Within KSB Group, the global giant of the hydraulic and mechanical engineering industry, the company’s Asia North region has emerged as a leader pioneering change.
Three-and-a-half years ago, Jun He took the reins of the region, which includes 10 entities across mainland China, Japan, South Korea, Taiwan and Hong Kong, and has steadily increased its turnover contribution to the KSB Group. Through the pandemic no less.
He tells The CEO Magazine he and his team are proud of this significant increase, but is quick to stress they are investing in this growth.
“We are growing not only on the top line, we are growing also in terms of the bottom line,” he says. “We put our focus on growth with profitability and that gives us a lot of freedom in terms of reinvestment, modernizing our facilities, improving the working conditions of our people, boosting team morale and investing in our future growth.”
As an example, the company recently invested more than US$13.6 million in Shanghai for its new high-efficiency petrochemical pump manufacturing facility.
“This covers about 8,000 square meters, so it’s a huge investment under the current economic situation,” he notes.
We will continue investing in people and we will continue investing in our culture.
Looking to the future
While the KSB Group has been an industry leader for the past 150 years with a strong focus on “people, passion and performance”, there are some areas He believes need more attention with an eye to the future.
“We had a very consistent strategy to base all the growth on people and culture and to grow our core business, which is petrochemical, energy, water, general industry, building services and SupremeServ,” he explains.
“But we have just adopted in our region a new core strategy, ‘Grow Beyond’, to grow beyond the core business by strengthening our localization, digitization and sustainability.”
He reveals Asia North’s investment in localization has been four-times greater in the past year than over the previous 10 years combined.
“That was a huge investment in terms of localization,” he explains. “But again, that was also thanks to our good performance over the last three-and-a-half years, allowing us to reinvest in ourselves.”
He says the investment was critical because of the fast-paced and dynamic development of the Chinese market. “Localization is really helping us not only in terms of lowering costs, but also to smooth or to counter the challenges of the supply chain,” he says.
“With the rapid development of the Chinese market and diverse customer requirements, we need to be more vigilant and get ourselves much closer to customer vicinity. We need to make our supply chain much more resilient by localizing products.”
Localization is really helping us not only in terms of lowering costs, but also to smooth or to counter the challenges of the supply chain.
On his suppliers, He reveals Asia North has implemented a strategic supplier relationship with key partners such as EagleBurgmann in Shanghai.
“In the past, our supplier base was very limited and we systematically built up the strategic supplier relationship with our critical suppliers. Through this, we support and grow together with our suppliers in terms of improving on competitiveness and quality control,” he says.
“We move our quality checkpoints within their company premises,” he continues. “We work together with them to increase their company capabilities so that they’re not only continuing to provide high quality, stabilized products to KSB, but they are also winning contracts in the other market segments that they serve.
“This is a win–win situation to us.”
Turning to technology
With digitization, He shares an example of how they are pioneering change in the space within the group.
Over the past 20 years, the company has sold over 260,000 pumps, but records were sparsely kept on the buyers. Distribution channels and third-party dealers muddied the waters further.
We are one of the leading forces within the KSB Group.
He made it a priority to register and map out all historical references in the Ki-Cloud, a self-developed digital system that provides detailed analysis of customer needs for repair and maintenance services that would later serve as a basis for enhancing the customer experience.
“With our digital twin-enabled Ki-Plant platform, we have radically changed the operation and testing process as well as logistics management in the traditional manufacturing process,” He says proudly.
“We are making every effort to reshape our KSB Shanghai factory into a digitization flagship that is ready to further transcend to the next level of excellence. We are one of the leading forces within the KSB group.”
As for the third pillar of the Grow Beyond strategy, sustainability, Asia North has even surprised itself with its results.
He reveals they set a 30 percent carbon reduction target for 2025 and successfully reached that goal with two years to spare.
“Decarbonization is only a small fraction of our sustainability initiative,” he explains. “We also mean sustainability in terms of human resources, correcting the disparity between genders and highlighting the importance of women in leadership.”
Decarbonization is only a small fraction of our sustainability initiative. We also mean sustainability in terms of human resources, correcting the disparity between genders and highlighting the importance of women in leadership.
In fact, management training is one course offered in Asia North’s new KSB Academy.
The business school offers nine branded categories, which include Leadership, Young, MAP, IN, STAR, Craftsman. Eagle, Q and Master Forum. It is made up of more than 30,000 hours of online courses covering subjects such as management, technical engineering and sales.
“We will continue investing in people and we will continue investing in our culture,” He says.