China has well-established its position as a manufacturing powerhouse in modern history. China was ranked seventh in the 1980s in the global manufacturing sector, trailing behind Italy. In 2011, they became the world’s largest producer of manufactured goods, overtaking the United States, allowing for double digit growth of the country’s GDP per capita over the last decade according to data by The World Bank. China is able to achieve this in a few decades as compared to the 150 years the United Kingdom took with their industrialisation efforts.
China’s astonishing growth in the manufacturing sector is attributed by the economy’s macroeconomic factors such as the economic liberalisation policies after 1978 with an open door policy and its subsequent confirmation in 1992. This led to a substantial increase in FDI (Foreign Direct Investment) of an estimated value of US$83 billion in 2007.
The manufacturing sector is a very important pillar for the country’s economic growth and transformation. The industry serves as a main channel for employment around the country and a symbol of progress and international competitiveness. One is unable to separate the image of production lines and factories from the country. China has developed a comprehensive and optimised manufacturing industry with excellent infrastructure and a large and highly-skilled workforce to be the world’s largest manufacturer.
It is therefore imperative that the sector remains prosperous in ensuring China’s market leadership in the global supply chain. The sector is also the backbone of the country’s economy and it is important they remain ahead of the game and continuously improve themselves in order contribute growth to the country’s GDP.
Potential Roadblocks
Today, China faces new challenges in manufacturing due to a myriad of factors. The slow economic growth, risings costs of business and more complex value chains have caused the decline of China’s exports, which leads us to question if the country can still maintain its position as a leader in low-cost manufacturing. The rising competition from cheaper manufacturing plants in the region such as Vietnam and India and the move towards automation have also contributed to the slow manufacturing growth in China.
The industry is losing momentum fast, experiencing the sharpest drop in the last six years. The Caixin/Markit manufacturing purchasing managers' index (PMI) slipped to 47.3 in August 2015, the lowest reading since March 2009 and a further decrease from 47.8 in July 2015. A print above 50 indicates an expansion in activity while one below points to a contraction.
To counter the slow growth rate of the manufacturing sector, China has recently implemented new measures to improve the industry’s productivity. This includes a government scheme through policies, subsidies and incentives to persuade manufacturers to move towards high-end manufacturing. Chinese manufacturers have sought to upgrade their skills and capabilities, with a distinct focus on higher technological capabilities according to The Economist.
Precision Machining Industry
With the move towards modernising production capacity in the country, companies are moving upstream in the value chain to produce mid to high-end products to meet global demand. This causes a shift in improved production methods and an increased investment in high-tech machinery. Chinese manufacturers are seeing the need to switch their machinery to more complex CNC machine tools capable of automated tool swapping and workpiece loading and distribution. This will allow manufacturers to produce precision machined products that will result in higher margins and production value.
The adoption of technology and innovation has led China’s modern economy to shift their focus on innovation and high tech services, moving away from being too reliant on their low-end, labour-intensive methods. This has paved the way for the country’s industrial zones to be upgraded with automation, workforce skills training and new production methods according to The Economist.
Shenzhen: China’s Silicon Valley
Shenzhen is a southern Chinese city known to be China’s “Silicon Valley for hardware”, a prominent manufacturing city. The city was built with the purpose to cater to electronics and hardware manufacturing. Shenzhen was the first city to undergo China’s Special Economic Zone policy that practices market capitalism “guided by the ideals of Chinese socialism.” Soon, the city was booming to become an international port and a manufacturing centre focused at the profitable electronics industry.
The city has created a modern and collaborative environment for manufacturers to work and learn from each other. This allows companies to stay nimble and competitive due to the endless flow of information and support.
Lubricating It Right: Shenzhen Yihe Mould
Shenzhen Yihe Mould is a high-tech manufacturing company that produces hardware punching press parts and precision punching-press moulds. The company is an example of a high-tech manufacturer that benefited from the talent, innovation and marketing influence of the southern Chinese megacity.
The company utilises about 40 units of the Mori Seiki CL 200 CNC machining centres for their precision machined products. The CNC machines’ slideways used a third party brand of oil as a lubricant. The oil had poor adhesive properties, causing it to leak into the cutting fluid system of the machines. This leakage produced a foul odour in a very short time, which resulted in an unpleasant working environment for employees on the production floor.
Additionally, the oil caused stick-slip chatter in the machine that produces a stop-start jerking pattern. Consequently, there has been a drop in operational accuracy, a component highly important in producing precision punching press parts and moulds. This decline in productivity levels due to the oil used caused at the company to have lower product quality and high oil consumption rate for the CNC machining centres, incurring higher manufacturing costs.
After conducting customer feedback and an on-site investigation, ExxonMobil recommended that they switch to Mobil Vactra Oil No. 2 for their CNC machine’s slideway lubrication.
Mobil Vactra Oil No. 2 is an ISO VG 68 slideway lubricant that is recommended for horizontal slideways on small to medium size machine tools. It reduces slideway oil leakage into the cutting fluid system, therefore preventing the formation of strong odours on the production floor. This creates a safer and improved working environment for the company’s employees.
Adhesive properties prevent the removal of lubricants from critical surfaces. Its controlled frictional characteristics helps eliminate stick slip, which improves the product qualification ratio and effective production of their manufacturing output. In addition, the oil has coolant separability properties that reduce slideway oil and cutting fluid discharge, enhancing the service life and performance of both the lubricant and coolant.
Shenzhen Yihe Mould was also provided with complementary services such as equipment system inspection, cutting fluid proposal and a clinic seminar in order to ensure optimum results for the company.
Since switching to Mobil Vactra Oil No. 2 in 2001, the company has seen the consumption of slideway oil reduced by 10 percent, which in turn caused a reduction in cutting fluid consumption by 12 percent annually. The product qualification ratio of their precision punching press parts and moulds has also improved significantly after the switch. All in all, the company has achieved an annual saving of US$11,890 after since making the switch to the new lubricant.
The Mobil Vactra Oil numbered series are premium-quality slideway lubricants that are formulated to handle accuracy requirements, aqueous coolant separability, and equipment protection of precision machine tools. Its anti-corrosion properties reduce the deterioration of sliding surfaces in the presence of water and aqueous coolants during production. The series is specifically designed to meet the stringent needs to slideways, therefore providing an additional margin of machinery protection.
