With Industry 4.0 on the horizon, China is making moves to become the world’s top production hub.
To prepare for this high-tech industrial era, the nation is carrying out its Made in China 2025 plan, which involves digitizing all manufacturing by 2020. The plan is set to boost the country’s sluggish economy and reduce competition from emerging markets as the production becomes more automated in the coming years.
“China is going to change drastically in two ways: by moving to a more consumption market and moving to industry 4.0,” Lectra CEO Daniel Harari said at a Lectra conference in Bordeaux, France on Friday. “This will give China an advantage over other countries.”
As China pursues more intelligent manufacturing, near-sourcing and consumer activity are also on the rise. In its 2016 Annual Report, Lectra said although Western brands are still producing clothing in China, Chinese garment tycoons are relocating their facilities to other low-cost regions, like South-East Asia, and creating their own lines. Chinese shoppers are also buying more apparel items and demanding more personalized goods, while remaining loyal to domestic brands.
Although China’s evolving economy could bring new opportunities for Chinese and non-Chinese companies, it also has potential challenges as well.
“There is no more cost advantage to manufacture in China,” Harari said. “China has the same level of cost as the U.S. today. Because there is no second country, China’s companies are demanding factories in the countries around it.”
Western companies may also have a hard time tapping into the nation’s advanced production factories in the future. With the Made in China 2025 Plan, the nation aims to have local industries control as much as 80 percent of the domestic market in eight years. A report from the European Union Chamber of Commerce in China said due to the nation’s desire to own domestic-market share of 10 industries, including robotics and renewable energy, China may not need Western companies to supply apparel manufacturing machinery. This could potentially push Western apparel brands out of China and force them to relocate their supply chains elsewhere.
To aid apparel companies in adjusting to China’s new manufacturing initiatives, Lectra is offering its own technology solutions, including a new software as a service (SaaS) product.
Set to commercially launch in 2018, the new SaaS offer will help apparel companies fine tune integration between equipment, software and services. Using this new management tool, apparel companies could automate tasks manually, reinforce industrial integration with sub-contractors and increase collaboration between all team members. With these technology solutions, global apparel companies could efficiently digitize their supply chains, while keeping up with China’s factory of the future changes.
“Our concept is a unique combination of equipment, software, data and expertise,” Harari said. “Using the basic blocks, we are going to build different solutions for industries, including apparel, for different customers because you need to help them grow and move to industry 4.0.”