One cornerstone of Supply Chain 4.0 is known as Industry 4.0. Let’s look at how China, and specifically Haier, has joined the emerging development of the factory of the future. We’ve translated the following article by Luo Chao from Chinese to English, which was originally published on Baidu Baijia. Read more about Supply Chain Service 4.0 on the HWTrek blog.
On August 11, Haier held a “Three-No” (transparent factory) press conference—no human labor, no site, no product—that broadcast the production situation of Haier’s Internet-based factories via multiple cameras to the whole world. As a result, every customer, no matter where they are, can watch the entire manufacturing process in the Internet-connected factories by mobile phone or PC.
What is the Transparent Factory?
The Transparent Factory is actually a new manufacturing system of Haier, which is based on Internet-connected factories like Zhengzhou Air-Conditioner Smart Connected Factory, Shenyang Refrigerator Smart Connected Factory, and Foshan Roller Connected Factory. Furthermore, it is said that more and more Internet-based factories are going to be built in the very near future. These factories have the following characteristics:
- Mass deployment of robotics
As industrial robot technology improved dramatically during the past two years, Foxconn and other well-known manufacturers have begun large-scale deployments. Meanwhile, Amazon and other e-commerce platforms have begun adopting the use of robots, drones, and other similar technologies in their warehouses and logistics.
There are many advantages in adopting robots in the manufacturing industry. First, costs decrease—in situations of increasing labor costs, this is an advantage. Second, robots work tirelessly and continuously. And, they are more efficient, seamlessly integrating with other aspects of the production chain. Finally, more accuracy—robots are more accurate than humans.
Haier Transparent Factories have widely adopted the use of robotics and unmanned intelligent technologies. Air conditioners, refrigerators, washing machines and other appliances with varied production process are gradually transitioning to robots. For example, Qingdao FPA Inner Drum Cylinder is the only one in the industry to be able to make 2 mm diameter inner cylinders, precisely enhancing better product quality.
2. Transparent and open manufacturing process
Customers, viewing the production process in real-time from anywhere via the web, play the role of supervisor.
In the food industry, this model will have great advantages. Due to distrust of food safety, consumers expect to understand the food production process, the processing chain from farm livestock and other ingredients production processes to restaurant kitchens. Dairy giant Yili has a transparent ranch plan for example.
In presenting the production process to the outside world via intelligent cameras, Haier echoes the transparent ranch with the same purpose. The transparency initiative shows their concern for user experience and a confidence in their own manufacturing capabilities. If you need to cut corners or take other similar actions, naturally you will not make them public. Large scale deployment of robots and other cool technologies not only helps to contribute to leaving a deeper impression on users but also enhances the sense of user involvement at the same time. Real-time dynamic information of the logistics chain provides a strong practical value to the consumer.
3. Fulfills the customized needs of supply & demand patterns
In the past, household appliance manufacturers based decisions about what models to launch, batch manufacturing, channel distribution, marketing, and finally delivering to the consumer on surveys and similar market research. Batch mode production is not flexible enough and likely to cause inventory pressure, while uniform products cannot meet individual needs. Future production must customize production for all the needs of the user. To meet the dynamic, abundant, and varied demand, we need a more agile and resilient mode production.
The Haier Transparent Factory, linked together with e-commerce and crowdfunding, has achieved a transition from mass production to mass customization. According to preferences, users can select appliances with different colors, styles, and functions. After an order is submitted, the intelligent manufacturing system automatically schedules production, automatically transmits through to each step of the production line, all module suppliers, and logistics providers, to complete product assembly and delivery to the consumer.
Industry 4.0 in China
Haier’s large investment in its Transparent Factory is to capture the emerging global Industry 4.0 wave.
Industry 4.0 is regarded as the fourth, and last, industrial revolution. As I understand it, Industry 4.0 is: the future of manufacturing will become part of the information industry, the raw materials produced will possess information attributes, and will be integrated with the mobile internet, big data, social networks and the Internet of Things. Integration is the means, there are three objectives:
- The new mode of production: the centralized factory is replaced with distributed production, crowdfunding, and other internet spawned models have been grafted to production.
- The new production process: there are opportunities to apply new technologies in every link of production, such as 3D printing, robotics, human-computer interaction, remote control, and automatic production, etc.
- The new supply and demand: market research, batch production, and the traditional channel sales model have been turned on their head. Internet-based C2B, big data analytics, P2P (the sharing economy) and many other models come together to form new production supply and demand.
An industrial revolution is occurring in China – “a new round of technological and industrial revolution is coming.” Haier, while actively laying out intelligent manufacturing, building transparent factories, embracing the internet of things, deeply participating in the new industrial revolution taking place, will reap the benefits of Industry 4.0.
You can check out several of Haier’s Transparent Factories online here. It may take a minute or two for the video to begin playing.
Haier started off as a home appliances manufacturer and expanded their business into communications, IT, digital products, home furnishing, logistics, finance, real estate, and bio-pharmaceutical. According to the statistics of Euromonitor, the Haier brand accounts for 10.2% of the global retail volume, making it the top large household appliance brand in the world.
Haier Open Partnership Ecosystem (HOPE) is an online portal, built by the R&D Center of HAIER Group, for technology exchanges and innovation. Haier HOPE partnered with HWTrek with the intention to find home automation innovations and sell them through the Haier retail network. Hardware creators on the HWTrek platform can also use HOPE resources, collaborate with their online community and experts to solve any arising tech issues. Read more about Haier HOPE on the blog here.
Connect directly with Jay Park and Hank Chang, experts from Haier, on the HWTrek platform.
