Innovation is the Lifeblood of Enterprise

By Shi Huashan

What is the spirit of craftsmanship in this new era? I would say from my own experience that innovation is the key to successful business.

Let me tell you the story of how our drainage pump came into being.

This small drainage pump for household appliances, which our factory currently manufactures more than 100,000 per day, costs about twenty to thirty yuan per unit to make. What was the market for drainage pump like when we first started our business? Italy’s Askoll accounted for 38% of the global share; coming next was Emerson of the United States, accounting for 33%; the third was Hanning of Germany, 15%. We were in the lowest echelon and could only take repairing jobs when people’s pumps broke down. To put it in another way, it’s like other people had biscuits, and we had the crumbs that accidentally dropped out of their hands.

Yet, the landscape has changed now. The drainage pump manufactured by Jiangmen Hanyu Group accounts for 30% of the global market. How did we make it? We started with the impeller, which involves a patented technology. We made further improvements on one patent, then went to Samsung Electronics of South Korea for testing, which proved that our product could last 23.7 years, while other peer products then could only last for 4.8 years. Therefore, our product surpassed the industry leader in quality, and the price was lower. Now, after three generations of development, the average service life of our pumps has increased a lot, to such an extent that it won’t break even after being used millions of times.

Another more important innovative technology was to replace the main material from copper to aluminum, which we pulled off against all kinds of odds and difficulties.

In the summer of 2006, the price of copper rose sharply, from about 30,000 yuan per ton to more than 80,000 yuan in the international market. Copper wire is traditionally the main material for drainage pumps, accounting for 30% to 40% of its cost. This once caused more than 3 million yuan loss in one month when we took Samsung’s order. I was on a business trip in Thailand. While staying in a seaside hotel, I sat there cross-legged, and contemplated what to do next. In this distraction-free moment, an idea hit me. Since copper was so expensive, could we replace it with aluminum wire?

Aluminum wire indeed can replace copper wire, for the former is very thin, only a little thicker than hair. Moreover, aluminum is easily oxidized and not electrically conductive. So how do we solve the problem of corrosion resistance? This was a difficult technical problem. Since aluminum wire is susceptible to oxidation, we wrapped it up and completely isolated it from oxygen, after which we did many experiments on it, like soaking it in salt water, exposing it to salt spray, etc. While other people run 24-hour tests, we ran ours for a week. We didn’t just test on one or two products, but several batches. After several improvements, we won the international patent for aluminum wire packaging technology.

How much is the value saved by replacing copper wire with aluminum wire? It reduces the cost of one pump by 1 US dollar. The price of aluminum is only one-third that of copper. Meanwhile the specific density of aluminum is 2.7, while copper is 8.9, which means, with the same amount of money, we can buy much more aluminum than copper. When these factors add up, the cost difference is obvious.

Now everyone wants to have the aluminum-based technology. A competitor at home even threatened to veto our patent with 10 million yuan in legal personnel. We had ten patent lawsuits against him, competing with the 10 million yuan at a very low cost. This was a patent in 2007. During the 9 years from then until now, we have built many safeguards in the form of patents, which protect our technology and products.

As our competitors pressed harder, I began to think whether we could form another innovation mechanism. Later we started the 008 project. The pump originally had a plastic wall that was 1 mm thick, with a clearance of 0.5 mm. I wondered if we could reduce the 1 mm to 0.1 mm and make the whole pump into a completely integrated structure. In this way when the pump gets hotter, the heat can be conducted away through other channels, in which case the pump would never break. Was it possible? I had worked on it before, to no avail. Later on an engineer told me that this should be feasible. I told him that I failed, but he was more than welcome to try.

This engineer worked on it for two months and went nowhere. Later I found out it’s because he was doing his research work under poor conditions—he was afraid of using good expensive materials for his experiments. I told him not to worry about the materials and do whatever needed to be done. In the end he succeeded, reducing the overall material cost of the pump by 15%.

Take the washing pump of dishwasher as an example—the weight of our pump is one third that of a conventional pump. We use a small amount of aluminum wire, while others use a lot of copper wire; we use a small amount of silicon steel sheet while others use a lot of silicon steel sheets. Our product does not leak water easily because it’s a completely isolated design. When our new product came out, we put it to trial with small numbers of customers for a period of time. It ended up winning the approval of Whirlpool Corporation of the United States, who asked to purchase it right away. Our first customer turned out to be our biggest one.

I rewarded the team of the 008 project with one million yuan in cash. I like to reward my employees with money these days. Recently, I allocated another 20 million yuan for a new project. I reckon it’s better to give money to our employees for their research and development work rather than using other people’s patents and pay tens of millions to lawyers for possible lawsuits when disputes arise. The best thing is, this core intellectual property belongs to our own company. With ten million, we can try hundreds of technologies and file hundreds of patents. I also innovate in the ways I reward employees. For example, I’d divide into a few parts the reward, say, one million yuan, for one particular project. Let researchers get the corresponding sum at different stages of the project, and eventually all of it is theirs when the project is done.

(From Business Review, January 2017. Translation: Lu Qiongyao)

創新是企業護城河

文/石華山

什么是新時代的工匠精神？從我自己的經歷來說，那就是：不創新，我不敢做企業。

講一下我做排水泵的故事吧。

家用電器的小排水泵，二三十元人民幣一個，現在我們的工廠每天要生產十幾萬個。這個排水泵，我們剛創業的時候是什么狀態呢？意大利的阿斯科占了全球份額的38%，第二是美國艾默生，占33%，第三是德國漢寧，15%，我們在最末梯隊，別人的水泵壞了，我們就去做點維修。我常常這么比喻：當時是別人吃餅干不小心掉了一點餅干屑，我們靠舔餅干屑活下來。

現在，格局已經逆轉，我們地爾漢宇生產的排水泵占據全球市場30%的份額。我們怎么逆轉的？首先從葉輪開始，它是有專利技術的。我們就改造了一個專利。當時我們到韓國三星電子去測試，我們的產品可以用23.7年，意大利原來的當時國外同行的專利只能用4.8年，我們在品質上就超越行業老大，成本也更低。如今，葉輪又經過三次迭代，整體壽命提高很多，使用幾百萬次也壞不了。

比葉輪更重要的以鋁代銅技術，更是被逼出來的創新。

2006年夏天，國際銅價大幅上漲，從每噸3萬元左右漲到8萬多元，而銅線是我們生產排水泵的主要材料，占排水泵成本的30%到40%。那時，地爾漢宇接下三星的訂單，有一個月就虧損300多萬元人民幣。我在泰國出差，在一個面朝大海的酒店里，我盤腿靜坐。心無雜念的時候能想出一些東西：銅這么貴，能不能用鋁線來代替？

鋁線可以替代銅線，但是鋁線非常細，只比頭發絲粗一點。而且鋁容易被氧化，氧化鋁是不導電的，怎么解決耐腐蝕的問題？這是很難的技術問題。既然鋁線怕氧化，我們就把它封裝起來，讓它跟氧氣完全隔離，然后做大量的實驗，在鹽水里面泡，做鹽霧實驗。人家測試24小時，我們泡一個星期。而且不是做一兩個，是幾批一起來做。經過幾次改良，我們拿下鋁線封裝的國際專利技術。

鋁線代替銅線價值在哪兒？一個泵的成本降低1美元。鋁的價格只是銅價格的三分之一，關鍵是鋁的比重是2.7，銅的比重是8.9，就是一樣的錢買回來的銅只有一點點，買回來的鋁卻很多。這兩個因素加在一起的話，它的成本差別非常大。

以鋁代銅的技術，大家都想仿。國內有一個競爭對手，揚言要花一千萬元把我們的專利否決掉。我們跟他打了十場專利官司，用非常低的成本跟一千萬元較勁。這是2007年的專利，從那時起到現在9年時間里，我們通過專利做了很多道圍墻，這是我們的護城河。

因為競爭對手步步緊逼，我開始思考能不能形成一個創新的機制。后來我們又啟動008項目。水泵原來有一個塑料壁厚1毫米，間隙0.5毫米，我們想，能不能把1毫米降到0.1毫米，把整個泵做成完全一體化的結構，這樣水泵發熱就可以通過其他地方導走，水泵幾乎永遠不會壞。這項研發我以前干過，沒成功。后來一個工程師跟我說，這應該是可行的。我告訴他，我反正沒成功，你愿意做就做。

這個工程師干了兩個月也沒成功。后來，我發現原因是條件太差，舍不得用好材料做實驗。我告訴他，你愛怎么折騰就怎么折騰。最后成功了，這讓水泵整體的材料成本降低了15%。

拿洗碗機的洗滌泵來說，我們三個泵的重量跟傳統一個泵重量差不多，我們用少量鋁線，別人用大量銅線，我們用少量的矽鋼片，別人用大量的矽鋼片。我們不怕漏水，因為我們是完全隔離的一種設計。一般新產品出來，我們會拿到小客戶或者維修市場先歷練一段時間，結果很快被美國惠而浦公司看中，馬上就要采購。第一個買單的就是最大的客戶。

對這個008項目小組，我給了現金一百萬元的獎勵。我現在比較喜歡用錢來獎勵員工。最近我又拿出兩千萬元，要弄一個新項目出來。與其使用別的專利，發生糾紛后拿一千萬元交給律師打官司，還不如把這一千萬元拿來獎勵公司的員工做研發，這樣，這個核心知識產權就是公司自己的。一千萬元，可以做好幾百個專利、好幾百個技術。獎勵的方式，我也做了革新。比如這個項目是一百萬元獎勵，我會分幾個階段，到什么階段就獎多少，速創速獎。