The industrial transformation in Northeast China is making a vigorous leap by standing on the shoulders of 5G.

In November 2023, the Ministry of Industry and Information Technology officially announced the "2023 5G Factory List", and 300 national-level 5G factories that have been built were brought to the forefront, becoming benchmarks for digital transformation.

However, surprisingly, a company called Benxi Tools from Northeast China made it to the list.

This is a company in Benxi, Liaoning that specializes in the production of saw blades and has a history of 70 years.

Benxi Tools is located in Northeast China, a place known as the "eldest son of the Republic's industry".

The first jet aircraft in New China, the first 10,000-ton ship, the first internal combustion locomotive... More than 1,000 "firsts" in the industrial history of New China were born here.

In the black soil of Northeast China, not only the materials of the past era are buried, but also the unfinished and ongoing changes that are about to break through the soil.

We still need steel and automobiles, but we need a more efficient way to produce and organize them.

In contrast to the long stagnation perception brought by literary and artistic works, for more than twenty years, Northeast China, which has existed as a symbolic image, has never given up the pace of development.

In Benxi Tools, through cooperation with Liaoning Mobile and ZTE, not only has it built the first national-level 5G factory in Liaoning, but also increased the company's output by 1.5 times, shortened the material waiting time by 50%, and reduced the delivery period by 20%.

At the same time, the export market has also been opened. During the three years of the epidemic, the profit of Benxi Tools increased by 15% annually, and the revenue from exports to Europe, America and Southeast Asia accounted for about 50% of the company's total sales.

Furthermore, focusing on the three pillar industries of equipment manufacturing, petrochemical, and metallurgy, as well as refined operations, digital waves, and intelligent changes, Northeast China has never missed any opportunity for revitalization.

The second rise of Benxi Tools is silently providing a new footnote for the transformation of Northeast China's industry.

The Long Transformation

In 1998, a state-owned tool factory in Benxi merged into the era of transformation and reform through painful adjustments.

On May 11 of that year, the state-owned Benxi Tool Factory officially stepped down from the historical stage, and the Benxi Tools Co., Ltd., funded by more than 600 employees, was registered and established at the Benxi Administration for Industry and Commerce.

The transformation from a state-owned enterprise to a private enterprise changed from a "big pot meal" to a "buffet". The positive side is that one's income depends on one's efforts, but the negative side is that the industrial growth rate in Heilongjiang, Jilin, and Liaoning has been at the bottom of the country for ten consecutive years, and self-financing also means that there is no longer institutional support.

At the end of the story of "The Long Season", Wang Xiang, once an outstanding model worker, stood in the cornfield and said to himself, "Look forward, don't look back". This is also what everyone in Benxi Tools said to themselves this year.

With the old order shattered by the wheels of the times, the vigorous new force stubbornly breaks through the cracks. The first cut of the transformation was aimed at the product line. In the past, since its establishment in 1953, with tool manufacturing becoming a business card of Liaoning and even Northeast China, the production line of Benxi Tool Factory also expanded continuously until the end of the planned economy, and the flowing orders were impacted by the market.

Rather than spreading out and being attacked from all sides, it is better to concentrate on one area and specialize. The consensus of making it a unique strength was quickly reached within the company, and the products were simplified. Since then, reciprocating saws and band saw blades have become the flagship products of Benxi Tool Factory.

Over the past two decades, by establishing a provincial-level enterprise technology research and development center, Benxi Tools has invested an average of nearly 10 million yuan in research and development expenses each year for a considerable period of time.

With the support of the old industrial foundation, the market scale of Benxi Tools has remained in the top two in the industry for many years. In addition to the bimetal band saw blades and high-precision carbide band saw blades becoming the mainstream products in the Chinese market, the products are also exported overseas.

However, another background of the times is that after the transformation of state-owned enterprises in Northeast China, the long-term pain is not only reflected in the economy, but also in talents. Statistical data shows that in addition to the low fertility rate in Northeast China, at least 70% of the 1 million college students who graduate from colleges and universities in Northeast China every year will leave the region. The higher the overall education level towards the top of the pyramid, the greater the proportion of outflows. At the prestigious Harbin Institute of Technology, the local retention rate is only 11.89%.

The old foundation will eventually disappear, and the new forces are insufficient to replenish. How to retain the accumulation of the past few decades is a systematic problem.

The answer is digitization, solidifying intangible experience into systematic capabilities; turning the technology passed down orally into digital assets that can be replicated in batches.

Therefore, Benxi Tools has long started the reform of the management system. By introducing various ERP systems, it has solved the management pain points such as the original manual statistics, separate summaries, and duplicate data. It has also applied the two-dimensional code production traceability system to digitize the traditional management methods of people, machines, materials, methods, and environment, significantly accelerating the material flow speed and capital turnover efficiency, and enabling traceability.

But is this enough?

Shortly after the launch of 5G, Liaoning Province clearly pointed out in several official documents that 5G should be integrated and applied with the province's advantageous industries, and typical cases and demonstration benchmarks for the promotion of 5G lightweight scale applications in key industries and characteristic industries should be promoted.

The system no longer dominates everything, but still indicates the latest direction of change and transformation for the players in the midst of change.

The New 5G and the 70-Year-Old Factory

The 70-year experience and technological inheritance is the halo of Benxi Tools, but also a curse in technological change.

The first difficulty comes from the factory area itself. Over the past few decades, steel smelting and processing have been typical labor-intensive industries. To improve efficiency, automated equipment such as AGVs must be introduced. However, the original factory environment of Benxi Tools does not match the deployment requirements of automated equipment. For example, the uneven factory floor makes the AGV unable to operate.

Of course, this historical legacy problem of uneven floors is not difficult to solve. The real difficulty is how to overcome the thinking inertia of every employee on the production line.

In the factory and production workshop, a considerable number of employees, especially the older masters, have only primary and middle school educational levels. They have rich experience, but it is not an easy task to persuade them to accept intelligence and change their working methods of the past few decades. For example, in the context of bonuses determined by output, how to make all workers develop the habit of checking the machine tools before starting production every day?

Similar problems occur in a more concealed manner in the central platform and clerical departments with a high level of intelligence. In the past, in order to complete digitization, the enterprise introduced many ERP software related to finance, production, and research and development. However, the various links are not connected. For example, for the same product, there is often one name in the R & D department, another name in the production area, and in order to facilitate understanding in the finance and sales departments, there are often new names. Between different software, the data standards therefore become diverse and difficult to summarize.

Difficulties follow one after another, but how to carry out the transformation is a confusing new topic for everyone.

For example, in order to introduce more automated equipment and connect the data transmission of different links, Benxi Tool Factory once tried to introduce 4G and WiFi. However, in the factory production scenario, the data transmission volume is much higher than that of the commonly used home scenario, and the requirements for signal transmission rate and stability are extremely high.

In the words of Cui Duo, vice president of the China Mobile Industrial Internet Innovation Research Institute: The 4G bandwidth is inherently insufficient; although the WiFi bandwidth has an advantage, it does not meet the low-latency index requirements of the industrial scenario.

5G might be a solution. But at a glance, there were not many enterprises in Northeast China at that time that dared to make such an attempt. Would Benxi Tools be the first to try? In the same year when the digital transformation entered the deep water zone, with the matchmaking of the Industry and Information Technology Bureau, Benxi Tools officially established a connection with Liaoning Mobile and ZTE.

During a visit to ZTE's Nanjing Binjiang Factory, Benxi Tools found the answer to "copying homework".

Here, it undertakes the intelligent manufacturing of ZTE's core products such as servers and network equipment. There are only a dozen workers in the production area of over 10,000 square meters. All cargo transportation is carried out by AGV cloud intelligent trolleys, pallet storage systems, and 5G air corridors shuttling between the 100-meter production line and the warehouse composed of 28 workstations.

In the past, an order required at least six workers to sort for three days. Now, through automated equipment and 5G, it can be completed in only 2 hours. In addition, through the 5G CPE technology, a high-definition camera is installed on the robotic arm, and all equipment assembly can be completed through computational analysis for flexible production on one production line, and the overall automation rate of the production line reaches more than 98%.

From data connection to warehousing and logistics, to automated production and maintenance, the problems of Benxi Tools have been answered in ZTE's intelligent factory and rounds of communication with China Mobile.

Benxi Tools is a typical discrete industrial manufacturing enterprise. In addition, the industry to which Benxi Tools belongs is a typical niche TOB-type industry. Whether it is the upstream equipment, raw materials, or the products produced by the factory, they lack the standardization of consumer goods and have a high degree of non-standard and customization characteristics.

So how to efficiently organize these non-standardized product tools and equipment together? The answer is still 5G.

A New Era Factory Example

The first step in technological change is to replace the manual material transportation in the original production link with the introduction of AGV robots and ground cattle.

In the past, as a typical discrete manufacturing enterprise, the lengthy material transportation link of Benxi Tools greatly affected the manufacturing efficiency and capital turnover efficiency of the factory. Often, it only takes 1 to 2 days to produce a product, but it takes several months for the semi-finished products to be stocked and leave the factory. Even simple outbound, packaging, and shipping require at least 2 to 3 days. Sometimes most of the enterprise's profits are accumulated in the company's inventory, resulting in poor cash flow turnover.

Now, through these unmanned devices, the warehousing and transportation efficiency has been greatly improved, and the overall warehousing scheduling time and inventory cost of the enterprise have also been reduced by a full 50%. At the same time, the use of 5G forklifts and three-dimensional warehouse platforms has replaced the wooden pallets that were easily consumed, not only bringing great cost savings, but also simplifying the labor demand in the warehousing link.

In the final outbound link, in the original band saw blade workshop, at least 3 or 4 workers were required to package the finished products, but now all these cumbersome tasks are replaced by an automatic palletizer that can work 24 hours a day, all year round.

In addition to logistics and warehousing, Benxi Tools has also realized the automation of product quality inspection by starting with machine vision recognition and detection technology through edge computing and slicing technology. Generally speaking, the production of band saw blades has very high quality inspection requirements. Not only is the height difference between adjacent teeth required to be less than 0.04mm, and the height difference within ten teeth is required to be less than 0.1mm, but even the distance where the detection point is located at the milling cutter processing position is strictly controlled within 2m to 2.5m. The requirements are so high that it is difficult to get started without three to five years of rich experience, and even the most skilled masters in the factory often make mistakes.

Through the deployment of 8K cameras and the training of defect algorithm models, unmanned quality inspection has been realized. In the past, in the 4G or WiFi mode, the size of the photo file taken by each high-precision camera is at least 3G; the minute-by-minute traffic throughput is as high as hundreds of gigabytes, which cannot be smoothly loaded. The large bandwidth feature of 5G perfectly solves this past problem. By transmitting the images taken by two 8K cameras in real time to ZTE's Digital Nebula Quality Inspection Platform for defect analysis, the yield rate of Benxi Tools has increased by 8%, and the profit increase for the factory is as much as 6 percentage points.

In this process, technology is not only replacing people, but also liberating people. Regarding the individual ups and downs brought about by the historical reform of state-owned enterprises in Northeast China in the past, one that is repeatedly presented in film and television dramas is: When the train of the new era rolls in, how exactly should the best screws of the old era go from here? In Benxi Tools, we have seen the answer: The relationship between the changes of the times and individual fate is not only confrontation, but also integration and even going against the trend.

Here, many of the older masters in the past factory were rich in production experience, but they didn't even know what a mouse and keyboard were. But now, most of them have perfectly integrated into the digital production line transformation. For example, for commodity warehousing and outbound, if it is recorded by the traditional manual method, it is not only time-consuming and boring, but also prone to errors. But through the barcode scanner, the commodity code can be recorded and warehoused in less than 1 second. Even old employees without computer operation experience can quickly master and cooperate. In the past, it took at least one hour of copying every day, but now it only takes 5 minutes, which is not only labor-saving but also worry-free.

Not only is this a single-point change, but the dilemma of numerous standards and data silos in the past digital construction has also been solved through the deployment of 5G private networks in different devices, enabling data collection, summary, integration, monitoring, and application. Based on this, production scheduling, inventory management, and production traceability based on data have become possible. The 70-year-old factory has realized the comprehensive perception of the overall production and operation situation for the first time.

Of course, the imagination of 5G is more than that. In the transformation of Benxi Tools, technicians often mention a term called "cutting the braid". Simply put, it is through the replacement of traditional wired equipment with 5G. Whether it is large equipment or small AGV robots, its flexibility in free assembly and combination is as simple as moving the sweeping robot at home from the living room to the bedroom.

In the past, the factory where the equipment was fixed once it entered the site has become "detachable", "assemblable", and "upgradable". The equipment can be freely combined in different workshops and production lines to achieve truly flexible production