On August 23, 2022, the 19th China Construction Machinery Development High-level Forum, themed "New Stage, New Pattern, New Actions", was grandly held in Changsha, Hunan Province. At this conference, Guo Xuehong, the vice president of China Construction Machinery Corporation, delivered a keynote speech titled "Shaping New-Type Manufacturing Enterprises: The Digital Transformation Road of China Construction Machinery"

Guo Xuhong, Vice President of Zhonglian Construction Machinery Co., Ltd.

The following is the transcript of the speech:  

Dear leaders and colleagues in the construction machinery industry, good morning! 

It's a great pleasure to gather here in Changsha with all of you to jointly discuss the innovative experiences and development trends of the industry. Now, on behalf of China Twin Towers Construction Machinery Co., I would like to share how China Twin Towers has utilized digitalization to drive the innovation transformation in the process of shaping a new type of manufacturing enterprise. 

Zhonglian Heavy Industry was founded in 1992. It mainly engages in the research and manufacturing of high-tech equipment such as construction machinery and agricultural machinery. It is currently one of the leading enterprises in China's construction machinery industry and holds a leading position in global and domestic markets in areas such as construction cranes, concrete machinery, engineering lifting machinery, aerial work platforms, and smart agriculture. 

At present, the international competition in the construction machinery industry is intensifying. In this era of global technological innovation, how to achieve sustainable and high-quality development of the company, occupy an advantageous position in the international competition landscape, and achieve a comprehensive breakthrough, the transformation of enterprises has become particularly important. Zonglian Heavy Machinery has deeply considered the transformation strategy of the company. Whether it is + Internet or + Capital, to achieve industrial transformation, we need to enhance our own capability foundation and our own transformation momentum, and shape a new type of manufacturing enterprise in the era of digital economy. 

In 2014, Chairman Zhan Chunxin proposed the concept of "end-to-end", aiming to eliminate the business process breaks, data flow breaks, management breaks and performance assessment breaks existing in traditional enterprise operations through the end-to-end approach of the entire enterprise's business. By using digital means, it aims to reduce non-value-added intermediate links, achieve effective allocation, effectively reduce operating costs, effectively provide product services and effectively manage the enterprise. Based on the Internet of Things, big data and cloud platforms, it firmly grasps the enterprise, the market and the products, achieving the transformation of the new type of enterprise. 

Under this overall framework, from 2008 to 2014, we completed the single-point online transformation of our internal core business, and starting from 2015, we began to upgrade the unified IT architecture and product 4.0 intelligent innovation, focusing on the end-to-end construction of the marketing side. During this period, we basically connected the entire process from business opportunity to delivery, and the enterprise's marketing service business achieved 90% mobility. All marketing management actions were fully moved forward to the management stage, and at the same time, through the development of big data BI reports, we began to cultivate managers' ability and habits based on digital decision-making. In 2019, our digital transformation entered the third stage. We conducted a comprehensive reconfiguration of the industrial internet platform and fully owned the intellectual property rights. At the same time, the company began to plan the Smart Industrial City project. Based on intelligent manufacturing, starting from the end-to-end of R&D, supply, manufacturing, and quality in the factory, we carried out a comprehensive digital upgrade of the company's factory product delivery side. Of course, it also included overseas digitalization and the integration of business and finance. We continued to push the digital transformation of Zhonglian Heavy Machinery to a deeper level. Currently, this process is still ongoing. 

With the support of enterprise digital transformation, Zhonglian Heavy Machinery successfully seized the development opportunities during the new round of the construction machinery cycle in 2017. By implementing the company's "Four Precision" and "Four Requirements" extreme management transformation, the transformation of the end-to-end marketing model, and the digital transformation of the enterprise, the company achieved rapid development and significantly improved its performance without an increase in personnel. 

Next, I will share the digital transformation of Zonglian Heavy Industry from five aspects. The first thing to introduce is the work of establishing a unified digital architecture for Zonglian Heavy Industry. The technical platform and technical system are the foundation of the digital transformation. 

Before 2014, each business division of Zhonglian had its own IT system. Apart from OA and ERP, which had a unified architecture across the group, all others were different. The siloed business system architecture led to serious data island problems. Starting from 2015, we built the Yungu Industrial Internet Platform with independent intellectual property rights. Based on this platform, through containerization and microservice transformation, we dismantled the entire company's siloed information systems and constructed a unified IT governance system and IT technical architecture, achieving unified technology at the bottom layer of digital construction. 

By leveraging the industry-leading industrial IoT connectivity technology, we have achieved unified access to devices on a global scale with high frequency and low latency, as well as device profiling. This supports the data integration and intelligent cluster collaboration of over 500,000 sets of equipment worth tens of billions, including construction machinery, production line equipment, and park equipment. It enables the centralized management and control of the entire enterprise's data, business, equipment, personnel, and finance on a single platform. 

Secondly, research and development is the starting point of the entire product life cycle of an enterprise. The digitalization of research and development as well as products is also an important beginning for the enterprise's digital transformation and construction. 

In terms of digitalization development, since 2020, we have adopted the innovative R&D model of Zhonglian Product 4.0 as the core, and established a new-generation digital R&D platform. Based on the full three-dimensional digital prototype, two main lines of BOM and three-dimensional model run through all the R&D departments' digital design, simulation, analysis, and testing processes, achieving multi-disciplinary and integrated R&D design collaboration. Through the integration with industrial internet technologies, a new type of digital R&D capability and R&D project management capability driven by data and featuring interconnection of physical and virtual entities and integration of virtual and real worlds have been formed. 

We have installed a variety of intelligent sensors on the equipment. Based on the Internet of Things, each device can be connected, enabling the equipment to have the ability to sense. Combined with big data and artificial intelligence, a smart brain is installed on the equipment, allowing it to have the ability to think, and achieving self-diagnosis, self-adjustment and self-adaptation of the equipment. 

We have integrated intelligent products to provide customers with digital application value-added services such as equipment management, construction safety, performance analysis, data decision-making, equipment control, and intelligent operation and maintenance. For example, in the equipment management aspect, we can view the equipment status in real time through mobile phones. When encountering abnormal situations such as power failure, overload, or excessive inclination of the equipment, it will immediately send an alarm and directly push it to the user end and the enterprise service end. The service personnel of China Tower Construction Machinery can quickly intervene remotely and provide intelligent fault diagnosis and maintenance services through the expert diagnosis system in the background, making the equipment management of users reliable and worry-free. 

Take the crane equipment as an example. We have provided a complete solution covering the entire process from intelligent lifting planning to automatic positioning, to intelligent lifting assistance, and finally to intelligent management. During the lifting planning stage, through parametric modeling output, an automatic lifting plan can be generated, the equipment model and working conditions can be optimized, and through automatic path planning and unmanned operation, one-click vehicle display can be achieved. During the lifting process, by combining intelligent cameras and control systems, the entire process can be unmanned-controlled, with hook anti-shaking, and at the same time, based on the precise alignment technology with visual closed-loop feedback, the alignment accuracy of the entire lifting process can reach below 15 centimeters, achieving a crane with eyes and thinking ability. At the same time, by comprehensively applying intelligent on-board video and the intelligent management app, we can statistically analyze the entire lifting data and generate analysis reports, providing data support for the health status management and maintenance of the equipment. 

Furthermore, based on industrial internet technology, we also provide an overall intelligent construction site solution covering the entire construction process from the foundation excavation to pouring, low-altitude hoisting, and high-altitude hoisting. This enables efficient collaborative operations from the ground to the air and from people to equipment. 

The products of Zhonglian have now moved from the 4.0 era to the 4.0A era. The basic model products that have reached the level of intelligence have exceeded 150 types, and the contribution rate of sales revenue from intelligent devices has exceeded 90%. This demonstrates the significant role of digitalization in empowering products. 

Thirdly, in the digital transformation of marketing and services, China Twin-City Heavy Machinery mainly utilizes new technologies such as mobileization, big data and artificial intelligence to seamlessly connect the business and processes from the company to the customer side, achieving a business model transformation where "the market is on the mobile device, the products are online, and the data is in the cloud". 

On the marketing side, we comprehensively reviewed over 100 business processes ranging from lead generation to collection of payments, from order placement to delivery, and from problems to resolution. We fully standardized these processes through various tools such as the marketing platform, APP, and WeChat, effectively connecting resources including business personnel, service engineers, financial and credit managers, channel partners, and customers. This enabled the connection of all marketing elements and the establishment of a customer-centric全员 responsibility performance system. We also achieved a 24-hour business response capability， such as internal contract review， equipment application to delivery， and emergency repair requests， thereby reducing the distance between the company and its customers. 

On the service side, we utilize the Industrial Internet 4.0 to connect intelligent products, conduct real-time remote monitoring of equipment operation status, establish an intelligent early warning model for equipment failures, enabling self-diagnosis and automatic alarm of intelligent products. We also actively push information to customers through the APP, achieving a full digitalization process from automatic equipment early warning, intelligent scheduling of service resources, to visualization of the service process, and online customer evaluation. This has promoted a comprehensive upgrade of the service model of China National Heavy Machinery Co., Ltd. from passive to active, effectively enhancing the service effect and increasing customer satisfaction. 

Meanwhile, we have utilized new technologies such as the Internet of Things, big data, industrial internet, and blockchain to build a device full life cycle management platform. This platform provides customers with value-added services in various scenarios, including basic maintenance services, equipment security services, usage efficiency, asset revitalization, customer operations, and second-hand equipment transactions. The value of these services has been extended with the support of digitalization. 

By fully digitizing the service resource, customer issue, and service resolution business process, we have achieved a unified management of service resources, a consistent service standard, and a significant improvement in service response capabilities. The 15-minute response rate has increased from 93% to 99%, and the 24-hour completion rate has risen from 74.2% to 92.8%, thereby enabling the value of services to be more deeply demonstrated. 

Fourth, in the field of intelligent manufacturing, manufacturing efficiency and capacity utilization are the lifelines of engineering machinery industry enterprises. 

Under the guidance of the "Three Highs and Four New" strategy, Zhonglian Heavy Industry has invested 100 billion yuan to build an intelligent manufacturing and smart industrial park covering 10,000 mu. After full production, the annual output value will exceed 100 billion yuan, driving the development of the entire regional construction machinery ecosystem and forming a new industrial highland. To create this international pioneering and globally leading construction machinery industrial park, integrating "visible intelligence" and "invisible intelligence" to achieve no backwardness for 20 years, Zhonglian Heavy Industry is using digital emerging technologies to deeply build a flexible production and agile supply chain operation system. 

We are guided by the lean concept, aim for excellent operation, base on the Internet of Things and connectivity, and take the digital system as the handle. We have achieved the networked data, systematized business and intelligent management upgrade from the factory to the workshop, to the team, and to the individual. On the basis of lean production, through automated production lines, we realize the automation of the production process; through the intelligent manufacturing MOM system, we achieve the digitization of process control; and through the application of new technologies such as AI and artificial intelligence, we realize the intelligence of production execution and factory management. Finally, we create the intelligent manufacturing model of the industrial city, achieving operational improvement, efficiency enhancement, safety and reliability, and green and energy-saving in product production. 

"Multiple product varieties, small batch production, and customization" is a major characteristic of the construction machinery industry. To ensure the fully automated, high-speed, and flexible production of the intelligent factory cluster, we have established an accurate sales and demand forecasting model through digital technology. We coordinate demand forecasting with suppliers efficiently, dynamically grasp the inventory and production capacity of suppliers, combine production demands, coordinate the supply rhythm of materials, assist suppliers in stocking, and improve the comprehensive supply cost within the industrial chain. 

At present, the "Lighthouse Factory" cluster of China United Construction Machinery has initially achieved the integration of "human, machine and object" in terms of virtual and real aspects, as well as collaboration. The entire business process, including planning, production, quality, equipment, safety and environmental protection, and energy, has been upgraded to digital and visual levels. In the Smart Industrial City, with the support of digital applications and intelligent equipment, the production of our medium and large-sized excavators can basically be carried out as follows: the left side of the steel plate is inserted, and the right side of the excavator comes out. Currently, our intelligent manufacturing line can produce and deliver an excavator every 6 minutes, and the improvement in overall production efficiency has been achieved in an exponential and leapfrog manner. 

The fifth aspect is that the development of an enterprise is inseparable from the execution of its business, but what is even more crucial is to make quick, accurate and timely business decisions in the rapidly changing competitive environment. 

Through nearly 14 years of enterprise digital transformation, our R&D, manufacturing, supply, marketing, and service have all been upgraded. The enterprise management processes and business execution levels have reached new heights. At the same time, we have also accumulated a vast amount of business data and financial data. Utilizing these data, we provide decision support for enterprises in various management activities such as improving operational efficiency, reducing operating costs, preventing business risks, and controlling investment decisions. This is also an important task for us in this stage. 

Through the construction of its independently controllable big data platform - Zhonglian Brain, Zhonglian Heavy Machinery has achieved the application of over 1,000 data analysis themes in 8 major business scenarios. By integrating external market data, internal business data and equipment IoT data, Zhonglian Brain provides enterprise managers with multi-scenario, multi-dimensional, multi-perspective and real-time operational analysis and data decision-making capabilities, and drives the enterprise's data decision-making through innovative applications of AI artificial intelligence. 

We unified the data standards at the bottom layer, connected the data flow links, and established KPI assessment indicators through the Zhonglian Brain. We created a unified and clearly-defined enterprise operation data pool, achieving data-driven excellent operations. Every day, when the chairman and the general managers of each division arrive at the office and open their computers, they can see real-time and accurate information such as the overall trend of enterprise operations, the development trend of cash flow, the popularity of orders in sales regions, the production situation in factories, and the efficiency of business execution. Through data drilling, one can delve into the lowest level of orders and the lowest-level performance responsible persons. Truly, we have achieved speaking with data, assessing with data, and making decisions with data. The intelligence level of enterprise operation management has been significantly enhanced. 

In the future, our digital transformation strategy will, on one hand, shift from digitalization to higher-level intelligent applications. By leveraging AI technology, digital twin technology, and metaverse technology to build a digital industrial chain platform, we aim to drive the traditional linear industrial collaboration to transform into a networked industrial ecosystem, achieving optimization, synchronization, and collaborative win-win outcomes across the entire industrial value chain. On the other hand, it will involve internal capacity output and external empowerment. We have established Zhongke Yugu Technology Co., Ltd., hoping to utilize our advanced technological capabilities and mature application scenarios in the discrete manufacturing sector to contribute to China's manufacturing, and serve the strategy of building a manufacturing power. 

That's all for my presentation today. Thank you all for your continuous support and attention to China Twin Towers Construction Machinery over the past 30 years. Thank you!