 Good morning, everybody. Welcome to the last day of the annual meeting of the new Champions 2019. We have a great opening press conference today. I'd like to welcome you all to talking to us about the factories of the future, specifically looking at Asia. These factories are all part of the forum's global lighthouse network of factories that are really transforming the way of how things are made. In parallel with this morning's press conference, the World Economic Forum is excited to announce that we are going to be recognizing 10 new sites from around the world as the newest members of the global lighthouse network, one of which is represented here on stage with us today. So without further ado, I'd like to introduce my panelists here today. So I'll start with Katie George, who's the senior partner of McKinsey & Company. We have Jay Lee, the vice chairman of Foxconn Industrial Internet. We have Lee Yong Lee, the head of Siemens Chengdu Factory. And we have Lan Changsang, the vice president of the Shanghai Automotive Industry. So I think what we're going to do is turn to Katie first. Could you give us a bit of background on what this global lighthouse network is and why it's important to the future of intelligent manufacturing and production? Absolutely. We are delighted to be collaborating with the World Economic Forum in this effort. This is the third year of our collaboration. And we began by wanting to identify the plants around the world that were the most advanced in applying industry 4.0 technologies to improve their performance. And as you mentioned already, over the course of our work together, we identified first 16 sites in January and now another 10 that are really leading the way in applying a whole suite of new manufacturing technologies. These plants are special in that they bring together automation, so the latest and flexible automation, connected manufacturing capabilities, and also the advanced use of data and analytics to guide decision-making and optimization. What we're learning from these sites is what it really takes to move from piloting these new technologies in individual use cases to really bringing together a whole set of use cases in order to scale impact in a particular site. The group is now working collaboratively together to share learnings with each other and also to open their doors to other companies that are interested to learn how to scale industry 4.0 technologies for dramatic increases in productivity, flexibility, quality, and service. Great, thank you very much. So I think it's time we go to one of the newest members of this community. Lan Changsang, can you share with us why you decided to adopt these 4.0 technologies and how did they begin to transform your site? Okay, can I speak with you? Yes, please. It's a great pleasure and I'm really proud to be here. Now, SEIC's factory has been chosen as the Adelhaus site and SEIC is the biggest manufacturer of cars. And SAC Maxas is the youngest member of the group and we have a history of eight years, but you can see we have eight million cars and we have hundreds of brands in China. So what can we bring to our customers and how can we bring values to our stakeholders and our shareholders? This is something we have been thinking in the last 100 years or so has always been standardization, scale, economy, et cetera. For example, to control the cost, to improve quality and provide better services. But there is homogenized and similar products and offerings, especially in the Chinese market. So we've been thinking from B to C, can we make it C to B? We should know each customer's demand so we can tailor make the product a consumer needs. Since 2015, we started this exploration. In the beginning, we have to break nine technical boundaries. This includes technology, legal boundaries, et cetera. After three or four years of efforts, our whole business chain is an enclosed cycle. In the 19th factory, you will say this is similar to any other factory. Yesterday, I was talking with friends. You see in Chinese language, when you see the mountain, you don't see the mountain anymore. You see the philosophy. But then you see the mountain again. You see the factory, but you can see through. We can have tailor-made solutions for hundreds of millions. It's not tens of thousands. It's hundreds of millions. This is based on the big data collection, analytics, and our intelligent tailor-making system. We have designers who design flexibly. We have quick supply chain and distributed manufacturing system. SAIC is exploring. It's customer-driven, customer-to-business. We are greatly honored to be part of the Lighthouse network. We are happy to work with partners and our suppliers in the auto industry and in other industries to explore the opportunities to create values for consumers, for the shareholders. Thank you very much again. And thank you very much. And we're really happy that you're now part of this network. I think now what we'll do is we'll switch over to Li Yongli, who is the head of Siemens Chengdu Factory. Sir, can you tell us a little bit about some of the lessons that you've learned or hurdles that you've overcame on your way to becoming a Lighthouse factory? OK. Good morning, everyone. In Siemens, they call it industry 4.0 and deterioration. I want to address two topics. First of all, a traditional problem-oriented approach is not the right way to help you develop your digital strategy. The deterioration in Siemens Factory Chengdu is based on platform concept, instead of a tool for one function plus a tool for another function. You know, this digital enterprise solution requires a bigger view. It covers the whole demand of the per-life cycle management and the supply chain management. It is a collaborating platform, you know, on which the machine works with the machine, machine with the people, and the people with the people. So we need to integrate many functions into this platform, such as the manufacturing, R&D procurement service, as well as the collaborating process with the suppliers and the customers. So the scope is much bigger than short-flow digitalization. It covers how do you design your product, how do you develop your production process and equipment, and then how do you manage, optimize your operating performance. So this is a three key element when we talk about the industry 4.0. That means the production and the performance. So we use a digital twin to manage this three key element. That means we have a virtual world, and in the virtual world, we can do a lot of verification, simulation, and optimization. Anything we want to realize in the physical world, we will do this simulation and so on in the virtual world first. So it is quite a comprehensive approach. Nobody can achieve it in one day. So to develop long-term digital blueprint based on our own situation, based on the business, is very important. To simply copy from others or buy a ready product from market is not a right approach. Second, I would highlight people, means our colleagues. It is true that digitalization needs top-down approach. And top management play a crucial role in the transforming to drive the change. Well, I want to emphasize the mindset and the competency of people at the working level in the operation function, they are the final factor to determine if this transforming can be a success or not. In our factory, the implementation is always with step-by-step approach. Means we use pilot product to verify and optimize the solution, then expand to the whole company. And from my point of view, this is the best process for our colleague to help them establishing the competency and also confidence. At the beginning, they have to learn to adapt to change. Well, after about two years, they are developed as a driver in the innovation. Now they push us to do more digital practice because they know the value for their work. So I want to point out, after this digital transforming, the job requirement will be totally changed. We need to help our employee, our colleague, to be capable to work with this powerful, intelligent digital platform to do the job like digital planning, data analytics, or data-driven simulation. So in Siemens, we focus on both to develop the digital enterprise solution and develop people. Now we have already defined this long-term enterprise level blueprint. And we are implementing it step-by-step. Thank you very much. I think in the fourth Industrial Revolution, it's characterized by this acceleration of information. And I think some of the challenges is just keeping up and staying informed as to what's happening. So this Lighthouse community provides a valuable way to share information on what's working, lessons learned, et cetera. So I'd like to turn now to Jay Lee, the vice chairman of Foxconn Industrial Internet, to share how did you start to use your position as a Lighthouse to share these learnings across the network? And then also, to give us maybe your perspective on what was the value for joining this network. Well, I think the Lighthouse in general is a mission very clear, like Katie mentioned. You have a great connectivity. You want to address the flexibility on automation, which has a meaning, not just for the sake of automation. But most importantly, you want to make sure the business has a resilience. Resilience means the intelligence means something for the people, for the future, the workforce. So basically, what Foxconn Industrial Internet is a manufacturing company originally, we make different products to support industrial internet business, like cloud components, industrial big data, industrial AI, and 5G network, and AK, and plus the mobile devices, and plus robots. So these are quick technology basically are the driver for the future industrial internet. So when we demonstrate such things, what we do with our first step is to let's look at what we make. And then second, we use the large number of resources how to establish a good platform. For example, we have a lots of machinery. We have 175,000 machine tools, like 80,000 robots, and 1,800 SMT line, which is about 14% of the world capacity in terms of SMT. And then these data, when they connect it, but we have to do something. First, you have to make sure the quality can be as KPI much better, and the cost much lower, efficiency up. Eventually, then you can manage in the entire system is more agile. Now, after you build such capabilities, what you want to do the next step is to vertically, you want to help your suppliers do the same thing. Then going up, you support your customer to do the same thing. That's what we established called the Lighthouse Academy. Lighthouse Academy, the function is to provide such education system, support our people, staff, plus our collaborator and our partner. That's very important. We open the Lighthouse Academy. And then we provide the principal-based training and practice-based training, project-based training, and professional-based training. We call 4P system. And next, we also have a horizontal. We're going to expand to different vertical industries because after you have enabling technologies now, you can help different companies, different verticals, automotives, electronics, and every others. How do you do that? We have a partner platform. We just had our annual meeting in Shanghai on June 29. We launched 30 different partnerships with different companies. And this partnership will be our collaborator in providing the industrial service-oriented manufacturing. So yeah, we are a regionalized manufacturing company. But you wanted this enabling technology to support a service-based manufacturing. So let's become a new paradigm of a value delivery. Thank you very much. I'd like to open it up. I have a couple of questions, but I know some of the people in the audience will as well. So my colleague is going to come with the microphone. Please. Thanks, Amanda, for giving me this chance. I'm with Phoenix. I have a question for Jay Lee from Foxconn. So due to the very complicated political climate and also the right intention between the US and China, some companies are considering moving their factories overseas to other parts of Asia to avoid tariff. So does Foxconn have a plan to relocate its business, if so, to which destination country? Thank you very much. Many companies, global companies, Foxconn is an international global company as well. And so it's a global footage. Always support the global networks. So basically, the long-term goal is to support the global operation. Manufacturing is the roots of, I think, the company business. We work with many, many vendors and the suppliers globally network. And the foundation in China was originally the base. But they're growing globally. So this is always a strategy to support the global operations. And I think the many economic development are going to be opportunities for many companies as well. So I think for talent development and one thing, FI believes very strongly to support the workforce development, continue to sharpen the skills of workforce, provide our industrial internet academy, also our, the Lighthouse Academy, provide training for different partners. And of course, this education will give us stronger a workforce development in the base manufacturing side here. Other questions? We have one in the second row. Hello, I'm with Xinhua News Agency. My question goes to Mr. Lan. Could you please share with you your C2B factories? Thank you. For the C2B factory, that is the user-driven business development strategy, what we call the B-end of the business. The C2B factory currently need to reply to the demand of our users. Right now, all the orders to set maxes are online. Our users order a vehicle, they can customize their need. After we receive order, the information will feed back to our factory. And it will also automatically goes to our supplier. Our smart supply chain would initiate the manufacturing of the component. So it is truly built to order. For this smart factory, need to have their digitalization in distributed manufacturing and smarter logistics, smart supply chain, all of these areas are needed to support our manufacturing. Eventually, for the production line, that's automation that is at least prioritized by the automobile industry. We have been doing automation for past 20 years for efficiency. What we value more is in the early stage, digitalization capacity. The digital analytics will bring us intelligence and we will can collect more user behavior data and order data to make forecast into next possible manufacturing demand. And with the data coming in every year, we would know at a different time of year, at different age group, what has a preference of the user. You know, we are at a very priming moment with smartphone, smart connectivity, bringing us more opportunity. So more users would like to share with us their ideas. Sometimes these ideas are not realistic yet, but at the OEM, Seik Maxis would like to listen to the user's needs. We have seven to eight million user interact with us on our platform, share with us what they want, what are the M-mat needs. We're happy to be in the era of mobile internet and IT technology that enabled our capacity where an OEM can interact with millions of friends and our hundreds and thousands of engineers can talk to our user 24-7, not just into working hours. So when I was introducing the Seik Maxis Smart Factory, we say, in Chinese philosophy, you need to look at the mountain. First step is a mountain. Second step, you see the philosophy behind. Third step, you see the mountain again. So when we say intelligence, it is not just automation. It should be digitalization. We need to support individual needs of our user and while we deliver, we would have around extra one week for the manufacturing time. We are having a slightly high cost compared to conventional automaking, but we can increase efficiency to cover that extra cost. So behind such a smart factory, we are restructuring the relationship of the consumer and OEM. We manufacture to the individual need of our consumer and that is customized vehicle. I hope I can answer your question. This is something we have been doing for three decades, so I explained a lot of words, but it's not easy to answer your question in a clear way. If possible, you can talk to me offline and we welcome you to come to visit our Lighthouse Factory. Thank you. We have time for one more question. Do we have right in the back? I'm sorry, is it possible for me to have three questions? Three? I am with a media under NDRC. I have a question. First factory, the Ministry of Information and IT Technology had been working on the industrial internet. When you mentioned the Lighthouse Factory, is it similar to what we have in the MIIT in China or will you also participate in the standardization of China Authority? Second question to the virtual world and real world of Simons. Is that combination means the future smart space and digital trains? And third one goes to St. Max's. You have been doing it for three to four years. Do you have any data to support you to show that there is an increase in your business or a added value? I hope you can share with us some real world data and figures to show how your strategy pays out. Three questions? Thank you. Who would like to take the first part of it about standardization? Well, I can make some comments, right? So basically the guideline, the world industrial internet has a different layer of meaning, but in general they have a general framework, which is a guideline. It's not called standard, it's a guideline. So basically the system is really defined driven by sectors. For example, you have automotive sectors, semiconductor sectors, and the electronic sectors, and transportation sectors, mining sector. Each sector might have different types, application layers. But for our integration, we follow the 5C architecture, which is a well layout. If you look, if you Google cyber-physical system Wikipedia, you will see 5C architecture, which I created. Okay, layer level one is connectivity. How to connect things in the right way. There are many standard OPC, MT Connect, and so eventually they give different type of format. Second thing is conversion. How do you take the data layer, convert to some features so you don't have to collect all the data and put in the cloud? So the edge devices, for computing edge device, second level. Third level is a cyber level, which is a cloud, cyber, and which you manage the relationships between different devices operation. The fourth layer is a cognition. How people can see the problem, understand the issues. The last level, fifth level is called configuration. How do you change? How do you optimize? Avoid problems. So the 5C, that's a kind of protocol as well. So which is aligned exactly the same way worldwide. Thank you. May I? Please. Just so what I... Okay, allow me to answer your question partially on the first question and the question for Zach. First question about the MIIT industrial internet. It started with a methodology. Right now, all the companies need to transform itself with internet and digitalization trends. What MIIT is doing is, they are accelerating the transition with methodologies and tools. We are also working with the Ministry. We have good communication and data exchange with them. Every off-the-business needs to do things based on their status quo and their capacity in IT and digitalization. Big companies may have more resources. Smaller companies may have less resource but more agile. I hope all of the companies can have your own opportunity. In the future, if you are not digitalized, your efficiency cannot compete in the future world. Secondly, when we do the C2B, Digitalized Smart Factory, you'll ask about data from January to May. I think auto marketing in China reduced by 15%, but we increased by 15%. And I also talk about being a young company. The set Maxis started from the zero in brand-building and up to now in several niche markets. We are in the top. And for the set Maxis, we're also having a good global deployment with the two 45 countries, regions, EU, UK, and others. So at the very beginning, we would like to face the future. Those digitalized companies would have their competitive edge in efficiency. But there is a challenge. We did not mention today is the organizational change as well as doing all the innovative business can attract better talents, including the talents coming from IT or digitalization areas. They would like to work in some company like us, who seems to be a conventional company, but a highly innovative. We are happy to attract those futuristic talents. I hope I answer your question. Thank you. I would like to explain the virtual world and the physical world. You know, we call it digital twin. Especially the virtual world, data is the foundation. Now data is very hot topic. But it doesn't mean you have a data then you can have your virtual world. You need to use this data to build your virtual world based on your knowledge, your experience to build the pattern, the algorithm, the intelligence, and to build this virtual world. When the virtual world can tell you more than your physical world, this can help you to work and rely on more on your virtual world. And then finally, this virtual world can contribute a lot to your physical world. So quite often we talk about data analytics, we talk about simulation, we need to use data. When you use data, that means you are talking about the virtual world. Well, if I may add one point, please. Because the earlier cyber physical thing, if you look at the paper in 1998, I wrote the first one. Why are we doing this stuff? It's a cyber physical system because in a human world, based on a man-made world people can see, can define. But once we have a means to collect data, then we can see the invisible world. Co-relationships, right? So once visible, once invisible. So visible world model, human-made. Invisible model, data makes. Eventually you can understand what you define versus what you have not defined. You can learn from those things. That's the power of a cyber physical system, right? So eventually that help people, help human understand more about what to do better. That's the purpose. Not just to have a computer to look simulation. That's not the purpose, yeah. Well, I'd like to thank you all for all of your questions. Many thanks to my panelists and congrats to the new members of the Lighthouse community. That's a wrap for us today. Enjoy the rest of your annual meeting of the new champions. Thank you. Thank you.