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Smart tech wins Tsingtao brewery WEF honor

By XIE CHUANJIAO in Qingdao, Shandong | (chinadaily.com.cn) | 2021-03-19

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Tsingtao Brewery employees work at a production facility in Xuanhua, Hebei province. [Photo by CHEN XIAODONG/FOR CHINA DAILY]

An over century-old manufacturing site of Tsingtao, one of China's top breweries based in Qingdao, Shandong province, has been admitted to the World Economic Forum's Global Lighthouse Network after successfully adopting and integrating cutting-edge technologies.

The GLN is a community of world-leading manufacturers using Fourth Industrial Revolution technologies to enable bottom-line growth.

So far, only 69 factories around the world have received the honor, 20 of which are located in China, more than any other country.

Leading organizations like Tsingtao "realize the importance of having mass-customization capability, and they are innovating business models that make best use of resources to deliver tailored products to market at unprecedented speeds", said a report published by the WEF on Wednesday, in collaboration with McKinsey & Co.

Huang Kexing, chairman of Tsingtao Brewery, said: "Recognition of the GLN is a testament to our transformation efforts as we presented the first online customization platform in the industry, enabling customized packaging for business-to-business or business-to-consumer sales channels.

"It achieves tailored product development that targets the main drivers of product popularity, generating a detailed 'fingerprint' for each product to inform product development based on demand."

At the 118-year-old Tsingtao Brewery facility, workers have cut lead times for personalized products from an average of 45 days to 20 days, through digitalized transformation of production lines.

The minimum quantity per order decreased from 3,000 to 15 boxes and revenue per 1,000 liters was raised by 158 percent, according to the factory's calculations.

"Various kinds of beer products, including personalized products, use the same production line through digitally enabled flexible manufacturing. At the end of the high-speed line, a set of 360-degree high-resolution cameras can accurately identify certain kind of products and lead them to the corresponding delivery terminal without manual sorting," said Meng Qingshang, the factory's chief.

Huang Xing, an executive at the factory in charge of packaging, said every bottle and can of beer is printed with a QR code, which records data from the whole manufacturing process, ranging from selected raw materials to the finished product.

"In addition, energy consumption in the factory has also been declining with power and water consumption dropping by 19 percent and 5 percent, respectively," the executive said.

The higher efficiency production line is just part of Tsingtao's efforts to engage new business models and smart digital technology across the value chain in a bid to optimize customer engagement, product development, production and distribution.

Tsingtao posted an 18.86 percent year-on-year growth in net profit in 2020 despite the economic downturn caused by COVID-19. Over the past year, the Qingdao-based brewery sold 7.82 million kiloliters of beer and generated an operating revenue of 27.76 billion yuan ($4.27 billion).

He Yong, secretary-general of the China Alcoholic Drinks Association, said it is a necessary and even urgent step for breweries to digitize their manufacturing facilities and marketing business.

He said that as a total of 180 million bottles are consumed every day in China, "such a huge scale meets diversified needs from market, leading to solutions of cutting-edge technologies such as big data, 5G and other intelligent applications. The change is expected to bring structural transformation in the industry and consumption and even social transformation."

The secretary-general said he is pleased to see Chinese breweries taking the lead in the structural transition.

Automated manufacturing facilities are going to be seen in the brewery sector in the near future, he added.