This article focuses on the market dynamics, applications, the industry ecosystem and future opportunities and challenges. Specifically, the article mainly analyses these complex issues through the in-depth case study of Youhualin, with unique insights from the industry expert.
According to The 14th Five-Year Plan on Development of Smart Manufacturing of the People's Republic of China ("十四五" 智能制造发展规划), by then, more than 70% of the manufacturing enterprises will realize digitalization, cyberization, intelligent manufacturing equipment, and improvement on the technical level and market competitiveness of industrial software. The market satisfaction rate of intelligent manufacturing equipment and industrial software exceeds 70% and 50%, respectively.
Under China's favorable policy and market environment, the intelligent decision-making market has grown rapidly in recent years. Many companies and governments have begun to rely on AI solutions.
Key Market Insights
Artificial decision-making technology is a leading emerging technology, and it has been reshaping the business world. This technology helps support, augment and automate business decisions by using a combination of computer science and electrical engineering to link data with decisions and outcomes.
According to International Trade Administration, the global AI industry is booming, and many companies and governments are beginning to rely on AI solutions. In 2021, AI funding reached $66.8 billion globally, and a record 65 AI companies hit $1B+ valuations, up 442% from 2020.
Asia Pacific is expected to lead the market growth of artificial intelligence for two reasons. Firstly, Asian countries such as China, Japan, India and Singapore have increasingly adopted the 5G, which is likely to escalate the Al use cases. Secondly, these nations have developed policies and relevant strategies to boost AI technology implementation. In 2021, the Chinese market size is about CNY 6.3 billion, an increase of 66.4% over the previous year, and the compound growth rate is expected to be 54% in the next 5 years. Numerous intelligent decision-making companies emerged, and one of them is Youhualin.
Founded in 2016, Youhualin is a technology company driven by intelligent decision-making technologies. The company has been committed to the promotion of AI decision-making technology in China, focusing on the use cases for the manufacturing industry and the large transportation industry, providing enterprises with "Industry + AI + OR" intelligent decision-making overall solutions, improving the level of enterprise decision-making, and making sure the decision-making process is fast, sensible and quantifiable. Additionally, Youhualin always tries to enhance the configurability and executability of its core algorithm platform through continued investment. The company believes that the whole product system will continue to grow as more and more industries leverage AI decision-making technology
The Application of AI Decision Technology
The impact of artificial intelligence is being felt across multiple industries, which include transportation, manufacturing, education, marketing, and industries that are trying to realize digitalization. The automation, detection and prediction process are greatly enhanced with the help of AI. Additionally, employees are freed from the human-intensive and tedious routine tasks. This article will only discuss the AI application in transportation and manufacturing, which are two prominent fields that generate the most societal impacts, with the Youhualin case.
In the manufacturing sector, Youhualin focuses on the direction of supply chain management, aiming to start from the urgent needs, including demand/order planning, production schedule, procurement/supply and inventory planning. By integrating technologies such as operational optimization algorithms, artificial intelligence and extensive data analysis into products, Youhualin's solution provides real-time and synchronous production scheduling plans for different production stages while satisfying various production resource constraints to help enterprises maximize business objectives, production management and operation processes, reduce production costs, and improve enterprise profitability. The improvement in production and management efficiency and decision-making capabilities significantly shorten the production cycle, thereby speeding up the company's response to market demand.
In the large transportation sector, Youhualin's current key clients are in the aviation industry. In operations research, the decision-making optimization of aviation itself is a problem of large scale and high difficulty. At the same time, as aviation is an infrastructure industry highly regulated by the domestic country with high requirements for safety, there will be little customization demand, which is suitable for the large-scale application of intelligent decision-making products. Therefore, in the early days, Youhualin decided to start with intelligent aviation, based on the two major management lines of revenue and operation and launched a series of products and solutions such as airline crew scheduling, route network scheduling, and intelligent freight rate management. For instance, the aviation smart scheduling system is to help airlines decide which routes to open, how many flights to fly on each route, what type of aircraft to fly, and which aircraft to fly; The crew intelligent scheduling system helps airlines designate pilots, flight attendants, air security and other positions on the flight, automatically matches qualified personnel and tasks, realizes automatic scheduling, and performs post-queuing verification and early warning monitoring in real-time. In a group project with more than 10,000 personnel, the intelligent crew scheduling system of Youhualin can reduce the number of flight attendants by 10% while covering the same flight size and improve the utilization rate of each flight attendant's working hours. At present, Youhualin serves more than 30 Chinese airlines and is simultaneously increasing its market penetration
AI Industry Ecosystem
The artificial intelligence industry chain consists of three parts: the basic layer, the technical layer and the application layer. According to Han Lixi, the Coo of Youhualin, the algorithm platform of Youhualin could be viewed as the technical layer. The application of the entire system, including the problems it solves, such as the integration of production and marketing, belongs to the application layer. Therefore, the core investments are concentrated in these 2 layers, which need support from the underlying basic layer and, most fundamentally, the data layer. The data layer can be perceived through sensors, some enterprises, or external industries. Establishing an ecosystem or cooperative relationship with the technical layer is essential so that the technical layer and application layer can be better deployed and promoted.
Cooperating with ERP or MASS manufacturers becomes extremely important, as they have accumulated a sea of data about supply chain models, production or execution. After the data is obtained, it needs to show value. At this point, AI decision companies will cooperate with these manufacturers to help our business clients realize their corporate importance.
Additionally, there are two specific ecosystems. The first one is the big data platform, which is relatively prosperous now. The data center is similar to many BAT companies, including Ali, Tencent, and Baidu. A large amount of data could be accumulated once the strategic cooperation relationship is established. The second one is giant companies posing all three layers in one ecological circle, such as Huawei. Sometimes consulting companies are also included in this circle to make diagnoses for other companies and come up with corresponding data governance and data value management solutions. The ultimate goal is always to bring enterprise value to the clients.
Opportunities and Challenges
Companies often face several complexities when making certain marketing decisions. Precisely, customer-driven market complexities included in decision-making are increasing every day. The customer needs and desires must first be understood. Eventually, the products must be aligned with the relevant needs and wishes. Grasping dynamic consumer behavior is also crucial for long-term and short-term marketing decisions. Appropriate AI modeling and simulation methods may help people to gain better insights into the buyers' viewpoints.
Technically, there is no major industry other than modern AI. Today, narrow AI is known to perform objective functions through data-trained models. It either falls into the category of machine learning or deep learning. In the last few years, robust IoT connectivity, quicker computer processing, and the proliferation of connected devices have ramped up data collection and analysis. Some sectors are exploring AI, whereas others are veteran travelers in this field. There is a long way to go.
Han Lixi holds the same opinion. He believes decision-making from perception is much better than before. The public has witnessed significant improvements in speech recognition, face recognition, and the control of robots AGB throughout 2022. However, AI functions for more complex roles still require further management and operational norms, as well as data norms.
About the Interviewee:
Lixi Han is the Coo of Youhualin. He graduated from Shanghai Jiao Tong University and has more than 10 years of industry experience.