Industry Reflection

35,000 Smart Factories — Yet Cutting Digitalization

Still at the “Basic Level”?

The 2026 Shanghai International Smart Factory Exhibition has just concluded, and one set of official figures kept being cited:

China has built a cumulative total of 35,000 basic-level smart factories, 8,200 advanced-level, 500 excellent-level, and a number of leading-level factories.

From basic to leading, what is being evaluated is the depth of digitalization — whether systems are connected, whether data flows end-to-end, and whether intelligent decision-making is in place.

The numbers are impressive.

But if you randomly pick one of these certified smart factories, walk onto the shopfloor, and stand beside a machine tool to ask a few very basic questions, the answers might sound like this:

• How long has this tool been used?
  “About two weeks, not exactly sure.”

• How many inserts are left in stock?
  “The warehouse checks at the end of the month.”

• What caused the last abnormal downtime?
  “The tool chipped. We just replaced it.”

• Can that replaced tool still be reconditioned?
  “Probably thrown away. No one really knows.”

The factory may be rated as a “basic-level smart factory,”
but on the cutting shopfloor, the level of digitalization may not even qualify as “basic.”

This Is Not an Isolated Case

Over the years, manufacturing digitalization has followed a clear priority path:

• ERP → Finance and procurement

• MES → Work orders and traceability

• SCADA → Equipment connectivity

• WMS → Warehouse logistics

Each layer comes with mature systems and clear ROI.

But cutting management sits in an awkward gap.

It exists below the MES execution layer, yet is far more complex than simple machine connectivity.

• Work orders are dispatched — MES considers the job done

• Machines are connected — SCADA shows machine status

But what actually happens during cutting —

• How fast tools wear

• Whether parameters are correct

• When tools should be replaced

Most systems cannot sense it.
Most factories never planned to collect it.

The Blind Spot of Digitalization

The result is clear:

Digitalization has illuminated offices and warehouses,
but left the one square meter beside the machine tool in the dark.

How Knowhy Fills the Gap

What Knowhy is doing is essentially filling this gap.

Not replacing MES or ERP, but building an independent data layer at the cutting edge —
so that what happens at the tool tip can be:

• Computed

• Visualized

• Managed

1. Making Machining Computable

CNC data, usage records, and tool lifespan data —
the full lifecycle of every tool, from storage to scrap, is comprehensively captured.

Not “approximate numbers” from monthly records,
but precise data recorded for every cutting operation.

2. Making Status Visible in Real Time

• Which tool is in use?

• How long has it been used?

• How much lifespan remains?

• How much inventory is idle?

• How many “uncertain” used tools are piling up in reconditioning?

All visible in real time —

• No phone calls

• No Excel searching

• No waiting for month-end stocktaking

3. Enabling Decisions to Happen Automatically

• Uncertain tool lifespan
  → Real-time machine data replaces experience-based estimates

• Tools with remaining lifespan
  → Automatically prioritized for use

• Tools not returned
  → System rules can block new withdrawals

What used to rely on “experienced workers knowing”
becomes “the system knowing.”

What required manual supervision
becomes rule-driven execution.

A Full-Stack Cutting Management Ecosystem

Knowhy’s:

• Smart Tool Box

• Tool Lifespan Management

• Smart CNC Box

• Process Agent

• Operations System

All serve one purpose:

To transform fragmented cutting data into a traceable, reusable, decision-ready digital asset infrastructure.

Conclusion

35,000 smart factories mark a milestone in manufacturing digitalization.

But the true value of digitalization must ultimately be reflected in:

• Every production site

• Every cutting process

• Every tool’s utilization efficiency

If the space beside the machine tool is still in the “manual era,”
then the “basic level” of smart factories is missing a critical piece.

Filling this gap may be more valuable than deploying yet another system.

Because the ultimate goal of digitalization is not certification levels —
but making production more controllable, more transparent, and more efficient.