m-smart: intelligent, interoperable appliances -...
TRANSCRIPT
Advances Newsletter, March, 2014
1
Vol. 4, #2, March 2014, No. 36
M-Smart: Intelligent, interoperable appliances
Midea is using its unique product range to pioneer interoperable appliances
Advances Newsletter, March, 2014
2
ADVANCES Newsletter
Contents
Midea Advances Newsletter is published monthly
by the International Strategy Department of
Midea Group. We welcome all comments,
suggestions and contribution of articles, as well as
requests for subscription to our newsletter. You
can reach us by email at: [email protected]
Address:
ADVANCES, International Strategy Department
Midea HQ
No. 6 Midea Road
Beijiao, Shunde, Foshan, Guangdong
P.R.C. 528311
Tel: +86-757-2360 4714
Web: www.midea.com
Managing Editor:
Kevin McGeary
Mandy Wang
Regular Correspondents:
Chen Minshan
Amber Liu
Blinda Li
Tony Miao
Mao Guojun
Zhou Fu
James Yu
Zhang Xiaoming
Liu Jiao Crystal Lun
NEWSLINE
Midea Renews Partnership
with FINA PAGE 4
Midea VP Attends National
Congress PAGE 3
M.I.D Marks International
Cost Month PAGE 3
Midea Donates 1 Million RMB
to Beijiao for Fifth Straight
Year PAGE 5
GMCC Signs 10-Year Coop-
eration Deal with TCL PAGE 5
www.midea.com
Midea CAC Receives AHRI
Performance Certification PAGE 11
PAGE 17
FEATURE
SNAPSHOT
PEOPLE
An Intercultural Innovator PAGE 14-16
CAC Attends 2014 Climate
Exhibition in Moscow PAGE 7
Midea Ad Broadcast to
Millions in Chile PAGE 6
CMI Dealer Delegation Visits
Midea CAC PAGE 9
Launch Event of iSmart
Washing Machines Held in
Wuxi PAGE 8
Midea Carrier Brazil
Launches New Line of
Microwave Ovens PAGE 10
„M-Smart‟ Event Shares Intel-
ligent Tech Strategy PAGE 13
3 Dishwashers Win Provincial
-Level Recognition PAGE 6
Laundry Division Wins 2014
Chinese Appliance Award PAGE 4
Little Swan and Alibaba Join
Forces PAGE 9
New Products from Midea
RAC Debut at MCE Milan PAGE 12
Midea Makes Energy Effi-
ciency Leadership List PAGE 12
Advances Newsletter, March, 2014
3
Midea VP Attends National Congress
By Chen Minshan
Y uan Liqun, senior
vice president of Midea Group
Co., Ltd, attended the National
People’s Congress in Beijing as
part of the Guangdong delega-
tion in early March. Yuan, who
joined the company in 1992,
attended the Two Sessions on
March 2 and later that evening
spoke to reporters at the Capi-
tal Hotel, where the delegation
was staying.
Yuan told the reporters
that she had personally made
three suggestions at the con-
gress: The first was that compa-
nies should be encouraged to deepen restructuring to achieve
more sustainable growth; the second was that the improvement
of the pension’s service system should be accelerated as the pop-
ulation continues to age, and the third was that the use of fake
brands (for exam-
ple the notorious
KFG fast food
restaurant chain)
should be cracked
down on to ensure
a better and fairer
economic environ-
ment.
Talking to reporters
from a wide variety
of news organiza-
tions including
Guangdong Televi-
sion, Nanfang Dai-
ly, China Economic
Daily, and Foshan
Television, she explained that Midea itself would abide by those
principles, improving products, creating a more consumer-
centered business, and developing intelligent appliances.
NEWSLINE
M.I.D Marks “International Cost Month”
By Liu Jiao
F rom March 3-31,
Midea International Division
held a series of events to mark
“International Cost Month.”
The series of events had the
theme “If costs can be reined
in by an inch, profit can in-
crease by a mile” and their aim
was to increase awareness
among employees of the im-
portance of cost control and
responsible spending.
Events for “International Cost
Month” included a slogan selection
event to promote it; an event titled
“Golden Ideas” during which em-
ployees’ suggestions were solicited;
a campaign to select a “star of cost
efficiency.” This is all part of an
attempt to make cost efficiency part
of the culture of the company.
At the same time, a campaign has
taken place through internal media
to propagate the idea of cost effi-
ciency throughout the company.
Advances Newsletter, March, 2014
4
Midea Renews Partnership with Fina By Chen Minshan
M idea renewed its official partnership with
FINA, the international governing body of swimming, div-
ing, water polo, synchronized swimming and open water
swimming on January 14. Senior representatives of Midea
met with FINA’s Chairman Julio C. Maglione and Execu-
tive Director Cornel Marculescu in Shunde to renew the
partnership which began in 2010.
Also in attendance were Wang Lusheng, Secretary
General of China Swimming Association, his assistant Zhou
Xuhong, and members of China’s national diving team Wu
Minxia, He Zhong, Jiao Liuyang and Lu Ying. Other Chi-
nese swimmers were also invited to add some stardust to
the occasion. In 2012, Wu Minxia became the first Chinese
athlete to win a gold medal in a single event at three consec-
utive Olympic Games.
Midea is FINA’s leading Chinese partner and this global
strategic partnership has been successful enough to warrant re-
newal. In a speech, Julio C. Maglione asserted that its associa-
tion with FINA is helping Midea advance its global strategy and
that his governing body is also keen to enhance its brand in Chi-
na.
Senior Vice President of Midea Group, Ltd. Huang Xia-
omin reinforced Maglione’s point, stating that sports sponsor-
ship would increase Midea’s brand influence as the company
strives to increase its competitiveness around the world.
Founded in 1908, FINA administers five aquatic sports
for the International Olympic Committee. It is headquartered in
Lausanne, Switzerland and has five continental associations
underneath it.
NEWSLINE
By Blinda Li
Laundry Division Wins 2014 Chinese
Appliance Award
M idea’s laundry division triumphed at the 2014 Chi-
nese Appliance Awards which were part of the Appliance World
Expo on March 19. The TD80
-1408LPIDG front-loading
washing machine beat 230
competitors to take the Low-
Carbon Environmental Protec-
tion Award.
The committee for the
award, which was founded by
Chinese Household Electric
Appliances Association, starts
the product appraisal every
March. It demands the highest
standard in R&D as well as consumer-orientated manufacturing.
The winning product is part of Little Swan’s iSmart series
and offers both front loading and top loading. Through the
innovative functions such as i smart
precise injection, smart special wash-
ing, smart water magic cube, it has
achieved the optimum laundry effect
of “smart precise placement and
residue-free washing”. It has won 39
national patents and 7 international
patents, and its aerospace technology
of piston pumps has realized the
universal precise placement (error
range of ±1ml) in different environ-
ments and with different detergent
brands.
Advances Newsletter, March, 2014
5
GMCC Signs 10 Year Cooperation
Deal with TCL By Zhang Xiaoning
G MCC, Midea’s compressor arm, signed a 10 year
strategic cooperation agreement with Huizhou-based electronics
company The Creative Life (TCL) on March 11. The two sides
will increase interaction through information sharing, marketing
strategies, and industrial chain integration, according to the
agreement.
GMCC first announced back in September that it would
seek strategic partnerships as part of its continuing attempt to
make breakthroughs in the home appliances field. Like GMCC,
TCL is a famous brand that has thrived during China’s reform
and opening up era. The agreement resolves to do two things
for the companies: increase consumer confidence in the prod-
ucts and keep up with the competition. After-sales service is a
major part of both companies’ strategies.
The agreement will help both companies pioneer a new
model of after-sales service for compressors. While in the air-
conditioner, washing machine and refrigerator industries it is
common to offer after-sales services, it is standard to offer a
three-year after sales guarantee. This new agreement will see a
10 year guarantee being offered to the consumer on air condi-
tioning compressors, blazing a new trail in the home appliances
business.
The deal is expected to bring both companies unprece-
dented success in fostering customer loyalty as they overcome
the threat of bottlenecking progress.
NEWSLINE
Midea Donates 10 million RMB to Beijiao for
5TH Straight Year
By Zhou Pu
M idea has been recog-
nized for making 2013 the fifth
straight year in which it donated
10 million RMB to the Beijiao
community. The donations mostly
go towards poverty relief, early
education and social welfare.
As the company has grown
over the past 40 years, it has not
forgotten its responsibilities to
society. As the home of the compa-
ny’s headquarters, Beijiao gets spe-
cial support from Midea.
For this reason, Midea has
consistently made its contribution to
the village’s education, healthcare,
sports infrastructure, overall living
standard and rural development.
Advances Newsletter, March, 2014
6
Three dishwashers win provincial-level
recognition By Mao Guojun
On March 14, Guangdong Province identified the out-
standing high-tech products of the year and Midea had its share
of the spoils. Guangdong Provincial Science and Technology
Department recognized the Cleaning Appliances Division’s E4
Dishwasher, the Oceania-series dishwasher and the autonomous
-series dishwasher as outstanding high-tech products.
Innovations in the dish-
washer industry in recent
years include high-speed
washing, intelligent drain-
age systems, PTC thermis-
tors and hot and cold dry-
ing. This has led to im-
proved noise performance,
speed and efficiency.
This result augurs well for
the future performance of
these products.
NEWSLINE
Midea Ad Broadcast to Millions in Chile
By James Yu
A highly original television commercial for Midea was
broadcast during the red carpet
opening of a nationally-televised
summer festival in Chile on Feb-
ruary 21. The ad was broadcast
there after considerable research
was done into maximizing expo-
sure and positioning the brand,
according to Benjamin Peña Isla,
Business & Marketing Manager
of Midea Carrier Chile.
“When we tested the cam-
paign, everybody smiled upon
seeing the graphics. The women
particularly appreciated not seeing themselves portrayed as sole-
ly responsible for housekeeping,”
comments Benjamin.
The ad campaign has already started
to pay dividends. “We are very hap-
py with the response of the market
and spontaneous congratulations
being received on social networks by
consumers,” said Isla.
Besides the TV commercial, the
campaign considered several other
media and materials, such us radio
spots, banners, outdoors and POP
materials.
Advances Newsletter, March, 2014
7
CAC Attends 2014 Climate Exhibition in
Moscow By Tony Miao
T he 10th International specialized HVAC&R exhibi-
tion Climate World 2014 was hosted in Moscow from March 11
-14. It is the largest Russian Exhibition Project in the field of
heating, ventilation and air-conditioning (HVAC) equipment.
Climate World represents the entire spectrum of the Russian
HVAC&R market - from suppliers to engineering and installa-
tion companies.
With
around 400
exhibitors from
30 different
countries, more
than 22,000
visitors and an
exhibition
space of
24.000m2, it is
the largest de-
voted trade fair
for this indus-
try in the Rus-
sian market and
among the
biggest in Eu-
rope. Midea
Commercial
Air-
conditioning
(CAC) partici-
pated in the event.
Midea’s booth had a minimalistic design featuring the
company’s traditional blue and only a few products were on
display. Among these were the latest V5X all DC inverter VRF
product and the newly-designed indoor units for various applica-
tions. The V5X boasts the most advanced technology in the
industry. The single module capacity up to 22HP and combined
capacity is 88H, making it the largest in the world. Meanwhile
the IPLV is 7.5, the most efficient in the VRF industry. Midea
distributor Daichi is one of the largest air conditioner distribu-
tors in Russia and it also represents Daikin and Samsung. Midea
CAC’s comprehensive commercial product lineup and up-to-
date technology innovation is the foundation for cooperation
with the Daichi Company.
In the MDV booth, all DC inverter variable refrigerant
flow products and the MCCU air-cooled modular refrigerator
were displayed. The products were as well received as they have
been in the Chinese market. MDV positions itself in the Russian
market as a luxury
brand, a strategy
that has proved a
success. In the
MDV booth, the
latest air cooled
modular chiller
which is called
Aqua Tempo
Super is the most
attractive product
for the design and
convenient appli-
cation in all kinds
of projects. Along
with the modular
chiller, the hy-
draulic module
including the
pump, expansion
tank, water flow
switch and con-
trollers is also
displayed. The hydraulic module is a packaging pumping sys-
tem used to reduce the design and installation costs and risk on
the site and also facilitate the project installation. This system is
likely to be a hit in Russia and Europe where labor costs are
high.
Russia is a strategic market for Midea CAC and “Climate
World" is the most anticipated and intriguing event on the Rus-
sian HVAC & R calendar. It brings together all the players in
the industry and both networking and idea exchanges happen
there. In the age of e-commerce, this may be the only time
when these people get to meet in person.
NEWSLINE
Advances Newsletter, March, 2014
8
Launch Event of iSmart Washing Machines
Held in Wuxi By Blinda Li
T he “2014 Launch Event of the Complete-series Little
Swan iSmart Precise-dispensing Washing Machine” took place in
Wuxi in March. The launch reinforced the determination of
Little Swan to pioneer the integration of washing machine tech-
nology with the Internet of Things. With its 36 years of experi-
ence in the field, Little Swan is leading the way in research and
development as well as available technology.
It is known that the new products of complete-series
iSmart
precise-
dispens-
ing wash-
ing ma-
chine
released
by Little
Swan
include
three
series
and 15
models,
and cov-
er front-
loading
and top-
loading.
Through
the inno-
vative
functions such as iSmart precise dispensing, smart special wash-
ing, smart water magic cube, it has achieved the optimum laun-
dry effect of “precise and smart injection, residue-free washing.”
With its computerized “brain”, Little Swan iSmart Wash-
ing Machine has won 39 national patents and 7 international
patents. It can precisely sense the weight of each garment and
bundle, and combine the cleaning mode and dirt gear to deter-
mine the accurate amount of detergent. Its aerospace technology
of piston pumps has realized the universal precise injection
(error range of ±1ml) in different environments and with differ-
ent detergent brands.
According to the authoritative test, the cleaning ratio of
the iSmart washing machine is up to 1.05, the highest level in
the industry (according to the state new energy efficiency stand-
ard), 25% higher than that of manual injection, and 20% higher
than that of ordinary automatic injection; the amount of its de-
tergent is 73% lower than that by manual dispensing, and 17%
lower than that by ordinary automatic injection.
Hu Ziqiang, the Technical General Manager of Little
Swan, said
there is plenty
to work with
and Little Swan
is reaching for
the top. As
early as four
years ago, Little
Swan has suc-
cessfully re-
searched and
developed the
IOT washing
machine, and
has realized the
remote control
parameter set-
ting, the precise
washing in
expert mode,
user’s customi-
zation of use
habits, smart diagnosis and considerate services.
Mr. Xu Dongsheng, Secretary General of China House-
hold Electrical Appliances Association, claims that the largest
contribution of Little Swan is the establishment of a value scale
in smart washing machines. He also claims that, driven by Little
Swan, China’s washing machine industry is taking a more prag-
matic road in intelligence. Along with the “realization” of the
Little Swan, iSmart precise-dispensing washing machines, the
white household electrical appliance market in China will usher
in a new round of rapid growth.
NEWSLINE
Advances Newsletter, March, 2014
9
CMI Dealer Delegation Visits Midea CAC
By Amber Liu
A delegation of 14
dealers from Carrier Midea India
Private Limited (CMI) visited
Midea Commercial Air-
Conditioner Company on March
12 to examine the latest products
and breakthroughs. CMI is a
Joint Venture formed in India in
2012. It is 60% funded by Midea
and 40% funded by Carrier.
The guests were all experi-
enced HVAC dealers and famil-
iar with manufacturing process,
testing facilities and methods.
They took a tour of the product showroom, history museum,
VRF factory, testing center and were deeply impressed by
Midea’s innovative products and
cutting-edge technology.
In India, VRF system are becoming
more popular among HVAC con-
sultants and system designers due
to their energy efficiency and intel-
ligent control. And VRF sales are
growing rapidly with the expansion
of the Indian economy as well.
According to reports, Indian VRF
market was worth approximately
21,000 units in 2012, the annual
growth rate is around 27%. Midea
believes that together with local
dealers, Midea VRF can grow stronger in near future.
NEWSLINE
Little Swan and Alibaba Join Forces
By Blinda Li
W hile Midea was announcing its Cloud cooperation
with Alibaba on March 17, its subsidiary Little Swan was launch-
ing its own smart strategy. Little Swan is the first household
appliances brand to use the “smart card” in such a high-profile
way. Its current series of products is testament to this adven-
turousness.
Hu Ziqiang, the Technical General Manager of Little Swan
said: “At the moment, it’s difficult to maintain the growth rate
of a few years ago for the entire washing machine market. This
is because the market is at a reasonable development stage, the
number of purchases has decreased and quality standards have
increased.
Our previous online and offline surveys reveal that con-
sumer demand for washing machines is changing. Consumers
are now paying more attention to both eco-efficiency and con-
venience. Responding to this demand, our company has pro-
duced the smarter precise-placement washing machine, which is
a strategic link to Midea itself..
After delving into large & small household electric appli-
ances and air conditioners, Midea Group’s diversification is
aimed at the fields of refrigerators and washing machines. Little
Swan is leading the way in initiating the smart layout in the field
of white household electrical appliances.
“Little Swan will spend two years realizing the updating
and upgrading of automatic-placement washing machines pro-
gressively, and it’s expected that until 2016 the Little Swan auto-
matic-placement washing machine will account for 60% of all
products.” A senior spokesman from Little Swan stated that the
brand will take full advantage of the smart upgrade to seize the
high ground and aim at 60% of the smart washing machine
market.
Over the past few years, the competition to seize the larg-
est market share in the washing machine industry has become
fiercer. Insiders think that since listing, Midea has helped take
Little Swan to a new level.
Advances Newsletter, March, 2014
10
NEWSLINE
Midea Carrier Brazil launches new line of
Microwave ovens By James Yu
M idea Carrier, the largest manufac-
turer of air-conditioning in Latin America,
launched its new product line of microwave-
ovens which is titled “Liva.” The launch,
which took place in Sao Paolo, Brazil on
March 19, saw five models with innovative
functions released into the Brazilian market.
"We are reaching the domestic market with prod-
ucts that meet the desires of Brazilian consumers.
To this end, we conducted a survey of consumers
and distributors of used microwaves and Brazilian
designers to develop products," said Midea Carrier
JJV President Carlos Renck .
Among the highlights of the new line of mi-
crowaves are two unique features of the brand: "
More Light " function is used to lower calorie
dishes as it reduces the fat in the food it’s prepar-
ing and the "Easy Clean," which brings more prac-
ticality for cleaning instructions. Putting a glass
with water and lemon slices in the microwave
and activating the function, the steam pro-
duced reacts with the dirt and cleans without
the use of chemicals.
The production capacity in Manaus
for the first year will be around 500,000 with
an extension plan to be more than 1,000,000
for next year. MCJV Brazil is now aiming to
enter the top 5 brands in its field.
Advances Newsletter, March, 2014
11
Midea CAC Receives AHRI Performance
Certification By Tony Miao
T he Air-Conditioning, Heating and Refrigeration Insti-
tute (AHRI) granted the AHRI 550/590 certification to Midea
CAC upon its successful passing of the institute’s performance
test. The Institute has added Midea Chongqing General Refrig-
eration Equipment Co., Ltd to the Water Chilling Packages Us-
ing the Vapor Compression Cycle (Water-Cooled) (WCCL) Cer-
tification Program as an Original Equipment Manufacturer
(OEM).
Certification from the AHRI is a mark of
satisfactory performance in terms of equip-
ment. To earn the mark, products must under-
go rigorous, independent annual evaluation to
ensure that they perform according to the
manufacturers’ published claims. Certifying
equipment and component performance allows
consumers to compare products based on in-
dependently verified performance ratings.
The centrifugal chiller product ranging
from 1200Rt to 2200Rt and water cooled
screw chiller ranging from 220Rt to 390Rt
have passed the AHRI performance testing
program.
Midea chiller will add the AHRI certifica-
tion to its growing list of important industry
certificates. This valuable certification will also
provide new opportunities for the company to
tap into new market segments where AHRI
certification is mandatory for approval.
Midea chiller performance testing facilities have also been
certified by the AHRI. Midea Chongqing chiller testing center
is one of the largest testing bases in the world for chiller prod-
ucts. The 8000Kw chiller performance test stand is certified by
China National Refrigeration Equipment Inspection Center and
it owns the widest cooling capacity test range from 140kW to
8000kW.
Power supply: 380—460V 50Hz/60Hz
6000/6600V/10000/11000V 50Hz.
High automation: test instruments are controlled by varia-
ble frequency and PID, the set point can be reached in a short
time.
High occupant efficiency: The test bench is equipped with
three individual cooling and control systems and at most three
chillers can be tested simultaneously.
The test bench recovers all cooling capacity by means of
blending chilled and condensing water with a high energy utili-
zation rate. The whole system only needs to discharge the heat
generated by compressors thus energy and operation costs are
saved.
NEWSLINE
Advances Newsletter, March, 2014
12
NEWSLINE
By Crystal Lun
New Products from Midea RAC Debut at
MCE Milan
T he exhibi-
tion Mostra Convegno
Expocomfort (MCE),
which was founded in
1960 in Milan, Italy is
the most important
and influential exhibi-
tion in the heating,
refrigeration and sani-
tation industries. Held
every two years, MCE
has given Midea a plat-
form to introduce its
technology and prod-
ucts to the world.
From March
18-21, Midea air-conditioner division gave debuts at MCE to
seven series of split products
and light commercial ACs,
portable ACs and dehumidifi-
ers. The rich product line-up,
professional product strength,
and attractive designs attracted
numerous customers from
around the world who were
willing to sit down and learn
more about Midea’s products.
During the exhibi-
tion, to teach people more
about our new technology, a
training conference was orga-
nized by Midea RAC. More
than 50 customers took part,
helping the company build
relations with new markets.
Midea Makes Energy-Efficiency
Leadership List By Crystal Lun
O n February 28,
sponsored by the China Re-
search Institute of Standardiza-
tion, the 2013 energy efficiency
leadership award ceremony was
held in Beijing. Midea air-
conditioners accounted for four
of the top 10 in the list of lead-
ers in energy efficiency. The full
range splits with consumption
of 1 kWh per night was includ-
ed on the list, as also was the
range of models that apply full
DC inverter technology. These
were rated as first Class in energy efficiency.
The inclusion of all models from Midea Eco range was
evidence of Midea’s forceful implementation of the high qual-
ity strategy and scientific and technological achievements.
They have been leading
the domestic market
for several months.
Midea Eco
series of “1 kWh per
night” adapts full DC
refrigeration system
and 0.1 HZ precise
temperature control
technology. This can
realize 0.1W standby,
0.1hz operation and
±0.1 temperature fluc-
tuation. It enables power consumption to be as low as 1 kWh
for at least eight hours.
Advances Newsletter, March, 2014
13
„M-Smart‟ Event Shares Intelligent
Technology Strategy By Chen Minshan
S enior Vice President of Midea Group Cai Qiwu went
into detail about the company’s strategic vision for smart house-
hold technology at the M-Smart event on March 10. Key to
Midea’s strategy is networking, cloud computing, and interoper-
ability.
The smart household strategy will involve the implementa-
tion of a plan known as “1+1+1.” That is, it will contain a smart
household system + an M-Smart networking community + a M-
Box management center. This will provide the consumer with
the most comprehensive smart household appliances system to
date, according to Vice President Cai.
According to experts, Midea has a unique advantage in
providing the whole range of electrical appliances for a house-
hold. This open, integrated system is guaranteed to cause a
splash in the household appliances industry.
Cai Wuqi told the audience that in 2013 Midea sold 250
million units of electrical appliances and market holdings
reached 2 billion units, influencing 500 million households
around the world. Midea can use its status as a powerhouse to
be at the forefront of the new era of smart household technolo-
gy.
The electrical appliances market is fiercely competitive
both at home and abroad but Midea has the advantage of being
able to offer an almost uniquely broad product range. This will
serve the company well in its marketing of integrated technolo-
gy.
Mrs. Jiang Feng, chairman of the China Household Appli-
ances Association gave a speech at the event backing up Cai’s
claims. Jiang said that 2014 is a key year in the promotion of this
technology.
Cai stressed that, in terms of cleanliness, Midea must stay
at the forefront in air, nutrition, water and energy. This technol-
ogy will involve the integration of air conditioners, water dis-
pensers, air purifiers and other products. These products will
remember users’ preferences and adapt to their needs.
In 2013, eight of these intelligent products were devel-
oped and two entered the market. The process will be acceler-
ated this year.
FEATURE
Advances Newsletter, March, 2014
14
An Intercultural Innovator
By Mandy Wang & Kevin McGeary
Luo Bin
Commercial Air-Conditioning
Performance development expert
Luo Bin joined Midea Commercial
Air-Conditioning (CAC) in June
2013 having worked in Japan for
several years. When asked what his
first impression of Midea was, he
gave a smile and said: “The youth
and enthusiasm of the engineering
team.” Despite having been here for
less than a year, Luo Bin has already
been responsible for two hugely
successful projects at CAC.
ADV: During your time at Dalian
University of Technology from 1999 to 2004, why did you
study such varied subjects such as foreign trade, Japanese, and
electromechanical engineering?
Luo: I am primarily a scientist, and I’m a fan of dongman (a type
of Japanese animation). It’s really that simple.
ADV: When you started working at another multinational
company in 2004, was it far ahead of its Chinese competitors?
Luo: Yes, it still is now. Look at it from two angles, business
strength and technological strength. Compared with 10 years
ago we are catching up in product strength. Whatever the
Japanese have, we can have if we put some work in. In some
respects, such as energy efficiency, we can even beat them. But
from the point of view of technological strength, we still cannot
compete with the Japanese in the cost of materials. But the gap
is narrowing.
ADV: Is Midea catching up with its overseas competition in the
field of commercial air conditioning?
Luo: Of course it is. But when will we surpass our competitors?
I think only when CAC is established in overseas markets,
especially those of developed countries, can we say that we have
surpassed our competitors. We need to become an international
brand like Japan’s Toyota and China’s Huawei.
This year a lot of our products will enter the American
market. We need to strive to compete alongside huge
international brands like Daikin, Mitsubishi, Samsung as well as
maintaining our huge presence in the domestic market before
we can call ourselves a big brand.
ADV: So can Midea compete in both product strength and
technology strength?
Luo: With the investment of a lot of resources, we are finally
breaking the duopoly of Korean and Japanese companies.
Domestically we are leading in both cooling and heating
products. Moreover, we have successfully met the standards of
America’s Air-conditioning, Heating and Refrigeration Institute
(AHRI). In energy efficiency, we still lead Daikin, Mitsubishi
and a lot of established American competitors. Therefore,
overall we are not far behind the Japanese in product strength.
We have to consider the fact that our materials costs
are slightly higher. We are still behind in figuring out the core
components. The pioneers of CAC, bosses Tian Mingli and Wu
Guanghui have done brilliantly in pulling us close to level in
terms of product strength, now it is the responsibility of my
generation to reach the top in technological strength. So now I
am full of a sense of urgency and determination.
ADV: When you first joined Midea, you were part of the DC
Inverter duct machine project. The resulting MDS-PID has
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Advances Newsletter, March, 2014
15
An Intercultural Innovator (cont.) By Mandy Wang & Kevin McGeary
already achieved six invention patents and one utility model.
Can you give us an introduction to the product you’re working
on now?
Luo: Basically I am working on the fixed-speed alternative to
the domestic air-conditioning inverter. But we cannot succeed
in America on the same terms that have allowed us to succeed
in China. There are two major differences. The first is that more
than 80% of the U.S market is in replacements. The second is
that American fixed-speed air conditioners have different
communication systems for the interior and the exterior. The
components may have been made in three different factories.
When I arrived at Midea, this project was still in its
inaugural stage. I saw the internal and external communication
systems they were working on and I knew
they could not break the American market
with those. To solve this, we needed to take
an approach that Midea had never taken
before. My experience with my previous
company came in useful and the result was
the MDS-PID control system.
At the 2014 North American
Refrigeration Exhibition, Daikin and Carrier
exhibited similar air conditioners. This has
increased our confidence.
ADV: You guys were also responsible for the
VRF program. This was also a huge deal for
the company. Can you introduce that to us?
Luo: This was the first thing I was involved in at CAC. It was
one of the division’s biggest projects of the year. At the time I
was honored to be granted so much trust, but also daunted to
have such a big responsibility. Every day I would be working
from early in the morning till 11 p.m. and this went on for over
a month. The biggest challenge was reaching the threshold for
AHRI’s energy efficiency standards. Cracking this enabled us to
emulate Daikin, Mitsubishi, LG and Samsung.
ADV: How did you increase the energy efficiency?
Luo: Unless everything is done within the budget, then it is not
a viable product. So the biggest challenge is becoming a market
leader in energy efficiency within the budgetary constraints we
have. My first thought was maximizing the quality of core
components such as heat exchangers and compressors. Initially
I put thoughts of energy efficiency on the backburner. The
biggest priority was making sure the hardware was good
enough.
This experience gave me two stories to tell. We faced a
lot of problems with the heat exchanger. We had to experiment
with the diameter capillary as the overall quality of the heat
exchanger. We really had to come together as a team to get this
right.
The second story is about the interior of the machine.
When we’d solved the refrigeration problem, we all thought it
would be easy to solve the heating problem. But we had a lot of
problems with these experiments. We would stay at work having
worried discussions till 11 p.m. The fact that my initial
estimations were out by 15% bothered me. But as soon as we
learned what we needed to know about the downstream heating
system, we could come together and complete the project.
ADV: How much did energy efficiency increase by?
Luo: Without increasing cost, we managed to increase energy
efficiency by 15-20%. The copper tube aluminum fin for the
heat exchanger was also within the existing limit. The air
temperature and the saturation temperature of the refrigerant
were 2 degrees lower. The whole team is very proud of this
achievement.
ADV: You’ve been part of so many projects? What do you feel
is your biggest achievement?
Luo: Two things: 1. The rigorous style that I have cultivated. In
Japan, everything is more rigorous and more detailed. 2. The
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Advances Newsletter, March, 2014
16
An Intercultural Innovator (cont.)
By Mandy Wang & Kevin McGeary
spirit of single-mindedness. When I was at Daikin I learned the
importance of focus and playing one’s string right to the end.
ADV: How important is teamwork in your role?
Luo: I only get the opportunities that my teammates in the
division give me. No project can succeed without teamwork. I
am mostly responsible for the development phase.
ADV: What’s the most important factor in making a project a
success? For example, is it the risk management? Is it the
delegation of responsibilities?
Luo: When it comes to
research & development,
the essence of a good
project is the product that
comes at the end. What
products are needed? What
experience do we need?
How do we position the
product? What standards
do we need to meet? In
the end, everything comes
down to one value: do the
right thing.
T h e q u a l i t y
depends on the work of
everyone f rom the
d e s i g n e r t o t h e
manufacturer. In my
previous company I learned that detail is everything. In my
previous company, the head of the R & D department told us
that we could lie to him and tell him the product was good and
the product would lead the market. But he added that the
market doesn’t lie. So a culture of “do the right thing” needs to
pervade the whole company.
ADV: How do you stay innovative?
Luo: The essence of innovation is the need to correctly identify
a problem. Before we do anything, we need to think about
minimum cost and maximum efficiency. When this is
established, everybody knows that the main issue is identifying
the key problem. Everything should be orientated towards the
result. It’s important to know every component inside out.
During the experimentation process, we need to turn every
“failure” into a learning experience.
Toyota’s five “whys” have been hugely influential throughout
Japan’s manufacturing industry. Japanese innovation is
exemplary and innovation is about asking “why.” For example,
today I’m feeling happy, why am I feeling happy? Because today
is Saturday. Why does it being Saturday make people happy?
Because they don’t have to work the next day. Why does the
prospect of not having to work make people happy? Because
they don’t want to work. Toyota believes that five “whys” can
take you to the heart of any problem. The first step in the
innovation process
is: find the problem.
ADV: What do you
think will be the next
big innovation in the
industy?
Luo: I think the new
concept of smart
home appliances is
interesting. That is,
products that offer
t h e c o n s u m e r
services beyond the
product itself. But
original equipment
manufacturers have
to get it right and the consumer has to embrace it.
ADV: What do you think our engineers currently most lack?
Luo: The inability to identify problems. When I was in Japan I
heard a lecture by a Harvard professor that I remember well. I
particularly remember the part where he said that if you have 1
hour to solve a problem that is a matter of life and death, you
need to spend the first 55 minutes identifying the problem and
only the last 5 minutes looking for a solution. Identifying
problems is an essential quality of a technological engineer. The
approach of finding the big issues and breaking them down to
their bare bones is something we should learn from the
Japanese.
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Advances Newsletter, March, 2014
17
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