Antonio Guerrini, general director of Ceced Italy, has no doubts: for boosting the household appliances market we need products news and a full transformation of the manufacturing towards the digital technologies. But also a greater awareness of consumers, who should opt for better products not only to save money on the bill. It is necessary to reflect on the benefits for the Country, the environment and the quality of life
By Lara Colombi
If the home appliances companies were able to sell it is because they have proposed, and continue to propose, innovation. Even if today, by themselves, they cannot do it. It is necessary that also the Country focuses on tomorrow, developing a sustainable industrial model that, as part of a national industrial policy, allows to maintain in Italy the decision-making centers, R&D, sector production activities based on high added value. Antonio Guerrini, general manager of Ceced Italy, explains it, strongly underlining how product and process innovations, combined with an increased consumer’s awareness, can move the sales to high-end products. With benefits for everyone, businesses, country and environment.
Experts, economists and manufacturers agree: innovation can be a card to play to overcome the current crisis in consumption. Do you agree?
There is no doubt that innovation is the renewing key of progress and the essential tool to boost the market. But it is not enough. Nowadays, innovation is successful especially for non-essential products that touch motivations and feelings sometimes irrational, but very rooted: I think of smartphone and all applications for mobile connectivity. Home appliances have never been seen as sexy, glamorous, fashion, gratifying proposals. They offered a constant innovation, aimed at higher performance to improve the quality of life at home and respect the environment of all. Practical innovation, useful, that has not always been understood by consumers and often not valorized by the distribution.
Nowadays, what kind of innovation can be put in place in the household appliances sector?
Appliances born to perform precise functions: cooking, cleaning, storing food, making pleasant the home air, helping with cooking and cleaning. This they must continue to do better and better, with lower consumption. An innovation in line with the demand of connectivity, always and everywhere, can lead to a further improvement of the basic functions. I think of smartness, that is “intelligence” on board, remotely accessible. As part of the Internet of Things, connectivity opens up new prospects for the use of individual appliances that, through a more controlled and rational use, will be able to contribute to improve the sustainability of life and to reduce the family’s costs. All kind of home appliances have equal development opportunities, also through highly innovative killer technologies.
Do we need product or process innovations?
Both. Process innovation should follow the general guidelines that we have listed in our “Progetto Orizzonte” of 2014, purposeful study developed with Confindustria and presented to all stakeholders, including the Government, that does not seem to have understood the importance of it.
“Progetto Orizzonte” identifies as prior factor for the arrangement of the manufacturing base in Italy the transformation of manufacturing to the digital enabling technologies (for example: 3D printing and prototyping, Internet of Things, Artificial Intelligence). In the industrial processes of the sector we need manufacturing flexibility to provide a rapid response to the market, especially in new geographies, and provide customized solutions using standard products, components and sub-systems. Last but not least, it is necessary a new management of complexity, the most effective tool for the new paradigm of the Advanced Manufacturing, which consists in the integration and use of different enabling technologies: from advanced materials (metals, polymers and advanced ceramics), to mechatronics, sensors, nanotechnology, automation, 3D printing.
Is the White Goods industry still able to propose innovation?
Yes it is. Even in the last long years of crisis companies’ investments for innovation have never stopped. In 2014 alone, the final balance of R&D costs for the companies in Italy was equal to 3 billion euro.
What has been done and what is still lacking?
The transformation of production processes is still to be completed and, above all, the improvement of external factors, whose inefficiency seriously affects all Italian industry.
What are the fundamental elements that make possible the triggering of innovation processes in this sector?
There is nothing to trigger, but rather to continue, to support, to strengthen the already consolidated commitment in innovation, until now entirely funded by companies.
Focus on high-end ranges, more environmentally friendly and performant products, implied large investments, but the biggest difficulties result from not being able to transfer to the consumers the message that the benefits should not be measured only on savings in the energy home bill.
There is a lack of awareness by consumer about the benefits of high energy-efficient products for themselves, the Country, the environment and the quality of life.
Another key element are the incentive programs of long duration, such as those for refrigerators, which has essentially transformed the market towards products with low consumption and high efficiency. The savings on the national energy bill have amply rewarded them. Adjustments in electricity rates are essential: they must not penalize incrementally consumptions beyond the social tariff to promote market transformation towards the most innovative products (for example: heat pumps, induction cooking…).
What are the weaknesses for the development of an innovative ecosystem?
The years of general economic crisis have shifted the demand towards the low-end appliances. Consumers must be convinced of the benefits of energy efficient products. As mentioned above, the weaknesses that curb the change must be solved. We need incentives, new electricity rates, better environmental awareness.
Where is increasingly necessary a national, far-reaching, strategic action?
It is the message of “Progetto Orizzonte”: a sustainable industrial model that, as part of a national industrial policy, allows to hold in Italy decision-making centers, R&D, sector production activities based on high added value. Processes affecting the sector, on which the competitiveness of enterprises depends, are the restructuring, immediate action on job policy and general taxation (labor costs etc.); product qualification, continuing with the placement on the top of the range, integrating functionality and environmental sustainability; process innovation and business models by acting on the value chain according to models of stretched chain.
At a national strategic level, actions of short and medium-long term are necessary. In the short term specific actions of industrial policy must be implemented to contain the immediate issues. The priorities are unlocking the available resources and adopt flexible tools to manage the companies’ right-sizing.
Transversal factors of all industrial sectors are the reduction of the tax burden, the support for innovation, the adjustment of the energy cost.
The strategy of medium-long term is based on key elements such as: enhancement and strengthening of existing production chains; application of evolutionary boosts, priority for the sector; development of network and synergies among the involved territories.
IoT seems the last frontier, one that is defined by many the card for a new industrial revolution. Does the possibility of replacing an entire generation of objects represent an opportunity for growth and development of the sector?
Investments in innovation are focused just to the Internet of Things, without prejudice the primary function of any appliance. It must be said that the replacement rate of household appliances is measured in several years (for example, over 10 for refrigerators), and then it will take time to transform the installed base. A prerequisite is to establish a common protocol of connectivity among household appliances as part of the “connected home”, of the Internet of Things, of the smartness at all levels (house, building, city, networks). In addition, problems of privacy and security exist too, which need to be faced at European institutional level. It is necessary a technological platform that includes also communication infrastructures and energy transport. It is a complex, multiform, long process, involving many actors and must be coordinated at European level to continue to establish the priority and quality of Europe in the sector, of which Italy is leader.