[August 18, 2017]

Towards Industrial 4.0: TEDA Is Making Chinese Manufacturing Smarter

When Chinese underwater vehicle maker Deepfar became a winner of Reddot Award 2017 for its WhiteShark Max remote-controlled submarine, executives at the Tianjin industrial park where the firm is based knew their strategy was beginning to pay off.

Deepfar's submarine can dive to depths of 100m, uses image recognition algorithms to track sonar beacons and is made from a special material that reduces the risk of disturbing sensitive marine species such as sharks. The reddot jury said it was "powerful and versatile".

"This is exactly the kind of company we hoped to see emerge from the ecosystem we have created here," says Xu Datong, chairman of the Administrative Committee at Tianjin Economic-Technological Development Area (TEDA) - China's top ranking industrial park.

New 'Made in China'

The TEDA administration has been working to transform TEDA from a center for heavy industry into a globally influential hub for advanced manufacturing.

The park's strategy is mirrored at national level - the "Made in China 2025" initiative aims to move manufacturing up the value chain to prevent the Chinese economy from being squeezed by lower cost countries on one side and high-end manufacturers on the other.

In June, TEDA unveiled its Intelligent Industrial Zone, a 20 sq km area expected to host firms in areas such as artificial intelligence, smart manufacturing, intelligent finance, intelligent healthcare and smart logistics.

"We are embracing smart manufacturing with open arms. It will allow us to respond to the needs of increasingly demanding consumers both here and around the world and it represents the backbone of the next stage of China's development," adds Mr Xu.

Good Timing

TEDA - which has a GDP of $45bn and a growth rate of more than 10 percent - is also well placed to benefit from some big national and international trends.

It is located within the Beijing-Tianjin-Hebei region, which comprises some 120 million people and has been earmarked by the central government for greater integration. The plan will see some administrative and economic functions moved out of the crowded and expensive capital to Tianjin, including some of Beijing's start-up activity.

Tianjin is also the region's major port, connecting the Asia-Pacific region and the Bohai Gulf region to inland China and Eurasia. This means it also stands to gain from China's vast trade expansion under the One Belt, One Road initiative - perhaps the biggest overseas investment drive ever carried out by a single country with $900bn of planned investments abroad.

"One Belt One Road will connect the ancient Silk Road trade route with southeast Asia and we are in the middle. We need to make sure we are ready," says Mr Xu.

Long in the Making

That readiness is the result of years of work to move away from traditional industry and towards Industry 4.0 - digitized factories in which machines communicate with one another and computer algorithms optimize efficiency and productivity.

The park administration has assembled a variety of supports aiming to encourage smart manufacturers such as Deepfar in TEDA.

TEDA is home to China's National Supercomputing Center, which is developing its Tianhe-3 supercomputer, capable of a billion billion calculations per second. It will provide services to companies in areas such as oil exploation, high-end equipment manufacturing, medicine and animation.

It is also the location for the Chinese Academy of Sciences' automation institute, set up in 2015 as an incubator focused on smart recognition technology. So far it has successfully incubated three companies, persuaded another two companies to relocate to TEDA and attracted $12.5m in private equity funding.

The park has launched a center for intelligent unmanned systems whose flagship tenants are Deepfar, the submarine maker, as well as EFY Tech, which makes aerial vehicles.

There are also partnerships with the private sector. The Qualisys Benchmark Innovation Center at TEDA was launched in 2015 in collaboration with consultancies Munro and Associates from the US - which specializes in what it describes as "lean design" - and Shenzhen-based Qualisys.

The center provides product analysis and re-engineering support to TEDA companies manufacturing parts for cars, aerial vehicles and high-speed trains. It also monitors best Industry 4.0 practices from around the world.

Yu Kai, a veteran commentator on the auto industry in China, is convinced.

"The region has real cutting edge in terms of informatization and it thus enjoys better DNA when it comes to leapfrogging its rivals in developing Industry 4.0," he says.

In addition, equipment manufacturers at TEDA are provided with training, funding and talent services, as well as access to shared labs, 3D printing, pilot-test production and five-axis machining facilities.

Trailblazers

Deepfar is just one of the success stories to grow in the TEDA ecosystem.

Wei Jiancang, who founded the company in 2013, says unmanned submarines came to public attention during the search for Malaysian airliner MH370, which went missing in the Indian Ocean in 2014.

But Mr Wei says there is a $1.5bn market in China alone for automated underwater vehicles in areas such as aquaculture, offshore exploration and archaeology.

He is a member of China's so-called "Generation Y" entrepreneurs - who dream not just of personal success but also of having a positive impact on society - and his team includes seasoned executives who have business knowhow from stints working with software giant Oracle (News - Alert) and components manufacturer Foxconn.

Another startup to have moved to TEDA is Watrix, a firm that specializes in identity recognition and authentication at a distance and in complex situations. Its technology can be applied in contexts from smart home care to public security and anti-terror operations. The company says its technology is now almost 95 percent accurate and is close to commercialization.

Overall there are about 60 TEDA-based manufacturers that specialize in intelligent manufacturing such as industrial robot maker Baolai Industrial Robotic or Yiersu Easy-Robot, which provides services to help integrate industrial systems.

Smart Noodles

Traditional manufacturers at TEDA are also benefiting from moves towards Industry 4.0.

Michael Griffin from elevator company Otis, which has set up a joint venture in TEDA, says the focus on innovation is key.

"This facility here has smart manufacturing. And TEDA is also basically about how to create an intelligent city here and has also made a very innovative culture of how to solve problems," he says.

In the auto sector, Volkswagen's joint venture with China's FAW has incorporated 900 robots in the welding procedures, bringing the level of workshop automation to more than 75 percent. Meanwhile FAW's joint venture with Toyota is introducing a flexible assembly line to reduce cost and manage product variability.

Founded in TEDA 27 years ago, instant noodle-maker Master Kong is an old-school manufacturer. Yet people are still visiting its facilities to see how the company operates because of the level of automation it has achieved.

Throughout the manufacturing process - from flour mixing, maturation, composite rolling, continuous rolling, wire forming, cutting, cooking, cutting into quantities and drying to finally packaging the product - very few workers can be seen making it all happen.

Meanwhile production has doubled, efficiency has gone up by a quarter and per-capita productivity has tripled, the company says, making the TEDA factory the biggest single instant noodle-producing plant in the world.

"The underlying industrial strength at TEDA offers a launch pad to create truly joined-up technology at the forefront of smart connectivity," says Sun Hongyu, director of TEDA Administrative Committee's General Office.

"Digitalization reinvents the world of manufacturing and means the bricks-and-mortar economy can be upgraded."

Signposts to the Future

Hou Xiaolu, deputy director of TEDA's Development & Reform Bureau, says maintaining momentum as companies move up the value chain is key.

TEDA is offering a package of tax breaks, loans, R&D subsidies and funding to manufacturers that can show they are moving forward with service-based manufacturing processes.

"We are aiming for a switch from focus on products and production, to efforts in expanding services," says Li Weihua, deputy director of TEDA Administrative Committee's General Office.

"We are pushing the envelope for a more collaborative and innovative ecosystem where we will see such activities as web-based design and co-creation by supply chain partners leading to collaborative and agile production."

Mr Li says the park's aim is to identify gaps in emerging supply chains or technology and then find companies that can fill those gaps and persuade them to locate in TEDA.

He says the search is on for more companies in the areas of industrial robotics, 3D printing and sensor technology.

"Tenants need to have outstanding R&D capability and a cutting edge in producing key components or providing total solutions. If they have proprietary technology and good contacts then that's even better," he says.

With TEDA's Intelligent Industrial Zone now entering operation, Administrative Committee Chairman Mr Xu says it is not a question of if but when there will be another success story like Deepfar.

"Intelligent manufacturing is our future. I'm confident that TEDA can contribute to a smarter China and a smarter world."

View source version on businesswire.com: http://www.businesswire.com/news/home/20170818005246/en/

[ Back To TMCnet.com's Homepage ]