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To improve China’s global competitiveness, the government launched national initiatives such as “Made in China 2025.” Along with enabling technology approaches such as smart manufacturing and IIoT, service-oriented manufacturing (SOM) has emerged as another vital pillar of the country’s Made in China 2025 initiative, which aims to increase the overall production efficiency and quality of Chinese manufacturing to be able to produce higher value products.
Last year, China’s Ministry of Industry and Technology Information (MIIT) and National Development and Reform Commission (NDRC), along with Chinese Academy of Engineering (CAE), released an action plan to promote development of service-oriented manufacturing. This encouraged manufacturers to transform to intensive, high-value-added and service-oriented manufacturing. ARC Advisory Group observes that many technologies are emerging that could serve as enablers for this challenging transformation. These include supply chain optimization, Industrial IoT, cloud computing, and others; many that are already being applied in smart manufacturing pilot programs.
Why Service-oriented Manufacturing?
Low labor costs and preferential government policies have enabled China to emerge as the world’s leading producer of low-cost products. However, China is still weak globally when it comes to innovation and the value chain; the country still has a long way to go relative to research & development, marketing, and other areas at the higher end of the value chain.
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Keywords: China, Made in China 2025, Service-oriented Manufacturing (SOM), Industrial IoT, Supply Chain Management, Cloud Computing, ARC Advisory Group.