Welcome, Guest  |  Login    Register

CHINA JOURNAL: After the Trip, Reflections on China

Posted By David Brousell, October 15, 2017 at 6:57 AM, in Category: Industrial Policy

China1.jpgSaturday, October 14, 2017 – After a 17-hour flight from Hong Kong, the last leg of our 16-day visit to China, we arrived in Boston early Monday morning on October 9, the flesh weary but our spirits still charged about what was truly the trip of a lifetime.

The China International Manufacturing Forum (MIF2017) conference I attended and spoke at in Tianjin concluded on Friday, September 29. The next day, my wife Irene and I boarded a high-speed train for what was a 30-minute ride to Beijing, China’s capital city, and four days of sightseeing that included the Great Wall, Tiananmen Square, the Forbidden City, the Summer Palace, and much walking about various areas of this metropolis of 23 million people. After Beijing, we flew  to Hong Kong for four days of exploration there.

Beijing, Hong Kong, and the days after the MIF2017 conference gave me time to reflect about what I was seeing on my first trip to China. I certainly had preconceptions about the country before the trip – about its vast size, huge 1.4 billion population, its Communist political system, and, of course, its status, achieved in 2010 when it passed the United States, as the world’s largest manufacturing engine.

Nothing, however, could have adequately prepared me for what I actually saw. The size, scope, and condition of the cities – the smallest city we visited, Tianjin, for example, has 15 million people, just under twice that of New York City, the largest city in the U.S. – the numbers of people, the modernity of the country’s airports, and the wide variety of goods and services left me scrambling for appropriate adjectives.

But one of the things that struck me the most was the extent of the consumerism I saw. Granted, we stayed in the best parts of the cities we visited, but the many shopping malls filled with global high-end brands, the luxury automobiles, the elegant hotels, and the wide variety of restaurants made me understand that China is more similar to the west than I had previously imagined. In just one shopping area in Beijing, for example, we encountered five Longines watch stores, several of which were only one hundred yards or less from each other. Every time I turned my head in Shanghai or Beijing, it seemed, there was yet another Louis Vuitton outlet. And Hong Kong must be the Tesla capital of the world.

Another thing that stayed with me, particularly in Shanghai, Beijing and Tianjin – Hong Kong, perhaps more influenced by western norms, is another matter – was how clean these vast cities are. You can’t find a cigarette butt in the streets of Beijing. There’s an army of uniformed people with brooms and dust pans constantly cleaning the streets, sidewalks, and parks. To me, this spoke volumes about civic pride and discipline, not to mention the fact of needing to employ people.

And globalization’s long tentacles reached into the most unlikely places and in amusing ways. On our way to visit the Great Wall, for example, we stopped in a small village called Mutianyu, where there was a cluster of shops and restaurants. We had lunch in a place called Laker’s, where we ate pizza, drank Stella Artois beer, and listened to Bob Dylan sing “Knockin’ on Heaven’s Door”.  It was just about the last thing I expected to be doing in the foothills of China.

When I got back from China, one of my colleagues at the Council, David Van Engel, asked me whether Chinese manufacturing companies have embraced Manufacturing 4.0 ideas and technologies, and where they might stand in relation to their U.S. competitors.

Good question.

From what I was able to learn at the MIF2017 conference, the answer is that, much like many U.S. manufacturers, China’s industrial companies are also at the beginning of the journey to M4.0, and they are trying to understand what it means in terms of digitization of processes, the use of IT technologies such as advanced analytics, and changes to culture and organization.

The Great Wall Motor Company Limited, whose mid-size SUV plant I toured on my first full day in Tianjin, seemed highly automated and was very clean, much like many U.S. plants I have visited. Automated guided vehicles move parts and supplies around the plant as workers conduct final assembly operations. Productivity appeared strong as the number of vehicles produced during the shift I witnessed exceeded a posted goal.

The central themes of many of the discussions and presentations at MIF2017 were squarely on urging Chinese manufacturers in attendance to change their thinking about what they have been making and how they have been making it. Chinese industry executives made clear that they want to reposition Chinese manufacturing in the eyes of the world from being a mass producer of products to a nation of truly global companies recognized for high-quality products and brands. This is one of the objectives of China’s state-sponsored Made in China 2025 program. They were told that an important part of this shift requires improving quality, embracing digitization, and adopting advanced technologies such as analytics, artificial intelligence, and the cloud.

And a number of the speakers at the conference were not shy about talking about the challenges that Chinese companies face in realizing this new vision of Chinese manufacturing on the world stage. Improving quality, understanding cultural differences in countries they want to do business it, and getting access to the new technologies and developing the expertise to use them were all cited as hurdles to overcome.

But there may be a lot more to it than just these factors. After I was back for a few days I had a chat with John Fleming, a member of the ML Council’s Board of Governors and former executive vice president of global manufacturing for Ford Motor Co., who in his role at Ford traveled to China for more than 10 years and continues to do so today as an advisor to companies there.

Fleming has witnessed significant changes in China, many of which have taken place in the last couple of years, and while he is impressed with the intelligence and work ethic of Chinese manufacturers, he feels that there has to be a fundamental shift in mindset if they are going to be able to accomplish their goals in the age of digitization and Manufacturing 4.0.

“The Chinese are the world’s best copiers,” Fleming said. “But they may not understand what they need. They say ‘so and so has built this and we want the same’. But they have to start learning for themselves what they want.

“There is a huge gap between what the leadership wants and what the people want. Innovation can’t be top down. But the big thing in China is that the government is behind the China 2025 program. They are going to make whatever is needed whatever the cost. They will get all the physical things in place but there is a long lag in getting the credibility they seek.”

As the Chinese try to up their manufacturing game, other countries’ manufacturing industries are not sitting still. M4.0 is a worldwide trend, with initiatives underway not only in the U.S. but also in Europe and Asia. As a result, a new round of competition is underway.

Who will come out on top? Will China, already the largest manufacturing economy, benefit from its vast scale and its state-sponsored determination to become a world-class quality manufacturing brand?

In 2016, Deloitte Touche Tohmatsu Limited and the Council on Competitiveness predicted, based on a survey of about 500 executives, that the U.S. would regain the top spot in its Global Manufacturing Competitiveness Index as a result of its emphasis on talent and technology. At that time, China held the number one spot. https://www2.deloitte.com/global/en/pages/manufacturing/articles/global-manufacturing-competitiveness-index.html

The road to the future of manufacturing dominance will be full of challenges not only for China but for the U.S. and other countries as well as the extent of change required to succeed in the digital age comes more into view and becomes better understood. Only time, and the ability to survive the many bumps along the way, will tell, of course.

In the interim, I may have to make another trip to China to find out more.

 

 

 

 

 

 

 


Category: Industrial Policy
user_avatar
Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council



Add Pingback

Comments

You must be logged in to leave a reply. Login »