role of digital service providers. For example, Megvii Technology is committed to using digitalization, AI and robotics to bring qualitative changes to the growth of traditional enterprises.

In many people's impressions, logistics centers are often equated with heavy manual labor, especially during the e-commerce promotion, even if employees grow three heads and six arms and work three shifts a 24 hours, they can't digest the mountains of express delivery.

But the logistics center of Sinopharm Guangzhou Co., Ltd. is a different picture. After the intelligent transformation of Megvii Technology, autonomous mobile robots (AMR), stacker cranes (AS/RS), and AI robotic arms liberate workers from heavy physical labor.

In fact, a few years ago, the logistics center hit a throughput ceiling. According to Megvii Science and Technology staff, the logistics center is the distribution center of Sinopharm's drug supply in the Liangguang area, and it has been arranged with three-dimensional shelves of more than 20 meters, but due to the increase in daily shipments dozens of times in several years. At the same time, each worker has to walk an average of 30,000 steps a day to pick goods, which is equivalent to a half-marathon; Every day, an average of 30,000 catties of goods are carried every day. This leads to an increase in cost and a geometric increase in management difficulty.

The general environment of the pharmaceutical industry is also undergoing great changes: with the deepening of policies such as the two-invoice system, centralized procurement of medicines, and traceability of drug circulation, the cost pressure of pharmaceutical circulation enterprises is rising. In addition, the gradual trend of pharmaceutical retail has also amplified the pressure on logistics. "Originally, it mainly docked with institutions such as hospitals, and the delivery volume of one order was very large, but now there are only a few boxes or even one or two boxes per order in e-commerce retail, which has high requirements for timeliness and accuracy, and the workload has become huge." The staff member said.

In this context, the traditional way of adding labor and renting new warehouses is becoming more and more difficult to adapt to real needs, and the change of technical means is more urgent.

After the digital intelligent transformation and upgrading of Megvii Technology, the operation efficiency of the logistics center has been greatly improved, and the average daily load of one employee has been 150 tons, but now it has realized automatic depalletizing and unmanned operation of robotic arms, and the efficiency has increased by 106%. Different warehouses are digitally connected and work collaboratively, with employees leaving work two hours early. The intelligent transformation has brought significant cost reduction and efficiency increase, and the center has achieved an average daily throughput of 40,000 boxes, a storage capacity of 450,000 boxes, and an annual business volume of more than 30 billion yuan.

In fact, such digital intelligence upgrades are not the patent of large manufacturers, and more and more small factories are also enjoying the growth dividends brought by digital transformation.

Shitoxin is a factory in Huangyan, Taizhou, Zhejiang Province, that produces wooden toys, which is traditionally a labor-intensive industry and makes heavy manual labor less attractive to young people. People familiar with the project told Leopard Change that it has been difficult to recruit workers in recent years. "Overseas demand is strong, factory orders are increasing, but the loss of workers has made production capacity not increase but decrease, resulting in many orders have to be abandoned."

In March 2022, the "lean production, smart logistics" project cooperated by Shixin and Megvii Technology was completed and put into operation: the intelligent three-dimensional warehouse is nearly 24 meters high, and intelligent equipment such as pallet stackers, multi-category AMRs, and conveyor lines are efficiently coordinated with the staff to realize the linkage between smart production and intelligent warehousing, with an annual output of 20 million sets of wooden toys.

The Megvii AMR robot is handling materials

For Shi Playxin, a factory that did not understand what AGV, AMR, or even ERP was a year or two ago, has now become a benchmark for local intelligent factories in Taizhou. After the digital intelligent transformation, the production efficiency and product quality control of Shixin have been greatly improved, and the production cost has been significantly reduced: the utilization rate of warehousing space has increased by 3 times, the production efficiency has increased by more than 2 times, and the labor intensity has been greatly reduced, and the manual links under the same production capacity have been reduced by 60%.

In addition, a large number of new entity enterprises have won many large projects involving the national economy and people's livelihood and national energy security by virtue of their strength, and have enjoyed the dividends of national economic growth while escorting nuclear energy, wind power and other major countries.

In the vast mountains of Guangxi, stands the largest onshore wind farm in South China. These wind turbines are mostly distributed in remote mountainous areas, roads, communications and other infrastructure are poor, coupled with mountains and rivers, staff inspection and operation efficiency is low, difficult, and it is very easy to produce potential safety hazards, bad weather and even threaten the life safety of staff.

"There is a big fan a few miles away, and in the past, it was measured by manpower meter by meter. Now we have built a stable wireless communication network for wind farms, which can be used to improve inspection, O&M efficiency and safety, and reduce communication costs," said AsiaInfo.

Large energy infrastructures require communication networks not only convenience, but also security. Many people have the impression that nuclear power plants are top-level scientific and technological facilities, and for safety reasons, nuclear power plants mainly relied on wired communication in the past.

In the Hainan and Fuqing nuclear power projects, AsiaInfo, a leading provider of software products, solutions and services, built a 5G production wireless private network to empower production and operation. "The 5G private network not only realizes the call between people, but also realizes data fusion processing and intelligent scenario linkage, truly achieving multiple uses in one network." AsiaInfo technology business experts said.

In the daily operation of nuclear power plants, 5G private network is an important infrastructure for their digital transformation. Relying on 5G data transmission, promoting the Internet of Everything, escorting the operation of nuclear power units and the construction of smart power plants, its production and operation efficiency will be optimized.

Behind individual experience, digital technology, as the leading force of the world's scientific and technological revolution and industrial transformation, has poured into all fields and processes of economic and social development. These new types of physical enterprises take root in the entity and leverage the practice of digital technology, which will also become a spark in the new round of industrial transformation, sprinkling into a broader space, and eventually forming a trend of burning the plain and helping China's economy achieve curve overtaking.