After experiencing a golden age with phenomenal exports during the 1970s and 1980s, Taiwan`s OA (office automation) furniture parts makers now are trying to relive their erstwhile glory by fine-tuning and diversifying products and services, instead of merely relying on underselling as do many competitors in emerging economies.

The fact is that Taiwan`s furniture making sector has been plagued by overwhelming rivalry from counterparts in China and Vietnam, who have been resorting to underselling to wrest away increasingly larger global market shares in the budget segment over the past several years. Some insiders noted that since Asia has become the world`s key supply base of furniture and related parts, suppliers in China and Vietnam, which boast ample production resources and low costs, have become a dominant force to be reckoned with in the area.

To cope with extremely price-competitive rivals, Taiwanese makers have moved to peer into the finer points of furniture making-offering technical tips to help buyers improve functionality of parts, improving packaging so as to extend storage life of parts, studying for buyers feasibility of new products, emulating product segment leaders to improve quality, and going upmarket by turning out high-end parts. The tacit agreement among Taiwanese suppliers is that to compete against undersellers by their rules is futile, so they are focusing on enhancing product, production process and organization instead of simply taking on subcontract orders.

Value From Expertise and Management

A Taiwanese OA furniture parts maker known for quality is OHLA Plastic Co., Ltd., which was established in 1993 in Taiwan`s central county of Taichung and offers consistently high quality products through strictly controlled production management.



OHLA`s main product line includes casters, plastic hardware and tube plugs for OA furniture, such as computer desks as well as hand tools as screwdrivers. Putting heavy emphasis on quality, the company keeps a close eye on the quality of outsourced raw material, which helps to solidify its quality-conscious reputation in the market. Despite being pressured to start offering low-priced parts, it is unwilling to compromise quality.

OLHA is more than a quality-oriented supplier. It also diversifies its service by tapping years of expertise in the furniture parts industry. Joan Chen, a senior sales manager, says, "we can offer know-how and advice to clients with new ideas and designs for furniture parts, providing further support for product development." She added, "for example, when clients send us blueprints or prototypes of new furniture to be used in chilly climates, we suggest that they use dedicated, cold-resistant materials so as not to compromise the structural integrity of the product." In other words, from a viewpoint of safety and durability of a piece of furniture, the company is undoubtedly more than a reliable contract supplier on an OEM (original equipment manufacturing) basis, but one able to be part of the design process.



In addition, backed by many years of experience in applying for international standards and patents, OHLA willingly helps clients with such procedures for newly developed furniture, such as SGS. "Our clients are glad that we provide such services, as the applications can be quite time-consuming, especially when furniture makers have to reapply whenever changes are made to already certified products."

Also, being a seasoned mould designer and manufacturer, OHLA has a forte in doing feasibility studies for new products for clients, which is another considerate service offered based on expertise, according to Chen. In short, along with invaluable expertise related to production of furniture parts, the company has succeeded in differing from rivals by offering value-added, expertise-enabled services, when underselling competitors can only deliver low-end products in large volumes.

To top it off and to build more advantages against rivals, OHLA recently has moved to improve its organization, including enhancing staff training, sales, production, and R&D management, which others in the line ignore to do.

Chen says, "We pursue higher operational performance and sales through improving financial structure and product quality, as well as earnestly upgrading PM (production management)." For instance, the company changed its packaging process and methods to extend the storage life of furniture parts, which used to be a problem for clients. The bottom-line for OHLA is to create value for both itself and customers, according to Chen.

While viewing the future of Taiwan`s furniture parts sector optimistically, OHLA has begun to move upmarket by developing high-end parts for medical and sports devices, hence building higher added-value. By sharpening its competitiveness in production, R&D and services, the company aims to keep growing despite the daunting challenges posed by rivals.

Quality and Versatility Combined

Founded in 1982 in Changhua, central Taiwan, Lei Ming Industrial Co., Ltd. is also a renowned OA furniture parts maker that has been devoted to R&D and quality, which has buoyed its competitiveness in the line.



Producing wheel casters for household, commercial and industrial applications, Lei Ming has become a leading supplier in central Taiwan with a product line totaling over 260 items. The company is a reliable OEM maker who goes the distance to keep improving product quality and providing satisfactory services.

Also, the company can take on ODM (original design manufacturing) and OBM (original brand manufacturing) production, while its 20-plus patents prove the firm`s considerable R&D capability, which helps the company to effectively explore the markets in the U.S., Japan, and Taiwan.

Jack Sung, owner of Lei Ming, noted that the company develops wheel castors based on efficiency, durability and compact exterior design. "Efficiency depends on the relative geometry between the width and height of a caster," Sung says, "while durability and exterior design vary with the materials used and structural design." In fact, the firm`s developmental concepts for a wheel caster are inspired by U.S.`s TEND and Japan`s SKK, both heavyweight brands in the global segment.

"In fact, we have learned a lot from Japanese enterprises, including manufacturing technologies and design concepts," Sung admits. "Also we heavily adopt compound materials in casters, another tip taken from the Japanese."



Also noteworthy is that Lei Ming has benefited from Taiwan`s integrated manufacturing infrastructure, which consists of upstream and downstream contractors and suppliers that offer flexibility, versatility and efficiency within easy access. "I think the presence of such an manufacturing infrastructure makes a company`s production capability more flexible," Sung comments. "It allows us to farm out costly, routine production processes, cutting costs and increasing capacity. Actually, this is the synergy that makes Taiwanese makers competitive."

The downside is, however, the difficulty of quality control as not everything is done in-house. "That`s right. So, we control quality of products at three stages-materials at the first stage, production process at the second, and finished goods at the third," Sung emphasizes. "We demand to keep a defective rate on finished products of less than 5%, and train workers to carry out QC processes, as well as fully authorizing them to make judgment calls."

Lei Ming has recently begun to expand production capacity by building a new plant, aiming for a bigger global share of the wheel caster market. The company is virtually a bellwether-not only trying to lead more small makers to form a sound supply chain, but also a mature, common and accessible supply base in central Taiwan.

Such grand goal sounds hard to achieve, but Sung, however, is willing to try. "I am optimistic about seeing Taiwan become the world`s major supply base of furniture parts, just like automotive parts. It merely depends on whether our peers identify with such mission and if we share the same passion. If so, then we have to get started to keep moving up in the market."

Commitment to High Quality

Founded in 1987, Hsien Hsing Hardware Co., Ltd. is a specialized metalworking firm in Changhua County, central Taiwan, that manufactures metal furniture parts, including nuts, screws and bolts, for OA furniture.



As a seasoned OA furniture parts maker on both OEM and ODM basis, Hsien Hsing is committed to quality, spending sizable capital adopting advanced manufacturing equipment. Such dedication enables the company to be extremely skilled in punching and welding processes, offering fine OA furniture parts measuring up to clients` needs.

H. C. Chang, a partner in the company, says, "Hsien Hsing is good at improving production processes and hammering out rigid quality standards to make sure its parts are durable." The company`s major product, T-nuts, which feature very tough structure and are available in various sizes, are perfect for assembling tables and tabletops, with the fasteners being widely popular in overseas markets and generating excellent profits.

To deal with emerging rivals from China and Southeast Asia, the company simply sticks to the motto "quality," according to Chang. "Despite being challenged by cut-throat underselling, we continue to improve product quality so as to differentiate our products from theirs."

Besides, to cushion the impact from price rises in raw materials, the company has installed a program to minimize wasting raw materials and defective rate by tightening up production processes. Such effort has been paying off as the company has seen steadily increasing returns due to less defective parts produced. As a result and although impacted by rising costs and reckless underselling by rivals over the past several years, the company is still able to generate better-than-expected sales, with furniture parts exported to Germany, the U.S. and Southeast Asia.



To fully exploit its already strong punching capability, the company plans to diversify its product line for better profitability in the future. Having gained considerable know-how in punching, Hsien Hsing has been aiming to leverage such expertise by procuring quite a few advanced punching machines. The company is confident that the machines can help its product diversification, as well as devotion to offer quality products."
(by Steve Chuang)