China Digitisation expected to transform Shenyang into a global force

Author / Editor: Stéphane Itasse / Rosemarie Stahl

Even though the products manufactured by Shenyang Machine Tool are relatively simple, the competition from Germany and Japan has a strong advantage. Since technical innovations for productivity leaps do not appear to be in sight, the Chinese manufacturer is focusing on digitisation.

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Shenyang Machine Tool is setting its sights on easy-to-use machine tools for untapped markets.
Shenyang Machine Tool is setting its sights on easy-to-use machine tools for untapped markets.
(Source: Shenyang Machine Tool Group)

Shenyang Machine Tool, one of the world's largest machine tool manufacturers, has experienced drastic changes in recent years, as explained at the autumn conference in Karlsruhe by Dr. Ömer Sahin Ganiyusufoglu, Advisor to the Chairman. The company still produced 96,000 machine tools in 2011, but only 31,000 of these were produced using CNC. In 2016, only an additional 30,000 CNC-manufactured machines left the factory floor. The manufacturer of cutting machine tools employes a total of 20,200 workers, 14,000 at the site in Shenyang, generating revenues of approximately 1.8 billion euros.

According to Ganiyusufoglu, all industries in China are being supplied with milling, turning and boring machines. However, on the home market of Shenyang, imported machine tools still account for a large portion of the machines supplied. The government in Beijing is ambitious and hopes that the industry will be able to catch up. However, this is not so easy for Shenyang according to the consultant who foresaw the stagnation in technical innovations, innovations that otherwise could have brought significant gains.

That's why Shenyang Machine Tool is taking a different approach. “Why can't a machine tool be as easy to use as an i-Phone?” Board Chairman Guan Xiyou asked himself this when Apple launched its product in 2007, according to Ganiyusufoglu. And he set the course: “This is the prototype for the machine tool of the future.” Thus, the Chinese company would also have a chance.

“The future lies in digitisation and it starts with control technology,” Ganiyusufoglu explained at the conference. The Chinese machine tool manufacturer has developed its own control system platform, referred to as the I5. The system is intended to serve as a platform for the digital world of the future. The control system was released in 2014 and by 2016 Shenyang had already sold 20,000 machines equipped with this control. The 2017 sales target was set for an additional 20,000 machine tools.

As easy to use as a smartphone

The Chinese are also currently looking for another way to access world markets. They are setting their sights on areas with little or no industrialisation. “80% of global machine tool exports go to countries inhabited by only 20% of the world's population,” the consultant clarified. He explained: “Over the long-term, the Chinese want to conquer markets nobody else sees.” In order to tap these markets, Shenyang is not preparing itself for a technical race, but for strategic innovation. This may come in the form of new product types and features, but also as new business models and “win-win co-operations”. However, the Chinese machine tool manufacturer is aware of the fact that it is not alone in its quest. “We would not be able to tap into these target countries by ourselves; co-operation is key,” said Ganiyusufoglu.

To help it maintain its perceptiveness for the world market, Shenyang has also launched an internal strategy: Go Smart. “Smart” is an acronym that stands for simple, maintenance-friendly, affordable, reliable and timely to market and profit. “If we are planning on targeting the markets of the future, our machines must meet these requirements,” the consultant states. “We need to come down from the world of high-tech and build machines for everyone using the i-Phone principle.”

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