Small and medium enterprises that policy calls specialised, refined, distinctive and innovative are a support of Chinese manufacturing and the key to strengthening and completing supply chains. The government work report called for cultivating them with support on capital, talent and incubators. The Ministry of Industry and Information Technology says that on top of existing support it will do more for these firms, in particular by lowering the digital threshold and speeding up digital enablement.
So how does the arithmetic work — what gets subtracted, and what gets added?
Subtracting the threshold
How much steel a spring needs, at what furnace temperature, over how many labour hours: at a spring manufacturer that has spent decades in the trade, big data now answers those questions precisely. By connecting its equipment and moving production, logistics and supply onto DingTalk, the firm matched supply to demand far better — production efficiency rose 20% and both cost and inventory fell sharply. ‘An open platform puts digital capability within much easier reach,’ a manager there said, adding that the next step is a smart warehouse with barcode receiving and automated dispatch.
For companies in narrow segments, removing information asymmetry and making each link in the supply chain more transparent is both the route to better quality and efficiency and a way to ride out market swings. Digital technology is central to it.
The ministry sees building out services for SMEs as the focus for this year and for the 14th Five-Year Plan period, and lowering the digital threshold as a key measure within it.
‘We will run a digital transformation action plan for manufacturing, pilot the integration of new-generation information technology with manufacturing, and build up firms’ ability to apply digital technology,’ said Tian Yulong, chief engineer at the ministry. Alongside scaling up 5G virtual private networks for industry and hardening the network base for transformation, the ministry will encourage firms up and down supply chains to open their data.
It is already happening: large firms are opening application scenarios, sharing production factors and lowering the threshold. JD Industrial’s supply chain decision system builds a service network and uses cost, inventory and payment-term data to design solutions for companies in its ecosystem; Kuaishou launched a one-stop open platform that opens its traffic to physical businesses; Lenovo started a programme to help SMEs digitise, aiming to give 10,000 firms a zero-cost start within three years.
He Qiang, a professor at the Central University of Finance and Economics, suggests giving SMEs friendly and trustworthy computing, network and storage capacity, and backing that with policy that cultivates digital procurement platforms serving them, so that smaller firms can use data to cut cost and lift efficiency.
Adding the intelligence
Lowering the threshold is only half of it; the other half is adding intelligence.
To protect supply chains, Hebei has brought industrial internet platforms online in Tangshan, Handan and elsewhere. To protect energy use, the Linping district power company in Hangzhou has mapped the storage potential of local firms and offered retrofit plans to industrial parks and SMEs. To widen the scenarios, manufacturing, mining and power are being worked through for 5G-plus-industrial-internet applications. From manufacturing driven by barcodes to production driven by data, the effect is showing.
The ministry has said that in 2022 it will identify and promote a set of 5G-plus-industrial-internet applications at production-line and workshop level, push industrial internet platforms into bases, parks and clusters, and extend 5G into more industrial settings.
‘We will keep innovating on the path for these specialised SMEs. This year we plan to cultivate another 3,000 national little-giant firms,’ said minister Xiao Yaqing, adding that the policies behind them should extend to small and medium enterprises more broadly.
Republished for information. The original text has not been independently verified and does not necessarily reflect our views.
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