From Hardware to Digitalization: Central Control has Forged the “Great Power Heavy Tool” of Process Industry in 30 Years



Jan 3, 2024

After 30 years of development, Zhongkong has gradually transformed from a hardware provider in the wave of digital transformation to a comprehensive solution provider that helps process industry enterprises achieve their five major goals of “safety, quality, low-carbon, cost, and efficiency”. Nowadays, facing the possible development trends of future technology, the company continuously innovates and proposes a new model of “1+2+N” intelligent factory, providing feasible solutions and roadmaps for achieving digital transformation of enterprises. Recently, Professor Chu Jian, the founder of Zhongkong, gave an interview to the Chinese version of Harvard Business Review (HBR China), providing a detailed interpretation of Zhongkong’s practices and strategies in digital transformation, and exploring how to create a “great tool” for the country’s process industry.

Founder of Central Control

Chu Jian

HBR: Over the past thirty years, it has played a very important role in China’s industrial development path. From your perspective, what opportunities and challenges will China’s industrial internet face in the future as it develops to this day?

Chu Jian: Digital transformation is the trend, and what we need to discuss is nothing more than where digital transformation will take in the future. Some things we cannot imagine. Since the emergence of generative artificial intelligence (such as ChatGPT), we have realized that AI may bring us enormous challenges, including enormous opportunities. For the industrial field, in the vast majority of cases, it is logically clear, from principles to products, whether it is physical or chemical processes, they are all scientific. But there is still a lot of knowledge that is not sound and comprehensive, scattered in the minds of different experts, and most of the knowledge is in books, research reports, and production practices. If we can connect data and knowledge well, it is actually an AI based approach that we may challenge in the future.

If today’s industrial internet is simply described as “industrial+internet”, it may not be complete. I believe that we should achieve the transition from “Industry 3.0” to “Industry 4.0” through digital transformation. Digital transformation includes the interconnection of equipment, data, and professional knowledge, from obtaining data to better solving problems that occur in production based on data. For manufacturing enterprises, digital transformation is not the goal, nor is intelligence the goal. The ultimate goal is to improve the competitiveness of the enterprise. Firstly, it is necessary to enhance the profitability of the enterprise, enhance the innovation ability of the product, and reduce energy consumption. In the process industry, safety production is the top priority, and environmental protection, low-carbon, human efficiency, and long-term operation of equipment are all the core competitiveness of enterprises. The focus is to help enterprises solve these problems through digital and intelligent means, while balancing safety, quality, cost, efficiency, and low-carbon.

HBR: You mentioned that the transformation of the digital market is not only an improvement in management models, but also a requirement for the transformation and upgrading of the process industry. So, what are the practices worth exploring for central control in assisting the transformation and upgrading of the process industry?
Chu Jian: Enterprises are aware of the necessity of digital transformation and clearly realize that their competitiveness is facing challenges, such as the difficulty of talent recruitment. Because most chemical enterprises are located outside cities, even in remote areas, some in raw material production areas. Due to transportation costs and environmental factors, they may encounter various challenges such as personnel training and equipment maintenance. As long as we look at this from the user’s perspective, we may have a way out. Central control has its advantages, for example, we have designed nearly 180 5S stores (Sales, Service, Spare Parts, Specialists expert consultation, and Solutions solutions) that can cover all 643 chemical parks across the country, reducing service radius, shortening response time, and being more sensitive to customer pain points. Faced with over 30000 customers accumulated over the years, we have heard countless demands. Are there any common issues among them? Is there a common solution? We cannot personalize solutions one by one, but we can abstract common problems and develop products and solutions with common characteristics. Now that we have mastered some of the technologies of artificial intelligence, based on so much data, scenarios, and existing knowledge and experience accumulation, how can we make it play a better role? Ultimately, it is to help enterprises improve their competitiveness.

HBR: Central Control has gradually transformed from the earliest automation hardware supplier to a supplier that integrates hardware, software, and intelligent system solutions. Now, a new model of “1+2+N” intelligent factory has been proposed. Has there been any significant business model or even strategic change for the central control company in the past thirty years? What kind of thinking is behind this change?

Chu Jian: For a considerable period of time in the past, we were only a company selling DCS, mainly hardware, combined with embedded software. A customer once told me that central control should not be just a DCS (Distributed Control System) company, nor should it only focus on automation. But at that time, the central control company was just a DCS company, and the automation service field was still incomplete because the scope of automation was large, and our capabilities were not enough. Faced with more and more personalized customer needs, we have felt many opportunities, but of course, there is also pressure. Afterwards, we think that if the customer’s needs cannot be solved temporarily today, it’s okay. We can first collect demand and reserve information, and when we have the ability, turn the demand into a product and then provide services. This forms a virtuous cycle, and the service will be even better.

After accumulating this information, we wonder: can we innovate in our business model? So the central control proposed a new one-stop intelligent service model of “5S store+S2B platform”, which is a different transformation. The S2B platform not only provides products for central control, but also offers products for partners that customers need. But this innovation alone is not enough. How can we make further efforts in product innovation? For example, we used to control compressor units, which are the heart of the process industry. The control of compressor units is very complex, and optimizing control is even more complex. It is impossible to achieve energy conservation and efficiency without understanding the process and equipment. In addition, we have done a lot of on-site control and real-time optimization, and we need to be familiar with the process and modeling. In this context, we propose a 5T strategy that comprehensively integrates automation technology (AT), information technology (IT), process technology (PT), operational technology (OT), and equipment technology (ET). The underlying layer of the specific scenario is the basic software, which is the process simulation software. Therefore, we are making great efforts to develop the Process Industrial Process Simulation and Design Platform (APEX). Then the customer raised another question, saying that DCS already has operational parameter data, but the equipment condition is unclear, and it is unclear which device is normal or abnormal. If the data on DCS is clearly inaccurate, is it a production issue or a problem with the equipment itself? We must trace back to the source, so we are building a full device intelligent perception platform PRIDE to help enterprises make their production processes more transparent and achieve digitalization. In order to better achieve all of this, we also hope to integrate into a more open innovation ecosystem, allowing more experts, schools, and research institutes to research and develop applications on this basis.

HBR: As the founder of Zhongkong, you have been a witness and participant in Zhongkong for thirty years. Looking back, how do you evaluate Zhongkong’s growth in technology over these years? What is your personal opinion on the improvement of central control technology capabilities?
Chu Jian: The past thirty years of central control have been very difficult. We have made progress, on the one hand through our own efforts, and on the other hand, it is also a good opportunity to catch up with China’s development. The deepest feeling is still perseverance, as long as the direction is right, we must persist. Our biggest fear is that there are too many temptations that can easily be influenced. For example, in the early days, the benefits of agency products were actually greater, while one had to invest in their own research and development and also bear risks. But we believe that we still need to persist and have a mentality of “if we don’t succeed, we will succeed”. A while ago, when I was reading “The Biography of Elon Musk,” there was a comment that said, “Musk is either bankrupt or extremely wealthy.”. With this spirit, it is possible to achieve something. We didn’t say we had to accomplish anything big, but rather focused solidly within our capabilities, especially in the process industry. The process industry refers to the raw material industry, especially some basic raw materials, and China has a large market share globally. As long as we solidly advance in the field of raw material industry, make great efforts in safety, environmental protection, and cost control, the global supply chain cannot do without us. If the raw material industry can go global with high quality, it can contribute greatly to the competitiveness of China’s exports. High quality competitiveness lies in safety, quality, cost, and efficiency, including low-carbon goals, with great room for improvement and enhancement.

HBR: In response to the differentiated needs of digital transformation in process industry enterprises, how can Central Control provide customized digital solutions while quickly promoting the construction of intelligent factories through standardization and modularization?

Chu Jian: This involves two issues, one is the service model, and the other is the solution. The concept of ecological cooperation has deeply rooted in people’s hearts, at least in the era of mobile internet. How to collaborate in an ecosystem requires technical means, including technical interfaces. We propose a new solution for “1+2+N” intelligent factories, where “1” refers to the factory operating system supOS, which every enterprise needs. Just like Android, different phones can be used interchangeably. And the apps on it, many people or companies can create various types of apps. Assuming that all over 50000 customers of enterprises above a certain scale in the process industry in China now recognize the “1+2+N” model and can apply the factory operating system, all internal logistics, equipment, funds, and human behavior data of the enterprise will be connected, eliminating all information silos and laying the foundation for digital factories. We hope to achieve this step. If this can be done, then the service can be handed over to engineers from various enterprises to do it themselves. I believe there are also many service providers around the park, and it is not necessary to go through our 5S store. It can be imagined that 5S stores, like McDonald’s, KFC, and Starbucks’ direct and franchise stores, are socialized. I hope the center console is a research and development role, doing things that have advantages. If everyone can build an ecosystem on this basis, I believe it must be a win-win cooperation. Central Control hopes to use the ecosystem to make previously non-standard, customized, and personalized products more universal and standardized, with stronger applicability.

HBR: Our country has always emphasized the autonomy of technology. How does central control maintain and enhance the innovation ability and vitality of enterprises?

Chu Jian: Innovation is the gene of central control from the beginning. I have been conducting research in the technology industry and initially didn’t understand anything – I didn’t understand marketing, business management, production and manufacturing, quality control, cost control, human resources, and finance. I am an outsider and don’t even want to care about these things. My interest is in research. In the past, I used to have creative ideas in school, and if I thought it was okay, I would do it. If I couldn’t do it, there would be no loss. For enterprises, their scope of thinking will be more focused. I think the most difficult part of innovation is to determine whether it truly meets market needs. If it does not meet market needs, then the innovation is meaningless; Even if it meets market needs, it still depends on whether you can make the product good and whether customers can afford and use it. This will involve a series of factors such as performance, quality, cost, and service. If you say the product is good, but they cannot afford it, it is still useless. If it is expensive, it is meaningless; Another issue is whether the service throughout the entire lifecycle is in place.

In the past, our innovation still had reference points in many aspects, with multinational corporations serving as benchmarks. But if there is no reference in the future, how can we challenge it? This is something I have always been concerned about. In the future, we will invest greater efforts in innovation without reference points. Including our gradual establishment of overseas research and development institutions in Singapore, Japan, and other places, as well as the acquisition of the Dutch high-end analyzer company Hobr é, we are preparing to expand our research and development in Europe. I hope innovation can always become the gene of central control, and I also hope to have at least one-fifth of my research and development energy focused on original ideas that are created out of nothing.

HBR: What is your vision for the future of central control at the milestone of thirty years? What kind of enterprise belongs to the future and has long-term vitality?

Chu Jian: I hope that in thirty years, the central control team will still be alive and healthy. The vitality of any enterprise actually depends on its judgment of the future, investment in technology research and development, and responsiveness and sensitivity to customer needs. I hope that Zhongkong can become a standardized, modern, and international company. Standardization is likely to be bureaucratic, so we are accelerating the implementation of digitization now. In addition, the central control needs to continuously improve the culture and efficiency of innovation. The second one in our proposed “INFERNO” plan is “Never Say No.”. What I have always advocated is not to say “no” easily, especially when leaders give advice to subordinates. If the risk is not high, then try it out. It’s not a big deal, the losses caused are limited. A modern enterprise should have a spirit of tolerance for failure. In terms of internationalization, it is still very challenging for Chinese enterprises. Different cultures, languages, and laws are all challenges for us. If these three are done well, I believe there will be a future for the center console.

HBR: What kind of management philosophy have you developed since starting your business for so many years? As a founder and helmsman, what are the bottom lines that cannot be touched? Why?

Chu Jian: This is reflected in our core values: sixteen words – “customer success, striving for innovation, dedication and integrity, and the pursuit of excellence.”. A consulting company asked, can we remove the term “professionalism and integrity” from it? I said this is a basic requirement of a company and cannot be taken away. Because we haven’t done a good job yet, we still have many integrity and dedication issues that should be continuously optimized and solved. Dedication primarily targets the internal, while integrity primarily targets the external. The current business environment often lacks integrity, so it is necessary to build integrity, and we must strive to do it well. Speaking of “pursuing excellence”, which company does not pursue excellence? But is this pursuit hanging on the wall, on the lips, or in action? These four sentences are actually the same for all enterprises, suitable for any location, but they are not so easy to implement. These sixteen words serve as a goal, and I hope that all people, behaviors, and things in the central control team can strive to achieve this goal. I dare not say that we have done very well now, I think we are far from truly landing. The first thing for central control is to live with vitality and passion, and the rest is directional. If everyone continues to innovate, they can create greater value for customers, continuously promote technological innovation and social progress.
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