Speaking at Alibaba Group’s Cloud Computing Conference 2018 in Hangzhou, Jack Ma, executive chairman of Alibaba Group, said Wednesday that “New Manufacturing” is the way of the future.
Two years after first proposing the concept, Ma said New Manufacturing means a future where traditional B2C manufacturing will shift to more-personalized manufacturing largely driven by consumer demands.
Closely related to Alibaba’s “New Retail” strategy, a consumer-centric retail approach that merges online with offline for seamless shopping experiences, Ma believes that New Manufacturing will greatly impact traditional manufacturers in the next 10-15 years.
“New Retail seeks to redefine the retail sector. Today, however, I’d like to talk about New Manufacturing, because it will soon bring a wave of threats and opportunities to the manufacturing industry in China, and around the world. We must be prepared, both mentally and in every way possible.”
Jack Ma, executive chairman of Alibaba Group
While the challenge for the industrial age is to make one product at scale, the information age calls for the ability to efficiently produce a wide variety of products.
“In the past, it would be impressive if an assembly line can produce 2,000 of the same garments in five minutes. Today onwards, making 2,000 different garments in five minutes will be more impressive,” said Ma.
Adding that today’s consumers aren’t satisfied with fashionable clothes, instead demand outfits that are unique, just for them.
End of Pure-Play Manufacturers
According to Ma, the lines between different industries will be increasingly blurred, and the manufacturing, tech, and service sectors will become more interconnected.
“You can’t have one without the other,” he said. “Data analysts and algorithm engineers of the future will not be working in-house at internet companies, but in manufacturing facilities instead.”
At the core of New Manufacturing is analytics and computing capabilities. He predicts that advanced technologies such as the Internet of Things, semiconductor chips, artificial intelligence, big data and cloud computing will impact manufacturing in ways the modern steam engine and oil before did for industries based on manual labor.
Unlike New Retail, which merges the virtual with physical, New Manufacturing combines the manufacturing sector with the service industry.
“New Manufacturing is the perfect blend between manufacturing and service. A company’s competitive strength won’t lie in its manufacturing capabilities, but rather measured by its underlying innovative thinking, customer experience and service capabilities,” concludes Ma.
Future of China-Based Global Manufacturing?
His words are not to dissimilar from other futurists. Amazon already has a patent for on-demand manufacturing just as Ma describes.
While Ma’s audience was mostly the Chinese market where Alibaba dominates the eCommerce space, his words could mean less reliance on cheap-labor markets as U.S. and other western countries could bring automated manufacturing back.
Over time, technology may even drop to a price point when small businesses can afford to offer such services.
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