Xu Lejiang Delivered a Speech Titled “Transforming to Service Manufacturing, Building Wisdom Steel” in the Second Global Annual Meeting of Made in China 2025 and Industry 4.0 [ 2016-09-30 ]

During September 24-25, the Second Global Annual Meeting of Made in China 2025 and Industry 4.0 was held in Beijing. Party secretary and chairman of Baosteel Group Xu Lejiang attended the meeting and delivered a speech titled “Transforming to Service Manufacturing, Building Wisdom Steel” in the main forum of the annual meeting.

China and Germany are both important manufacturing giants in the world, and have the extensive foundation for cooperations in the fields of building an ecological, wise and open type community of interests. With the theme of “Construction and implementation path of wise manufacturing system”, this annual meeting aims to build a platform for dialog and exchange between Chinese and German wise manufacturing enterprises, make in-depth discussions on the new paths for Sino-German cooperations in future to satisfy the most urgent transformation and upgrading demand of Made in China. The annual meeting consists of the main forum and 5 sub forums in parallel, with both cutting-edge trends and implementation schemes. In the roundtable exchange of the main forum, the guests from Germany and China bring intense and wonderful meeting of minds, while the sub forums focus on cutting-edge trends, solutions, best practices, Made in China 2025 and policy promotion, and capital investments in wise manufacturing, etc.

As the representative of Chinese manufacturing sector, Xu Lejiang delivered a speech in the main forum. He said, steel industry, as a typical manufacturing industry, is indispensable to carry out Made in China 2025 strategy, and is also the traditional industry most likely to realize transformation by promotion of wise manufacturing. China’s current economic development is confronted with the major strategic mission of promoting the transformation and upgrading of manufacturing industries including steel industry. In view of the developmental course of transnational enterprises, the fusion of manufacturing industry and service industry, and the development of wise manufacturing based on Internet technology is the inevitable course to enhance the competitiveness of manufacturing industry. Xu Lejiang analyzed and pointed out that, along with the downstream users’ improvement of automation and wisdom level and the requirements for improving the quality of final products, the requirements for the performance and quality of steel materials keep increasing; with the development of e-commerce, the increment in steel demand come more from the middle and small users, the traditional mode of serving the large customers mainly is difficult to sustain, therefore, individualization service is the premise of realizing the “wise manufacturing” of steel industry. Steel industry is one of the most automatic and longest manufacturing process industries in China, the space for optimization through wisdom and digitization is huge. Based on this, steel industry is the industry that is most suitable to carry out Industry 4.0 pilot work in China, and is also the key industry to practice Made in China 2025 strategy. The horizontal integration, longitudinal integration and end-to-end integration of Industry 4.0 will impose a subversive impact on the purchase & sales, production & manufacturing, R&D service businesses of steel industry. Digitization is the key to wise manufacturing of steel. To forge wisdom steel, the relationship between scale customization and individualization service, wise manufacturing and individualization service must be handled properly.

Xu Lejiang believed that, wisdom steel is an important grasp to promote the supply side structural reform of steel industry. To promote the supply side structural reform of steel industry with wisdom steel as the grasp can more effectively give play to the regulating measure of  marketization, which can resolve many persistent ailments in the industry currently, and moreover, avoid the phenomenon of bad money driving out good money easily arising from administerization. The upgrading of product structure shall be realized by building advantageous capacity with wisdom steel. Intelligent steel is that steel industry shall also arms itself with modern information technology, wise manufacturing technology and new energy technology, to build advantageous capacity and incorporate modern service sector into itself, to realize the synchronized upgrading of product structure and user’s demand structure. During the promotion of wisdom steel, the enterprises will naturally weed out the outdated capacity according to the matching of market demand and equipment technology, and realize structural optimization. Propel green manufacturing with wisdom steel, to improve the resources utilization efficiency of the industry. Comprehensive promotion of green manufacturing, accelerated construction of the industrial structure and production method of high technology content, low resources consumption and less environmental pollution, and the realization of green manufacturing method can effectively alleviate the resources and energy constraints and ecological environment pressure of the industry, and propel the development of green industry. To drive management innovation reversedly with wisdom steel, and improve the management level of the industry. Intelligent steel has the reversed forcing effect on the management innovation and business mode innovation of steel industry. The construction of a supply chain with complete functions and rapid response by steel industry with the help of wise manufacturing technology and wise management and by means of Internet tools, requires the steel enterprises to transform the the management mode of the enterprises, and highly integrate the automation, wisdom and Internet informatization to realize Agile Manufacturing and Delicacy Management. Reduce the manpower cost with wisdom steel and promote the all-round development of people. Intelligent steel is a profound industrial revolution, the blue ocean of innovation, and must be “human-oriented”. The final purpose of promoting wise manufacturing can be summarized as “serving people, helping people, substituting people, surpassing people, liberating people and relying on people”. The construction of wisdom steel can realize unmanned posts of conventional purchase, operation and sales business and cut down manpower cost, meanwhile, more people will be engaged in R&D and other innovative jobs, to promote the overall development of people.

Xu Lejiang introduced Baosteel’s practice and exploration in transforming to service manufacturing and building wisdom steel. As early as in 2009, Baosteel put forward the construction of 5 core capability, i.e. technology leadership, service in advance, digitized Baosteel, green industry chain, production and finance incorporation when formulating 2010-2015 6-year development planning, formally launched the journey to transforming towards service and building wisdom steel. In 2012, Baosteel put forward the target of “Three Transformation”, and took “from manufacturing to service” as the first transformation target of the company to make breakthrough. The detailed practices include, while resolutely weeding out the outdated capacity, speeding up the construction of Zhanjiang Steel’s wise “Dream Works”. Baosteel resolutely carries out and implements the country’s requirements for de-capacity of steel, plans to cut down 9.2 million tons of excessive capacity in 3 years, and makes the commitment of dismantling and never restarting the production again. Now some blast furnaces, converters and rolling lines in Shanghai, Xinjiang and Guangdong have been shut down and dismantled. Zhanjiang Steel’s No.2 blast furnace has been ignited for production, 2030 cold rolling line has started trial production, 1550 cold rolling line is under construction. Baosteel will take Zhanjiang Steel’s wise “Dream Works” as the prototype, to upgrade and revamp the equipment and lines under the Group that are still at the stage of Industry 2.0, gradually evolve towards Industry 3.0 and 4.0 standards, strive to build Baosteel into a paragon of Chinese wisdom steel mills. Constructing flagship type professional steel service platform to ensure that the wisdom steel flies on both wings. Intelligent steel consists of two wings, i.e. wise manufacturing and individualization service. While laying emphasis on revamping and application of wise manufacturing technology, Baosteel also attaches importance to the construction of a individualized service platform tallying with the wise manufacturing ——Ouyeel, to build the most dynamic steel service & sharing ecological circle, so far, Baosteel’s wisdom steel structure system of “One body and two wings” has taken its preliminary shape. Promoting EVI mode and shifting from selling steel to selling wisdom and service. Through early involvement in downstream users’ lead demand, Baosteel is shifting from merely selling products to laying equal stress on selling products and selling wisdom and service. By means of building in-depth cooperative relationships with all the domestic mainstream OEM, Baosteel has formed the EVI cooperation type and packaged solutions covering the total automobile development and manufacturing process from advanced process design, early (conceptual) and car body design, mould (tool) design and development to car model commercialization and batch production, etc., which caters to the demands of different users. Energetically developing IT industry to serve wise manufacturing with informatized service. Baosteel’s information technology associated with steel manufacturing has now developed into an emerging business, effectively supporting Baosteel to transform from manufacturing to “wise manufacturing”, and go out to serve the city and enterprises. After the growth of nearly 20 years, Baosteel’s information industry involves two sectors: industrial software and wise city. In recent years, it started to expand towards the emerging fields such as cloud computation and Internet of Things, etc. Baosteel has carried out cooperations with leading German enterprises in the field of wise equipment. Famous German equipment manufacturer Siemens has long-term stable cooperative relationships with Baosteel, and Baosteel Ltd.’s phase 2 and 3 projects and the projects after phase 3 have all imported and used Siemens technologies and equipment. In June this year, witnessed by Chinese Premier and German Chancellor, Baosteel and Siemens signed “Strategic agreement of wise manufacturing (Industry 4.0) between Baosteel and Siemens” officially in Beijing, and jointly promoted “Baosteel-Siemens Joint Exploration Projects of Industry 4.0”, and carried out pilot work in “1580 hot rolling wise workshop”, a pilot project for wise manufacturing by the Ministry of Industry and Information Technology of PRC, to jointly establish the Industry 4.0 standard of Chinese steel industry.

Source:Baosteel News Centre