(Yicai Global) April 3 -- Traditional manufacturers looking to digitize must focus on creating value and not fall into a digital trap, according to Fang Hongbo, president of Chinese home appliance giant Midea Group Co.
“We have both gained benefits and made detours during our digital transformation,” Fang said during a speech at the China Guangdong Digital Economy and Innovation Conference. “Sometimes, the tools generated nothing but a few reports.”
He believes that digital tools must have a specific role in improving efficiency and generating value. “A digitized enterprise combines manpower and machinery data to form integrated analyses which can support company managers,” Fang added, saying that since 2016, Guangdong-based Midea has collated its data online for 24/7 access all along the industrial chain.
Midea has 48 million mobile terminal uses sharing its data, and has enjoyed enormous improvements in efficiency in such areas as supply chain coordination, he continued. The firm has halved its employee numbers to 100,000 over the six-year digitization period, Fang said, adding that it has removed all redundant positions and makes better use of its factory space.
Midea’s next step will be to progress its Industrial Internet. “We have a deep understanding of manufacturing,” Fang said. “In terms of industrial mechanization and robotics, we started to distribute and invest in key components early, and this has equipped us with hardware technologies.”
The company hopes to be fully digital-driven next year, and manage operations with real-time data to improve efficiency, meet customer needs and reduce waste at every step, he added.
Midea rolled out its software platform MeiCloud in December 2016, integrating Midea’s experience with hardware and software to provide a complete Industrial Internet solution, Fang said. It has over 60 clients, including China Eastern Airlines Corp. and carmaker BYD Co., and offers complete enterprise software for the mobile internet era, he added.
“We cannot complete the digitization of traditional manufacturing overnight,” Fang said. “Instead, we need to start with the basics, which by my understanding means starting with a lean digital transformation. Only in this way can we achieve automation and digitization.”