More companies show interest in Industry 4.0 process: report

Nearly 80 percent of Chinese companies believe that Industry 4.0 will increase their competitiveness, far more than in developed countries, a report released by McKinsey&Company said over the weekend.

The survey, which covered 130 executives from companies across a range of industries, said that about 76 percent of respondents in China believe that Industry 4.0 will increase their competitiveness.

That compared with just 57 percent of U.S. respondents, 50 percent in Germany and 54 percent in Japan.

The report said that privately owned Chinese companies demonstrated the highest levels of optimism at 86 percent.

That compared with 73 percent of respondents at State-owned enterprises (SOEs).

In addition, Chinese manufacturers expect Industry 4.0 will yield revenue and cost improvements of more than 15 percent, a level that exceeds what was observed in other markets.

Despite the apparent hype, many executives express considerable concern around their ability to implement Industry 4.0 strategies, as only 57 percent of Chinese players feel prepared, compared with 71 percent in the US and 68 percent in Germany, the report noted.

SOEs in China seem to hold the biggest reservations regarding their Industry 4.0 preparedness, with only 44 percent expressing readiness, compared with 68 percent of executives at private companies.

The optimism among private companies may be due to their urgent need to increase efficiency and quality to remain competitive, as well as their relatively greater level of flexibility to reduce labor costs compared with SOEs.

The uncertainty that Chinese manufacturers express toward Industry 4.0 may stem from their lack of a systematic approach to implementing such initiatives, the report showed.

Only 9 percent of Chinese manufacturers have assigned clear responsibilities for this process, compared with 22 percent in the U.S. and Germany and 31 percent in Japan.

Only 6 percent of Chinese companies have a clear roadmap, in contrast to 33 percent of companies in the U.S., 35 percent in Germany, and 21 percent in Japan.

The report was released at the opening ceremony of the Beijing Digital Capability Center at Tsinghua University.