Industrial Internet - 'making

most out of the data' business

opportunity verification in China

Client: Finpro

Quotation # 150128

INNOVATION BUSINESS ACCELERATOR

ERIC CHENG, ERICC@INNOVBA.COM

APRIL 8, 2015

Table Of Contents

► Executive Summary ……………………………………………………… ... 3

► Market Overview ………………………………………………………..… . 6

► Findings …………………………………………………………………… ... 13

► Conclusion & Opportunities ……………………………………………. 26

► Appendix: Interview Results …………………………………………….. 30

► Case Studies …………………………………………………………… . . 35

2

Executive Summary

3

Executive Summary

Chinese manufacturers are facing local and global economic slowdown, as well as continuous rising labor and property

costs. Even with some multi-national companies pulled out their manufacturing from the country, in a move to be closer to

customers or to other lower cost countries, Chinese manufacturers remain over-capacities and face stiff competitions locally

and internationally.

Chinese government is well aware of the dire situation and understand industries must informatize, automate and innovate in

order to remain competitive locally and internationally. The government launched Made in China 2025 initiative among much

fanfares, with top government officials actively promoting Industrial Internet (Industry 4.0) and Internet Plus via public media.

There will be consolidations over the next several years or maybe decade across many industries in China; and most likely,

those informatized, automated and innovative manufacturers will have better chances to survive and stay competitive, while

those manufacturers who do not, may disappear.

Industrial Internet adoption is just commencing in China, with heavy governmental encouragements and industrial wide

pressure. Interested participants should bring their expertise, identify their position, align their partnership, build their team and

prepare for this forthcoming industrial revolution. For foreign companies, it takes time to localize and climatize, to search for

right partner and get acquaintance, and to understand local needs and prepare offerings. There is no better time to action

than right now.

Entering China market from faraway pretty well guarantee failure. Foreign companies should be well funded, committed, and

represented in China with local staffs and/or partners – local supports are absolutely necessary.

4

Types Of Chinese Manufacturers &

Their Industrial Internet Status

Types Manufacturers Status in Industrial Internet Adoption Comments

MNO / JV

Multi-National Organizations / Foreign Joint Ventures

• Many MNO factories are more advanced, there are already some levels of adoptions, mostly in the phase of Operational Efficiency.

• They are gearing up to compete internationally.

• Most suitable customers for foreign companies.

• Users may have some English language skills.

LC / WFOE

Local Companies /

Foreign Wholly Owned Enterprises

• Private companies need to face the market challenges of survival and competitions.

• Some are contented with China market locally, and some needs to go international.

• Many already have or in the process of implementing automation.

• Have urgent needs to adopt Industrial Internet, if funding permits.

• Will consider local and foreign partners, but users

may or may not have English language skills.

SOE State Owned Enterprises

• Government owned, and typically sell to other local SOE.

• Most aren’t equipped to compete, but are so what

governmentally protected without much real market competitions.

• Many don’t have nor in the process of implementing automation.

• SOE typically prefers or obligates to local partners.

• May be challenging for foreign companies.

5

Market Overview

6

Industrial Internet Data Analytic &

Visualization Market

The Industrial Internet is still at an early stage, similar to where the Internet was in the late 1990s. Survey results by Gartner shown

the vast majority (88%) of respondents say that they still do not fully understand its underlying business models and long-term

implications to their industries.

In the 2nd annual Internet of Things World Forum (IoTWF), there were a few quantitative and qualitative numbers on IoT growth:

IoT connections have soared from about 10.7 billion things to 13.7 billion things in the past year alone. We think by 2017

the industrial connections will outpace consumer connections, and total connections reach 50 billion by 2020 (Source:

Cisco Consulting Services)

IoT Revenue has grown at a 19% compounded annual growth rate (CAGR) each of the past three years to US$2.3 trillion

now, which is 3-4x faster than IT overall and faster than any market before (Source: IDC)

Sensors shipped in the past year rocketed about 150% to about 23.6 billion units (Source: IMS)

Our analysis shows that the global IoT value across both the public and private sectors can reach US$8 trillion (Source:

Cisco Consulting Services) from dramatic boosts in revenue, customer and citizen experiences, asset utilization, employee productivity as well as supply chain and logistics operations.

When leveraging the Internet of Everything – the connections of things, data, processes and people – the global

opportunity rockets to US$19 trillion (Source: Cisco Consulting Services).

7

Value Of Industrial Internet

Source: Introduction

to the Industrial

Internet of Things,

Accenture 2015

8

Only Small % Of Companies are

Ready

Source: Winning with the

Industrial Internet of Things:

How to accelerate the

journey to productivity and

growth, Accenture 2015

9

China Is Not Among The Leaders in

Enabling Factors

Source: Winning with the

Industrial Internet of Things:

How to accelerate the

journey to productivity and

growth, Accenture 2015

10

China-Germany Cooperation In

Industrial Internet (Industry 4.0)

The "Industry 4.0" concept has appeared in a China-Germany cooperation guideline

released on the 3rd governmental consultation between China and Germany.

This concept was first put forward at the Hannover Messe in Germany in 2013. Germany

has adopted Industry 4.0 as its national strategy, while China has proposed the "Made in

China 2025" strategy to promote integration of information and industrialization.

With "Made in China 2025", China is adopting a more pragmatic approach in the

advanced global industrial chain and focuses on medium to long-term high-end designs.

Taking opportunity of Chinese Premier Li Keqiang's state visit to Germany, China and

Germany have made a breakthrough on the "Industry 4.0" proposition and considered a

"win-win" potential for Sino-German industrial development and innovation.

Two elements of the cooperation should be noted.

Firstly, both countries deemed that it companies should have the freedom to promote progress in cooperation, while it is the role of the two governments to provide policy support for this progress.

Secondly, the worldwide success of the strategy relies on international rules and standards. The two countries will cooperate closely on issues of standards and "Industry 4.0" will be incorporated into the Sino-German standardization cooperation committee.

11

Internet Plus Set To Push China's

Economy To Higher Level: Premier

BEIJING, March 15 (Xinhua) -- The favorable wind of the "Internet Plus" is set to push the

Chinese economy to a higher level, Premier Li Keqiang said Sunday, commenting on fast

development of the country's e-commerce.

The "Internet Plus" action plan was unveiled in the government work report that Li

delivered to national lawmakers on March 5.

The plan aims to integrate mobile Internet, cloud computing, big data and the Internet

of Things with modern manufacturing, to encourage the healthy development of e-

commerce, industrial networks, and Internet banking, and to help Internet companies

increase international presence.

Source: http://news.xinhuanet.com/english/2015-03/15/c_134067831.htm

12

The Chinese government has designated the Industrial Internet of Things an “emerging strategic industry,” and

plans to invest some $800 million in the Industrial Internet by 2015.

China has also recently proposed its “Made in China 2025” strategy to promote domestic integration of digital

technologies and industrialization.

Findings

13

Interviews Conducted

Total 8 interviews were conducted:

6 manufacturers in different industries and different company structures:

Eoslift, Chinese machinery manufacturer, listed on NEEQ

[Anonymous], Multi-national car parts manufacturer, listed internationally

Putian, Chinese-Italian consumer electronic manufacturer, JV

Handan, Chinese iron & steel manufacturer, state owned enterprise

Luye, Chinese pharma company, listed in HKSE

Intel, Multi-national semi-conductor company, listed in NASDAQ

1 big data service provider

Neusoft, Chinese software company and big data service provider

1 industry publication

China Information Times, IOT Forum

14

Individual Interview Summary: Eoslift &

An Anonymous Carparts Company

Eoslift

Eoslift is a local SME specializes in designing, manufacturing and selling indoor low-carbon green warehouse equipment. It’s

listed in Beijing NEEQ with annual revenue less than RMB100M.

Production processes are modularized and automated, with interoperable modular devices. Data are collected, but not

analyzed; hence, does not have respective IIoT staffs in-house. Company does not have in-house knowledge to collect

appropriate data and make use of them; they are opened to work with local and international consultants. Company

understands the needs of Industrial Internet adoption, and hope to improve operational efficiency, competitiveness and

preventive maintenance. There is no immediate timetable for Industrial Internet.

Anonymous

Interviewee is the Chinese factory of a multi-national car parts manufacturer. It listed internationally with annual revenue

well over RMB10B.

Production processes are automated, with interoperable modular devices. Data are collected, analyzed, and used to

adjust operation, and has in-house IIoT staffs. Company understands the needs of Industrial Internet adoption, and is using

the system well to improve operational efficiency, competitiveness and preventive maintenance. Currently, system is being

developed in-house, and integrated across all departments. Company is opened to work with local and international

consultants if needed, and using SAP for their ERP.

15

Individual Interview Summary: Putian &

Handan

Putian

Putian is a Chinese-Italian joint-venture consumer electronic manufacturer, with annual revenue less than RMB1B.

Production processes are modularized, but not automated. Machine data are not collected, but production data are

analyzed to adjust operation. Company feels they have in-house knowledge to collect appropriate data and make use of

them. They are using outside consultants, Kindee, for production and finance, and preferred to work with local consultants.

Company understands the needs of Industrial Internet adoption, and hope to improve operational efficiency (i.e. supplier

and product quality), competitiveness and preventive maintenance. There is no immediate timetable for Industrial Internet.

Handan

Handan is a state-owned Chinese iron & steel manufacturer, with annual revenue over RMB1B.

Production processes are not automated nor modularized. No data are collected for analysis and adjust operation

adjustment. Company understands the needs of Industrial Internet adoption, and hope to improve operational efficiency,

competitiveness and preventive maintenance. There is no immediate timetable for Industrial Internet, but when needed,

company is opened to work with local and international consultants.

16

Individual Interview Summary: Luye &

Intel

Luye

Luye is a local pharmaceutical manufacturer listed in the HKSE with annual revenue over RMB1B.

Production processes are not automated nor modularized. No data are collected for analysis and adjust operation

adjustment. Company understands the needs of Industrial Internet adoption, and hope to improve operational efficiency,

competitiveness and preventive maintenance. There is no immediate timetable for Industrial Internet, but when needed,

company is opened to work with local and international consultants. Currently, they have experiences working with

industrial specialist consultants.

Intel

Interviewee is the Chengdu factory of a multi-national semi-conductor manufacturer. It listed on NASDAQ with annual

revenue well over RMB10B.

Production processes are automated, with interoperable modular devices. Data are collected, analyzed, and used to

adjust operation, and has in-house IIoT staffs. Company understands the needs of Industrial Internet adoption, and is using

the system well to improve operational efficiency, competitiveness and preventive maintenance. Currently, system is being

developed in-house, and integrated production and R&D only. Company is currently co-operating with Tsinghua University

on big data from new processes, and looking forward to co-operate with other leading research institutes.

17

Individual Interview Summary: Neusoft,

A Key Big Data Service Provider

Neusoft, Industry Solution Team

We’ve interviewed their Senior Manager of Industry solution Team. He said:

Many leading manufacturers are using Distributed Control System (DCS) and Manufacturing Execution Systems (MES)

in the factories, collecting production data in an effect to improve production management and process

improvement.

Current Industrial Internet implementations focused mainly in Operational Efficiency, and haven’t extended to include

design, sales, finance and CRM. In most cases, data are collected in silo departmentally without company wide

integration.

Neusoft’s solution for wind power operators focuses in wind turbine operation and environmental factors data collections for

real time analysis, so that, operators, from a distance, may immediately manage its operation, arrange necessary

maintenance and improve overall operational efficiency. Further integration and improvement are planned for the future.

Neusoft, like all other local service providers, is interested in various industry specific Industrial Internet solutions and success

cases applications.

18

Individual Interview Summary: China

Information Times, IOT Forum

China Information Times, IOT Forum

China Information Times is a magazine operated by China Information Industry Association, and supervised by National

Development and Reform Commission.

We’ve interviewed their Deputy Chief Editor. He said:

Chinese government launched “Made in China 2025” initiative, which raised Industry 4.0 to national strategic level,

and heavily promote Industrial Internet and Big Data applications and developments. Hopefully, Industrial Internet will

improve productivities, competitiveness and innovations to various Chinese industries.

Some challenges in the current development of Industrial Internet are:

1. Establish data sharing and security policy,

2. Build more reliable broadband infrastructure with more capacity and better quality of service,

3. Innovative applications and industrial big data development and analysis techniques, and

4. Industrial internet talents development.

19

China In Early Phases Of The Evolution

Organizations in China are behind those

in developed countries in Industrial

Internet adoption, and are entering

phase 1 and exploring phase 2, which

should accelerate in the next 2 years,

focusing mainly on:

Process automation, and

Industrial informatization.

Data are now being collected mainly

from the automation machineries, and

organizations are still learning to:

Identify what data to collect, and

How to use the results more

effectively.

20

Customer View On ‘Making Most Out

Of Data’

All companies understand the importance of collecting and making use of their data, and have internal

urgency to venture into Industrial Internet.

Other than some large size multi-nationals, local companies seemed to lack own competence in making most

out their data, nor the knowledge in what and how to use such data to better develop their business and

capability etc.

Many leading local manufacturers are automating the production processes, collecting volume of production

data and doing analysis in an effort to improve their operational efficiency; however, majority of the locals,

including many Stated Owned Enterprises (SOEs) especially in those traditional labor intensive industries, are still

exploring the idea, lagging behind their local and international competitors.

Almost all companies are mainly focused in the immediate benefits from better operational efficiency –

process improvement, costs and energy reductions, and quality and yield improvement, etc.

Chinese companies traditionally prefer to own internal expertise and if possible internal technology solutions,

therefore, it is expected most local companies will eventually build an in-house Industrial Internet team. Before

that, they will definitely eager to learn from international experienced experts, reference success cases, and

utilize proven technology solutions.

21

Potential Customer Needs

There are 2 main drivers for manufacturers to adopt industrial internet and big data in China:

Production efficiency and cost reduction – automation and big data application in production processes

enable manufacturers to better improve equipment efficiency, reduce equipment failures, improve

product quality, and reduce production costs.

Government drives to promote industries informatization, and energy saving and emission control –

encourages manufacturers to invest in production automation systems, as well as energy and emission

data collection systems.

Different industries have different requirements and applications with big data, and many big data are

unstructured. Customizations are often needed for data collections, analysis, visualization and integration that

require extensive industry knowledge and experience.

Industry specific applications and tools are not readily available in the market nowadays, therefore, there are

great opportunities available for industry specific expertise in:

Data collection, management and application models

Data analytic tools

Successful case applications

22

Who Are Most Potential Customers?

Some characteristics of the potential manufacturers to adopt Industrial Internet:

Multi-national Organizations (MNO) – Wholly Foreign Owned Enterprises (WFOE)

Foreign-Chinese Joint Ventures (JV)

Manufacturers with automated productions and are collecting good amount of data

Manufacturers who are facing international competitions (i.e. international brand such as Lenovo, Haier, etc.

and industries such automobile, chemicals, etc.)

Larger size manufacturers and have funding

Public services providers (i.e. power, water, infra-structure, etc.)

23

China Top 50 Big Data Analytics

Companies – Potential Partners /

Competitors

24

Innovation

Capacity

(35%)

Service

Capacity

(20%)

Solution

(30%)

Market

Influence

(15%)

Category Score (10)

Rank Company

Total Score

(10)

1 IBM 9.1 10 8.5 8.5 9

2 Oracle 8.7 9 8 8.5 9

3 Google 8.6 9 8 8.5 8.5

4 Amazon 8.5 9 8 8.5 8

5 HP 8.3 8.5 8 8.5 8

6 SAP 8.2 9 8 7.5 8

7 Intel 8.1 9 8 7.5 7.5

8 Teradata 8.0 8.5 8 7.5 8

9 Microsoft 7.9 8 7.5 8 8

10 阿里Alibaba 7.7 8.5 7 7 8

11 EMC 7.4 8 7 7.5 6

12 百度Baidu 7.0 8 5 7.5 6

13 Cloudera 7.4 7.5 8 7.5 6

14 雅虎Yahoo 7.0 8 6.5 6 7

15 Splunk 7.1 8.5 7.5 6 5.5

16 腾讯Tencent 7.0 7 6 7 8

17 Dell 6.6 7 6.5 7 5

18 Opera Solutions 6.3 7 5.5 6.5 5

19 Mu Sigma 6.0 6.5 5 6 6

20 Fusion-io 6.1 7 5.5 5.5 6

Innovation

Capacity

(35%)

Service

Capacity

(20%)

Solution

(30%)

Market

Influence

(15%)

Category Score (10)

Rank Company

Total Score

(10)

Innovation

Capacity

(35%)

Service

Capacity

(20%)

Solution

(30%)

Market

Influence

(15%)

Category Score (10)

Rank Company

Total Score

(10)

39 集奥聚合Beijing Geo 5.0 5 5 5 5

40 国双科技Gridsum

Technologies 4.5 4.5 5 4.5 4

41 百分点Beifendian 4.5 5 5 4 3.5

42 荣科BringSpring 4.3 3.5 6 4.5 3.5

43 博雅立方CubeAd 5.0 5 5.5 5 4

44 亿赞普 IZP

Technologies 4.3 5 3 4.5 4

45 InsideSales 4.4 4.5 4.5 4.5 4

46 众志和达Soul 4.3 4 6 3.5 4

47 颖源科技YYSoft 5.0 5 5.5 4.5 5

48 星环科技Traswarp 4.2 5 4 3.5 4

49 拓尔思TRS 4.2 4 4 5 3

50 国云数据Guoyun

Data Tech 4.1 4.5 3 4 5

Source in Chinese: http://www.weste.net/2014/8-8/98295.html

21 1010data 5.8 6 6 5 6.5

22 SAS 5.8 6.5 5 5.5 6

23 Twitter 5.7 5 6 6 6

24 LinkedIn 5.6 6 4 6.5 5

25 华为Huawei 5.9 6 5.5 6 6

26 淘宝Taobao 5.3 6 4 6.5 3

27 用友Yonyou 5.3 6 4 5.5 5

28 曙光Sugon 5.2 6 5 5 4

29 东软Neusoft 5.2 6 5.5 4.5 4

30 MapR 5.2 6 5.5 4.5 4

31 金蝶Kindee 5.1 6 5 4 5.5

32 Alpine 5.1 6 5 4.5 4.5

33 高德AutoNavi 5.1 5.5 6.5 4 4.5

34 Fujitsu 5.1 6 5.5 4 4.5

35 华院数云Shuyun 5.1 6 5.5 4 4.5

36 博康智能Bocom 5.0 5.5 5.5 4.5 4

37 九次方金融数据

Jusfoun Big Data 5.3 6 5 4.5 5.5

38 永洪科技Yonghong

Technologies 4.9 5 6 4.5 4

Some Local Industrial Internet Solution

Providers

Industrial Internet Solution Providers

Beijing Teamsun Technology Co., Ltd. www.teamsun.com.cn

Inspur Co., Ltd. www.inspur.com

Shanghai Digital Intelligence System Technology Co. Ltd.

General Data Technology Co., Ltd. www.gbase.cn

Harmony Wisdom Technologies Co., Ltd.

Beijing Baoxin Technology Co. www.baoxinkj.com

Neusoft Corporation www.neusoft.com

25

Conclusion &

Opportunities

26

Drivers For Professional Services

Engagements

Services will be the largest segment of Big Data Analytic and Visualization market, in terms of consulting and

integration & deployment services.

From a business perspective, enterprises are looking to professional services firms for:

Guidance in identifying the most valuable data sources and Big Data Analytics use cases;

Understanding the privacy/security/compliance implications of various uses of Big Data analytics;

Advice on aligning internal stakeholders including the C-suite, LOB executives and IT.

From a technology perspective, enterprises are looking to professional services firms to:

Advise on technology investment decisions, including hardware, data management software (e.g.

Hadoop distributions) and business intelligence/data visualization applications;

Aid in architecting, deploying and administering Big Data infrastructure and analytics technology;

Help integrate Big Data technology with existing infrastructure, systems and business processes.

Professional services are business of relationship. Current trusted partners will be the primary candidates to be

engaged as service providers.

27

China Industrial Internet Market

Readiness & Immediate Needs

China is behind developed countries in Industrial Internet adoption.

Industry is just entering phase 1 “Operational Efficiency” focusing mainly on Process Automation and Industrial

Informatization for some of the larger and more advanced organizations.

Some pioneering organizations are starting to explore phase 2 “New Products & Services”, which should

accelerate in the next 2 years.

Full integration across all internal departments and entire business value chain is being contemplated, and will

be several years down the road.

Data are now being collected mainly from the automation machineries, and organizations are still learning to:

Identify what data to collect, and

How to use the results more effectively.

In current early adoption phases, organizations are focusing on “Operational Efficiency” and there are

opportunities to bring in:

Industrial specific method of operations which are working in advanced countries, and

Industry expert to localize and standardize solutions for Chinese industries.

28

How To Access The Market

Industrial Internet advisory and implementation requires trusted consultants, typically resulted in years of close

co-operations with potential customers.

Foreign companies lack local success cases and trusted relationships. It is advisable for foreign companies to

bring in much needed international expertise and success cases, and form win-win partnership with local

professional providers who have solid relationships with potential customers.

Potential professional service providers are:

Reputable international consulting firms – advisory works

Industrial specific technology and solution providers – technologies and workable solutions

Local industrial internet and industry specific research centers – localized applications and internal

developments

Production automation and smart production system integrators – automation system deployment and

data collections

ERP service providers – integrating big data into other departments

29

Appendix: Interview

Results

30

Interview Results (1)

31

The Company current status:

Production automation Y Y N N N Y

Using automation data Y Y Y N N N Y

Modularize process Y N Y N N N Y

Collect and analyze operation data N Y Y N Y Y

Data solution N SAP Kingdee N N Internal

Consulting service N N Pdn, Fin Consider Ind expert Tsinghua Univ

Internal driving force Y Y Y Y Y Y

Operation improvement IIoT stage Y Y Not yet Not yet Not yet Y

Company wide integration N Y N N N Pdn, R&D

Industry Y

Company listing N

Annual Revenue in RMB millions Some0% 50% 100%

Eoslift

Machinery

NEEQ

< 100

Anonymous

Car parts

CN subsid

>10,000

Putian

Consumer

IT/CN JV

100-1,000

Intel

Semi-conductor

NASDAQ

>10,000

Handan

Steel

SOE

>10,000

Luye

Pharma

HKSE

1,000-10,000

Interview Results (2)

32

The company perception of “Value” in IIoT:

Operational efficiency

Preventive maintenance? ( Y / N ) Y Y Y Y Y Y

Process automation? ( Y / N ) Y Y Y Y Y Y

Operation optimization? ( Y / N ) Y Y Y Y Y Y

Global asset visibility? ( Y / N ) N Y N N N N

Others? ( Y / N ) N N N N N N

Incremental revenues

Operations and predictive maintenance? ( Y / N ) Y Y Y Y Y Y

Commercial optimization? ( Y / N ) N Y Y Y Y Y

New customer experience and M2M applications? ( Y / N ) N Y Y N Y Y

Others? ( Y / N ) N N N N N N

Industry Y

Company listing N

Annual Revenue in RMB millions Some0% 50% 100%

Eoslift

Machinery

NEEQ

< 100

Anonymous

Car parts

CN subsid

>10,000

Putian

Consumer

IT/CN JV

100-1,000

Intel

Semi-conductor

NASDAQ

>10,000

Handan

Steel

SOE

>10,000

Luye

Pharma

HKSE

1,000-10,000

Interview Results (3)

Unconventional revenues

Product as a platform? ( Y / N ) N N N N N N

NextGen products/services? ( Y / N ) Idea phase Y N N Y Y

Most valuable information provider? ( Y / N ) N Y N N N N

New business and operating models? ( Y / N ) Idea phase Y N N Y N

Others? ( Y / N ) N N N N N N

In-house IIoT staffs

Data Scientists? ( Y / N ) N Y Y Y

Data Managers? ( Y / N ) N Y Y Y

Statisticians? ( Y / N ) N Y Y Y

Data Analysts? ( Y / N ) N Y Y Y

33

Industry Y

Company listing N

Annual Revenue in RMB millions Some0% 50% 100%

Eoslift

Machinery

NEEQ

< 100

Anonymous

Car parts

CN subsid

>10,000

Putian

Consumer

IT/CN JV

100-1,000

Intel

Semi-conductor

NASDAQ

>10,000

Handan

Steel

SOE

>10,000

Luye

Pharma

HKSE

1,000-10,000

Interview Results (4)

Making Most Out Of Data “DATA”

Are DATA being analyzed? ( Y / N ) internal or outside tools? N Internal Outside N N Internal

Know what to do with DATA? ( Y / N ) N Y Y N N Y

Know how to use DATA to help to develop their business? ( Y / N ) N Y Y N N Y

Can DATA be easily visualized? ( Y / N ) internal or outside tools? N Internal Outside N N Y

If buy services, from Local or Foreign company? Both Both Local Both Both Both

What are short term perspectives, operation improvement? Idea phase N Y Y Y Y

What are long term perspectives Idea phase N Y N Improve ind Integration

Any urgency to make use of DATA? ( Y / N ) Y Y Y Y Y Y

Made concrete progress with IIoT? ( Y / N ) N Y N N N Y

Have a comprehensive strategy for IIoT? ( Y / N ) N N N N N Y

34

Industry Y

Company listing N

Annual Revenue in RMB millions Some0% 50% 100%

Eoslift

Machinery

NEEQ

< 100

Anonymous

Car parts

CN subsid

>10,000

Putian

Consumer

IT/CN JV

100-1,000

Intel

Semi-conductor

NASDAQ

>10,000

Handan

Steel

SOE

>10,000

Luye

Pharma

HKSE

1,000-10,000

Case Studies

35

Case Studies: Industrial Supply Chain

JD.com utilizes big data to analyze and forecast regional product demand, enhance the efficiency of

distribution and warehousing, and ensure customer’s next day delivery experience. Complete supply chain big

data are collected using RFID and other electronic identification technologies, internet of things (IoT), and

mobile Internet. Using the analysis results of these data enabled JD to improve warehousing, distribution and

sales efficiency and reduce costs.

Haier has a fairly efficient supply chain system linking up various components of its market chain. The system is

centering around customer order information, integrating global supply chain resources and global user

resources, and driving product flows and capital utilizations. All aspects of its supply chain, customer data,

internal data, and supplier data are aggregated into the supply chain system. Utilizing the collected supply

chain big data and the analysis, Haier is able to improve and optimize its supply chain continuously and to

ensure prompt response to customers’ needs. Please see “Case Studies: Haier’s Intelligent Manufacturing Enters

Industry 4.0”.

Many manufacturing companies rely on market forecasts and various other variables, such as sales data,

market information, exhibitions, news, competitor data and even weather reports to support their product

sales. Using data from sales, product sensor and supplier database, manufacturers can accurately forecast

global demand in different regions. Manufacturers can also save costs, by tracking inventory and component

prices, and buy when prices fall. If further using data generated by product sensors, manufacturers can identify

and predict what and where replacement parts are needed, they can greatly reduce inventory, and optimize

the supply chain.

36

Case Studies: Haier’s Intelligent

Manufacturing Enters Industry 4.0

To combat rising production costs and changes in consumer demand, to get out of

the low-cost Chinese manufacturing and price war in electrical appliance industry,

and to establish brand reputation and improve user experience, Haier had adopted

Internet 4.0 and upgraded their manufacturing plants to "smart factory".

In 2015, Haier is operating a smart refrigerator factory in Shenyang and air conditioner

factory in Zhengzhou, and is upgrading other factories. Users can order home

appliances in Haier mall, customize according to their personal preferences,

including color, style, performance, and structure. Haier even allows users to interact

with the factories and visualize the productions in real-time during the whole

manufacturing process of their orders.

Hidden behind these changes, Haier had reinvented their manufacturing process.

Productions are automated, product design are modularized, and operation and

management structures are interconnected online.

Haier looks to represent its industry, maybe even its country, and enters China Industry

4.0. The company is commencing its evolution from “mass production” to “make to

order” intelligent manufacturing.

37

Case Studies: Industrial Internet Trial

Companies with Ministry of Industry

and Information Technology “MIIT” (1)

Region No Company Model Website

Beijing

1 China Guodian Corporation, China

Datang Corporation

Integrated Internet platform for innovative power applications www.cgdc.com.cn

2 Beijing Jingdong Technology Co., Ltd. Virtual intelligent hardware incubator www.bjjingdong.com

3 Baidu Industrial crowdsourcing APP development platform www.baidu.com

4 Beijing Uniwisdom Technology Co.,

Ltd.

Industrial enterprises big data intelligence service platform www.kolong.cn

Henan

5 Synear Food Holdings Food wechat direct marketing solutions www.synear.cn

6 Zhengzhou Huijia Software Innovative household industry consumer services O2O platform www.123huijia.com

7 Centfor Electronic information industry Internet personalization solutions www.centfor.com

Shandong

8 Haier Innovative full-service interactive Internet system www.haier.net

9 www.hopingshandong.gov.cn Consumer goods industry ecosystem internet marketing services

platform

www.hopingshandong.gov.cn

10 Luthai Textile Virtual fitting and big data technology for online customization

production system

www.lttc.com.cn

11 Huitong Network Mobile community O2O business service platform www.ythuitong.com

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Case Studies: Industrial Internet Trial

Companies with Ministry of Industry

and Information Technology “MIIT”(2)

Region No Company Model Website

Guangdong

12 China Southern Airlines Company

Limited

Innovative mobile aviation customer service and management

process system

www.csair.com

13 Everygold Science & Technology Co.,

Ltd.

Innovative integrated service platform for manufacturing

foreign trade taxation

www.everygold.com

14 Guangdong Guangxin Holdings

Group Ltd.

Innovative security management traceability platform for

mobile operators

www.gdiic.com

15 Prosperity Textile Innovative fabric crafts and customized production using laser

technology

www.pdenim.com

Anhui 16 Potevio New energy vehicles intelligent network management platform www.potevio.com

Jiangsu 17 Yanghe Distillery Mobile Internet flexible production model www.chinayanghe.com

18 Suning Commerce Mobile Internet social marketing solutions www.suning.cn

Inner

Mongolia

19 Inner Mongolia Yili Industrial Group Development of product innovation and transparent industrial

chain based on big data

www.yili.com

Jiejiang

20 JoYoung Consumer behavior platform based user experience big data

analytics

www.joyoung.com.cn

21 Wellcom Technology Co., Ltd. Mobile Internet 3rd party payment security system www.wellcom.cn

Chongqing 22 ZBJ Network Inc. Industrial services crowdsourcing platform www.zhubajie.com

Fujian 23 www.liuti.cn Fluid machinery manufacturing marketing services solutions www.liuti.cn

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Contact Information

Innovation Business Accelerator Co., Ltd.

www.innovba.com

Eric Cheng

Principal Consultant, ICT

Tel: +852 9262 6202

Email: ericc@innovba.com

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