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'Made in China' Manufacturing Transformation Summit held at SJTU

2017-06-20 •

'Made in China' Manufacturing Transformation Summit was held on Jun 10 at Antai College of Economics and Management (ACEM), Shanghai Jiao Tong University. Combining academic strengths in manufacturing, operations and management of the college and the university, and substantial experiences from years' of industry practice of the CLGO (China Leaders for Global Operations) program and Lean Enterprise China, the summit aims to promote exchanges of best practices in manufacturing transformation and contribute to China's goal of becoming a global manufacturing power.

Hosted by Prof. Dong Ming, Associate Dean of ACEM, the summit sees a group of informed speakers, including Mark Reich, Chief Operations Officer of Lean Enterprise Institute, Kevin Nolan, Vice President and Chief Technology Officer of Qingdao Haier and Forest Hou, Senior Expert at McKinsey & Company, taking the stage and sharing their insights in manufacturing transformation.

As the Chief Operations Officer of Lean Enterprise Institute, Mark Reich delivered a speech titled 'reforming everyday work management and boosting transformation', pointing out that business transformation requires to set up a framework of clarifying objectives, improving work flows, developing employee capability, building up basic values among its staffs, and establishing leadership and management system, in order to change ideas and practices, and return its focus to purpose, process and human resource managing. Finding the origin of business objectives means consultation among all employees and finding a shared goal, while finding the starting point of process management asks the company to focus on value creation.

 

Drawing on his working experiences as Vice President and Chief Technology Officer of Qingdao Haier, Kevin Nolan introduced the transformation of GE Appliances.

With North America as its main market, GE Appliances manufactures consumer electronic goods such as air-conditioners, wash machines, refrigerators, dishwashers and kitchen appliances and has annual sales revenue of 6 billion US dollars. However, dogged by problems of the sequential product development model and rigid product development projects, the company was severely affected by economic downturns during 2001-2008, losing innovative capability and competitiveness, and was almost given up by GE headquarters.

After internal evaluation finding existing problems in tools, processes and human resources, GE Appliances adopted a series of active measures from 2009-2013, including investing one billion US dollars to launch 11 leading industrial platforms, building or refurbishing 6 factories and hiring 3,000 new employees and talents. Through cross-department co-operation, it enhanced support for core product development, creating an orderly operations system that churned out star products successively.

It also actively seek opportunities for systematic improvements, forming an integrated New Product Introduction (INPI) process to constantly upgrade existing products and techniques and a 'centre of excellence' model to construct product teams around experts.

In 2016, GE appliances became one of the most valuable part in Haier Group and will jointly strive to become a real global leader in home appliances market.

 

As a McKinsey Senior Expert, Forest Hou expressed his ideas on “from lean transformation to digital transformation”. Mr. Hou thinks that China's economy is at a turning point of transformation and upgrading, and excellent operations is a key element in enhancing productivity, tackling higher costs and meeting consumer expectations.

Lean transformation and digital transformation are two different ways for implementing excellent operations. In essence, digital transformation helps reducing redundancy and extracting value from large amounts of data. Mr. Hou points out that plans for transformation are not 'one size fits all', rather, companies must adopt different approaches, such as lean transformation, digital lean, Industry 4.0 and etc., to suit their own unique conditions.

He also stresses that although digital tools can help raise efficiency and effectiveness in business transformation, a corresponding digital operating system, management structure and digital eco-system are also essential for achieving success.

 

Manufacturing is a major part of national economy. At present, China manufacturing not only faces challenges in shifting from quantity to quality, but also new opportunities brought by global technology revolution, industrial transformation, new ways of resource allocation and changes in manufacturing production model. With joint efforts from academic and industry leaders, the summit hopes to play a vital role in shaping the transformation and development of China's manufacturing sector. 

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