Service Oriented Manufacturing - Why Is It China’s Favorite At The Moment

China’s National Development and Reform Commission with Ministry of Industry And Technology Information recently revealed an action plan that can take the Chinese service-oriented manufacturing to a new level in terms of promotion and publicity. It is another initiative taken by government under its’ “Made In China 2025” program. The program mainly aims to bring up the overall quality and efficiency of Chinese manufacturing. One of the prime aspects of the MIC2025 is aggressive expansion of automation which brings the service-oriented manufacturing under the radar.

Au contraire to the product-based manufacturing, service based manufacturing is leading trend in China right now. The service-based manufacturing blends products with services and offer the customers with some comprehensible solutions. Firms and organizations that go for product service system (PSS) are often more focused on offering producer services for each other leading to formation of a service-oriented manufacturing network. Zuo Shiquan, the director of China Center For Information Industry Development says, “Service-oriented strategy means a development toward the high end in the value chain.”

In simple terms, the value proposition offered from a product-based manufacturing approach is based on a tangible product, the service based makers’ identify their primary product as their production capacity. The approach has number of benefits especially for a huge manufacturing-based economy like China. For example, the product-oriented manufacturing is sometimes burdened with an over-reliance over inventories that satisfies their demand. Maintenance of these inventories is an expensive affair. A better option under this condition is to meet demand through service-oriented manufacturing network.

An enhanced interconnectivity among manufacturers is another facet of the MiC2025. Cloud computing can definitely help in enabling of new manufacturing services ecosystems which will permit the companies to let others know about their respective capacities and requirements automatically. As per a statement released by China’s State Council, “This type of new manufacturing, as an important measure of supply-side reform, could become a new economic growth engine, benefiting the quality and profits of the supply system and complying with the demand of upgrades in consumption.”