The innovation truth of Chinese manufacturers

From June 10th to 30th, "CEConline" held the first "Innovation Survey of Chinese Manufacturers". A total of 342 manufacturing elites participated in the survey, most of whom are corporate executives such as chairman, president or general manager. The survey results show that technology and product innovation are the areas Chinese manufacturers are doing best at present, and the areas they want to improve most in the future. What is the truth behind this seemingly contradictory conclusion?

Strengths and weaknesses of corporate innovation

48% of manufacturers say technology and product innovation are the areas of corporate innovation they do best. But when it comes to innovation in marketing, product distribution, and business models, most manufacturers have fared poorly (see Figure 1 on this page, "Innovation areas where manufacturers do the best work").

Xu Huchu, President of Greater China of PricewaterhouseCoopers Strategy& Consulting, analyzed that China's manufacturing industry is still relatively backward in terms of technical content and productivity, and they still use The traditional way to market development, product development and competition, pay less attention to business model innovation.

He believes that the innovation of business models will serve as a breakthrough point for China's manufacturing industry to reach a higher level in the competition of the entire market in the future. "Especially, 'Internet +' is very important to the manufacturing industry. In the environment of 'Internet +', if you can combine your traditional advantages with the business model innovation brought by the Internet, it will be very beneficial to the development of enterprises. Breakthrough."

Zhejiang Fangda Intelligent Control Technology Co., Ltd. is a successful case of technology and product innovation. The company applies today's hot Internet of Things, cloud computing and big data to urban lighting. "By loading a chip into each lamp, we connect all the lights into a net, and connect all the street lights into a net through wires, without extra wiring, the original wires connect all the lights. Become a network." Song Hongwei, chairman of the company, said.

Song Hongwei said: "From the perspective of innovation, we have already started to do it in the past few years when everyone did not have this technology and product; when everyone saw this business direction, we have already done it. We have done a lot of projects around the world. Our technology is one step ahead. When our competitors are doing lighting and lamp control, we have come to the point of not only using street lights as lighting, but also using them as the entrance to smart cities. We are now Load the street light with wifi, video, sensors, and then load the charging pile to integrate a comprehensive light.”

With innovative technologies and solutions, Fangda Zhikong has won several PK competitions with Philips in the international market. , and won large orders from Saudi Arabia, Indonesia and other countries.

Quanzhou Shilian Wuzhou Light Industrial Products Co., Ltd. is a successful case of business model innovation. The manufacturer, which mainly produces backpacks, has been exploring the company's business model, from initially doing OEM contract production, expanding to ODM self-designed and OBM self-built brands. In the craze of the Internet and cultural creativity, the company implemented the business model of "culture + Internet + industry".

"We design cultural images in the form of animations, print them on our backpacks, our products, and customers love them. Many manufacturers don't do much cultural stuff, they just do some industrial stuff It’s like saying that we have become another Disney company. Disney is just spreading culture through its products.” said Tang Chenglin, chairman of Quanzhou World Union.

The survey results show that the main drivers of technology and product innovation are leadership, customers, corporate culture and competitors (see Figure 2 on the previous page, "Top Drivers of Technology and Product Innovation")

In the opinion of Liu Chengyuan, chairman of United Resources ‧3A Enterprise Management Consulting Company, leadership should play a greater role in innovation. This kind of leadership is not only reflected in the high level of the company's emphasis on innovation, but more importantly, the leader plays a leading role. "It's not that the customer has a demand, and we work hard to respond to it, but it is a kind of ability shown by leaders when they plan products, put forward requirements and lead the market."

Xu Huchu Said that leadership and corporate culture related to leadership play a big role in innovation. However, for a mature enterprise, especially some large international "Top 500" enterprises, their innovation is actually realized by investing in a system and mechanism. "Whether you get this leader today or another leader tomorrow, why this company has been able to develop is because it is guaranteed by its internal system and mechanism. This is where Chinese manufacturers can improve in the future."

Creative Sources and New Product Development Cycle

The survey results show that customers, competitive intelligence, and in-house management teams are the most important sources of ideas for manufacturers (see the figure on the previous page). 3 "The most important source of ideas"); more than half of the manufacturers have a new product development time-to-market shorter than one year (see Figure 4 "Manufacturers' new product development-to-market cycle length" on the previous page); while the impact of research and development The factors of cycle, in the top two in order of importance, are product complexity and innovation, and then R&D intensity (see Figure 5, "Most Important Factors Affecting New Product Development and Time-to-Market", on the next page).

Xu Huchu believes that this result reflects from one aspect that Chinese manufacturers focus more on modification and improvement in the entire product development, real and substantial product development, and brand-new product development. In fact, it is not what they are focusing on now.

He said that if a brand-new product is truly developed, the entire development cycle of Chinese companies, from R&D to listing, is far longer than those of foreign companies that have done well. "Our Chinese manufacturers have two biggest problems in the entire R&D process. First, the R&D strategy is often changing, and it is not clear, and we have not figured out what strategy we really want to develop; the second is that our process is not perfect. , In the entire product development process, we have changed too much in each link, and each change you make will prolong the time, so the management of the process is a big problem.”

Liu Chengyuan, chairman of United Resources ‧3A Enterprise Management Consulting Co., Ltd., holds a similar view. He even believes that "the most important factor affecting the time to market of a product is the management of the R&D process."

For Shenzhen Luguang Electronic Technology Co., Ltd., the launch of innovative products benefits from effective R&D process management. The company is a high-tech enterprise dedicated to the design, development and production of environmentally friendly and energy-saving diodes and transistors. The high-voltage TVS diodes developed and produced by it are well received by overseas customers such as French Peugeot. High-voltage TVS diodes can instantly absorb high voltages and are widely used in communications, automotive electronics and other industries. For example, they are essential to protect the engines of new energy vehicles.

In Luguang Electronics, each node in the R&D process has corresponding quality control. "For example, the chip must be tested and inspected to pass the standard. We generally require more than 99%. After the chip is tested, OK, take the data to the next process, that is, bind the chip to the structural parts. We have about four Five processes, each process is to ensure more than 99%, which is our quality goal." Zhu Ligui, chairman of the company, said.

Strengths and Powers of Product Innovation

The survey results show that in terms of product innovation, manufacturers do best in product innovation, followed by product-related technologies Innovation, and less so, innovation in industrial design and complete innovation in product functionality (see Figure 6 on this page "Where Manufacturers Product Innovation Does Best"); the top reasons for product innovation success are market insight and leadership, respectively attention, but the process does not fully play its due role (see Figure 7 on this page "Why product innovation is successful"); the place where manufacturers want to improve product innovation most is the complete innovation of product functions and innovation of product-related technologies (see this page). Figure 8 on page 8 “Where Manufacturers Product Innovation Most Want to Improve”).

From these survey results, Xu Huchu saw that Chinese enterprises will truly become world-class enterprises in the future, and brand-new product innovation is not only the current shortcoming, but also the direction that enterprises will spend a lot of time and effort in the future. . He also said that many international "Fortune 500" companies attach great importance to industrial design. They regard industrial design innovation as a very important aspect of innovation and basically protect it in the form of patents.

In Liu Chengyuan's view, the survey results "reflect the weak originality of Chinese manufacturers", and the main reason is the management of the R&D process. "The control elements of each node in the process are not clear, and the entire process management is inefficient."

Hangzhou Dengxin Technology Co., Ltd. currently focuses on automatic placement machines and is the leader of fully automatic desktop placement machines in China. Its innovation experience is: targeting niche markets for differentiated innovation.

"SMT (Surface Mount Technology) industry has a relatively long history, and foreign products are already very mature and very good, but their prices are very high. Like domestic, We don't mean to do the same as others or use our own things to compete with others, we choose a blank market and make our own characteristics. What we make is a desktop mounter, which is the first desktop machine in China. It has done a really good job in the desktop model, and it has become such a company in a mature industry." said Chen Liyang, founder and deputy general manager of Dengxin Technology.

At present, the company's desktop placement machines have been exported to more than 100 countries, and achieved 80% urban coverage in China.