Scale mismatches are often the cause of a company’s end. The underlying role of smart manufacturing in market structure and innovation is achieved primarily by affecting the optimal scale of the production process. In the era of smart manufacturing, the curse of corporate scale is expected to be broken. Intelligentization will have a subversive impact on the manufacturing market structure, management model, production process and working conditions, and has basically become a consensus in the academic community. The underlying role of smart manufacturing in market structure and innovation is achieved primarily by affecting the optimal scale of the production process. In the era of intelligent manufacturing, technology will become the core force that constrains the scale of enterprises, and the internal management cost is weakened by the dominance of enterprise scale. By then, the curse of the scale of the company is expected to be broken.
The optimal size of the enterprise will become much looser in the era of smart manufacturing. Technical characteristics of intelligent manufacturing The technical basis of intelligent manufacturing is information technology, and the rapid development of information technology has spawned the intelligentization of manufacturing. Therefore, the technical characteristics of intelligent manufacturing are essentially determined by the characteristics of information technology. The difference is that the technical characteristics of information technology have also shown some special performances in the manufacturing industry.
Manufacturing technology is highly shared In traditional manufacturing, manufacturing technology mainly uses production equipment and raw materials as carriers to enter the production process, and finally through the characteristics of finished products. For example, in the manufacture of garments, the production process of garments is mainly composed of three parts: manufacturing lines, fabrics and auxiliary materials (such as buttons, zippers, etc.) and design drawings. These three parts themselves imply many technical procedures. In general, what kind of assembly line a garment manufacturer chooses basically determines its production capacity and production efficiency, as well as the optimal scale.
If the market occupied by the garment manufacturer can meet the optimal scale of the production line, there is no waste of capacity, and it is enough to produce it for itself. However, if the clothing manufacturer occupies a small market, or if some markets are lost due to other reasons, if it is only produced for itself, there will be surplus capacity, and the production scale will be smaller than the optimal scale. For other garment manufacturers, the opposite situation may occur, the market share is greater than the optimal size of the production line, the investment in new production lines is not cost-effective or too late, and so on, it has to ask for help from similar manufacturers.
In this way, the prototype of manufacturing technology sharing has emerged. When informatization is underdeveloped, the range of manufacturing enterprises to purchase technical services from similar enterprises is small, and the space for selection is not large. At the same time, it is impossible for manufacturing companies to rely on the technology of other manufacturing companies for development. The market structure of manufacturing companies is dominated by competition, and it is of course impossible to achieve a high degree of sharing of manufacturing technologies.
However, in the era of intelligent manufacturing, the characteristics of this market structure of manufacturing companies have been greatly affected. First, the information barrier between manufacturing companies was broken. As technology develops faster and faster, the cross-industry applications of technology are becoming more widespread. Manufacturing companies rely on technological advantages to stay ahead of the curve, and companies are looking for ways to unlock the potential value of technology in a short period of time. For example, when an advanced manufacturing technology is broken, traditional manufacturing companies are considering how to use new technology to crack down on their competitors and expand their market share.
However, in the era of intelligent manufacturing, the first consideration for enterprises is how to rapidly expand the application of technology in order to bring out the advantages of technology in the shortest possible time. Because the speed of technological advancement is too fast, technical advantages are difficult to maintain for a long time. Therefore, the subjective power of manufacturing technology is highly shared.
Secondly, there have been many technology platforms in the development of information technology, and the physical means of sharing technology in manufacturing has been relatively mature. Through the Internet, manufacturers can choose the right technology in the entire industry chain, purchase technical services in a short period of time, and put other people’s technology as a production factor into the production of their own products, which not only protects their own market. The advantages of advanced technology have also been brought into play.
Fundamentally speaking, the high sharing of manufacturing technologies has eased the competition within the manufacturing industry. The market competition among manufacturing companies has shown a trend of differentiation and division of labor, and the space for cooperation between enterprises has increased. Thirdly, the sharing of manufacturing technology has intensified the diversification of manufacturing technology, the division of labor within the industrial chain has become more and more detailed, the network has become stronger and stronger, and the effect of endogenous technological advancement has become more and more prominent. In fact, knowledge sharing is also a win-win situation, which is in line with the general trend of technology development. In general, the high sharing of manufacturing technology has changed the situation of internal competition in the manufacturing industry.
The structure of manufacturing enterprises has become flat, internal labor has intensified, cooperation between manufacturing industries has increased, and cross-applications have increased. This feature of intelligent manufacturing fundamentally breaks down technical barriers and expands the technology spillover effect. Manufacturing technology is highly shared and becomes the biggest technical feature of smart manufacturing, and it will have a profound impact on the market structure. Production factor organization network Another feature of intelligent manufacturing is the networking of production factor organizations. From the perspective of factor organization structure, the biggest difference between intelligent manufacturing and traditional manufacturing is that the optional space of production factors becomes exponentially larger.
In the era of intelligent manufacturing, the technical choices faced by each manufacturer are not certain. Unlike traditional manufacturers, smart manufacturers do not have to limit manufacturing technology to a certain level, but can find the right technology in the entire industry chain according to their own development strategy. After determining the technology choices, manufacturers can also find organizational production factors, including talent, labor, raw materials, design, production processes, etc., within the entire industry chain and even across the industry chain. The network of production factor organizations is mainly benefited from information platform enterprises. With the continuous development of the Internet, the platform enterprises are more and more perfect, and the manufacturing enterprises can obtain the information of the production factors through the platform enterprises, thus providing the possibility for the network of production factor organizations. On the one hand, manufacturing companies can find the production factors that can be obtained through platform enterprises, such as technology, design, process type, raw materials, etc.
On the other hand, manufacturing companies can also obtain product information through platform enterprises, so that according to product information, Modify your organization to get the best production decisions. Intelligent manufacturing process In the traditional manufacturing process, technology is embedded. Production can only be organized if the manufacturing company has mastered most of the technology. In the era of intelligent manufacturing, the manufacturing process tends to be intelligent. The intelligentization of the manufacturing process is mainly manifested in the following three aspects: The intelligence of the design process. In the traditional manufacturing design, it is possible to carry out product design after undergoing a series of processes such as market research, technical improvement, and raw material matching.
Therefore, in the traditional manufacturing process, the replacement speed of the manufacturing design is very slow, generally unchanged for many years. The era of intelligent manufacturing is different. Due to the application of high-performance computers and machine learning technology, the computer quickly completes most of the work in the product design process, including information collection, program comparison, and even small-scale sampling. It can be done through an intelligent network. For the producers, the intelligentization of the design process is more manifested in the choice of design results, rather than too much care about the design process, and the design process is basically intelligent.
The intelligence of the production process. The traditional production line is characterized by manual plus machine automation. The era of intelligent manufacturing is different, and the production process is dominated by computer programs. The computer leads the process design, raw material arrangement and production processing of the production process. In this process, people are auxiliary, and generally only perform a selection process. Intelligent technology improvement.
The intelligent manufacturing process also includes the process of discovering problems during the manufacturing process and proactively solving the problem. This is because the computer system has the learning ability, can continuously improve the manufacturing level according to the experience of the manufacturing process, check and fill the gap, continuously optimize the process, and improve the manufacturing efficiency. From this perspective, the intelligentization of the manufacturing process will weaken the advantages of the production process, and the comparative advantages of process control between producers will no longer exist. This competitive segment was replaced by the smart technology at the initial end.
Polarization of market structure and enterprise scale From the technical characteristics of intelligent manufacturing, it will inevitably bring about two major changes in the market structure, and ultimately lead to the polarization of the market structure. On the one hand, intelligent manufacturing eliminates the comparative advantage of the organization in the production process, making this competitive link no longer exist; on the other hand, intelligent manufacturing makes the advantages of the initial segment of manufacturing technology more obvious. Therefore, intelligent manufacturing inevitably leads to fundamental changes in the market structure.
Ultra-large scale production of intermediate parts In the era of intelligent manufacturing, technology is spreading very fast. Once a technology breaks through, it has the potential to quickly realize market value. Due to the highly developed information technology, the manufacturing enterprises organize the network of production factors, the service capabilities of manufacturing technology are getting stronger and stronger, the scope is getting larger and larger, and it has a tendency to develop toward the natural monopoly. As shown in Figure 1, in traditional manufacturing, the production of standard products (such as spare parts, standard parts and other intermediate products) is subject to the technical process and raw material organization, and the marginal cost will decrease with the scale to a certain extent.
No longer significant, this feature fundamentally determines the number of standard product manufacturers. For example, using traditional machine tools to produce parts with high precision requirements, a production plant can achieve a marginal cost of 1000 pieces per year (for example, 200 yuan per piece), and the scale benefits of technology can be completely reduced. achieve. At this time, even if there is a production plant with an annual output of 100,000 pieces, the marginal cost will not be too far from 200 yuan. Because the scale benefits of technology have been fully realized, we can only rely on management effects to reduce costs and have limited space. Therefore, under the optimal technical conditions of small scale, if the market is large, many manufacturers will inevitably appear.
In intelligent manufacturing, the investment in technology accounts for a very large proportion. The marginal cost of standard products tends to decline slowly as the scale of production expands, and this trend can continue to a very large scale. Therefore, in the era of intelligent manufacturing, the production of standard products has a tendency to generate a natural monopoly. For example, the production cost of the chip is very high. The production scale of 1 billion pieces can be reduced by 5% compared with the production scale of 900 million pieces. Even when the production scale reaches 3 billion pieces, the marginal cost is still falling. If there are only 2 billion chip markets in the world, then only one manufacturer is enough.
This technical feature does not require more producers objectively (except for the prevention of monopoly). In fact, in the information age, the production of standard parts such as integrated circuits, electronic standard parts, and chips has already appeared in this trend. In these areas, the production process has basically achieved initial intelligence, and the marginal cost of standard parts can only be reduced to a lower level when the production scale is large. From the perspective of market application, these standard electronic components, which can be widely used in many fields, have a huge market scale and a very lucrative profit, but the number of manufacturers is small.
On the one hand, the production technology of these standard parts is relatively high, and there are few enterprises that master this technology; on the other hand, the capital threshold for organizing production is also high, which limits the entry of some manufacturers. However, the root cause of the small number of production of these standards is the natural monopoly of the production of standard products in the era of intelligent manufacturing. At present, there are only a handful of vendors in the field of operating system development and smart chip production.
Although financial capital has tried to enter the field and has made technical layouts, it has not succeeded. In the United States, Google has always been suspected of monopolization, but the US government has no better way to deal with this problem, such as operating systems, search engines and other technologies, even in the case of huge customer numbers, its marginal cost is still declining. Imagine that even with a new company, like Google’s technical level, it is difficult for the company to make a profit, and there is no incentive to participate in the game. Small-scale production of finished products On the contrary, in terms of manufactured goods, smart manufacturing technology has another trend, namely the small-scale production.
In terms of standards and raw materials, smart manufacturing tends to be standardized on a large scale, and the production process has a tendency of natural monopoly. However, smart manufacturing has the possibility of small-scale production in terms of finished products. First of all, intelligent manufacturing technology greatly reduces design costs and sampling costs. Intelligent production technology utilizes computer systems to meet the needs of small-scale production without increasing excessive costs. In this way, in the field of finished products, manufacturers’ entry barriers will be low and can accommodate many manufacturers.
As shown in Figure 2, in the field of finished products, as manufacturing technology continues to increase, the marginal cost of manufactured goods will become less dependent on the scale of production. To sum up, the market structure of smart manufacturing will tend to polarize. The production of standard products tends to be a natural monopoly, while the production of finished products tends to compete fully.
From the perspective of market structure, smart manufacturing will not form a monopoly trend in the entire industry chain, so there is no need to worry too much about the market efficiency loss caused by smart manufacturing. It is worth noting that smart manufacturing has the potential to eliminate the advantages of the manufacturing process, that is to say, the advantages of traditional manufacturing labor may no longer exist. In the era of intelligent manufacturing, manufactured goods can meet small-scale customized production. The input of finished products is divided into two parts: one is standardized production inputs, such as mass-customized raw materials, standard parts, etc.; the other part is personalized production inputs, such as hand-made, personalized design.
There is almost no comparative advantage in standardized production inputs, and artificial comparative advantages will shift to the end of production. This means that in the era of intelligent manufacturing, the advantage of the labor force is reflected in the personalized production of the terminal products, which is no longer reflected in the assembly line. Determination of the size of the enterprise Traditional theory holds that the size of an enterprise is determined by the balance between internal management costs and market transaction costs. As the internal management costs of enterprises increase, the benefits of expanding the scale of enterprises are declining. When the internal management cost of the enterprise is higher than the market transaction cost, the enterprise no longer expands its scale, and the resources required by the enterprise are no longer produced through internal organization, but become directly obtained from the market.
This condition limits the unrestricted expansion of the scale of the enterprise, and the speed of development of the enterprise generally follows the law of marginal diminishing. The impact of intelligent manufacturing on the theory of enterprise scale is mainly reflected in two aspects: on the one hand, the information technology revolution has greatly reduced the transaction cost of the market, the enterprise can use the Internet conveniently and efficiently, and the cost of collecting information is greatly reduced.
In theory, the scale of the enterprise should be The smaller, because the market is more and more transparent. According to the logic analysis of market full competition, under the market conditions with extremely low transaction costs, the scale of the enterprise is naturally as small as possible, so that more management costs can be saved.
On the other hand, the technology sharing of intelligent manufacturing breaks many restrictions on technical barriers. Manufacturers’ understanding of technology has changed, homogenization competition has decreased, differentiated competition has intensified, and market-changing technology has gradually increased. The exclusive enjoyment has become a technology sharing, the production factor organization is networked, and the scale efficiency law of enterprise production has been broken.
The polarization of the intelligent manufacturing market structure has fundamentally changed the understanding of traditional theory on the scale of enterprises. Standard product mass customization has a tendency of natural monopoly, and the scale of production is determined by the initial segment technology, rather than the balance between internal cost and external cost. At the same time, in the finished goods market, small-scale production has become possible, and the scale of production has become smaller and smaller, which is in line with the inference of informationization and transaction costs. In fact, the technological revolution of intelligent manufacturing has broken the balance between internal costs and external costs. Technology has become a core factor affecting costs.
Management costs are less important than technology costs. In the traditional enterprise development strategy, inappropriate scale selection is often the reason that leads the enterprise to the end. In the era of intelligent manufacturing, technology has become the core force that constrains the scale of the enterprise. The internal management cost has weakened the dominant role of the enterprise scale, and it is expected to break the enterprise. The curse of scale, this will be the most essential embodiment of the market structure characteristics of the era of intelligent manufacturing. Choice of innovation path The path to innovation is different at different stages of manufacturing development.
In the era of intelligent manufacturing, the path of innovation also tends to be polarized. On the one hand, it is the technological transition of standard products, on the other hand, it is the diversified innovation of manufactured products. Intergenerational transition of standard product production In the era of intelligent manufacturing, once the production technology of standard products is determined, a trend of natural monopoly will soon be formed. Therefore, in the field of standard product production, it is difficult for manufacturers to choose a continuous innovation process.
Due to the large scale of production and the high replacement cost of production technology, manufacturers will not easily carry out weak technological innovations. Only when technological innovations are accumulated to a certain extent, the effects of innovative products can reach a considerable degree. New technologies will be adopted for the production of the products. Therefore, in the field of large-scale manufacturing standards, innovation often manifests itself as intergenerational transition. The technology update presents the intergenerational development process, and each generation of technology has a significant improvement compared to the previous generation.
This law is very obvious in the electronic information industry. When information technology innovation accumulates to a certain extent, it will be updated, from chip technology to communication technology, which all show similar regularity. If the meaning of the standard is extended to a wider range, we will find that the intergenerational transition of innovation in the field of processing such as automobile manufacturing, general electrical appliances, and computer equipment, which uses a large number of standard materials as raw materials, is also very obvious. In fact, in these industries, the intergenerational transition of standard production technology has also greatly promoted the intergenerational transition of manufactured goods technology.
Strictly speaking, in the era of intelligent manufacturing, all the manufacturing industries that meet the characteristics of large-scale standard product production will generally exhibit the characteristics of intergenerational transition. For example, smartphones are experiencing intergenerational transitions in technology compared to previous generations. Communication technology 3G to 4G, and then to 5G. Diversified innovation in manufactured goods Compared to large-scale production standards and industries that use large quantities of standard products for large-scale production of manufactured goods, many of the innovations in manufactured goods are characterized by continuous diversification and innovation.
Intelligent manufacturing, while meeting the small-scale production of finished products, also provides a convenience for small-scale production innovation. Because of the small scale of production and the intelligent production process, this opens up possibilities for micro-innovation. The small-scale sample customization approach to the finished goods market offers the possibility of some individual improvements compared to large-scale standard customization. Regardless of the choice of raw materials or product design, as long as the total amount of personalized customization is accumulated to a certain extent, it will produce better improvement possibilities.
In practice, it will be found that manufacturers that receive personalized customization can often summarize better products that are more suitable for a certain group of people after accumulating a large amount of production experience. This kind of innovation is highly random and not reproducible, but it is especially suitable for manufacturers of manufactured goods in the era of intelligent manufacturing. For example, based on WeChat to develop various micro-smart design, model dressing on Taobao, and various workpieces on vibrato, the innovative methods are varied, satisfying consumers’ individual needs and constantly generating new ones.
Innovation. The use of intelligent equipment for small-scale finished product customization, each manufacturer’s size is limited, the number of manufacturers in the entire market is large, and each manufacturer accepts different personalization needs, these different needs are in the entire market. Free combination will inevitably lead to the diversification of innovation. Since the intelligent manufacturing process itself is highly self-learning, the results of machine learning are different when meeting various needs. Therefore, in the rich manufactured goods market, manufacturers can be seen as a fully competitive group. Although they all use smart manufacturing technology, the types of customers are varied and the problems faced and solved are various. The innovation generated in the case is extremely uncertain.
If the finished goods market is seen as a fully competitive market, then this diversified innovation can be seen as a continuous process. Conclusion From the perspective of technological evolution, the influence of technology on market structure and production scale is increasing. The polarization of intelligent manufacturing market reflects the fact that traditional enterprise scale theory no longer adapts to new technological development. Although smart manufacturing tends to monopolize raw materials and intermediate goods, the market structure is still fully competitive in terms of manufactured goods.
The full competitiveness of the finished goods market eases the contradiction of internal competition in the manufacturing industry, is conducive to the development of the manufacturing industry chain to flatten, and promotes the transformation of homogenization competition to differentiated competition.
In the era of intelligent manufacturing, there are only two choices for manufacturing companies: either to be a very large-scale standard product manufacturer; or to be a sophisticated manufacturer of differentiated finished products. The competition of talents will also focus on the front end and the end of manufacturing, and the intermediate links will basically be unmanned and intelligent.
The labor advantage will no longer exist in the era of intelligent manufacturing. Instead, it will be the initial technological advantage or the differential technology innovation of the finished product. In the era of intelligent manufacturing, the optimal scale will become a concept of blurred boundaries, and companies can have many optimal choices.