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Automation Technologies 3/2015

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Automation Technologies 3/2015

NEWS AND MARKETS South

NEWS AND MARKETS South China is ready for upgrade Sushen Doshi Chinese companies must get beyond the “faster and cheaper” fixation that has characterized their approach to R&D in recent decades. The industry needs to focus more and more on automation and innovation to achieve the “faster and better” rather than the “faster and cheaper”. The Exhibition – Industrial Automation Shenzhen proves to be a perfect opportunity for Chinese manufacturers as well as multinationals in China to achieve it. Author: Sushen Doshi, Editor, Automation Technologies S henzhen is china’s first and one of the most successful special economic zones. With a population on 15 million it has a very vibrant and fast growing economy. With a GDP of $ 260 billion and growth rate of 16% the economic output of Shenzhen is larger than that of Portugal. Shenzhen port is also a major contributor to the success of china’s export policy, with more than 20 million container traffic in 2013 it is the 3rd busiest port in the world. It is a very huge and important manufacturing hub for the big bigger and the biggest corporations of china well as the world. The industries encouraged in the Shenzhen industrial zone are mainly from the field of Biotechnology, pharmaceuticals, construction materials, chemical production and processing, electronics assembly and manufacturing, industrial equipment and instruments, medical apparatus and devices, telecommunication equipment. A large number of hi-tech companies have their manufacturing plants in the region. With the highest number of start-up companies in china, the region is also regarded as the mother of all start-ups in china. With all the growth prospects that Shenzhen offers, there are also a numerous challenges that arise.

NEWS AND MARKETS next page Losing its competitiveness As growth slows from 16 to 10% and further forecasts to drop below 10% in the coming years, the rise in wages and higher inflation levels increase the cost of production. Add to this the fact that the consumers are getting more and more sophisticated and demanding. Moreover, these pressures are rising against the backdrop of a more fundamental macroeconomic reality: the almost inevitable decline in the relative role of manufacturing in China as it gets richer. Manufacturing growth is slowing more quickly than aggregate economic growth, evidence suggests that the country is already losing some new factory investments to lower-cost locations, such as Vietnam. This sparks concern about China’s manufacturing competitiveness, the very reason that made China a manufacturing powerhouse that it is. Companies, Chinese owned and multinationals alike can’t escape the need to raise their game and move up the value chain by boosting productivity, refining product development approaches, and simplifying supply-chain complexity. Those that do should prosper in the years ahead, while those that rely on yesterday’s model of rock-bottom wages and stratospheric domestic growth rates are likely to fade. Better rather than cheaper The pressing need of the manufacturing sector is to change its mind sets that have pervaded product development activities in South China. Domestic Chinese companies must get beyond the “faster and cheaper” fixation that has characterized their approach to R&D in recent decades. The industry needs to focus more and more on automation and mechanization to achieve the “faster and better” rather than the “faster and cheaper”. To stay competitive larger investments on machinery equipment that increase the productivity, improve the quality and performance of the product are needed. By betting on industrial automation, robotics, better electrical systems and industrial software systems Industrial Automation that reduce per unit cost of production but it also creates a good sophisticated perception about the product and the company itself. This addition in the value of perception is very important because a large number of ever increasing Chin a’s middle and the upper middle class prefers goods from foreign companies, especially goods from South Korea and Taiwan rather than that of locally manufactured cheaper Chinese goods. Showcasing improved machine intelligence At the Shenzhen Convention and the exhibition center, the Industrial Automation Shenzhen proves to be a perfect opportunity for domestic Chinese manufacturers as well as multinationals to showcase the latest technologies in the field of industrial auto- AUTOMATION TECHNOLOGIES 3/2015

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