5G technology triggers age of smart factories and digital transformation of manufacturing – South China Morning Post

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In recent years, digital technology has broadened the scope for innovation in the manufacturing industry. The use of artificial intelligence (AI) and 5G (fifth-generation mobile communications technology) networks offer a variety of benefits including better production efficiency, reduced operational errors and higher product quality. Employing these technologies in factories is quickly becoming essential for companies if they wish to stay competitive in a digital-first future.

Research by Fortune Business Insights suggests that the value of the smart manufacturing industry is expected to grow from US$310 billion in 2023 to US$745.1 billion by 2030. As it stands, Asia-Pacific holds the largest market share in this industry, and it is also predicted to be the fastest-growing region during the next decade.

Last month, Southeast Asia’s first-ever fully 5G-connected factory was opened in eastern Thailand, following a collaboration between Chinese electrical appliance manufacturer Midea, Huawei Technologies, the global provider of information and communications technology infrastructure and smart devices, Thai mobile phone operator Advanced Info Service (AIS) and telecommunications operator China Unicom.

The facility at Chonburi Industrial Park, in Chonburi province, makes air conditioners using technologies, including 5G, AI, big data and cloud computing. It is Midea’s first such factory outside China, and is now one of the region’s largest air-conditioner production bases.

“In line with Midea Group’s strategy of full digitalisation and full intelligence, the Thailand 5G smart factory sets the blueprint for the future of manufacturing, where each production phase is seamlessly connected, and the overall operating efficiency has been improved by 15 per cent to 20 per cent,” Vincent Cai, general manager of Midea Thailand Air Conditioning Factory, said.

Midea’s factory is a prime example of how industrial processes can be modernised using full 5G connectivity across the factory floor. Production devices can be monitored and analysed in real time, with the collected data helping to ensure that all the equipment is being used optimally.

The use of 5G technology also helps automated guided vehicles (AGVs) to transport goods around the factory. These vehicles are able to plan their routes using real-time information about the surrounding environment. They are equipped with cameras and lasers, which gives them the ability to communicate with other AGVs in the factory and detect hazards along their route.

The use of 5G technology at Midea’s smart factory in Thailand ensures that automated guided vehicles equipped with cameras and lasers can communicate with each other and detect hazards while transporting goods.

Phupa Akavipat, AIS’ acting chief enterprise business officer, said: “5G is the only technology allowing network coverage over 160,000 sq metres [1.7 million square feet] covering three production plants.” He said this level of connectivity has helped to transform the manufacturing process, making it more streamlined than ever before.

Eunice Tse, general manager of China Unicom Operations (Thailand), agreed, and highlighted the foundational importance of telecoms and IT infrastructure: “Thailand’s 5G network readiness positions itself as a front runner in the Asean region. China Unicom is devoted to supporting the success of Thailand’s 4.0 strategy with extensive use cases and new 5G2B scenarios, and driving digital transformation for manufacturers.”

AI inspection is another key component of smart factories, powered by 5G connectivity. Midea’s factories use AI to detect faults in the air conditioners that are being produced. Its implementation has led to a significant improvement in production efficiency at Midea’s smart factories, with first-time yield increasing by 4 per cent. It has also reduced the number of production line units that need to be reworked by 75 per cent.

Smart factories also offer improved working conditions, especially in terms of safety. Workers can oversee the movement of materials along the production lines, using 5G smartphones to remotely control robotic arms, which reduces the risk of accidents usually associated with manual labour in factory spaces.

Digital transformation has played a key role in Midea’s growth during the decade up to 2022, with the company’s net profits increasing more than five-fold. Midea has raised the automation levels in its manufacturing operations from 30 per cent to over 50 per cent during the decade.

Huawei has played an instrumental role in making this vision of smart manufacturing a reality. The company – ranked this year as the world leader in 5G core products and services for the sixth consecutive year by the data analytics company GlobalData – has contributed to a greater proportion of the world’s 5G networks than any other telecommunications business.

The 5G Operation Room at Midea’s factory in Thailand, which has been built using a range of Huawei and its partners’ smart manufacturing solutions.

Midea and Huawei began collaborating in 2021 at the electrical appliance maker’s first fully 5G-connected factory in China’s Hubei province. Private 5G networks, which cover all of the factory’s production and warehousing areas, enabled inventory rates to double and labour costs to fall by 30 per cent.

Huawei also worked with Midea in China to upgrade its production campus network in Guangdong province before the two companies’ latest collaboration involving the smart factory in Thailand.

“We have seen how 5G has played an important role in driving industry transformation,” Woragarn Likhitdechasakdi, chief technology officer of Huawei Thailand, said. “The manufacturing sector has shown significant potential for development and transformation with the adoption of 5G technology. Huawei remains committed to collaborating with industrial customers, operators and partners to generate 5G business value.

Midea’s use of AI to inspect the air conditioners manufactured at its smart factory in Thailand has cut errors and led to a 75 per cent reduction in the number of devices that need reworking.

“To achieve this goal, we will actively engage with our customers to understand their digital strategies. By delving into production processes and identifying specific needs, we aim to share valuable experiences and best practices that accelerate the adoption of 5G for intelligent manufacturing upgrades.”

The development of Midea’s 5G smart factory marks a key milestone for the manufacturing industry in Thailand and across Southeast Asia. It showcases the benefits of Industry 4.0 – the digital transformation of manufacturing – which the management consultant McKinsey predicted in 2018 could drive annual productivity gains in the region of up to US$627 billion by 2025.

Huawei remains committed to helping the development of Industry 4.0 infrastructure through the use of 5G and AI technologies. In June last year, the company teamed up with the United Nations Industrial Development Organization (Unido) to establish the Global Alliance of Artificial Intelligence for Industry and Manufacturing. This platform was formed to foster collaboration and knowledge-sharing in the process of bringing 5G- and AI-capabilities to global industry.

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