Fair Friend Group Forms "F-Team" to Consolidate Resources to Take on S. Korean and Japanese Rivals

Team consists of 7 subsidiaries and 14 subcontractors

Compiled by KEN LIU

The Fair Friend Ent. Group, Taiwan's biggest machine-tool conglomerate by revenue, has formed a consortium called “F-Team” and set up the production system “Fair Friend Group New Production System" (FNPS) as the foundation of its consolidation strategy or one trying to tap teamwork to take on South Korean and Japanese rivals.

Group Chairman Jimmy Chu stresses that Taiwanese machine-tool makers must consolidate to effectively compete against the two formidable rivals on the international market amid unprecedented circumstances.

The team is made up of seven of the group's subsidiaries on Taiwan and mainland China and 14 subcontractors. The subsidiaries include Fair Friend Enterprise Co., Ltd., Equiptop Hitech Corp., Leadwell CNC Machines Mfg., Corp., Sanco Machine & Tool Corp., Hanzhou Good Friend Precision Machinery Co., Ltd., and Hanzhou Leadwell CNC Machines Corp., with the subcontractors being Neo Precision Tech Co., Ltd., Takeshine Industry Co., Ltd., Long Shen Precision Industrial Co., Ltd., and Taiwan Spinflo Co., Ltd.

Chu says that his group has advantages not in possession of its competitors—manufacturing sites and distribution channels worldwide, specifically with 41 manufacturing sites, mostly in mainland China, Germany, Italy, Japan, South Korea and Taiwan, coupled with 26 brands globally.

Chu says the members of the consortium are able to strengthen their competitiveness overall by integrating group resources, as well as tapping manufacturing resources of its subcontractors around the Toyota Production System.

The group began implementing the FNPS and installed the Toyota Production System in 2011, examining every two weeks all production and management processes with improvement to ensure qualitative consistency, shorter lead time, and lower production cost. In 2004, the consortium achieved the goal of boosting efficiency by 40 percent per 3.30 square meters at manufacturing sites.

Chu concedes that only seven of his group's subsidiaries have joined the consortium, and the remaining 30 machine-tool suppliers will join in the future. The group's machine-tool business is predicted to generate revenue topping NT$50 billion (US$1.61 billion) in 2015, up from 2014's NT$45 billion (US$1.45 billion).

Besides machine tool, the company engages in printed circuit board (PCB), green-energy, and industrial-equipment businesses. Chu projects the group's machine-tool business to generate revenue of some NT$100 billion (US$3.22 billion) by 2020, with the potential to increase the group's total revenue to NT$200 billion (US$6.44 billion) in two years.

Fair Friend's president, J.C. Lee, says all of the group's subsidiaries have deployed FNPS, which has helped the group cut cost up to NT$55 million (US$1.77 million) through the end of 2014. He adds that the production system has effectively cut lead time of mass-produced machines by one-third, and the group is working to further shorten such lead time to only 32 hours.