FITRDC Helps to Hone Taiwan's Fasteners Makers' Global Edge

Despite their modest size and seeming unglamorous roles, fasteners have been important contributors to Taiwan's export-dependent economy over the past decades.

Currently around 600- 800 fastener makers and subcontractors, such as forging, machining, heat treating and surface finishing companies etc., are clustered in the big Gangshan area in Kaohsiung County, southern Taiwan, together achieving integrated supply chains.

Unfazed amid the global financial crisis, the fastener industry in Taiwan still turned out NT$114.2 billion (US$3.486 billion) of products in 2008, NT$99.2 billion (US$3.028 billion) of which in exports, up 3.9% annually, according to the ITRI (Industry & Technology Intelligence Services) under Department of Industrial Technology of Ministry of Economic Affairs.

But with the financial crisis simmering into 2009 to impact all kinds of manufacturing worldwide, the industry exported only about 190,000 metric tons of fasteners valued at NT$17.1 billion (US$521.79 million) in the first quarter of 2009, for 37% and 23% declines, respectively, from a year earlier. Also the export price averaged at NT$90.6 (US$2.76) per kilogram in the quarter, sagging from NT$93.6 (US$2.857) posted a quarter earlier. Such lackluster performance has rung the alarm to urge the industry to come up with solutions to combat the worst global recession since WWII.

Academia-industry Partnership

After being selected early this year as the chairman of the Taiwan Fastener Industry Institute's (TFII), Joe Chen, also the chairman of Ho Hong Works Co., Ltd., a world-caliber maker of hex bolts and nuts founded in 1973 in Kaohsiung, says that the TFII will enhance its cooperation with academia on technological development and worker education to keep honing competitiveness of the industry, and accelerate the industry-academia partnership in Taiwan's fastener industry.

So far, local colleges and universities, including Koa Yuan University, National University of Kaohsiung, and National Kaohsiung University of Applied Sciences, have come onboard to support the TFII. The most active has been Johnson Gow-Yi Tzou, Koa Yuan University's Dean of Academic Office & Professor of Mechanical and Automation Engineering, who set up the Fastener Industry Technology R&D Center (FITRDC) in 2008 by tapping the university's resources.

Despite being only a year old, the FITRDC, captained by Dr. Tzou, has hosted several conferences and seminars, inviting Joe Chen and Bruce Sun, ex-chairmen of the TFII, and corporate managers as lecturers, that have received ample praise among insiders for contributions to the industry.

Sole Incubation Center

Tzou says that the FITRDC is approved by the Department of Industrial Technology of Ministry of Economic Affairs as a dedicated center promoting regional academia-industry cooperation, as well as being, above all, the only incubation center for the fastener industries on the island.

Justifying setting up the FITRDC, Tzou says that his team aims to take advantage of the considerable resources of academia to assist the fasteners industry to sharpen competitiveness and breed skilled, young and creative staff more systematically and effectively than before. "Located in Koahsiung County and near the Gangshan area, the Koa Yuan University expects to do its utmost to contribute to the sustained development of the fastener industry," he says.

Improving Training

Tzou says that worker training is typically in the form of apprenticeship in most Taiwanese fasteners factories in the past. So senior workers pass on what they know to younger staff, but seldom teaching know-how to only focus on production skills.

Furthermore, most factories have been OEMs (original equipment manufacturer) for decades, engaging in repeated operations of machinery that hinder innovation. Tzou notes that the industry has to progress with creative staff, especially when foreign customers tend to judge a maker by its capability to independently develop molds and custom fasteners.

Besides, he adds, nepotism is often the rule than exception in Taiwanese small- and medium-sized enterprises (SMEs), as is true in the fastener industry. In other words, a family business is passed down through the generations, which works against recruiting, promoting workers outside the family, as well as cultivating staff.

Despite the cultural hindrance, Tzou offers through the FITRDC a curriculum consisting of a spate of professional courses for corporate mangers and workers to cultivate sound knowledge of necessary production methodologies, including molding, forging, stamping, threading, machinery fine-tuning, process improvement and surface finishing, as well as image inspection and detection technologies for quality control.

According to Tzou, the FITRDC has successfully helped local fastener companies, including Thread Industrial Co., Ltd., Ho Hong and Anchor Fasteners Industrial Co., Ltd. etc., with worker education. "I believe manufacturers will always need help from academia if they want to improve staff," he says.

IT Solutions

The FITRDC also differs from traditional R&D institutes, like the MIRDC (Metal Industries Research and Development Centre) that is also in Kaohsiung and dedicated to technology development and operational improvement of metal product manufacturing industries, for its strong capability to develop IT (information technology) solutions to enhance efficiency of business operations in traditional manufacturing industries.

Citing personal experience in helping fastener makers to streamline efficiency, Tzou says that some must reorganize operations and management by introducing IT solutions to improve efficiency. For example, adopting computerization has helped rid of outdated, repetitive paperwork used to transmit information, which used to compromise competitiveness in this rapidly-changing market.

Over the past years, Tzou has helped a number of fastener makers by introducing e-management, including PDM (product data management) and computerized processes. Also, the FITRDC team has also developed a series of multimedia learning materials for companies to easily enable staffers to self-teach EPR (enterprise process reconstruction).

CAE

In terms of upgrading production, Tzou especially emphasizes the significance of CAE (computer aided engineering), which is vital for companies to evolve into ODM (original design manufacturer), because such technology effectively enables fastener makers to tap computerized simulation in analysis, design and manufacturing of a new mold with minimized development and production risks.

Developing a mold is costly, so fastener makers can't afford repeated failures, according to Tzou. So CAE is the ideal solution, because it allows engineers to simulate repeatedly that a mold is completely accurate in size and withstands high temperatures and pressures.

"I've seen many companies invest enormously to hire experts to install CAE software in R&D labs," Tzou says. "However, only a few can put it to good use ever, just because the experts don't teach them to solve problems with CAE, stressing that the FITRDC not only assists makers to adopt CAE, but also trains them till they can independently apply it in R&D."

Furthermore, Tzou's FITRDC team, composed of graduate students, Ph.D. candidates , research fellows, and professors, has been building a database of fasteners production technologies, including key ones for producing micro copper fasteners for 3C (computer, communication and consumer electronic) products and fixtures of titanium alloy, which are all value-added fasteners valued at over US$10-100 per piece. "We have been developing advanced production technologies and high-end products to lead the academia-industry partnership," Tzou notes.

Exports and Value of Taiwan-made Fasteners (Nails Included)
Year	Volume		Value		Average Export Price per KG
	KG	Year-on-year Growth Rate	US$	Year-on-year Growth	US$	Year-on-year Growth
2006	1,269,647,531	0.32%	2.568 billion	3.05%	2.023	2.72%
2007	1,231,081,767	-3.04%	2.889 billion	12.51%	2.347	16.04%
2008	1,215,061,132	-1.30%	3,028 billion	9.36%	2.601	10.80%
Source: TFII

Top-10 Importers of Taiwan-made Fasteners in 2008
Rank	Country	Volume			Value			Average Price
		KG	Share	Year-on-year Growth Rate	US$	Share	Year-on-year Growth	US$	Year-on-year Growth
1	The U.S.	575,885,119	47.40%	1.13%	1.329 billion	42.06%	10.56%	2.308	9.32%
2	Germany	88,558,694	7.29%	-4.94%	235.5 million	7.45%	7.82%	2.659	13.43%
3	Japan	56,373,814	4.64%	-3.40%	162.8 million	5.15%	-0.11%	2.889	3.40%
4	Holland	49,338,428	4.06%	15.16%	132.4 million	4.19%	26.25%	2.684	9.63%
5	Canada	40,991,823	3.37%	-20.38%	91.8 million	2.91%	-7.99%	2.241	15.56%
6	The U.K.	31,177,982	2.57%	-11.78%	90.8 million	2.87%	0.87%	2.914	14.34%
7	Italy	30,816,198	2.54%	-8.50%	73.1 million	2.31%	7.53%	2.373	17.52%
8	Australia	23,162,036	1.91%	0.88%	70.6 million	2.24%	19.71%	3.050	18.66%
9	Sweden	20,808,548	1.71%	-6.78%	62.4 million	1.97%	8.92%	2.999	16.84%
10	Russia	20,595,405	1.70%	-19.32%	38.8 million	1.23%	3.57%	1.888	28.37%
Source: TFII