The Haier PowerPad is a concept device shown at SinoCES which captures the energy contained within the water that runs off our bodies every morning in the shower, and returns said energy to the hot water tank. Haier claims the PowerPad is currently capturing and returning 15% of the energy coming out of the faucet and by the time it goes on sale six weeks from now, that figure will be 20-30%. Haier is one of the world’s most innovative companies and is hence foolish to bet against, but we’re struggling to understand the technologies being used and just how optimistic the claims are.

The rise of Haier

Just 30 years ago, 0.2 percent of Chinese homes had a refrigerator – that is, one in every 500 homes. Today that figure is almost 100% and China’s largest white goods manufacturer Haier made most of them.

Few companies embody the essence of China’s manufacturing miracle as comprehensively as Haier – in December 1984 it had annual sales of US$420,000 and debts of US$180,000 – bankrupt in every sense except unable to cease production because of State laws – exactly 25 years later in December 2009, it became the world’s largest white goods manufacturer thanks to implementing a policy of total innovation management.

The turn-around is the stuff of legend and will almost certainly be the first Chinese innovation case study to make the business school text books.

On the December 26, 1984, when Zhang Ruimin, now CEO, was appointed director of the Qingdao Refrigerator Factory, the ailing “collective production plant” had a massive quality control problem. Its rudimentary refrigerators cost two years of the average Chinese wage, and they had a dead-on-delivery rate of greater than 20%.

Zhang scoured the factory for defective refrigerators and eventually located 79 in the inventory of just 400. He then assembled them on the factory floor along with the entire staff, produced a sledgehammer and smashed the first one to pieces. He then produced further sledgehammers and invited the company’s employees to join him. ''The message got through that there's no A, B, C, or D quality”, he said at the time. ''There's only acceptable and unacceptable.''

One of those original sledgehammers is on display in the foyer of the company’s head office in Qingdao, whith good reason: that single act helped to precipitate one of the most profound turnarounds in business history. Zhang transformed the Qingdao (the same word and same home town as the Tsing Tao brewing company known internationally for its beer) Refrigerator Company into Haier, where he now holds the position of CEO.

In his 25 years at the helm, he has changed the company from one where no-one took individual responsibility to one where every employee considers themselves a Strategic Business Unit and where innovation is paramount – it may have been kickstarted with German knowhow but the company now holds more than 7000 homegrown patents and it is this policy of Total Innovation Management that has powered its growth into the biggest white goods manufacturer in the world.

Haeir now has 29 factories and sales in 160 countries and is rated as the number one global Chinese brand by the U.K.’s Financial Times, which has written extensively about the rise and rise of Haier, applauding its “transformation from a manufacturing to a service business” in order “to speed up the pace of providing clients with services and responding to market.”

Haier is living proof that China can develop global brand names. Though China boasts unequaled low-cost, high-quality, mass-manufacturing prowess, its success in marketing and brand development has to date been modest, and Haier is a rare example of a Chinese company growing a global brand name let alone one with brand values such as innovation, quality and customer service.

The application of modern manufacturing principals, plus being in the right place at the right time to ride China’s phenomenal economic growth, has spectacularly propelled sales past a raft of better known western brands to global leadership.

One of the primary factors in this growth has been the company’s diversification from producing refrigerators – in addition to the 20 million refrigerators a year it produces, that’s one of every ten refrigerators globally, it also makes one of every eleven washing machines produced globally.

It now makes freezers, home heating and air conditioning systems, dishwashers, microwaves, stoves and a list of other household technologies that just keeps growing so it can expand its 5.1% share of the global white goods market. Haier Group now also manufactures communications equipment, computers, media players, televisions, netbooks, tablets, oh, and solar panels which will initially power hot water systems but … progressively much more of the energy used in the home will be created this way as time goes by.

… and Haier’s total innovation philosophy sees it now turning its attention to developing products and technologies we don’t yet have, with the company’s eight R&D centres taking concepts and readying them for market at a dizzying pace – its concept-to-market times increasingly look to have surpassed what we in the West regard as world class time-frames.

Accordingly, when I came across Haier’s stand at SinoCES in its home town of Qingdao, I spent some time looking at what was on offer and what was being shown in the form of futuristic products.

Ubiquitous Home concept

The networked home is definitely part of Haier’s big picture and it appears to be getting closer faster at Haier than in most of its competitors. Haier’s concept for the home of the very-near-future involves the remote and automated control of all home appliances in what it is calling its “U-Home concept.”

U-Home stands for "Ubiquitous Home" and the idea is for ubiquitous communications to enable users to go through their daily lives, inside and outside the home, with complete control over the home environment. Chinese urban consumers have effectively skipped the desktop and laptop models of internet access and have embraced mobile internet access on a far greater level than any other country – they will be the wifrst consumers to control their home environment via their mobile phones.

The vision is for the U-Home to keep consumers connected to the world when they’re at home and connected to the home when they are elsewhere.

By connecting users permanently to the ubiquitous U-Home network using our phones and the internet, we’ll be remotely controlling our home power management systems, air conditioners, media recording and storage devices, washing machines, so we can manage our lives more effectively.

From the company’s press release for U-Home: "Haier always strives to make life more comfortable and convenient for people in today's changing world. This is why we developed U-Home, the future of home appliances. U-Home saves both time and energy while at home and away, allowing you more time for the things that matter in life."

Similarly, the saving of energy and resources in every aspect of the home environment appears paramount. The company’s new double drive washing machine is claimed to save up to 50% of water and 50% of electricity in comparison to single drive washing machines, and Haier also claims the machine cleans 50% better and 70% faster than conventional washing machines, while preventing tangling and having 70% less abrasion on your clothes. Once again, a number of the company’s patents are used in this high-efficiency design.

Haier also places a great deal of focus on providing specialized product to local environments for unique local circumstances, and there are some well documented and fascinating examples of this. For instance, it found that its washing machines were routinely being used in some provinces to not only wash clothes, but to clean potatoes to ready them for market, and quickly went about building far more robust washing machines for that area so that the washing machines met marketplace expectations. Another example involved the washing machines doing double duty in some Northern provinces where they were being also used to churn yak butter. See this Forbes post and this China Observer article for more reading on that subject.

Now Haier’s consumer electronics concepts are often quite predictive of technologies a long way into the future. In 2004 it won design awards for its Internet-based Air Conditioners and Oxygen enriching air conditioners and at CES this year it showed a large-screen TV using wireless power transfer technology.

Powerpad concept

Which brings us back to the Powerpad concept on show at SinoCES, which is as futuristic as it’s possible to be – nothing like Haier’s PowerPad exists in the market and it was the first time the product had been shown anywhere.

The PowerPad is a water energy saver which captures the energy contained within the water which runs off our bodies every morning in the shower, returning it to the hot water tank. You stand on it when you are showering and it is claimed to capture 15% of the energy coming out of the faucet in the form of heat and returning it to the hot water service.

I was fascinated with the concept and returned several times to Haier’s stand hoping to find someone who spoke English who could explain how it worked. On the third visit, I took an interpreter with me and predictably found someone from Haier who spoke English at the same time.

The PowerPad is being proposed as a concept, but it’s a fully formed product and Haier representatives on the stand at SinoCES said that it will hit the Chinese market around six to eight weeks from now.

I’d like to be able to tell you all about the new Haier Water Energy Saver and how it works, but sadly, the only details of the technologies being employed I could ascertain are that it takes the energy from the water, which is in the form of heat, and returns that energy to the tank. The description we got was repeatedly that it is a “heat exchanger.”

Now if that’s the case, given that the device will be working on heat differences, and the water coming out of the faucet has already been mixed with cold water, it’s very difficult to believe that the PowerPad is capturing 15% of the energy and returning it to the hot water tank, or that the company’s anticipated 20% to 30% efficiency of the model to go on sale, is not wildly optimistic.

The device does not in any way try to harvest any kinetic energy from the water via mini-turbines or the like, so Haier is obviously getting incredibly high efficiency in harvesting the heat in the water.

What I was able to find out though, was that the “concept” will cost around 4000 RMB – that’s a tad under US$600 and whilst it immediately hit me that you’ll be needing to spend a lot of time in the shower to ever get any return on that investment, they did point out that the 15% figure is only a start and by the time it reaches market, they’re hoping for better – maybe as much as 30% of the energy which started out in the hot water tank will be returned to it by this device.

Clearly there’s a niche market for such a product if such efficiency levels can be attained, and with mass production and the learning curve involved with such products, the price is almost certain to fall over time, and it might already be viable for environments such as gyms, sports clubs and dormitories where showers are used far more regularly and a more realistic return-on-investment period might be attainable.

If any of our readers have any ideas on just how optimistic Haier’s claims of 15% efficiency, or perhaps even 30% efficiency, please use the comments section.

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