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)

创新是企业护城河

文/石华山

什么是新时代的工匠精神？从我自己的经历来说，那就是：不创新，我不敢做企业。

讲一下我做排水泵的故事吧。

家用电器的小排水泵，二三十元人民币一个，现在我们的工厂每天要生产十几万个。这个排水泵，我们刚创业的时候是什么状态呢？意大利的阿斯科占了全球份额的38%，第二是美国艾默生，占33%，第三是德国汉宁，15%，我们在最末梯队，别人的水泵坏了，我们就去做点维修。我常常这么比喻：当时是别人吃饼干不小心掉了一点饼干屑，我们靠舔饼干屑活下来。

现在，格局已经逆转，我们地尔汉宇生产的排水泵占据全球市场30%的份额。我们怎么逆转的？首先从叶轮开始，它是有专利技术的。我们就改造了一个专利。当时我们到韩国三星电子去测试，我们的产品可以用23.7年，意大利原来的当时国外同行的专利只能用4.8年，我们在品质上就超越行业老大，成本也更低。如今，叶轮又经过三次迭代，整体寿命提高很多，使用几百万次也坏不了。

比叶轮更重要的以铝代铜技术，更是被逼出来的创新。

2006年夏天，国际铜价大幅上涨，从每吨3万元左右涨到8万多元，而铜线是我们生产排水泵的主要材料，占排水泵成本的30%到40%。那时，地尔汉宇接下三星的订单，有一个月就亏损300多万元人民币。我在泰国出差，在一个面朝大海的酒店里，我盘腿静坐。心无杂念的时候能想出一些东西：铜这么贵，能不能用铝线来代替？

铝线可以替代铜线，但是铝线非常细，只比头发丝粗一点。而且铝容易被氧化，氧化铝是不导电的，怎么解决耐腐蚀的问题？这是很难的技术问题。既然铝线怕氧化，我们就把它封装起来，让它跟氧气完全隔离，然后做大量的实验，在盐水里面泡，做盐雾实验。人家测试24小时，我们泡一个星期。而且不是做一两个，是几批一起来做。经过几次改良，我们拿下铝线封装的国际专利技术。

铝线代替铜线价值在哪儿？一个泵的成本降低1美元。铝的价格只是铜价格的三分之一，关键是铝的比重是2.7，铜的比重是8.9，就是一样的钱买回来的铜只有一点点，买回来的铝却很多。这两个因素加在一起的话，它的成本差别非常大。

以铝代铜的技术，大家都想仿。国内有一个竞争对手，扬言要花一千万元把我们的专利否决掉。我们跟他打了十场专利官司，用非常低的成本跟一千万元较劲。这是2007年的专利，从那时起到现在9年时间里，我们通过专利做了很多道围墙，这是我们的护城河。

因为竞争对手步步紧逼，我开始思考能不能形成一个创新的机制。后来我们又启动008项目。水泵原来有一个塑料壁厚1毫米，间隙0.5毫米，我们想，能不能把1毫米降到0.1毫米，把整个泵做成完全一体化的结构，这样水泵发热就可以通过其他地方导走，水泵几乎永远不会坏。这项研发我以前干过，没成功。后来一个工程师跟我说，这应该是可行的。我告诉他，我反正没成功，你愿意做就做。

这个工程师干了两个月也没成功。后来，我发现原因是条件太差，舍不得用好材料做实验。我告诉他，你爱怎么折腾就怎么折腾。最后成功了，这让水泵整体的材料成本降低了15%。

拿洗碗机的洗涤泵来说，我们三个泵的重量跟传统一个泵重量差不多，我们用少量铝线，别人用大量铜线，我们用少量的矽钢片，别人用大量的矽钢片。我们不怕漏水，因为我们是完全隔离的一种设计。一般新产品出来，我们会拿到小客户或者维修市场先历练一段时间，结果很快被美国惠而浦公司看中，马上就要采购。第一个买单的就是最大的客户。

对这个008项目小组，我给了现金一百万元的奖励。我现在比较喜欢用钱来奖励员工。最近我又拿出两千万元，要弄一个新项目出来。与其使用别的专利，发生纠纷后拿一千万元交给律师打官司，还不如把这一千万元拿来奖励公司的员工做研发，这样，这个核心知识产权就是公司自己的。一千万元，可以做好几百个专利、好几百个技术。奖励的方式，我也做了革新。比如这个项目是一百万元奖励，我会分几个阶段，到什么阶段就奖多少，速创速奖。