"Industry 4.0" helps China to overtake on bends

How can Chinese enterprises meet the wave of "Industry 4.0"? How to combine joint innovation and reverse innovation? How to create an open culture to stimulate innovation? Dr. Li Ruicheng, SAP Global Senior Vice President and President of SAP China Research Institute, told "CEConline" about his professional insights and innovative management in the field of management informatization.

How does Industry 4.0 land in China?

CEConline: Last year, the leaders of China and Germany exchanged visits frequently, and "Industry 4.0" was clearly written into the "China-Germany Cooperation Action Plan", becoming one of the most important areas of Sino-German economic cooperation. Is the informatization status of Chinese enterprises enough to meet the wave of "Industry 4.0"? What preparations are needed?

Li Ruicheng: In Germany, "Industry 4.0" is an important strategy to reshape the advanced manufacturing model. From its initial conception to the current design execution, SAP is one of the main participants. We are also very honored to receive the attention of the two governments and play an active role in the Sino-German "Industry 4.0" cooperation.

"Industry 4.0" centers on smart factories and smart production, and is based on cyber-physical systems (CPS), enabling production equipment to acquire wisdom and enabling factories to achieve self-disciplined and decentralized production methods. It is expected to help China achieve overtaking in corners and complete the transformation from a manufacturing power to a manufacturing power. To achieve this goal, we must first soberly analyze China's specific national conditions and the company's own situation. The informatization of Chinese enterprises has made great achievements, but the degree of informatization of management is uneven, far more than that of developed countries. According to our observation, in almost every stage of the development of management informatization, a considerable number of counterparts can be found in Chinese enterprises.

For example, some Chinese companies are still in their infancy, using the simplest IT technology to record events, collect data, and fill out reports. There are also some enterprises in the popularization stage, that is, they have begun to adopt ERP single solutions, usually led by a single department such as human resources and finance, and the information of each department has not been connected. More enterprises are in the optimization stage and have realized the drawbacks of internal information silos. Instead, they have linked the business chains of various departments to achieve optimization through information symmetry and transparency within the enterprise. The next step is the integration stage. On the basis of integrating the internal information flow, logistics, capital flow, and talent flow, the enterprise uses data warehouse and data mining to provide support for the company's high-level strategic decision-making. In the further stage of improvement, after the enterprise has completed the horizontal integration of internal information, it turns to the external vertical integration of information, integrates suppliers upstream (such as supply chain management SCM), and strengthens the management of dealers and customers downstream ( such as customer relationship management (CRM). Enterprises that have entered the stage of in-depth application of the Internet today are pursuing larger and deeper changes and innovations with the help of models and technologies such as Industry 4.0, cloud computing, big data, mobile Internet, and social media.

Many Chinese enterprises we have come into contact with are already at a level where they can implement "Industry 4.0" as measured by the standard of "Industry 4.0". The gap between the international advanced manufacturing mode and even the realization of overtaking in the corner.

However, there are still quite a number of enterprises in China, which are only at the level of 3.0 or below, and the bottleneck is not only in the informatization of production and manufacturing within the enterprise. There may be a misunderstanding in this - thinking that "Industry 4.0" is only about manufacturing. In fact, it is not. To give the simplest example, one of the important goals of the smart factory is to realize the large-scale flexible production of personalized and customized products by Dr. Li Ruicheng, SAP Global Senior Vice President of SAP China Research Institute. Data and manufacturing have become passive water, which also runs counter to the concept of "Industry 4.0".

Therefore, it is difficult to bypass the basic management and corresponding informatization construction of several stages mentioned above. But the good news is that "Industry 4.0" is still in its infancy and has not been launched on a large scale, and our enterprises still have time to make up for the lessons. That is to say, it is necessary to vigorously improve the basic information management work. While practicing internal strength and consolidating the foundation, strengthen the construction of management informatization, strive to make use of new technologies, and achieve leapfrog development through the advantages of latecomers.

CEConline: What are the similarities and differences between the German "Industry 4.0" model and the American "Industrial Internet" model, and what are the prospects? What are the specific paths for the implementation of "Industry 4.0" in China at this stage?

Li Ruicheng: The "Industrial Internet" model is to look at problems from the perspective of information, from top to bottom, to explore how to integrate information technology into the manufacturing industry, and how to improve the data in the manufacturing process through cloud computing, big data, etc. Use the land to do intelligent work. The "Industry 4.0" model focuses on factories, looks at problems from the bottom up, builds a cyber-physical system (CPS), and takes the lead in achieving breakthroughs in "smart factories".

We believe that the two models have different starting points and different focuses, but they reach the same goal. It is impossible to predict who will win in the future. In the future, the two may coexist, forming a situation where you have me and I have you. SAP is fully open to the most advanced SAPHANA platform and actively participates in these two models to help Chinese enterprises choose the model that suits them and realize the intelligence in the industrial field.

"Industry 4.0" is a gradual process, and it may take 20 to 30 years to fully realize its vision, but the trend of intelligent production has become obvious, and companies with strategic vision should and must follow. As far as the industry is concerned, I personally think that "Industry 4.0" will be the first to popularize in the field of high-end customization, whether it is cars, motorcycles, fashion, perfume, there are opportunities. At this stage, "Industry 4.0" can achieve breakthroughs in at least the following three subdivisions.

First of all, for those companies that want to improve the efficiency of production lines and improve the degree of customization and flexibility of manufacturing, the first recommendation is the smart factory; you can refer to the experience in Germany, for example, the Harley-Davidson production center uses the SAP smart factory The solution reduces the production cycle of customized motorcycles from 21 days to 6 hours. In addition, the transformation of new business models cannot be ignored. Enterprises can use new technologies to define products and services and reconstruct value chains. Of course, there are also cross-border innovations, that is, new innovations arising from the deep integration of IoT technology and physical industries. We have started joint innovation with a number of Chinese customers aiming at the forefront of the industry, for example, promoting the application of the Internet of Things in the medical industry, and providing new products through deep integration with informatization.

Open culture ignites the fire of innovation

CEConline: In the process of "Industry 4.0" landing in China, what will SAP China Research Institute do?

Li Ruicheng: SAP China Research Institute has launched a comprehensive strategic plan for the "Industry 4.0" SUPER for the Chinese market. For example, we are participating in the establishment of the "Industry 4.0 Spark Alliance", which includes our customers. , but also our partners; both German companies and Chinese companies; both German research institutions and Chinese universities. We will continue to adhere to the concept of open innovation and create a healthy ecosystem.

We promote the development of Industry 4.0 by adhering to the open concept that only through joint innovation can we better create value for customers and grow together with customers. More than a decade ago, SAP brought global best management practices to Chinese customers in the form of software, but it was "walking on one leg". Since 2011, SAP has invested heavily to implement the strategy of "Based in China, Innovate in China, and Influence the World" (Innovate in China for China and the World), promote the direction of research and development, and bring Chinese management wisdom to the world. Walking on one leg", you can walk faster and more steadily.

To help enterprises break through internal horizontal barriers and external vertical barriers in management, we believe that the key is to do this by ourselves first, so we advocate: externally, with customers and partners, Zero-distance interaction between colleges and universities; internally, zero-distance interaction with employees and SAP departments. In this process, we have paid great attention to improving the capabilities of our employees. For example, we have launched a design thinking (Design Thinking) training to train developers to efficiently interact with customers, through specific processes and series of tools, from technical feasibility to commercialization. It can effectively distinguish killer applications from ordinary applications, and quickly help customers find the most valuable development direction. It has achieved remarkable results in its work. Our cloud computing product developed for small and micro enterprises according to the requirements of Chinese customers, under the guidance of the above design thinking, not only sells well in the domestic market, but also achieves very good market in foreign countries. repercussions. Through effective interaction with customers, we have refined the inspiration and wisdom of Chinese enterprises in their management practices, sublimated them into applications with global universal value, and achieved reverse innovation in joint innovation.

CEConline: Can you introduce the experience of SAP China Research Institute in innovation in China?

Li Ruicheng: SAP entered China not only to expand the market, but more importantly, to establish itself in China and make SAP a member of the local society. China's talent advantage is very attractive to knowledge-intensive companies like SAP. Every year, many young talents are enriched in our R&D team. Now there are nearly 3,000 employees in the China Research Institute, which is not only in Germany but not in Germany. Outside the headquarters, it is the third largest research institute in the world.

To maximize the potential of local talents, we must find a way to adapt SAP to the Chinese cultural environment. I have led the American team, the European team and the Asian team, and the cultural differences between them are still obvious. For example, Germany advocates a highly self-responsible culture, employees are proactive, dedicated and self-disciplined, and very efficient during working hours; Chinese culture has a high degree of flexibility, and Chinese employees have excellent execution and high dedication; The team pays more attention to free atmosphere and innovation ability. Therefore, the key to managing a team is to understand the cultural background of each team. In terms of employing and educating people, we should make use of our strengths and circumvent weaknesses, hand over the right projects to the right teams, and assign the right talents to the right jobs.

To stimulate the vitality of innovation, in addition to assigning Chinese employees to positions suitable for their personalities, preferences and specialties, the key is to build a knowledge sharing platform, introduce an incentive mechanism and cultivate an innovative culture. A spark of inspiration and a passion for innovation. For example, in our Lecture Hall, we not only invite foreign colleagues from SAP to China Research Institute to share their insights and experiences in strategic direction and product architecture; we also encourage employees not to focus solely on products and technologies, but to focus on The scope is extended to a wider field. Many employees spontaneously set up many groups to study economic and social hotspots of interest. Among them is a group's research on the free trade zone, which involves the background of the free trade zone, the goals set up, the impact on China's economy, the opportunities and challenges for key industries, and SAP's countermeasures, etc. In the employee community Get a warm response and become the most popular wisdom sharing.

We also have two colleagues who found that large enterprises are faced with the problem of automatic connection of massive bills and bills. As developers, it is invaluable to actively focus on the pain points of the enterprise and create value for customers; moreover, they do not report to their superiors, which is completely spontaneous innovation. It is more distinctive in organization. The task division of the research group is realized through crowdsourcing on the internal platform. The members are not only colleagues from the China Research Institute, but also colleagues from the SAP Research Institutes in the United States, Germany, and India. The innovative culture of open communication, independent participation, mutual assistance and collaboration allows every colleague to share ideas freely, and everyone can find innovative inspiration from the sparks of collision. There are many more innovations that have arisen, such as our solutions for the express delivery industry relying on cloud computing.

Of course we also have incentives for innovation. Whether it is the contribution to the acquisition of intellectual property rights, or the improvement suggestions for working methods and processes; whether it is the completion of the research and development tasks assigned by the superiors in their own work, or the support and assistance provided to other colleagues in innovation; the achievements of each employee and efforts will be counted in innovation performance in different ways, and given corresponding material rewards.