The aspiration of a “billion dollar” high-tech enterprise of a thermos and light bulb company

Successful with its own path in digital transformation, Rang Dong Light Source and Vacuum Flask Joint Stock Company is aiming to become a regional high-tech enterprise and a "billion-dollar" enterprise.

"Find a teacher, learn from the way", find your own path

The conference to review 3 years of digital transformation implementation (2020 - 2023) of Rang Dong Light Bulb and Vacuum Flask Joint Stock Company took place in early October 2023 with the presence of many experts and scientists from universities, research institutes... A strange thing for many Vietnamese technology enterprises.

Following Rang Dong's development from the beginning, Senior Economist Pham Chi Lan recalled the first days of visiting Rang Dong: “At that time, Rang Dong was an equitized enterprise but 16% of the shares were still owned by the state. I visited the office of experts from the National University who were advising Rang Dong on new ways to do lighting technology. At that time, the working conditions, facilities, and rooms of the experts were still rudimentary. But I believe that an equitized enterprise that knows how to rely on such experts will definitely develop. That is something that few other Vietnamese enterprises can learn, although in theory everyone says that there must be a research and development department, and there must be experts to take advantage of resources. People often think that internal strength is the inner strength of each enterprise. But internal strength is all the strength of Vietnamese people at home and abroad working together to create a rich and strong Vietnam. Rang Dong thought and did that. This is how it works. very good

Rang Dong was established in 1961, one of the first 13 factories established by the Government 's decision, laying the foundation for Vietnam's industry in the early period of building socialism.

In 1990, Rang Dong's first innovation took place when the company decided to restructure, creating momentum to make strong strides in the Vietnamese market.

In August 2019, Rang Dong encountered a major incident: The finished product warehouse caught fire, causing serious damage both materially and spiritually. Difficulties piled on difficulties, challenges piled on challenges.

Even in the most difficult times, Rang Dong's leaders determined that only by quickly implementing digital transformation can they survive, develop quickly and sustainably.

“Even in the most difficult and uncertain times, Rang Dong's leaders determined that only by quickly implementing digital transformation, transforming from a traditional manufacturing enterprise into a digital enterprise, a high-tech enterprise, growing exponentially, and advancing strongly into the world, could Rang Dong survive, develop rapidly and sustainably in the coming time. Just two months later, on October 5, 2019, Rang Dong consulted Dr. Nguyen Quan (former Minister of Science and Technology - PV) on the draft Project to Accelerate Rang Dong's Digital Transformation. On December 2, 2019, the Project to Accelerate Rang Dong's Digital Transformation for the 2020-2025 period was officially issued. Digital transformation is considered the company's second innovation," Associate Professor - Doctor of Science Nguyen Van Minh, Chief Consultant of Rang Dong's Digital Transformation, recalled.

At that time, few people thought that a manufacturing company that was nearly 60 years old, with a "general manager" in his 80s, would have such a "modern mindset", while many young businesses and entrepreneurs did not know about it or were afraid to carry out digital transformation.

Playing the role of “reward boat” steering the “ship” Rang Dong through “turbulent waves”, General Director Nguyen Doan Thang likened Rang Dong’s digital transformation journey to having to overcome a “dense forest”, requiring “seeking a teacher and learning from the way” to pave the way.

There is no precedent, no model of digital transformation of manufacturing enterprises, exploring "rocks, finding the way", Rang Dong approaches the pioneering thinking of the West, studies the operation of smart factories Siemens, TUV SUD; refers to the experience of some large corporations such as Microsoft...

The "turning point" came when Rang Dong learned from both "Vietnam" and not just "the West": Synthesizing opinions from Think Tank groups (policy and strategy consulting research groups - PV) or the Digital Transformation Handbook of the Ministry of Information and Communications...

With the support of a team of elite intellectuals, Rang Dong has found its own theory to implement appropriate digital transformation.

Rang Dong has found its own theory to implement appropriate digital transformation.

“We were fortunate to meet Professor Ho Tu Bao - Institute for Advanced Study in Mathematics, and Dr. Nguyen Nhat Quang - VINASA Institute of Science & Technology, to learn about the very concise methodology ST-235 to form a digital transformation ecosystem. We determined that theory guides the way, practice leads the way, but only action creates the path. Learn to understand the nature, apply it to your own practice, then you will create your own path. Only your own path can make a difference and lead to success,” said Mr. Minh.

“Digital transformation in the manufacturing sector is very difficult. However, combining theory with the actual situation, Rang Dong has found its own way of doing things that is suitable for its conditions. One of the things I really appreciate and admire is that in addition to the vision and determination of the top leaders, Rang Dong has cooperated well, relying on the knowledge of experts and scientists to create common resonance, becoming one of the typical examples of connecting experts and scientists with business activities,” said Mr. Nguyen Duc Hien, Deputy Head of the Central Economic Commission.

Applying digital technology creates new growth space

Implementing the digital transformation strategy, Rang Dong promotes the application of digital technology to develop a 4.0 product and service ecosystem, opening up new growth spaces and creating an exponential growth flywheel.

Mr. Nguyen Doan Ket, Deputy General Director, Head of Rang Dong Digital Transformation Steering Committee.

Mr. Nguyen Doan Ket, Deputy General Director, Head of Rang Dong Digital Transformation Steering Committee, said that the company has quickly applied digital technology to create a 4.0 product and service ecosystem with the following attributes: Smart; Personalization; Platformization to create data services; Co-creation, increasing value with customers and partners; Greening and circular economy.

Rang Dong's 4.0 product and service ecosystem consists of 6 layers: (1) Technology products; (2) High-quality products; (3) Single smart products; (4) Local smart products; (5) IoT products; (6) Customized customer experience services on demand.

These 6 layers can satisfy the broad needs of society according to Maslow's Hierarchy of Needs, from ensuring basic human needs, to safety, harmony, respect, and self-expression.

The "specialties" in Rang Dong's "banquet" are products that combine artificial intelligence (AI) with the Internet of Things (IoT) to form smart systems, applied in Smart Home, Smart City, and Smart Farm.

Rang Dong Deputy General Director shared the example of Smart Farm products: Rang Dong's products with the advantage of manufacturing lighting equipment can master the creation of light sources with spectrums and wavelengths suitable for the growth and development cycle of each type of livestock and crops in agriculture, improving crop and livestock productivity. Integrating IoT to develop high-tech agricultural systems such as growing plants in greenhouses, membrane houses, using sensor systems to adjust environmental parameters such as temperature, humidity, water content, nutrient content, etc. Applying AI to create recommendation systems, creating lighting scenarios for each type of livestock and crops. In particular, TinyML tiny machine learning technology is applied to soil and water nutrient sensors, allowing for optimal irrigation, fertilization and pest management; suitable for application to small coordination devices, limited hardware, using simple algorithms to make immediate decisions.

Up to now, Rang Dong products have been present in the new homes of many Vietnamese families; contributed to the operation of smart lighting in Ben Tre, Can Tho, Quang Ngai, Quang Binh, Bac Kan, Hai Duong...; lighting up border patrol roads; lighting up smart spiritual landscapes at the Quang Tri Citadel relic site, Hien Luong Bridge, Vi Xuyen Cemetery...; have been used in greenhouses, high-tech tree-growing net houses in Lam Dong, Vinh Phuc, installed on dragon fruit fields for export in Binh Thuan..., and have been used by fishermen on offshore fishing trips.

Rang Dong is gradually increasing the proportion of high-tech product revenue in total revenue.

After 1 year of digital transformation, Rang Dong's high-tech product revenue increased by 144% over the same period last year, of which, grade 3 products increased by 170%, grade 4 increased by 54%, grade 5 increased by 252%, and grade 6 increased by 114%.

Understanding the law of the Technology Adoption Curve, Rang Dong strives to gradually increase the proportion of high-tech product revenue in total revenue from 20% in 2022 to 35% in 2023 and 60% in 2025.

Also according to Deputy General Director Nguyen Doan Ket, to create a high-tech product ecosystem, Rang Dong quickly built a smart, flexible production system to meet the requirements of large-scale production in the fastest way.

“With the smart production system and DBM digital business model, in the period of 2019 - 2023, Rang Dong has established a new growth level, averaging 15 - 20% per year, twice as high as in the period of 2015 - 2019. In the first 9 months of 2023, the country's GDP only grew by more than 4%, while Rang Dong still grew by 20.4%. Total revenue in 2023 is estimated at 8,500 billion VND", Deputy General Director Nguyen Doan Ket shared the information with pride clearly visible on his face.

Smart manufacturing systems are rapidly being built.

Journey of self-reliance with “Make in Vietnam”

Rang Dong's digital transformation strategy clearly defines its mission: "A pioneering enterprise providing a synchronous solution system based on core technologies of lighting and IoT, contributing to the creation of smart homes, smart cities, high-tech agriculture and precision agriculture, promoting a life in harmony with nature - smart - happy - environmentally friendly; Accompanying the nation to build a prosperous and prosperous Vietnam".

All of Rang Dong's activities are imbued with the spirit of "Make in Vietnam": Research and development in Vietnam, innovation in Vietnam, design in Vietnam, production in Vietnam.

Rang Dong LED bulb production line.

The automation program of the LED – Electronics – Lighting Equipment Factory is a specific example. Of the 36 production lines of the Factory, only 3 are extremely modern, the rest are old production lines with many different technology sources from the 80s – 90s of the last century. Rang Dong engineers have to manufacture their own equipment to automate the production lines according to Rang Dong’s design.

Currently, 72% (26/36) of the assembly lines have achieved complete automation, helping to increase labor productivity significantly. Notably, the M36 assembly line increased by 300%; the semi-automatic aluminum-plastic tube assembly line, LED module gluing, aluminum body feeding, power supply installation, parameter checking, automatic inner box packaging increased by 200%; the complete box assembly, printing, labeling machine for downlight drivers, round panels increased by 250%... From the position of an equipment importer, Rang Dong gradually became an equipment manufacturer to master the technology.

Referring to the Manufacturing Execution System (MES) model of Siemens and Foxconn, Rang Dong's engineering team found a way to transform from a traditional factory into an automated, intelligent factory, designing its MES system according to ISA-95 standard, creating an efficient real-digital production system.

Rang Dong engineers are completely self-directed, self-designed, and self-programmed, so they can integrate other platforms and develop new low-cost features. The latest technologies are gradually being introduced into production and sales operations. From simple things like applying AI to forklifts, AOI error checking equipment, equipment to read and retrieve material QRcode information... to developing an ecosystem of high-tech products and services.

MES has helped Rang Dong increase the efficiency of quality management, traceability, control, and warning of input materials. Thereby meeting the requirements of 100% of both export and domestic orders, with the correct quantity and type, in conditions of high growth (27%).

Thanks to MES, labor productivity increased by 20%; labor time decreased by 10%; warehouse area decreased by about 6,000m2; production cost/revenue decreased by 4.2%...

Rang Dong's MES excelled over 715 topics participating in the first Technical Innovation Contest of Hanoi City in 2022 - 2023 and won First Prize, contributing to proposing a digital transformation solution for traditional manufacturing enterprises with costs and implementation steps suitable for businesses in Vietnam.

MES has helped Rang Dong meet the requirements of 100% of both export and domestic orders.

Wishing to promote innovation, every year, Rang Dong allocates 15% of its after-tax profit to the Science and Technology Development Fund; 7% of its after-tax profit to the Venture Capital Fund. Not many Vietnamese enterprises can do this.

Currently, the company has 4 knowledge centers including: Digital Transformation Consulting Group; Lighting Research and Development Center; Digital Research and Development Center; Modern Business Model Research and Development Center (focusing on selling technology products).

Chief Digital Transformation Consultant Rang Dong assessed: “Make in Vietnam” is a journey of self-reliance, self-reliance, and persistent creativity. To do it, we must promote research, master production and operation technology, etc. As long as we have faith in the intelligence and capacity of the Vietnamese people, we can definitely do it.”

Recently, the public was surprised to see Rang Dong honored by the Vietnam Software and Information Technology Services Association (VINASA) in the Top 10 Pioneering Enterprises in Digital Technology Implementation and Vietnam's Trillion-Dollar Digital Technology Enterprise in 2023.

“At the age of 60, Rang Dong has really “prospered” in many fields, becoming a typical digital enterprise in Vietnam. Old age is often feared as not being able to keep up with new technology. But you have proven that any age group that is willing to learn and know how to connect can still become an innovator. Innovation has no age limit,” Senior Economist Pham Chi Lan expressed her admiration and respect.

Creating a “green path” on the “red ocean”, opening the way to the “blue ocean”

“The market currently has up to 6,700 enterprises operating in the field of manufacturing and trading LED products, not to mention the “entry” of corporations and companies outside the industry, competing with low prices and reducing profits is a race to the bottom, a painful death. The “green path” on the “red ocean” of Rang Dong is to compete with value, quality, reliability and suitable price. The technology product class must find a “green development path” in the “red ocean” by continuously improving products, reliability and quality, while reducing costs”, Associate Professor - Doctor of Science Nguyen Van Minh analyzed.

There are 3 unique advantages that help Rang Dong confidently develop the "green path": National brand, trusted, crystallized from the power of kindness; Mastering core lighting technology combined with digital technology such as IoT and AI to create a 4.0 service and product ecosystem; Wide, close-knit, symbiotic business network, capable of providing synchronous services nationwide.

Currently, Rang Dong is accelerating its participation in value chains and ecosystems of regional and global corporations. Vietnamese branded products researched and developed by the company have appeared in nearly 40 foreign markets. The main Led product (focusing on smart home solutions) has reached a number of key markets such as Korea, Australia, etc.

Rang Dong aims to become a high-tech enterprise by 2025 and a "billion-dollar" enterprise by 2030.

Rang Dong's development path is "Development through science and technology, innovation and kindness". Accordingly, science provides knowledge, technology creates endogenous strength; innovation helps pioneers make a difference; kindness is the foundation for creating long-term, sustainable and dedicated relationships.

Rang Dong is aiming to: By 2025, become a high-tech enterprise, a digital enterprise, leading the lighting market in Vietnam; Pioneer in providing 4.0 product and service ecosystems; Develop rapidly and sustainably with an annual growth rate of 25%.

By 2030, bring the Rang Dong brand to the regional level, with revenue reaching billions of dollars; Average income coefficient 1 reaches 2,000 USD/person/month.

Rang Dong High-Tech Company will meet the following criteria: High-tech product revenue accounts for over 70% of revenue; Expenses for research and development activities are over 1% of the difference between net revenue value and input value; The rate of direct research and development workers with college degrees or higher is at least 2.5%.

“I am very impressed with Rang Dong, every time I come here I see something new, full of emotions. At recent digital transformation conferences and forums, Rang Dong is always a typical case mentioned, not to show off, but to show that in Vietnam, nothing is impossible. I hope Rang Dong will change more and more, making the country, businesses and Vietnamese people shine,” said Dr. Vo Tri Thanh, Director of the Institute of Strategy - Brand and Competition.

Associate Professor - Doctor of Science Nguyen Van Minh, Chief Consultant of Rang Dong Digital Transformation.

“If you want to go far, go together. Rang Dong sincerely hopes that everyone will join the company to overcome upcoming challenges, joining hands to realize the aspiration of 2045 - Bringing Vietnam to stand shoulder to shoulder with developed countries”, Chief Digital Transformation Consultant Rang Dong proposed.

At the National Digital Transformation Day program organized by the Government Office in coordination with the Ministry of Information and Communications on the morning of October 10, 2023, General Director Nguyen Doan Thang directly participated in quickly recreating the breakthrough stage, digital transformation with proud achievements of Rang Dong - an industrial manufacturing enterprise in the new era.

The 81-year-old “captain” shared his positive thoughts for Vietnamese businesses: “As a Party member, I realize that I need to be responsible for implementing the Party’s policy on industrialization. Today, industrialization has the connotation of digital transformation of factories and manufacturing enterprises. Rang Dong has done it, I believe that traditional Vietnamese industrial factories can do it, as long as we have the spirit of innovation and accept the new.”

Vietnamnet.vn