Three Things That Smart Manufacturing Startup Needs To Show Investors

China set “Made in China 2025” plan to upgrade the country’s manufacturing power. In order to bring down the government’s ambitious plan to future strategies of Chinese manufacturing companies, a panel of “smart manufacturing technology innovation” discussed the current status of manufacturing in China. The panelists from ZJ Venture, Plug and Play, and Legend Star agreed on three conditions that need to be implemented for smart manufacturing: optimization to customers, smart supply chain, and automatic manufacturing.

“From the investors’ perspective, they should see the all the three things. In a nutshell, it should be a data-driven solution,” Huawei Kong, senior consultant at ZJ Venture as well as the moderator of the panel told TechNode.

According to Mr. Kong, smart manufacturing will have big boost from artificial intelligence (A.I.).

“A.I.-combined manufacturing can be adapted to all three parts: optimization to customers, smart supply chain, and automatic manufacturing,” Mr. Kong says. “The biggest winner within five years will be A.I. China now has internet+ plan, but soon we’ll see A.I.+ trend. A.I. will be combined with finance, commerce, and medical sector to form a new trend.”

Mr. Kong summarized the three things that smart manufacturing companies need to show investors, and gave example of A.I.-combined manufacturing solutions.

1. Optimization To Customers

Manufacturing is often thought to be B2B sector, however, in the future how to appeal to customer will be important for smart manufacturing companies. A.I.-combined B2C solution will allow user-targeted marketing and help provide optimized solutions to customers.

2. Smart Supply Chain 

Smart supply chain should cut down the cost and increase the speed of the manufacturing cycle to JIT (Just-In-Time). It should also connect supplier with different departments for better communication. To do so, we need companies that make better chips, PCB (printed circuit board), and software.

For example, A.I.-based smart logistics and supply chain will allow suppliers to see the current status of the milk. If a supplier knows that it will rain tomorrow, then he can put them on sale beforehand. Suppliers will also understand which part of location needs more milk to balance the demand. In short, we can find out the sales point and manage the storage accordingly.

3. Automatic Manufacturing

In China, the manufacturing process is often manual or semi-automatic. Automatic manufacturing is an important priority to upgrade China manufacturing ability to the next level. To do so, implementing robots, and automated equipments to factories is needed. For example, A.I-based video camera will check the freshness of the food and supervise the conveyer belt.

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Huawei Kong, senior consultant at ZJ Venture

Mr. Kong also stressed on the importance of the data-driven solution. Data-driven solutions that can be useful to B2C, such as the data analysis on stock investment or sleeping patterns will be in need, he says.

“I’m looking for: First, data-driven software. Second, a software that integrates all the three parts mentioned above. If it’s a hardware, it should embed the software I mentioned, then your competition barrier will be even higher,” Mr. Kong said.

Founded in 2008, ZhangJiang Venture is a state-owned venture capital and has invested a total of 4 billion RMB until now, focusing mainly on IT and the medical sector. Every year, the company invests couple hundred of million RMB to companies, according to Mr. Kong. Standout companies from the ZJ Venture portfolio are Hong Kong-listed medical company MicroPort, provider of custom silicon solutions VeriSilicon, and cloud-based storage solution provider Qiniu.

The “2016 Global 500 Company Innovation Investment Forum-Smart Manufacturing” was held in Shanghai, hosted by iStart Ventures, a startup incubator and angel fund founded by angel investor Cha Li.

Image Credit: iStart Ventures, Shutterstock