The 'COVID-19' crisis of 2020 is like a typhoon, indiscriminately sweeping across enterprises nationwide and rapidly reshaping China's economic structure.

Amid the pandemic, some companies have implemented across-the-board pay cuts, others have laid off employees, some have gone bankrupt, and countless small and medium-sized enterprises face 'cash flow emergencies.' This crisis is accelerating rapid market transformation. The ever-changing market conditions have left many business operators bewildered, while hundreds of millions of workers are gripped by anxiety. When the nest is overturned, can any egg remain intact? It is high time for our manufacturing industry, particularly printing enterprises, to consider transforming their operational and management models.

1. The Greater Crisis for Chinese Manufacturing Lies in Internal Management

Under the pandemic, the primary crisis facing Chinese manufacturing is first and foremost a survival crisis. Companies must ensure sufficient cash flow to stay alive! However, the greater crisis actually stems from their own management. Affected by the epidemic, most enterprises will see reduced orders in Q1; yet as the economy recovers post-pandemic, order volumes will experience explosive growth—the consequences of 'starving' and 'choking' are equally severe.

Pain points in day-to-day management—such as delayed deliveries, high quality losses, difficulties in recruitment and retention, and stubbornly high costs—will become even more prominent and acute, ultimately resulting in stagnant revenue and drastically reduced profits. As the saying goes: 'He who takes no thought about the future is sure to have immediate worries.' To remain invincible in crisis, enterprises must achieve a transformation in their operational and management models.

This 'transformation' is the evolution from Industry 1.0 to Industry 4.0. To realize this change, companies need to systematically build their technical systems and achieve management that is 'lean, informatized, automated, digitalized, and intelligent'—commonly known as the 'Five-Step Development' for enterprises.

Among the 'Five Steps,' lean management is the most important; digitalization is what should be achieved most; and informatization is the most essential technical means. Lean management is the foundation of the 'towering skyscraper'; digitalization is the necessary path for enterprises to cross the chasm to intelligence; informatization is a critical tool and means to solidify management, as well as the necessary technology to achieve automation and intelligence.

2. Lean Management Is the Foundation of the 'Towering Skyscraper'

Let us first focus on lean management. The essence of lean is the absence of waste; its core philosophy is to eliminate waste, reduce costs, and improve efficiency. In short, lean management applies lean thinking and methodologies to continuously optimize processes and reduce waste, helping enterprises improve various performance targets and indicators in operational management, establish ultra-low-cost production control systems, and enhance core competitiveness.

Lean management must be built upon a foundation of standardization. Standardization means enabling enterprises to 'do the right things' and 'do things right.' Companies need to establish sound quality, production, and supply chain management processes, develop scientific performance evaluation and compensation distribution systems, ensure continuous management improvement and innovation, and achieve standardization.

Furthermore, the value of people must be fully reflected throughout the management process. Standardization is the foundation of lean management; without standardization, there can be no lean management.

3. Digitalization Is the Necessary Path for Enterprises to Cross the Chasm to Intelligence

Next is digitalization. In our manufacturing sector, customers frequently send inquiries requesting sales staff to provide accurate pricing and delivery timelines. The enterprise's overall responsiveness becomes a critical weapon for winning business opportunities, and this requires digitalization to achieve.

Let us envision the ideal state: the moment a salesperson receives an inquiry, the information enters the Customer Relationship Management (CRM) system and simultaneously undergoes processing across other systems; the quotation module in the ERP system calculates prices for different quantities, materials, structures, delivery locations, and their breakdowns; the Supply Chain Management (SCM) system obtains feedback from material suppliers and collaborative partners; the Manufacturing Execution System (MES) provides delivery timelines under various order placement conditions.

All these tasks can be completed within seconds. While the salesperson is still confirming details with the customer, the response to the inquiry has already been generated, requiring only a final confirmation by the salesperson or an intelligent robot before submission to the client.

What previously took hours or even one to two days for price verification can now be accomplished in seconds. To reach this standard, enterprises must fundamentally reengineer their operational models, delivering the best possible experience and value to customers throughout the entire process.

4. Informatization Is a Critical Tool and Means to Solidify Management

Third is informatization. Enterprises in the Internet era must embrace the philosophy that 'IT is the business.' We must recognize that IT is a technology and a tool that must serve management purposes. At all times, enterprises must follow the logical relationship of 'management first, technology second.'

The planning and construction of IT informatization systems must be built upon a deep understanding of the company's business and development needs. The emphasis should be on aligning IT with business objectives, matching IT with corporate strategy, control models, and business processes, understanding industry trends, and anticipating potential changes within the enterprise.

IT informatization systems must efficiently process the increasingly massive data generated from daily operations, optimize algorithms, and even enable automatic analysis and 'poka-yoke' (error-proofing) processing of foundational databases. This continuously simplifies the complex and tedious workload for employees, reduces repetitive and inefficient labor, ensures sustained support for business needs and development, and manages various resources in business operations effectively.

The construction of enterprise IT informatization systems must proceed in phases. Management achievements from daily operations should be solidified using IT management methods and technical means, with both tangible and intangible assets accumulated as standard references for future innovation and continuous improvement.

Among all IT informatization systems, the ERP system is the core component. Its primary purpose is to assist enterprises with cost accounting and management, helping them gain eyes that can clearly see the 'line between survival and death,' and achieving the synchronization and integration of information flow, logistics, and capital flow.

The synchronization and integration of these three flows is the true hallmark of informatization for manufacturing enterprises. With an ERP informatization system, enterprises can promptly identify which customer or which order is incurring losses, and even pinpoint which production process caused the loss, enabling timely corrective actions.

Furthermore, the ERP informatization system provides the 'data-driven' core for future intelligent manufacturing. ERP supplies data sources, while MES handles data collection and transmission—including quality control process information, raw material and product traceability data, equipment parameters, and safety protection data.

Real-time data interaction among ERP, MES, and equipment constitutes the intelligent reporting feedback system and intelligent operating system that integrates the 'three flows' of logistics, information flow, and capital flow. This enables intelligent operations and control related to order-based manufacturing plan tasks. Together, ERP, MES, and equipment form a data-driven intelligent manufacturing architecture. At different stages of enterprise development, priorities vary; changes in operational and management models at each stage are an inevitable path for enterprises.

In 2020, competition in China's market economy will become even more brutal. When competition reaches white-hot intensity, three outcomes will emerge: profit margins will approach zero infinitely, products will shift from tangible to intangible, and the market will enter an era of refinement. For printing enterprises, this demands accelerated transformation and elevation of our mindset and thinking, as well as accelerated evolution of operational and management models. Only by understanding market development trends can we seize opportunities and ultimately achieve greater profitability.

(The author is General Manager of Shanghai Realscheme Enterprise Management Consulting Co., Ltd.)