On the morning of May 29, CCTV's Morning News program aired Digital Transformation: A New Rebirth for a Furniture Hub Amid Adversity, a report in the Frontline Research series on working together for development. The report focused on the major challenges faced by Dongguan furniture enterprises since the beginning of this year and how they are seeking opportunities amid crisis. It was planned, filmed, and submitted by Dongguan Radio and Television Station. Houjie Town in Dongguan, Guangdong, is a well-known furniture hub at home and abroad, with more than 500 furniture enterprises of all sizes. Since the beginning of this year, scattered outbreaks of the pandemic and rising costs have brought huge challenges to furniture enterprises. So how are they finding opportunities amid adversity? Let's look at the reporter's frontline investigation. When the reporter arrived at this furniture company in Houjie Town, Dongguan, employees were livestreaming to sell products. The boss standing nearby was not focusing on the livestream, but kept looking down at the latest data from the digital management system on the computer.
Lin Guorong, chairman of Dongguan Chuangyu Industrial Co., Ltd.: "When orders are placed at the front end, they can directly enter the factory's order collection database, so the whole process can be connected in one chain."
Although he said that, he still had some doubts in his heart. With the pandemic recurring, the company's sales in the first quarter fell by double digits. Could the newly introduced digital system really help his company? Five kilometers away, at the Economic Development Bureau of Houjie Town, Dongguan, Fang Weichao was also closely monitoring how these digital management systems were being used. Fang Weichao, director of the Economic Development Bureau of Houjie Town, Dongguan, Guangdong: "If the first batch of enterprises that try first succeed in transformation, they can drive a large number of other traditional manufacturing enterprises." For Fang Weichao, the pressure this year was not small. There are more than 500 furniture-related manufacturing enterprises in the town, linked to a whole chain of industries including hardware, coatings, and timber, involving hundreds of thousands of workers. With the pandemic recurring, many furniture enterprises have encountered the awkward situation of fewer orders and sharply declining profits. How can they be helped out of trouble? Dongguan decided to promote the digital transformation of furniture enterprises to improve competitiveness, but many companies also had their own concerns.
Zhou Lijuan, marketing director of Guangdong Soonfor Software Co., Ltd.: "You only need to invest 1% to 2% of your turnover as the cost of digital transformation, and under the same order conditions, it can increase your net profit by 3% or more." Chen Shimin, general manager of Dongguan Songhong Furniture Co., Ltd.: "Will the process become more complicated? If we go digital and it doesn't fit our company, what should we do?" To solve enterprises' concern about not daring to transform, the Dongguan Municipal Bureau of Industry and Information Technology plans to allocate at least RMB 420 million in fiscal funds to subsidize enterprises carrying out digital upgrades. At the same time, to solve the problem that enterprises do not know how to transform, Dongguan has established a digital transformation empowerment center to provide consulting services for small and medium-sized enterprises, introduce and cultivate service providers, and tailor digital transformation solutions for SMEs. Li Qingchou, member of the Party branch of the Economic Development Bureau of Houjie Town, Dongguan: "We will guide enterprises to apply according to their actual needs and reduce some of the burden they face in the process of digital transformation." Encouraged by these policies, Lin Guorong made up his mind to take a last stand. With one-to-one transformation services from the government, he completed equipment upgrades in just half a month.
Lin Guorong, chairman of Dongguan Chuangyu Industrial Co., Ltd.: "What I think is that if I work harder, customers support a little more, and policies help a little more, with the government standing together with us, we can make it." Lin Guorong regarded this digital upgrade as starting a business all over again, and this digital trial brought many rewards: 22 deposit orders and transactions worth more than RMB 1. million. What made him even happier was that orders generated during the livestream were synchronized to the factory in real time. Li Yi, an employee of Dongguan Chuangyu Industrial Co., Ltd.: "In the past, someone had to find the goods manually, record them by hand, enter them into the computer, and then print the order for the finance department. It used to take two hours; now it takes two minutes." Not only has the speed increased significantly, but processes that originally relied on manual marking and cutting now only require workers to input data, and the machine can immediately carry out complex cutting. Lin Guorong, chairman of Dongguan Chuangyu Industrial Co., Ltd.: "Now it takes two minutes to finish this cutting job. Before, it took more than half an hour. It is nearly twenty times faster."
What Lin Guorong values most is that this digital management system can connect with other companies in the furniture industry chain, which is equivalent to helping the enterprise expand both sales and supply channels. It has moved what were originally offline companies online, and labor costs alone have been reduced by at least 20%.
Lin Guorong, chairman of Dongguan Chuangyu Industrial Co., Ltd.: "The overall situation is there, and you can only face it. A crisis is a crisis. In a dangerous situation, you have to think of more ways, and perhaps under such circumstances you can break out a new opportunity."
Finding opportunities in crisis and turning danger into opportunity, more than half of the traditional furniture enterprises in Houjie Town have now begun to engage with digital transformation. Across the whole of Dongguan, the number of above-scale enterprises undergoing digital transformation is close to 1,000, and the amount of new loans to digitally transformed enterprises increased by 20.39% year on year. The former world's factory is embracing the digital wave and opening up brand-new development space. Source: CCTV News
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