How Haier Mobilizes without Organizations in the Fight against Covid-19 and in Returning to Business
A supply & demand platform was set up within 48 hours; an automatic medical mask production line established in Shanxi within 6 days. These are what Haier COSMOPlat IIoT platform has achieved during the Covid-19 epidemic.
During such a challenging time, COSMOPlat, an IIoT platform launched by Haier in 2017, connects users’ needs and the smart manufacturing system and precisely bridges supply & demand. COSMOPlat contributes Haier power to the fight against the novel coronavirus and empowers enterprises in returning to work.
Other than losses caused by force majeure, the Covid-19 epidemic also pushes enterprises to rethink their organizational systems.
Kevin Kelly once said, “To birth the new, the unexpected, the truly novel—that is, to be genuinely surprised—one must surrender the seat of power to the mob below. The most intelligent control methods will appear as uncontrol methods.” Either passively or actively, the bureaucracy or hierarchy of organizations will gradually be eliminated. So, how can the power of organization come into play?
During the epidemic, the previous centralized organization model and production process are suddenly disrupted. In this context, how can each city/province return to business while taking into consideration the local situation and practicing proper precautionary measures? When the “planned economy” style with a top-down hierarchy ceases to function, and the organization is paralyzed by the epidemic, how can employees and departments at the bottom level be mobilized? This will be an important indicator to measure the risk resistance capacity of an enterprise.
Various Haier micro-platforms such as COSMOPlat have risen to this challenge with excellent performance. They demonstrate flexibility and orderliness in arranging donations, business continuity, customer service, and empowering enterprises. These are the solutions that Haier provides to tackle this challenge. It is unique Haier models such as Rendanheyi, Micro-enterprises and EMCs (Ecosystem Micro Community) that make the solutions possible.
Though the novel coronavirus is a case of force majeure, almost all risks are essentially unforeseeable.
From donations to business continuity, we see the power of micros.
Haier was the first home appliance enterprise to respond to the epidemic. On 18th January, Haier Cell urgently delivered the first batch of relief materials to Wuhan. Afterwards, Haier mobilized global resources and delivered four rounds of donations to Wuhan, including cash, medical equipment, IoT home appliances, a Covid-19 task force, express logistics services and a medical expert group.
One distinct feature of Haier’s fight against the epidemic is that employees are always the first to identify the needs of frontline medical workers and provide assistance within the shortest time possible.
The lockdown measures in Wuhan significantly reduced transportation capacity. Haier RRS Logistics set up a 24-hour hotline at the early stage of the epidemic and established a “bloodline” for Wuhan with the assistance from RRS microenterprises.
Donations from Haier global teams are delivered to Wuhan Union Hospital by RRS Logistics
After the lockdown in Wuhan, there was a lack of communication in the supply & demand of medical materials. Haier entrepreneurs volunteered to set up a resource information sharing platform on COSMOPlat within 48 hours. This information platform has greatly improved the communication of information regarding supply & demand.
The autonomy and voluntariness of bottom-level employees are also reflected in business continuity plans.
By 16th February, 14 of 15 Haier industrial parks and 49 of 52 Haier factories successfully returned to work, except the Wuhan Industrial Park and three factories in the region.
Returning to business relies not only on strict epidemic prevention measures but also on comprehensive safeguard mechanisms. Haier business continuity plans were seen as models by local governments.
For instance, Haier Hefei Washing Machine Factory adopted an 8-step prevention policy and a streamlined dining process. Streamlining, a concept in production, means one by one without interfering with each other.
After introducing this standard in dining, workers at Hefei Washing Machine Factory have been able to have meals in sectioned areas and complete the pick-up, dining, and tray recycling in one stop.
This model has been reported in the local news and commented on as “airport dining style”.
During the epidemic, public transportation was limited and could pose potential risks of infection. At Haier industrial parks, this problem has already been solved. Haier shuttle buses pick up entrepreneurs at various locations; each passenger will be checked for body temperature before onboarding; and the buses will be disinfected after use. Rain or shine, day and night, Haier buses are safe, secure and comfortable.
To alleviate the shortage of hairdressers caused by the epidemic, Haier invited barbers to each industrial park to provide appointment-based hair cutting services for employees while maintaining strict disinfection measures.
A barber is providing hair-cutting service to a Haier entrepreneur at Haier Jiaozhou Industrial Park.
One barber at Huangdao China-Germany Washing Machine Park used a Casarte washing machine to dry the wet towels and was amazed at its excellent performance as well its sterilization function. He immediately decided to buy one unit for his own hair salon.
At Haier, there are many similar returning-to-business examples. However, this is not achieved through executive orders of Haier Group but through the choices made by responsible entrepreneurs and micro-enterprises who are well aware of their strengths and weaknesses and can make the decision whether to return to business or not and if so, how. Haier provides whatever service they need to continue business.
Luan, Xiaoling, a store owner of a Qingdao Laundry Store (Shengli Zhongbai), took an active step in returning to business without opening her physical store. She hosted an online event “Shopping as Usual” via live stream. The live stream lasted for 150 minutes, received an audience of over 11,500 people and secured a sales volume equal to almost half of her monthly revenue.
The success of the live stream event came from the cooperation between entrepreneurs. To find more target customers, all consultants and customers worked together and set up user groups where they promote the live stream events and update service information in real time. Regional groups, sales channels and customer services join efforts in online interactions and meet the demand of users.
Similar stories are seen on the frontlines of Wuhan, in factories returning to business, and in Haier industrial parks across the country. The Rendanheyi model has greatly activated entrepreneurs so that they can have zero-distance communication with each other, return to business in an autonomous and efficient manner and continuously satisfy the needs of users.
COSMOPlat empowerment, the key of Haier
The epidemic has put a lock on supply & demand and consumer consumption.
There is always a vague area between supply and demand. But as the novel coronavirus continues to spread, the area has been expanded and become more blurred. The Black Swan event also creates new types of needs.
These needs are different in nature with some changing and others remaining unchanged, for example the need for daily necessities. While some needs are delayed such as consumption of home appliances, parties or entertainment facilities, some needs are newly created, including healthy life solutions.
In light of the above, if the upstream and downstream supply chain are not responding to the needs, the recovery of the economy will be hindered.
Only when enterprises hold the key to reconciling the contradiction between supply and demand can they act fast and precisely in the combat against the epidemic and to move business forward. With its unique and self-iterating model, Haier groups the needs of users into different categories and solves the problems through customization.
Haier COSMOPlat IIoT Platform is one of the important keys.
COSMOPlat was launched by Haier in 2017. It is an IIoT platform with independent Chinese intellectual property rights and world-leading full-process user engagement. COSMOPlat is also viewed as an achievement of Haier Digitization which connects resources both internally and externally.
COSMOPlat connects user needs with a smart manufacturing system, where users can participate in the full process including product design, development, manufacturing, logistics, iteration and upgrade.
The user engagement and clear-cut user needs drive enterprises to pursue innovations and product solutions that better serve the users. As the cycle continues and upgrades, the traditional production and consumption relationships between enterprises and users are now transformed into one that creates lifetime values for users.
The precise and upgraded supply & demand model is proving to be of great value in the epidemic.
Since the outbreak of the novel coronavirus, several problems have been exposed such as inaccuracy of information, slow response and lack of transparency in the supply & demand of relief materials. On 26th January 2020 (the second day of the lunar new year), one COSMOPlat entrepreneur came up with the idea of a resource platform which received wide support from within the working group. On 27th January, 23 entrepreneurs volunteered to develop a supply & demand resource platform in the form of a boundaryless micro community.
In the following 48 hours, more entrepreneurs joined the mission without any break. They worked around the clock, had only one meal a day and discussed technical issues till late. Within 48 hours, the COSMOPlat Covid-19 Medical Resource Information Sharing Platform was successfully launched.
After the platform was launched, the communication of supply & demand information has been greatly enhanced with higher efficiency.
On 1st February, Ma Tao, director of the China Academy of Chinese Medical Sciences Guang'anmen Hospital, posted demand information of forehead thermometers on COSMOPlat. 10 hours later, Ma Tao successfully contacted Shenzhen Changkun Technology Co., Ltd, which provided 1,000 forehead thermometers.
Before he turned to COSMOPlat for help, he had been looking for suppliers for a week, but in vain. That the problem was solved in only 10 hours on COSMOPlat did surprise him. On 2nd February, he ordered another 20,000 forehead thermometers on the platform.
Once the demand information is posted on COSMOPlat, it will be directed to relevant suppliers who can respond to the request within the shortest time possible. In the case of Ma Tao, his request was given priority because he represents a hospital.
The supply & demand information posted on COSMOPlat will also empower enterprises to return to business or production.
In terms of vital medical materials – masks, COSMOPlat works with the Houma Municipal Government, the Houma Economic Development Zone and manufacturing enterprises to establish emergency mask and personal protection equipment production lines.
On 7th February, the first automatic mask production line was set up in Shanxi province with the support of Haier COSMOplat.
By leveraging the powerful supply chain ecosystem of COSMOPlat, the Haier Institute of Industrial Intelligence coordinated resources to provide full-process and end-to-end solutions for Houma City. The core production line, facilities and raw materials were in place within 48 hours. The first automatic medical mask production line was therefore successfully set up in Shanxi Province with a daily production of 10,000 disposable medical masks.
As more enterprises were struggling to return to business, the Covid-19 Medical Resource Information Sharing Platform soon evolved into a service platform that empowers enterprises to continue business and increase production. Enterprises will manufacture products according to confirmed orders. The demand side can also post their information on COSMOPlat for a quick match.
Take Shandong Aspop Costume Group. Inc as an example. Haier COSMOPlat, with its powerful supply chain ecosystem, has efficiently coordinated the equipment, raw materials etc. and provided Aspop with full-process solutions including the design of the production line and the techniques to produce protective suits and masks. Within 3 days, the enterprise altered its production line into one that produces medical supplies.
The COSMO-empowered Aspop altered its production line to produce medical supplies within 3 days.
Since the launch of the information platform on 30th January, over 930 hospitals, 500 communities and enterprises have successfully posted supply & demand information and coordinated over 50 million pcs of protective materials. Government departments and hospitals across the country, medical enterprises and logistics enterprises are also attracted to this platform for information sharing.
COSMOPlat, as one of the most important achievements of Haier, is not the only key to success.
One might be surprised by the power and mobility a decentralized and disintermediating Haier has demonstrated in the fight against the novel coronavirus.
According to the statistics from Haier Smart Home, over 3,000 live stream events were held with regards to washing and cleaning products. The laundry industry keeps exploring new ways to offer more services to users.
On the Wuhan frontlines, while users of other brands have trouble locating available aftersales services, Haier responds with efficiency; in terms of IoT healthy home appliances, Haier was also the first brand to offer customized solutions to users.
Self-reflection, early preparation, and holistic consideration are what define Haier. At Haier, change is eternal. The behavior and organization model of Haier change and evolve along with the time, location and social situation. At Haier, being unchanged is also eternal. Haier never changes its pursuit of its value which centers on the needs of users.
Why can Haier embrace changes with changes?
Today, the only thing that is constant is change. And change comes in bigger forms and at a faster pace. How to cope with changes has become an important indicator for the survival and development of each person. It is even more so for enterprises. As far as Haier is concerned, the sledgehammer on defective refrigerators has sparked the revolution within Haier and become a commonplace now.
Zhang, Ruimin once said, “in one word, we respond to change with changes”. Over the past 35 years, Haier has kept innovating and overturning the established balance while maintaining the “people-oriented value”. It can be said that the development of Haier is derived from the activation of individual initiative as well as the human-centered philosophy.
The introduction of the human value-oriented Rendanheyi model marks an important milestone of Haier’s revolution. It has now been over 15 years since the Rendanheyi model was first introduced by Zhang, Ruimin.
Over the 15 years, praises and criticism come hand-in-hand. Some believe that the model is too radical to be practical. Innovation in organization can only follow innovation in productivity. However, the contrary turns out to be true with organizing capacity and productivity being an organic whole instead of two contradictory and inseparable main bodies. In a highly efficient organization, organizational innovation never restrains productivity but serve as its catalyst.
Though organizations change, the principle of customer service does not. Since the development of the economy has diversified the needs of users, it is only natural for organization forms, product quality and service models to iterate and upgrade. Not only are these changes made to better serve the users, they also counteract risks in a decentralized way.
In the Rendanheyi model, microenterprises and entrepreneurs have the 3 Rights: on-site decision-making rights, human resources rights, and resource distribution rights. Therefore, they are more active in satisfying the needs of customers. Also, because they need to take responsibility for the profit and loss and the decisions made, they will do everything they can to provide premium services to customers.
During Covid-19, the needs have shifted onto the frontlines of epidemic prevention. Instead of waiting for orders from the superior, Haier microenterprises and entrepreneurs follow closely the needs that occurred in epidemic prevention and rely on their own strength and the resources and services of the platform to satisfy those needs. Obviously, their collective power outweighs donations from single parties.
Behind the proactive mobility lies the principle of “the user always comes first” which Haier has held since its establishment. Innovation and iteration are constantly realized with the service provider shifting from Haier to microenterprises and entrepreneurs.
Restructuring means changing and setting up new mechanisms. From Rendanheyi in 2005 to today’s EMCs (Ecosystem Micro Communities), Haier keeps moving forward on the road of self-innovation. With increased organizing capacity and the empowerment of platform resources, microenterprises are inspired to overcome the boundary decreasing effect and turn the “everybody's business is nobody's business” situation into meaningful competitions.
On 7th March 2018, Zhang Ruimin, CEO of Haier Group, delivered a public speech at Harvard Business School.
When every member of an organization is responsible for the result and enhances the result through various means, the organization will evolve into one that can drive, optimize and improve itself.
Naturally, this kind of organization will exhibit great flexibility and power.
All the achievements accomplished in the fight against the Covid-19, business continuity plans, and on Haier COSMOPlat essentially come from an organization that puts emphasis on users, constantly iterates and evolves.
In a changing environment where user needs are dynamic and employees active, enterprises are encouraged to embrace changes and transform each employee and user into a main actor, rather than following a stereotypical rule or model.
Kant once said, “Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means.”