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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
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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

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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

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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.

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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.

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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.

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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.

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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

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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

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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.

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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.

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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

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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.

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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

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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

PEOPLE

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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

PEOPLE

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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.

PEOPLE

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Advances Newsletter, March, 2014

17

SNAPSHOT

New Midea Global Website New Midea Global Website New Midea Global Website

Goes Live!Goes Live!Goes Live!


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