Being driven to stay competitive in the global market, Taiwan`s suppliers on an OEM (original equipment manufacturer) or ODM (original design manufacturer) basis have been sharpening their expertise in production and services, and, as a result, have been playing key roles in adding fuel to Taiwan`s economic engine.

Just like unsung heroes behind the successful scene, Taiwan`s OEM/ODM suppliers have propped up the island`s industrial prosperity for a long time, designing and supplying all kinds of products to the world`s hottest sectors, such as automotive, electronics products and machinery. In other words, the OEM and ODM suppliers in Taiwan have pushed ahead the economic vibrancy in Taiwan through both intangible and substantial inputs, by building into products invisible and yet precious added- value, as well as continually upgraded professional services.

One reason that Taiwan OEM and ODM suppliers have stayed relatively successful is their adaptability—being tenacious to stay with market trends with flexible production. For example, they moved offshore when local costs became prohibitive, while they began to target high-end segments when Chinese rivals knocked off bottom-end products at unbeatable prices. Plus Taiwan OEM and ODM suppliers have diversified services, such as offering design expertise during new product development, to retain client loyalty, a feat not easily copied by Chinese competitors whose main winning strategy is volume production and rock-bottom prices.

Strong Production Capability

A supplier boasting strong production capability is Excel Hardware Industrial Co., Ltd., which has been engaged in production of metal parts and hardware on OEM basis for nearly three decades, since its inception in 1978 in Kaohsiung, Taiwan’s southern industrial city.



Excel Hardware operates both in Taiwan and China with a workforce of about 130 persons. A newly constructed plant in China has also upgraded the company`s production capacity, which, coupled with that of an existing plant in Taiwan, already totals 7.5 million units of various parts per month for use in electronics products, hand tools, automobiles and construction materials.

Excel Hardware rolls out a wide range of metal parts, including pins, shafts, glove pins, knurled pins, inserts, pipe fitting parts, optical fiber links accessories, RF connectors, plugs, sleeves, precision accessories, screwing machine parts, turning parts, M/C parts, machined parts, lead screws, cold-forged parts and pressed parts. The company exports 90% of its output to Europe, North America and Latin America.



As a seasoned OEM supplier, Excel Hardware pays particular attention to efficient production, including studying precision tolerance and optimal solutions. It also runs an integrated shop with production lines together with a warehouse in-house, enabling the company to accelerate delivery and fully watch over production efficiency.

Plus, Excel Hardware adopts the project management approach, designating its sales agents to take charge of producing the whole order, as well as handling any problem for clients one at a time, which allows one-stop service provision and total meeting of various requirements asked by clients.

Backed by such sound production capability and management, Excel Hardware has hammered out an effective standard operation procedure (SOP) to control and test product quality. The company, before starting production, would continue discussing with clients to revise as necessary production plans until everything is ready. And it conducts rigid quality examinations on unfinished products at each production process. Then it double-checks quality and packaging at the finished stage.

To cushion an impact from a price rise in metal materials, Excel effectively switched its production focus to auto parts and other performance parts from copper-made parts. Meanwhile, it streamlined production processes to reduce costs and cut wastes, indicative of its production flexibility and ingenuity.

With eco-protection becoming often a prerequisite and increasingly popular, Excel Hardware, backed by an excellent R&D taskforce, has turned out a series of electronics and auto parts meeting RoHS (restrictions on hazardous substances) requirements, and does as necessary to use environmentally-friendly metals in production.

Excel Hardware is ISO-9001 certified, and sticks to its motto "best quality with reasonable prices for solid customer royalty." It recently set up two divisions engaged in pressing and die-casting aluminum alloy, effectively building an integrated production line in-house. Such move further fine-tunes its capacity to provide more specialized metal products to clients.

Service Takes All

One OEM supplier that concentrates on service is Lien Chin Industrial Co., Ltd., which started in 1994 in the Taiwan central county of Taichung and has accumulated ample expertise in metalworking over some thirty years, as well as having built a solid name among customers.



Lien Chin specializes in zinc, aluminum alloy die-casting, copper, aluminum alloy forging, aluminum alloy heat-treating and parts machining, turning out high-end precision parts for bicycles and optical products. Employing advanced manufacturing equipment, including computer numerically controlled (CNC) lathes, millers and machining centers, Lien Chin also boasts a precision production line in-house.

Along with strong commitment to quality, Lien Chin adopts many kinds of testing machines, and religiously calibrates gauges and clamping apparatuses periodically to make sure degrees of precision are maintained. "A supplier operating in Taiwan, who wants to survive in the line, must continue to upgrade its equipment and technologies to keep production capability flexible all the time," says Zhong-lin Lai, president of Lien Chin.



However, to sharpen its competitiveness, Lien Chin in particular puts heavy emphasis on service. This helps Lien Chin differ from other rivals from China. "To provide the best service, Lien Chin is already QS-9000 certified, and handles complaints from customers in accordance with TS16949 standards," Lai says.

When receiving orders for precision parts, Lien Chin would first prepare appropriate moulds, gauges and clamping rigs, and, at the same time, research optimal production processes and precision tolerance. This enables the company to supply customers with highly customized products faster than most counterparts in the line.

"With such efforts, we are able to adjust production process and change moulds even three times a day to turn out specialized parts. In short, we regard each production process as an integral service, making Lien Chin worthy of each customer`s trust," Lai indicates.

The flexibility of Lien Chin`s production has also helped the company to effectively beat price hikes in metals over the past few years. Lien Chin can fine-tune and streamline its production process not only to meet customers` requirements, but also to cut production costs. As a result, custumers are willing to accept increases in Lien Chin`s quoted prices.

In response to intense concerns of eco-protection issues, Lien Chin has done its utmost to eliminate hazardous materials in its parts. Also, it requires its contract suppliers to submit analytical reports on materials meeting SGS standards, and to deliver lead-free unfinished parts.

Production Network

One supplier that has grown by developing a sound production network is Shun Den Iron Works Co., Ltd., which was founded in 1976 in Kaohsiung County, northern Taiwan, and has been devoted to production of nuts and screws for more than three decades.



Shun Den started by manufacturing quick links and snap hooks, and then diversified its production into locks, nuts and screws. To carve out a niche, Shun Den ultimately decided to specialize in making nuts and screws for special purposes on OEM and ODM basis.

David Chang, business manager of Shun Den, says that the company works with quite a few contract suppliers, forming a reliable supply network, with which the company keeps a mutually-beneficial, harmonious relationship so as to keep its eye on quality control.

Backed by years of experience in metalworking processes, Shun Den dose not compromise the quality of products outsourced from contract suppliers, insisting on working along a series pre-agreed QC (quality control) measures. "We ask them to hand in quality testing reports on tolerance and specifications. Also, we send QC engineers to examine unfinished products in their plants randomly," Chang says. Sometimes, Chang would do this personally, so that he can exactly gain up-to-date information about products being produced, and, if necessary, can immediately discuss with operators for modifications.

Besides, the supply network allows Shun Den to take advantage of production flexibility, which realizes product comprehensiveness and production efficiency. For example, Shun Den can guarantee delivery time of less than 35 days— from the date of receiving an order to sending the first sample to a customer.



Undoubtedly, forming the production network actually enables Shun Den to take on specialized, customized orders, being able to meet even ultra-fine specifications. "In short, Shun Den and its contract suppliers are working as a team to achieve a simple objective—delivering high-caliber quality and service," Chang says.
(by Steve Chuang)