Clustering Effect in Central Taiwan Works Well For Furniture Parts Makers

After their boom years in the 1980s turned to rougher times in the 1990s, many Taiwan-based makers of furniture and furniture parts moved offshore, looking for cheaper manpower and materials in China and Southeast Asia. But a few opted to keep their operations at home; and, after years of effort, they are well on the way to global competitiveness.

Taiwan's furniture industry is sustained primarily by a number of unsung small and medium-sized OEMs (original equipment manufacturers) whose devotion to quality and trustworthiness has helped build a solid reputation in the world market, even in the face of emerging rivals who resort to underselling to seduce buyers.

The survival of Taiwanese furniture parts suppliers hinges on production efficiency, which assures product quality and on-time delivery. Another factor that strengthens the manufacturers is their clustering in the central Taiwan counties of Taichung and Changhua, where they form an integrated supply chain for furniture and furniture parts, with such integration providing high flexibility in production capacity and capability.

Statistics compiled by Taiwan Customs show that Taiwanese furniture parts makers maintain an export value of about US$1.3 billion a year, with metal, glass, plastic, and OA furniture and related parts being the main export categories. This export value suggests that the domestic industry is still competitive globally.

The following summarizes three seasoned Taiwanese plastic furniture parts suppliers, specifically their survival strategies amid ever-threatening global competition. The companies are known as the "big three suppliers" in their field in central Taiwan, and their ongoing success proves that furniture parts OEMs who produce at home can continue to wield importance in the market.

Brilliant Lake

Founded in 1989 in Taichung County, the Brilliant Lake Industry Co. is a veteran supplier of plastic furniture accessories that keeps its focus on product improvement as a means of countering the general sales slump of recent years.

Concentrated on OEM services for nearly 20 years, Brilliant Lake has accumulated considerable know-how in the manufacturing of wide ranging furniture accessories, including casters, plastic holders, tube stoppers and joints, knobs, glides, foot pads, oblique mounts, washers, tube connectors, headboard decorations, threaded metal caps, and related plastic and metal parts. A full 95% of its output is exported to Europe, America and Japan.

Chairman Hsu Wu-fong said that his company's experience in the field enables it to keep honing its production efficiency to cushion the impact of recent sharp drops in sales. "I have to confess that Brilliant Lake has suffered a 40-50% decline over the past few years," Hsu lamented. "However, backed by its production experience, my company will surely overcome the tough times."

Another factor that assures Brilliant Lake's competitiveness is its cutting-edge product improvement capability. One example of such capability is the debut of the BL-619-1 series rotational plastic glides, which Brilliant Lake developed independently to meet the need for reinforced, convenient glides for TV stands. Hsu noted that these glide are improved with reinforced structures and can rotate 360 degrees while carrying up to 30kg. Easy installation and other convenient features enhance the added-value of the glides, which are patented in Taiwan, China, and Japan.

Hsu reported that his company is now developing a plastic turntable featuring an innovative built-in track with steel balls that make it structurally tougher and easier to rotate than competing models. In other words, the company is applying its knowledge in the development of better plastic accessories to effectively differentiate itself from Chinese and Vietnam rivals.

Its extensive know-how, ability to innovate, and assured rapid delivery win Brilliant Lake the respect of its clients. Hsu sums up the reason for the company's success as "...nothing more than Brilliant Lake's seasoned experience."

Shen Shan

Placing heavy emphasis on the full integration of in-house production lines to make sure its product quality and production capability measure up to customers' needs is the tried-and-proven strategy of the Shen Shan International Glide Mfg. Corp., which was established in 1981 in Taichung County and has since been providing both OEM and ODM (original design manufacturing) services.

After 27 years, Shen Shan is the most experienced of the top-three makers of plastic furniture accessories on the island. The company employs 35 workers and turns out a comprehensive range of products including plastic plugs, casters, knobs, glides, OA chair tube connectors, foot pads, and other customized furniture parts, most of which are exported to Australia, the U.S., Germany, and Canada.

Wu Sen-mao, the managing director, said that the company's integrated production lines depend on its ability to develop molds in-house, and that this ensures the firm's competitiveness. He added that since its establishment, his company has independently developed over 1,000 molds for either standardized or customized plastic furniture parts. This capability enables Shen Shan not only to maintain production efficiency but also to be more flexible than its rivals.

Shen Shan's expertise in applying industrial plastics such as PVC (polyvinylchloride) and PE (polyethylene) in manufacturing processes is the key to keeping its production lines efficient, mainly because it can effectively reduce defects and waste. This expertise also allows Shen Shan to double as consultant-offering professional advice and helpful information about plastic materials to customers in the early stage of R&D.

Years of effort spent on upgrading manufacturing technology and equipment have enabled Shen Shan to go upmarket by venturing into the production of medical hardware and related accessories. This new product line has already earned the praise of clients for quality and compliance with standards. "Our solid production capability," Wu said, "facilitates the development of such high-end parts."

OHLA

With particular attention to customer service differentiating it from its rivals, the OHLA Plastic Co., established in 1993 in Taichung County, is the third of the major plastic furniture parts OEMs in central Taiwan.

OHLA provides a wide range of furniture parts including bolts, adjusting knobs, foot pads, steel tube stoppers and plugs, wrenches, screws, Lazy Susans, catch plates, casters, chair tube connectors, and hardware accessories, and exports them worldwide.

However, what impresses foreign buyers most is OHLA's unstinting commitment to considerate services. With its rich experience and expertise in making plastic parts, the company is able to offer useful know-how and advice to clients before engaging in the development of a new product, stated senior sales manager Joan Chen. "For example," she added, "my company will suggest that they use proper cold-resistant material so that their furniture will be more structurally sturdy in cold areas."

Another client-friendly OHLA service is, after the company helps clients develop new products, the willingly help offered to clients to apply for patents and safety standards certifications such as SGS. "Generally speaking," Chen commented, "customers are quite satisfied with such service for the enormous savings in time to handle the enormous amount of paperwork."

OHLA's R&D department is notable for its preparation-helping clients with preliminary product planning early in new product development and feasibility studies to lower the risk of failure.

In addition, religiously believing that continuous progress guarantees competitiveness, OHLA has actively improved its organization in recent years to achieve better operational performance. According to Chen, the company has invested considerably to optimize the plant layout, train its workers, and hammer out a series of SOPs for its factory.

"OHLA pursues better operational and sales performance through continuous improvement of its organization, friendly customer services, and effective PM (production management)," Chen summed up. "What OHLA does, in other words, is create mutually-beneficial value."