China's manufacturers look to integrate IT systems

05.12.2005
Manufacturing is the core of China's economy, accounting for 39 percent of the country's total gross domestic product and 90 percent of its exports. At the same time, manufacturing is undergoing profound changes in China.

Increasingly, trade disputes are severely affecting normal business and bringing great uncertainties to manufacturing enterprises that depend on exports. In addition, labor costs are rising and eating into the profits of manufacturing companies. Against this backdrop, manufacturing companies are looking for ways to enhance their competitiveness and maintain their position in the global supply chain.

The main task for China's large manufacturing corporations should be to improve coordination between their different divisions and integrate their core IT applications, said Yang Haicheng, chief engineer at China Aerospace Science and Technology Corp., speaking at the recent China Computerworld CEO & CIO Summit in Beijing.

Most importantly, the integration and coordination of IT systems must extend beyond different phases of production to include the entire production process as well as service and support through the finished product's lifecycle, Yang said.

This is the path that China's chemical industry is taking, said Li Zhong, deputy director of the Chemical Industry Information Center. Chinese chemical companies have focused on using IT systems in place in 1995. The slogan at that time was "run fast in small steps," meaning focus on applications without concentrating on the development of big projects, he said.

'However, we don't say that anymore because over 90 percent of enterprises have now set up network systems and over 75 percent have established IMS and office automation systems," Li said. In addition, 64 percent of Chinese chemical companies have established ERP (enterprise resource planning) systems, but these systems are fragmented and isolated, he said.