Internet penetration and transformation of the business sector is the reverse, from the consumer end of the recent advertising marketing, into the retail, infiltration into the distribution chain, eventually forced into the manufacturing process, in the process of production methods, management concepts, production Equipment, and even raw materials will undergo major changes. On the Internet + manufacturing industry will happen what kind of change? Traditional manufacturing enterprises how to embrace the Internet forced change? Based on the classic theory of manufacturing industry and the change of the industry edge, Ali Research Institute made a summary and analysis and discussed with the people in the industry.

1, Internet + manufacturing industry is forced out, and its transformation from the downstream part of the driving force
The Internet of manufacturing industry is a part of the collaborative upgrading of "production-sales-consumption", and the driving force for its transformation comes from the downstream circulation and consumer terminals. The higher the degree of downstream Internet (online, data), the more obvious the role of the upstream manufacturing links. At present, the retail industry in the book industry has a high degree of Internet connectivity, with a conservative estimate of over 50%. Therefore, we have seen that the "print and publish" links in the production and manufacturing of books have become highly Internet-enabled. Digital publishing and digital distribution are very popular. Textile and apparel is another highly Internet-enabled industry at the retail end, with an estimated 30% of the industry, which means that 30 out of every 100 apparel sold across the country are sold on the Internet.
    It is conceivable how much forcing force it has had on upstream manufacturing. Therefore, we see that in garment factories, the flexible production is accelerated, the production cycle is shortened, and the production methods and equipment are changed. For a large number of industrial manufacturing enterprises, the downstream is a Class B customer, the demand for such enterprises Internet + more from synergies between enterprises, but the power is still from the downstream customers. For example, the current smart devices and smart products in full swing, the sensor embedded in the product, sold to customers can continue to collect data uploaded to the cloud. But as you can see, there is such a momentum on the manufacturing side only when customers have such needs and are willing to share data.
2, "smile curve" mislead China's manufacturing industry
    In 1992, Taiwanese entrepreneur Shi Zhenrong put forward the "Smile Curve" theory. Smile curve that the curve on both sides of the high added value, profit margins; and in the middle of the curve arc processing, assembly, manufacturing, technical content is not high, low added value, low profits. The Chinese industry has portrayed the "smile curve" as a classic and has therefore become confused. Guided by this thinking, the direction of China's manufacturing transformation and upgrading must extend to the so-called high-end of the value chain, especially taking the road of branding. The road to the retail market and the brand is a "failure to a" strategy, a great risk, not for all manufacturing enterprises.
In fact, the manufacturing industry is not so pessimistic, and the opposite of the smile curve exists both theoretically and practically. In 2004, Japan's Nakamura Nakamura Institute put forward the "Wakasa curve" at the end of the 1970s. That is, the most profitable source of profit for the arcuate curve opposite to the smile curve is precisely the "manufacture." In June 2005, Japan's "Manufacturing White Paper 2004" also verified through surveys of nearly 400 manufacturing enterprises that there were many enterprises that recognized the high profit margin of "manufacture & assembly." The reason why China's manufacturing industry has been fooled by the smile curve is that the management level of China's manufacturing industry is bad.
    In the recent 20 years, under the WTO foreign trade dividend and government-led investment-led growth mode, China's manufacturing industry enjoyed profit easily while making real estate. It is too easy for the financial sector to make money and the business owners are generally unwilling to devote themselves to the manufacturing industry. In the past 30 years, China's manufacturing industry has not exported any ideas to the world. Instead, the mature manufacturing management theories such as IE (Industrial Engineering), TPS (Toyota Production System), and 6Sigma are rarely applied. All this leads to "manufacturing" due to the profits are far from reflected.
3, the direction of manufacturing transformation from a simple "manufacturing" to "supply chain collaboration"
    In the manufacturing internet transformation, the C2M model needs to have a retail gene and a slow branding effort. Not all businesses have this capability. In our opinion, the more viable transformation of manufacturing industry is to supply chain services. But what is the supply chain? Many people are talking, but it seems they have their own meaning. Give a simple example to illustrate the difference between "simple manufacturing" and "supply chain collaboration."
    An apparel factory received an order from the brand merchant on June 1, producing 1000 pieces of two pieces of clothing each in AB format, requiring delivery before July 1. The factory work hard, produce quality and quantity of clothes, sent the goods before July 1, which is called manufacturing. The "supply chain synergy" approach is that the factory in the production process to understand the brand where there: A selling style, in mid-June has been below the safety stock, and soon out of stock; and B-style unsalable, there are a large number in stock. Then the factory should accelerate the A-type production and delivery, and defer B-type production or even reduce the amount of orders, this is the "supply chain collaboration" approach.