Chinese state media is reporting “new momentum” in the country’s manufacturing sector due to the increased use of artificial intelligence (AI). Some of the reports cite hours-to-minutes efficiency gains.
Government-owned news agency Xinhua reports more than 400 national-level showcase factories have been established as part of a wide-ranging smart manufacturing pilot initiative.
“Over the past three years, China has been at the forefront of innovation,” Xinhua reported on May 28, 2024. The report describes AI Plus, a strategic initiative designed to propel an expanding digital economy by creating intelligent factories.
The report describes initiatives at several large manufacturing companies, including computer manufacturer Lenovo. The company developed an AI algorithm to streamline order processing at its LCFC manufacturing hub in Hefei, China. The facility handles over 8,000 new orders daily, mostly small customized orders. As the production scale grew, manual operations became inefficient. An AI algorithm analyzed 47 factors across personnel, machinery, materials, processes, and environment. It explored 2×10^19 sorting methods to optimize delivery efficiency and production cost. As a result, scheduling time was reduced from 6 hours to 1.5 minutes. Production efficiency increased 16%, output rose 23%, and order backlog dropped 20%. In 2021, the intelligent system was shortlisted for the Franz Edelman Award.
China’s existing centralization of various manufacturing sectors allows it to spread automation gains nationwide. Xinhua describes a data center in Shanghai that monitors 700,000 textile machinery units across 9,000 enterprises across the nation. The application of AI allows the many small and medium textile firms connected to the data center to adopt intelligent manufacturing.
Startup Zhijing Technology’s “miniature robots” have been added to weaving machines, enabling simultaneous weaving and quality inspection using AI visual recognition to detect flaws. Factory owners and operators can remotely monitor production data. One factory produces 250,000 meters of fabric daily with 95% machine efficiency using the robots. The report says AI streamlines operations, improves consistency, reducing sampling time from 3-5 days to 24 hours.
Xinhua says the core artificial intelligence industry in China did 578.7 billion yuan ($80 billion USD) in 2023, supported by more than 4,400 enterprises.
What we think
There are three factors driving AI-based manufacturing innovation in China: spending, changing demographics, and culture. Each factor by itself is important; together they portray yet one more way China intends to maintain its status as a global leader in manufacturing prowess.
Spending: The Xinhua report is a signal that the $800 billion spent on AI in 2023 will increase in 2024 and beyond.
Demographics: One of the showcase companies, a EV battery manufacturer, focused on inspections because all the humans good at it are retiring. China is facing the same issues of an aging workforce as Western companies, and sees competitive advantage by aggressively pursuing AI-based innovation.
Culture: In the West, when one manufacturing company achieves a breakthrough, its competitors scramble to catch up. In China, when one manufacturing company achieves a breakthrough, it shares the know-how with all its competitors. AI technology perfected at one factory will quickly find its way to all others like it.
Your comments are welcome