China is the leading nation when it comes to manufacturing.
China is set to lead the world in cloud computing within the next 5 to 10 years.
China is on course to be the most important big data market in the world.
Add those three insights together and you arrive at an interesting question:
How could big data revolutionise Chinese manufacturing?
This is an important question to explore, given the central role that manufacturing has always played in the economic prosperity of a nation. And with many countries reeling from the effects of recession, globalisation, and outsourcing to Asia…the question of the impact of Big Data on China is a critical one.
There are 4 ways that big data could revolutionise the manufacturing industry in China.
- Improve efficiencies, driving down costs, competitive edge
- New business models through analytics and data equity
- Boost customer loyalty through data-driven lock-in
- Data driven innovation
#1 Improving manufacturing efficiencies
For decades the words “made in China” have long been associated with the word “cheap”. Organising its manufacturing industry around lowering costs to boost profit margins has been a long-standing competitive edge for China.
So imagine the edges that China will get through operational excellence facilitated by big data.
As large file sharing and big data analysis become more commonplace, the insights generated about specific manufacturing processes and inefficiencies in the value-supply chain enable China to solidify its position as the world’s leader in manufacturing.
#2 Developing new business models
Big data is rampantly destroying business models across industries. A landmark example is in the demise of Blockbuster and the rise of Netflix. Blockbuster’s dominance in the video rental business was overturned by Netflix’s use of large file sharing systems to create an entirely new business model.
The same was seen in the music industry, the publishing industry and many others.
But the critical point in these examples is that Netflix and others weren’t afraid to engage with the technology – even to the point of it rendering old business models irrelevant.
Big data has a track record of doing this. And should China take big data as seriously as Netflix took the Internet, China’s position as a dominant force in manufacturing could be significantly hard to dent.
#3 Defending market share
In the battle for market share, one of the strategies that some companies employ is that of locking customers into their services. Big data offers this ability to create ‘lock in’ by enabling companies to provide “collaborative, data-driven services and activities”.
Or alternatively, as Amr Awadallah, CTO of Cloudera puts it: “…we are not doing proprietary things in our platform to lock them in. We are doing proprietary things in our platform so we can lock our competition out.”
According to research from the United Nations, China’s closest challenger in manufacturing is the USA, who generated $2.43 trillion in world manufacturing (trailing behind China’s $2.9 trillion).
Should China use the big data ‘lock in’ or ‘lock out’ dynamics to defend its current market share in manufacturing – whilst at the same time exploring new business models – it could very well find its lead unassailable.
#4 Creating data-driven innovation
“Innovation distinguishes between a leader and a follower,” said the late great Steve Jobs.
To innovate is to, by definition, “make changes in something established, especially by introducing new methods, ideas, or products.”
Big Data is constantly offering up the raw materials for new ideas, methods and products in industries all around the world.
And given the global fascination with China’s role in world economics, it will be interesting to see what innovations it triggers if and when it combines the power of Big Data, with the economic impact of manufacturing.
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