But labor costs and a lack of hands were holding it back. During the Lunar New Year holiday, when most of China shuts down and goes home, some 500 Mentech executives, engineers and administrative staff had to work three-hour shifts after their normal workday to keep the factory running, said Zhang Xiaodong, a research and development manager.
Mentech asked Mr. Zhang and others to figure out how to automate the factory. They spent two years working late into the night. Machines needed tweaking. Components needed to be redesigned so that machines could make them. Several projects failed.
“Not every problem has a solution,” Mr. Zhang said. “We know that smart manufacturing is the future. But getting there isn’t easy.”
Today, a factory floor that once needed over 300 workers now needs 100. More than half of the factory has been automated. The workers clustered around the machines will probably be replaced by machines themselves in a year or two.
To help, the Dongguan government provided $1.5 million in subsidies. It is also luring start-ups and helping scientists open research centers to provide more know-how.
One start-up aiding Mentech is Dongguan Precision Intelligent Technology, which will provide a good chunk of the machinery the company needs to automate fully. Because the equipment will be Chinese-made, it will be cheaper than purchases of automation systems from Japan or the United States.
“The biggest trend in manufacturing is that automation is irreversible,” said Forest Tian, a former venture capitalist who founded Precision Intelligent Technology. “There will be huge demand for these machines.”
The Dongguan government has taken other steps to ensure these centers of innovation help Local manufacturers. For example, it formed about 30 research institutes in partnership with major Chinese universities. Once the initial money was given, Dongguan officials told the institutes they had to figure out how to make money on their own.
The institutes teamed up with companies like Guangdong Janus Intelligent Group Corporation, a once-dowdy cellphone parts maker facing the familiar problem of high labor costs. Experts in the field became recurring visitors to its factory.
“We call it 18 Buddhas coming to Dongguan,” said Huang He, the head of Janus’s smart-factory Business, alluding to the followers of the original Buddha.
At a Janus factory, rows of automated machine tools work with robotic arms and green conveyor belts in a space nearly the size of a football field. The robotic arms feed metal blocks to the machines, which then punch, grind and wash them. The housings for phones and tablets come out.
The factory requires 16 workers on a shift, instead of 103 before it was automated. The robotic arms are made in China.
No doubt many Chinese companies will fail in their effort to upgrade. Made in China 2025’s other goals, such as building up world-class microchip industries or self-driving cars, remain out of sight for now.
Yet when it comes to manufacturing, Dongguan suggests Made in China 2025 will succeed partly because the effort is bigger than Beijing. Chinese companies and Local government officials are determined to climb the value chain so they will not fall into obsolescence. The best Washington can do is to make sure its policies help American companies stay ahead of the game.
source : CNBC