Industry 4.0 vs. New Manufacturing: Alibaba presents the Future of the Digital Factory - XUNXI
Back in Oct 2016, Jack Ma introduced the idea of the “Five Big Trends”: he predicted that digitization would fundamentally change five areas of business - retail, manufacturing, finance, technology and resource.
Since then, New Retail became such an intense focus of Alibaba’s work that they more or less stopped using the term, because it is considered old by now.
Next up New Manufacturing - which got a big push last Thursday when Alibaba revealed a completely re-designed factory concept called Xunxi (fast rhino).
While Industry 4.0 more or less is trying to digitize established manufacturing processes, New Manufacturing is re-inventing it the same way New Retail has re-invented retail.
It fits perfectly into a completely new customer-driven production paradigm called “Consumer-to-manufacturing or C2M”.
“When we started our digital factory initiative, the whole driving force was about consumption change,” Alibaba Group Chairman and CEO Daniel Zhang said at the WEF event. “How can we upgrade the supply to meet the quick-changing demands of customers and, most importantly, how can we share the insights of customer behaviors on the digital platforms and create new products fitting to the customer needs?
Unlike traditional manufacturing, which takes the "made-to-stock” approach, Xunxi is designed for “made-to-sell” production informed by consumer insights and real-time market trends aggregated from the Alibaba’s e-commerce platforms.
Technology is also leveraged throughout the factory to streamline the production process. For example, there’s an AI-driven advanced planning system that helps with scheduling and adjusting workflows to ensure maximum efficiency. By processing real-time feeds gathered from thousands of IoT touchpoints across the manufacturing floor, the system can alert staff and operators of any issues that arise so that they can be solved on the spot.
Like New Retail, Xunxi combines an extreme focus on customer needs with lots of highly relevant data + AI and re-thinks everything accordingly.
Alibaba chose the apparel industry to test-drive this approach because it’s an industry where consumers are showing a constantly accelerating demand for more-personalized designs – something that large-scale mass production is unable to deliver.
But over time Alibaba certainly will try to revolutionize way more than just the fashion industry…