In the past, China’s manufacturing boom relied heavily on a large pool of low-cost labor.
However, times have changed. In recent years, the new labor force has declined and living standards have improved. Labor is no longer a cheap resource.
Labor shortages have grown increasingly common. This has pushed enterprises to prioritize automated production to meet manufacturing needs.
As a key part of automated production, non-standard equipment has grown more popular over the past decade. This has spawned many non-standard equipment manufacturers—and DITAI is one of them.
Currently, enterprises’ demand for automated equipment is rising fast. Due to the diverse needs of different industries, non-standard automation makes up a large proportion.
Expenditure on non-standard equipment can be budgeted in advance. This includes costs like machine depreciation, electricity, gas, daily maintenance, and operator salaries.
One machine’s productivity can be equivalent to that of at least several, dozens, or even hundreds of workers.
Naturally, faster machines cost more. But this maximizes savings in production costs.
Moreover, products made by machines have more consistent quality.
After the financial crisis, China’s non-standard automation equipment industry is sure to thrive even more.
The non-standard automation market has grown rapidly, with deeper integration of automation products. In this field, China still lags behind developed countries by 10-20 years overall. New non-standard automation equipment is often mechatronic, leveraging the latest achievements in information technology. However, designers in some Chinese enterprises are unfamiliar with electronic products and hesitate to adopt them, significantly limiting technological advancement. Additionally, many core technologies remain dependent on imports, making it difficult to reduce costs. Nevertheless, over the past decade, non-standard automation has seen extensive application in the Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin regions, with domestic enterprises striving to catch up.
Currently, high-end products are still primarily imported. In theory, a growing market should drive technological R&D and enterprise scaling, offering favorable development opportunities. Paradoxically, domestic non-standard equipment enterprises have fallen into a vicious cycle of low-quality and low-price competition, relying on simple imitation rather than developing unique patented products. They also fail to accumulate sufficient funds for growth. Today, small workshops with a dozen employees remain the mainstream in the non-standard equipment sector.
The current state of non-standard equipment results from complex subjective and objective factors. Although the industry remains relatively healthy, seven major obstacles are increasingly hindering its development:
Lack of Scalability and High Input-Output Ratio
Non-standard equipment is tailor-made for specific enterprises without universal standards. Equipment for Enterprise A usually cannot be mass-produced for Enterprise B. A typical 300,000 RMB device takes 2-3 months from customer requirements, solution design, discussion, contract signing, drawing release, component processing, to assembly and acceptance. Due to the low input-output ratio, large enterprises often disregard such (tedious) small orders, while they attract small firms with 10+ employees. Thus, small-scale enterprises with a sales team, a few mechanical and software engineers have proliferated.
Intense Competition and Fragmented Market
While the non-standard automation market has expanded, the number of manufacturers has exploded. In 2000, there were about 30 renowned non-standard equipment manufacturers in the Pearl River Delta and Yangtze River Delta (mostly Taiwanese-invested), accounting for 70% of the estimated 600 million RMB market. By 2012, Chang’an (a major hardware manufacturing hub) alone had over 70 non-standard equipment factories, with tens of thousands nationwide. The market scale grew 100-fold to 60 billion RMB, but manufacturers increased a thousandfold, with new players primarily being small firms. This has prevented the formation of large-scale enterprises.
Low Entry Barriers and Diverse Competence
The low initial investment (around 300,000 RMB) fuels the rise of non-standard equipment manufacturers. A few grinding machines, milling machines, a few hundred square meters of space, and a dozen workers suffice to start such a business. Typically, 2-3 shareholders invest: one handles sales, one technology, and one after-sales service, requiring no large capital or corporate involvement. This has kept the industry fragmented, with poor-quality products often prevailing over high-quality ones, and limited innovation.
Low-Level Automation Demand Restricting Upgrades
Many manufacturers opt for low-level automation due to cost concerns, which hinders the industry’s advancement. Automation to save labor evolves in three stages: semi-automation, full automation, and integration of automation with informatization. Most enterprises choose semi-automation, where complex processes still rely on manual labor. Such low-level 需求 (demands) can be met by designers with basic mechatronics knowledge, limiting the industry’s progression to higher tiers.
Misplaced Focus on Cost Over Technology
Non-standard enterprises should sell technology and solutions, yet many haggle over material costs and management fees. Without technology, non-standard equipment is mere scrap metal. Enterprises should emphasize how their solutions save costs and enhance efficiency, justifying the returns for intellectual labor.
Management Issues in Medium-Sized Enterprises
While some medium-sized non-standard enterprises (100+ employees) with annual outputs of tens of millions have emerged, poor management and weak accountability among designers and technicians often lead to quality issues. Consequently, many clients revert to purchasing cheaper products from small firms.
Small Scale, Technological Gaps, and Homogeneous Competition
China has numerous non-standard automation enterprises, but most are small-scale, technologically backward, and trapped in homogeneous competition. How to compete in this industry poses a challenge. Yet, challenges bring opportunities: enterprises that survive the initial stage will embrace rapid growth in this promising market.
Conclusion
The non-standard automation equipment industry in China faces both hurdles and opportunities. Overcoming low-level competition, enhancing technological innovation, and scaling up will be key to transforming challenges into sustainable development in the future.
