Alibaba Group has revealed its new manufacturing model for the first time with the unveiling of Xunxi Digital Factory. Powered by Alibaba’s cloud computing infrastructure and IoT, the Hangzhou-based factory would offer SMEs a digitalized end-to-end manufacturing supply chain. This would allow for fully customized, demand-driven production.
“Data is the core of New Manufacturing and harnessing data insights is key to capturing new opportunities in the shift in consumer preference for personalized rather than mass-produced goods,” said Alain Wu, CEO of Xunxi Digital Technology Company, Alibaba Group. “New Manufacturing transforms traditional manufacturers with data-driven intelligence and technology to move towards a more agile model of production based on real-time demand. This allows traditional manufacturers to improve profitability and reduce inventory levels while still being able to meet these personalization needs.”
The introduction of ‘New Manufacturing’ is another milestone in the implementation of Alibaba’s ‘Five New’ strategy. It was first introduced by founder Jack Ma in 2016, and comprises New Retail, New Manufacturing, New Finance, New Technology and New Energy.
Produce Small-Batch Orders
At an early stage, apparel was identified as the starting point for Xunxi – a sector in which the lengthy production cycles and high inventory levels have long been a problem for small and large players alike. Powered by new technologies such as real-time resourcing, process and cost planning, automated in-house logistics and Xunxi’s manufacturing operating system, the factory would be able to produce small-batch orders at reasonable costs. Also, with shorter delivery times, consequently increasing manufacturing efficiency “from 25% to an average of 55%,” according to Alibaba.
Xunxi’s trend and sales forecast model alongside its own artificial intelligence-aided integrated product design platform gives manufacturers insights into consumer preferences. This enhanced information flow can reduce research and development costs and enable businesses to capture the fast-evolving opportunities for consumer personalization.
Since its inception, the factory has collaborated with Taobao and Tmall merchants, livestreaming broadcasters and streetwear designers to explore and experiment with new possibilities of apparel manufacturing.
As the initiative progresses, the technology will be replicated into other sectors in addition to the current focus of fashion and apparel. Mr. Wu added, “We look forward to learning from and partnering with industry peers to build the ecosystem of New Manufacturing together.”