INESA: A journey to Industry 4.0
INESA Group president, Cai Xiaoqing
Photography: Benjamin Beech
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INESA: A journey to Industry 4.0

Kenny MacIver — August 2018
Shanghai-based electronics giant INESA is transforming its industrial core and redefining its future as it embraces smart manufacturing and smarter city solutions.

China — the world’s pre-eminent source of manufactured goods since 2010 — today makes more than a fifth of all products sold around the globe. Its phenomenal rise in output over just three decades may have originally been fueled by an abundance of low-cost workers and a focus on labor-intensive processes and mass production but that is changing fast.

The country is facing up to the realities of a shrinking labor force and rising wages, worker expectations and skills, as well as the demands of an increasingly sophisticated domestic market. Against that background, many Chinese manufacturers — encouraged by government policy — are planning for a new era of industrial development that moves them up the value chain and is powered by disruptive digital technologies. Indeed, the Chinese government’s Made in China 2025 blueprint, launched in 2015, is all about the creation a next-generation industrial base enabled by the establishment of leadership in areas such as robotics, AI, IoT and big data.
Smart transformationOne major Chinese company embracing that big challenge is INESA Group. For more than 50 years it has been a leader in the manufacture of electronics instruments — from auto electronics and security products to smart tags and building controllers — and for a long period it fulfilled around half of all the demand for electronic instruments in China.

But confronted by new dynamics in its traditional markets — and drawn to fast-emerging opportunities in new ones — INESA has set a course to reinvent itself as a provider of smart manufacturing and smart city solutions.

INESA Group president Cai Xiaoqing outlines the ambition: “While advancing smart initiatives in our own factories, we are also working to create a new industry that fuses ICT and manufacturing. We are positioning this as a core infrastructure business that supports our [wider] strategic goal of contributing to the building of smart cities.”

Cai recognizes the effort required for that transition. “In this new era, we have to face both the new [market] requirements and the challenges of digital transformation,” he says. However, INESA has no intention of trying to meet these challenges unaided. Over the past three years the company — a state-owned municipal group centered on the city of Shanghai — has forged a number of close strategic partnerships, including with global ICT group Fujitsu.


As the first phase of a much wider implementation, INESA has worked with the Japanese technology company to transform INESA Display Materials, a specialist in color filters for LED displays, into an advanced smart manufacturer.

The two companies have implemented Fujitsu’s Intelligent Dashboard visualization system and a platform for big data analysis hosted in a private cloud. Those are populated with data aggregated from factory production systems, environment monitors and equipment, much of it fitted with wireless IoT.
Transparency and fast decisionsThe result is high levels of visibility into the status of production, equipment and maintenance activities — and speed, as the IT director of INESA Display Materials, explains: “Using the traditional methods, the record of equipment status was huge; it would generate hundreds of thousands of data [items] every hour. Processing that used to take more than 10 minutes but with the Fujitsu Intelligent Dashboard it only takes a few seconds to aggregate the data and synchronize it with the production line.”

Now executives can access information and make decisions in a timely fashion. They can simultaneously check video feeds of the highly automated manufacturing processes against the Intelligent Dashboard visualization display, without having to make physical inspections on the factory floor.

INESA Display Materials: Using the Fujitsu Intelligent Dashboard to visualize smart factory operations

The business benefits of that near real-time decision-making are already flowing. “This has greatly improved production efficiency and product quality,” says Cai, who plans to extend the capability to other INESA businesses. “We want to use the Fujitsu Intelligence Dashboard to make our factories as transparent as possible. It is accelerating [our contribution to] Made in China 2025.”

Building on the success of that collaboration, INESA and Fujitsu earlier this year created a joint venture, INESA Intelligent Technology, to provide a smart manufacturing platform and related services to companies throughout China.

Cai is a firm believer that the pace and scale of change of digital transformation requires the combination of expertise. “We very much agree with the concept of co-creation, which is why we are doing business with Fujitsu,” he says.

INESA has a strong pedigree in making such joint ventures work. Since China was opened up to foreign investment three decades ago, INESA has formed more than 200 joint ventures with non-Chinese companies, particularly with organizations from Japan.
Changing fundamentalsCai emphasizes that companies in China need to forge partnerships and embrace digital transformation to address the macro shifts that are underway in the economy. “An important issue that we are facing is an increase in manufacturing costs. The benefits of the [low-cost] workforce in China are getting fewer and fewer which means we need to think of how to reduce our costs by using machines to replace some workers,” says Cai.

At the same time, he points to major changes in the nature of demand in the Chinese market. “Another critical issue for us is that there is no longer a big market for standardized products in China. The demand is for the diversification of products for different needs.”

Historically the display materials factory, for example, would only switch the models it offered a handful of times. Now it has to change models more than 80 times and to provide for the specific needs of customers, says Cai.

“So we now need to think about how to produce our goods in small amounts to meet the more specialist needs of different customers. And only by implementing smart manufacturing can we fulfill that goal while also reducing costs,” says Cai.
From automation to Industry 4.0As well as at the Display Materials factory, such smart manufacturing is also being implemented at the INESA plant which makes LED modules for vehicle headlights.

The model there also involves building a private cloud of industrial IoT that underpins a full lifecycle management solution for the automotive electronics manufacturing industry, including the virtual design of products, manufacturing and warehousing, says Gu Deqing, general manager of INESA Intelligent Technologies.

The aim is to commercialize this approach. “We will build a standardized platform for smart factories and sell the solution as a set of cloud services to other companies outside INESA,” he says. The single biggest technical challenge is joining up all the related business processes. That is being tackled by integrating data from an array of back end systems (ERP, QMS, MES, LES and WMS), as well as SCADA systems and data coming in from wireless IoT sensors.

INESA Display Materials: An architecture for smart manufacturing

But the benefits are already flowing, says Cai. “In the color filter factory we have already seen big improvements in efficiency and higher quality, as well as better utility rates [of the production lines] and workforce efficiency. As a company, we may not have got to Industry 4.0 yet but we are moving fast beyond automation to Industry 4.0.”

Smart manufacturing is not the only milestone on INESA’s transformation journey. Its roadmap also talks of solutions for smart transport, smart education, smart government administration, smart medical treatment and smart buildings, among other areas. But that all points to a vision of an even broader transformation of the company — and the overall Chinese economy.

INESA is one of almost 60 customer stories detailed in the Fujitsu Technology and Service Vision. View more here.

First published August 2018
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