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Empowering High-quality Economic Development with Industrial Internet of Things Platforms

2019-08-16

By Li Yan

Research Report Vol.21 No.4, 2019

The industrial internet of things (IIoT)represents the new digital economy in the industrial sector.In recent years, with the in-depth integration of big data, cloud computing, internet of things (IoT), artificial intelligence (AI), and other technologies with manufacturing, manufacturing enterprises have accelerated transformation towards digital, networked, and intelligent manufacturing.The IIoT platforms, backed by intelligent technology, integrate all processes from design, production, circulation, and consumption to service. They constitute a service system based on the cloud platform encompassing the collection, aggregation, and analysis of massive amounts of data to support the ubiquitous connection, flexible supply, and efficient allocation of manufacturing resources. They are giving rise to a range of new patterns and new models featuring production and use integration, manufacturing and service integration, resource collaboration, and collaborative creation for shared development, becoming a new engine of industrial upgrading and high-quality development.

I. IIoT Platforms have Become a new Engine of High-quality Development

1.Path analysis of the IIoT platformsin promoting industrial upgrading and high-quality development

Currently, China’s economy has been transitioning from rapid growth to high-quality development. The driving force, structure, quality, and efficiency of economic development need to be improved accordingly. As the most important innovation in production modes in the new industrial revolution, the IIoT platforms have opened up a new path for industrial upgrading and high-quality development.

First, they have achieved data-driven innovation and development, fostering a new driving force for economic growth.The IIoT platforms collect massive amounts of data based on intelligent and interconnected equipment and the needs of end users, optimize data analysis and modeling through machine learning algorithms, and contribute to optimized decisions and solutions covering the whole life cycle ranging from R&D, design, production management, and operations and maintenance to after-sales services. Therefore, they are a typical part of the data and knowledge-driven economy.

Second, they have led the intelligent transformation of production modes,boosting industrial quality and efficiency.The IIoT platforms have taken the lead in the development of the new generation of intelligent manufacturing and promoted flexible and efficient match between supply and demand by building flexible and intelligent production systems, connecting internal and external data of enterprises, linking all elements of the industry, the whole industry chain, and the whole value chain, and developing new models such as on-demand customization, user participation in design, and large-scale personalization. They have combined their own production systems with the global intelligent supply chain,optimizing the allocation of resources on a larger scale and further improving the quality and efficiency of development.

Third, they have promoted the in-depth integration of advanced manufacturing and the modern service sector, driving economic transformation and upgrading.Relying on the IIoT platforms, manufacturing enterprises can provide services such as full life cycle management, remote operations and maintenance, online monitoring, and value-added information services based on intelligent equipment, so as to achieve integrated development of “intelligent products (equipment) + intelligent services” and build the industrial value chain featuring the integration of manufacturing and services.

Fourth, they have constructed an innovation and entrepreneurship ecosystem featuring value co-creation and sharing, unleashing new momentum for high-quality development.The distributed, open, and interconnected IIoT platforms are attractive to developers, producers, and consumers around the world, spawning new models such as outsourced design, networked collaborative R&D, and collaborative manufacturing, forming an innovation and entrepreneurship ecosystem featuring value co-creation and sharing.

2. China’s IIoT platforms enjoy agreat potential and a broad prospect

Globally,IIoT platforms are still in their infancy. Leading automated equipment enterprises, IT service providers, and vertical manufacturing enterprises have stepped up efforts in developing such platforms based on their own advantages. Although they are still at the exploration stage in terms of technical standards, business models, and ecosystem construction, the time window for expansion has come.According to the estimates of McKinsey & Company, a prominent consulting firm, the IIoT can bring in an annual revenue of up to USD 11.1 trillion by 2025. Give the large scale of China’s manufacturing sector, the transformation and upgrading of traditional industries requires efforts to crack the problems with the aid of the IIoT, such as mismatch between supply and demand, inadequate resource integration, low quality of products and poor work efficiency. Moreover, China has a vast consumer market with robust internet application and innovation. In recent years, guided by the IIoT policy of deepening the integration of the internet and advanced manufacturing,platform enterprises and IIoT platforms with certain industrial and regional influence have cropped up. According to the statistics of the Ministry of Industry and Information Technology, the number of platform enterprises with an annual revenue of more than RMB50 millionhas reached nearly 80,the number of platforms with certain industrial and regional influence has exceeded 50, and some platforms have been connected to more than 100,000 sets of industrial equipment. A development pattern of the IIoT platforms with industry-specific, regional, and application characteristics has taken shape, and a variety of platform value creation modes have come out.

First, create value in meeting user needs for customization.Through large-scale customized production, the COSMOPlat platform of Haier, a well-known home appliance corporation,has built awin-win ecosystem where every employee directly creates value for users and themselves. Currently, 9internet-based plant models have been launched around the world, which have been applied in12 industries such as construction ceramics, home furnishing, agriculture, and apparels in 11 regions and 20 countries, serving 35,000 enterprises globally.By the end of 2017, COSMOPlat had brought together a total of 320 million users and registered a transaction volume of RMB313.3 billion and customized appliances of 41.16 million, making it the largest platform of mass customization solutions in the world[]①.

Second, create value in the optimization of manufacturing process management. Relying on the IIoT platforms, manufacturing enterprises collect the data generated in the production process in a visual way for real-time monitoring and predictive maintenance, improving energy management, quality control, and yields.For example, by combining industrial big data with AI algorithms, the Aidustry IIoT platform of China Huaneng Group features a variety of AI modules for trend warning, failure diagnosis, and operation optimization of equipment at hydropower stations and thermal power stations, providing effective support for safe production and decision-making. As of now,128 diagnostic modules and 258 application models for hydropower equipment have been developed, which can conduct more than 20% of routine equipment inspection tasks. More than 100 failures have been successfully predicted,saving RMB5 million for power plants through timely alarms and maintenance[]②.

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