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    Digital Transformation Heart-to-Heart with Huawei

In recent years, Huawei has not only achieved robust and sustainable growth in the dedicated communications field, but also expanded to other fields such as consumer electronics, smart equipment, Industrial Internet of Things (IIoT), digitalization, and intelligent manufacturing, constructing a remarkable industrial ecosystem. Further, Huawei’s achievements have drawn worldwide attention.

Similar to Huawei, Siemens is a senior player among the world’s top manufacturing enterprises, a global-leader in electrification, automation, and digitalization technologies and solutions, just like Huawei. And, the dialogue between Huawei and Siemens has never stopped; however, it is really difficult to promote cooperation between large multinational enterprises. Every effort needs to be made together, including top-level design and planning at the strategic management level, communication and collaboration between enterprises’ multi-level functional departments, and implementation of best practices at the frontline execution level.

For example, in terms of digital transformation, intelligent manufacturing, and Industry 4.0, we have conducted multiple rounds of discussion with multi-level leaders from Huawei’s different business groups and functional departments. Our topics have covered R&D, production planning, production execution management, production engineering and automation, value-added services, and other manufacturing topics. We have collaborated on industrial software and industrial automation hardware products. However, considering the scale of the two enterprises, such cooperation projects are a mere drop in the bucket. The value created by our cooperation should not only include mutual benefits, but also the acceleration of advanced manufacturing development, and could even kick off new era in global manufacturing industry.

Recently, a popular speech from Huawei titled Planning Huawei’s Big Production System Architecture from the Perspective of System Engineering to Build World’s Top Advanced Production Systems has caught my eyes. After an in-depth study, I found that Huawei had already become one of those global players with the deep insights into the manufacturing industry, which gave me confidence to promote the comprehensive cooperation between Huawei and Siemens in the digitalization and intelligent manufacturing fields.

Systematic Overall Planning

A question I often hear from customers is: “From the ERP, PLM, and MES to various integrated software platforms, we have bought almost all the software systems in the intelligent manufacturing system architecture. Why haven’t we become a digital enterprise (or realized intelligent manufacturing) like we expected?”

In fact, digital transformation, intelligent manufacturing, and Industry 4.0 vision are not only a technical issue. They are complex engineering solutions that required top-down promotion. We need to conduct overall design and planning from the strategic management level of the enterprise and take every aspect into consideration, including current development status, future strategic objectives, management mode, the business model, the operation mode, characteristics of industry, the R&D system, the production mode, characteristics of process, as well as supply chain and logistics.

The result of overall design and planning is not simple paper work, but a systematic planning solution with clear scope of work, executable tasks, and timeline. Such a solution can provide effective guidance for the implementation of digital transformation and intelligent manufacturing.

This is consistent with the statement given by Huawei’s executive: “To achieve Industry 4.0 and intelligent manufacturing, we should plan and design the supply mode, manufacturing mode, and production mode for future-oriented business from the perspective of system engineering. We must better-define the architecture of the large production system because ill-defined architecture will lead us in the wrong direction.”

Similarly, Siemens, with in-depth insights into the transformation of manufacturing enterprises, established a professional digital enterprise competence and solution department in 2015 to provide digital enterprise consulting and planning services for customers. In contrast to management consulting companies who provide strategic consulting services for enterprises, Siemens provides customers with digital enterprise consulting and planning services based on its own technologies, resources, and experience. Through continuous technical verification, Siemens could ensure the implementation of digital transformation and intelligent manufacturing projects.

Siemens digital enterprise team has conducted digitalization consulting and planning, overall solution design, project implementation, and engineering supervision throughout the whole process for multiple leading enterprises in various industries, such as automotives, electronics, mechanical processing, etc.

Siemens believes that promoting enterprise digital transformation and intelligent manufacturing is just like cooking: Software and hardware are the main food materials; the overall planning and solutions are the cooking methods and recipes; customized solution is the seasoning; and system integration and engineering implementation are the act of cooking. Just as any good meal requires a well thought out recipe, system integration and implementation need to be steadily promoted based on overall systematic planning.

IT and OT Integration

System integration and interconnection are necessary conditions for successful digital transformation, as well as an important basis for achieving intelligent manufacturing and future Industry 4.0.

The ‘systems’ we usually talk about include not only Information Technology (IT) systems such as the Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM) systems, but also middle-layer Manufacturing Execution Systems (MES), a complete industrial automation system at the Operational Technology (OT) layer, and a full range of production equipment and terminal execution units at the execution layer. Broadly speaking, ‘system integration’ also includes data collection on the existing production equipment and the entire production process, and closed-loop control and continuous optimization based on data analysis.

Huawei already has in-depth understanding of both IT systems and the integration of different systems, however, OT layer (including the control layer and execution layer) also plays an important role in the large production system and even functions as its foundation.

The application of digital-twin technology in production and system operations is a typical example of IT and OT integration. Digital-twin technology focuses on implementing continuous iterative optimization of products, production, and machine operation through bi-directional information flow and continuous feedback between the physical world and the virtual world.

In this process, ‘continuous feedback and optimization’ is driven by data, the ‘world’s fifth source of energy.’ Production data can not automatically generated in the IT system. Instead, it is produced by the equipment that is continuously operating and running on the OT layer at the factory site. In order to attain the complete and efficient collection of real-time data from the production equipment, the automation systems of the production equipment require standard design, comprehensive industrial control systems, and automation integration software platforms. In other words, digitalization and intellectualization must be based on a standardized automation system. This is even more important for large enterprises. Both IT and OT are indispensable, and only through their effective integration can we promote the digital transformation of manufacturing enterprises, realize intelligent manufacturing, and move towards Industry 4.0.

Siemens’ two global digital factories in Amberg, Germany and Chengdu, China rely on highly standardized, fully integrated automation systems. Those automation systems could efficiently collect data to provide power for the whole system, which provides strong support for high-quality delivery, flexible hybrid manufacturing, and continuous and efficient production and operations.

Besides putting the preceding theories into practice at their factories in Amberg and Chengdu, Siemens has successfully assisted customers from different industries to achieve digital transformation. One of our customers, who is a world-leading electronics manufacturer in China, it was aware of the significance of automation standardization and systems synchronization in the early stage of production, and laid a more solid foundation for digital transformation and save more time than its competitors. Nowadays, the flexible intelligent manufacturing production line of the enterprise has improved production efficiency by more than 50 percent, reduced the operations cost by more than 20 percent, and shortened the product launch time by more than 30 percent. Each of these results has exceeded the intelligent manufacturing acceptance standards of China’s Ministry of Industry and Information Technology (MIIT).

Non-technical Adaptation

As mentioned above, we cannot rely on only technical integration to meet the complex system needs of digital transformation, let alone intelligent manufacturing or Industry 4.0 vision.

According to our experience, it is easy to identify and solve technology integration problems and gradually solve them through investment and renovation. By contrast, it is non-technical issues that hinder enterprises’ digital transformation. Non-technical issues like the mindset and strategic vision of executives, management hierarchy and completeness, organizational structures, etc.

In terms of Huawei’s quick strategic initiatives for global industries, Huawei’s executives have an up-to-date mindset and a comprehensive and forward-looking strategic vision. Based on the companies’ daily business communication, I believe that the management level of each Huawei business department is miles above the average level of the industry. The production capabilities of Huawei’s manufacturing bases and the quality of Huawei’s products for sale in the market indicate that Huawei has a deep understanding of the production processes within its industry.

Objectively speaking, most enterprises in the manufacturing industry can barely possess such comprehensive capabilities. However, since Huawei aspires to build a world-class advanced production system and lead the future of digitalization, intelligent manufacturing, and Industry 4.0, I would like to put forward the following suggestions for Huawei: Set up a horizontal department with high-level management with decision-making power to promote Huawei’s overall digital transformation and intelligent manufacturing. Internally, this department is responsible for coordinating and communicating with major business departments, functional departments, and subordinate units at all levels in a unified manner, and effectively integrating internal resources. Externally, this department functions as a unified interface to interconnect with external partners and ensure high efficiency of communication and collaboration.

This suggestion is not just idle theory; it is based on our experience in serving customers. At present, among all the manufacturing enterprises that have successfully implemented digital transformation or are steadily promoting digital transformation, more than 90 percent have a dedicated intelligent manufacturing department with the same or similar functions as described above. Adapting to this market change, Siemens created a horizontal digital business department that effectively serves customers with a unified interface.

A Few More Words

What is past is prologue.

Finally, I hope that Huawei can improve with each step of the digitalization journey, maintain its advantageous position, and continue its leading position worldwide. Meanwhile, we hope Siemens and Huawei will have the opportunity to continue exploring digitalization, intelligent manufacturing, and Industry 4.0 in harmony with the digital symphony!