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The Internet is going to overturn the traditional machine tool industry

January 03, 2015

At EMO exhibition in September 2013, industrial 4.0 was officially promoted to further enhance its position in the industrial automation manufacturing system. Industrial automation technology at present are intelligent, network and integration direction, this will bring overturn change to enterprise’s internal management and external competition. The  core of revolution is manufacturing mode change, but manufacture mode has not been radically change now. What will be biggest influence for us maybe is the upcoming things. The Internet and its development way will overturn the traditional machine tool industry.

The most valuable thing of Internet is not the production of new products, but to rediscover the potential of the existing industry, and use the Internet ways to redevelop traditional industries. From this view to observe, the Internet influence the traditional industry has the following characteristics: first, break the situation of the information asymmetry, doing everything to let all the information transparent. Second, use the big data generated to maximize the use of resources. Third, the group's will of the Internet has a self-regulating system (the human group thought pattern is called swarm will). You can imagine the establishment of a group of human brain memory: in the beginning a search path between each individual memory neural node is not yet set up, when we need to use them, they can establish strong connection slowly, the connection of the memory node path is weak before the birth of the Internet, strong connection is rarely, but after Internet appeared , all  the path light up in a moment and all nodes can be connected in a flash memory.  This will help human to make the future decision with unprecedented support system and experience of the past, based on the memory model, human will rewrite each industry and human future. The future of the machine tool industry will present the following features:

1. Crossover

This is an era in which every industry is being integrated, crossover and interpenetrating. If you have a product or industry that you've been making a lot of money, and then you meet another operator and suddenly become a free value-added service, how do you compete? How do you survive?

So the competition for the future is no longer the competition of the product, but the competition for the integration of resources, the competition of the end consumer; Who can own the resources and end consumer - no matter the customer consumer what kind of products and services, you will be able to get profit and guarantee your interests, you can be in an impregnable position in the competition.

For us, combine the machine tools and services (not only the machine tool service, it can also extension to upstream and downstream of the industry), firmly grasp of our end users and let them be fans of Shenyang machine tool Co., Ltd. In that case we can be in an impregnable position.

2. Positioning

There are five options for business orientation:

The first option: To be Mayun or Ma Huateng, to build such a good platform, to build an online sales system;

The second option: To be a third party companies, such as logistics company, training & education institutions, technical service institutions or marketing agency, get profit through training and service for companies and consumers.

The third option is to be a manufacturer, focusing on research and development of production and provide the best products and services for consumers.

The fourth option: establishing direct selling companies, expanding franchisees or selling products, and establishing chain experience system;

The fifth option is to make links, hold consumer resources, and then exchange the resources with the enterprise.

Of course, each enterprise should choose according to its own conditions. For traditional manufacturers, the third option is the simplest and easiest to implement, but there is limited scope for future development. The fourth option, we are going to change to this direction; the fifth option, we have a foundation, but it is difficult to break the existing model of the entire machine tool industry. Of course, the best thing is do all these five options, become a whole-industrial chain company, and really have the biggest right to speak in the machine tool industry.

3, Patterns,

Traditional manufacture industry is closed production, the manufacturer decide what to produce. The role of manufacturer and consumers are split. But in the future, the Internet will collapse in this status, the customer will fully participate in the production processing and decide to make the products what they want. In other words, the boundaries between the consumers and manufacturers will not clear in the future, while the traditional economic theory will face collapsing. This is bound to be a new model of C2B. The MI phone is a typical product of C2B model. Kevin Kelly described Wikipedia in the book “technical elements”:  People in the bottom of society have unlimited power, once you add some top-down rules of the game, after the combination of these two factors will burst amazing power. So it was completely beyond the Britannica. The current manufacturing industry is similar to the Encyclopedia Britannica, take a variety of resources to do a very difficult thing, did not use the power of the Internet. The trend of manufacturing industry in the future will be: first, traditional manufacturing will be unsustainable, mass advertising and mass production will end. Second, will enter the new era of tribal, personalization, customization, everyone is a designer, everyone is a producer, everyone may make a decision and will influence the future of the tribe. That's the game of the Internet.

 This will lead to the fact that in the future each company may be smaller, not larger, and the customer group will be more refined, not much and disorder. In the past, the enterprise segment the customers is according to the product function, but now, maybe we have to start from values for customers, this is a revolutionary change, the change of symptom is just beginning. Companies like Coca-Cola, Li Ning can define many clients, if according to the theory of "small but beautiful", this kind of company will face a big challenge, they need to take different values of the customer, subdivided into different tribes.

Of course, the company is small not means the turnover is small, the scope of the client also can be very big, can form the scope economy. Just as a tribe can be distributed all over the world and there will be a lot of people. In the same way, these "small and beautiful" businesses may be small, but they can be widespread. In the future, large and beautiful scale advantages will be replaced by small and beautiful scope advantages.

 "Small and beautiful" enterprise, the final development direction is the business model of C2B, that is, from the customer to the enterprise, this is a new business model. This model means that companies have a customer base first and supply chain later, on this basis, the entire business system and structure of enterprise will change. The business model will become: tribal, presale, customization, meaning there is a group first, marketing is presale. Stock goods will be very little in the future, presale style can realized all products are customized for our customers. The future profit model of e-commerce will be like this: find customers, creating a tribe, then presale and customization, this is the standard model of E-commerce in the future.

For example, Apple Inc was a pioneer of tribal E-commerce, and Apple created a culture of “ifans". Although all Apple's products are stock, but Apple carry out hunger marketing, is another model of presale system. Apple also just customize products for ifans, that is why iPhone have few different model.

The pattern of the machine tool industry will also be gradually developed to C2B direction, first to find the specific user base and then develop and improve the product according to the user's requirements. This requires that we have a very good definition of the product in machine tool, and we can make products quickly based on the requirements of the users. At the same time, connect the user groups of the different regions, and establish the related database, statistical and analysis their information and integrate their requirements and user experiences, etc.
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