| This
conference is somewhat unique in that it focuses exclusively on showcasing
technology developments in the worldwide appliance industry, and it
is conducted in a collaborative, academic setting, with each conference
sponsored by a university. It is a great opportunity for appliance
engineers, home educators, professors, and students to collectively
learn about the industry. The past several years have shown growing
participation by overseas appliance technologists (although several
presenters could not attend this year because of the world situation
and an inability to get visas).
But this year,
business was not as usual. The major U.S. original equipment manufacturers
(OEMs) sent very few staff. And the staff that did attend seemed too
stressed and busy to absorb much of the information and the experience.
The reduced attendance meant that supplier displays were poorly attended,
leading to questions about whether to display at all next year. Most
surprisingly, innovation from traditional sources appeared to be severely
limited.
What struck me
at this year's IATC is the magnitude of the innovation crisis that
the appliance industry - not to mention technology industries in general
- is facing. The economy's slowdown has hit the appliance industry
hard - which in turn has stifled investments in R&D, technology,
and staff development.
This innovation
crisis has its root in the decreasing productivity, "stagflation," and
the eroding competitive edge of the U.S. economy that commenced in
the 1970s. This was followed by the 1980s era of reengineering, which
became a euphemism for downsizing. Many corporate R&D labs were
reduced or eliminated altogether as corporations began outsourcing
their R&D and innovation to small technology start-ups. The dot-com
bust of 2000 hastened the demise of many of these start-ups, as the
venture capital needed to grow or maintain these businesses has become
next-to-impossible to obtain.
The challenge for
the major appliance OEMs is daunting, given the current ever-shortening
payback periods and an ultra-conservative financial environment. But
one thing is clear: innovate they must, or their smaller or international
competitors will continue to grab market share.
Take the Korean
company LG Electronics, Inc., which is now the fifth largest producer
of refrigerators in the world. Last fall they introduced the Internet
Refrigerator, an appliance that boasts a 15-in LCD display and its
own LAN port to enable high-speed Internet access. While its computer
display is not meant to replace the home computer, it offers computer
access in the hub of most homes - the kitchen. The refrigerator is
capable of keeping track of what foods are inside, how long the foods
have been there, and it can warn you when you are running low on certain
items - all without having to open the door.
In addition, it
allows the ability to leave a video message for a family member or
housemate, check e-mail, or surf the Internet. While this approximately
U.S.-$8,000 refrigerator may not be everyone's cup of tea, it does
represent a truly innovative combination of technologies, foreshadowing
future trends that will appear in mass-produced products. Field experience
with this unit should serve LG well in developing its future market
strategy.
Then there are
the true inventors who push the edges of appliance functionality. Kirk
Campbell, a policeman and helicopter pilot from Sacramento, CA, U.S.,
with no connection to the appliance industry, felt strongly enough
about a potential household safety problem that he developed a prototype
and patented a device to help. His plan: to tie appliances into home
security alarm systems. If an appliance is left on when leaving or
going to bed, for example, the security system will stop a homeowner
from arming the system until the appliance has been turned off. Monitoring
cooking appliances could go a long way in deterring the 86,000 residential
fires per year that fire department data indicate involve ranges and
ovens. Mr. Campbell spent his own money to come to the conference and
display his invention, hoping to learn from us and to find a business
partner. Whether the concept ultimately makes commercial sense or not,
that kind of drive and enthusiasm is rare of late at a conference largely
attended by the traditional appliance industry companies.
Ironically, the
appliance industry is currently trying very hard to develop long-term,
enhanced customer relationships by providing innovative, quality products
and backing that up with superior customer service. But we need to
evaluate progress and chances for success against a perceived lack
of enthusiasm, commitment, and investment in technology. Companies
soon will be faced with the challenge either to change traditional
approaches to meet 21st-Century customer and business paradigms or
to be replaced by others more flexible and willing to take risks.
Where do you weigh
in?
| Dick
Topping
Dick Topping
is director of Appliance Research at TIAX LLC (www.tiax.biz). He
can be reached by phone at 617/498-6058, by fax at 617/498-7206,
or e-mail at topping.r@tiax.biz.
From the Top
appears bimonthly in
APPLIANCE
Engineer¨. |
 |
|
