Service and more
E Chain Industrial, based in Kaohsiung’s Gangshan Benjhou Industrial Park, started life as a trading company, but went on to establish its own factory in 2008. This expansion enabled it to accept manufacturing orders in addition to the trading and purchasing services it already provided.
Speaking about the factors that led to this reinvention, general manager James Shiuan explains that when the company was exclusively a trader and broker, it lacked direct control over product quality and delivery times. There were occasional cases where products manufactured correctly according to the engineering drawings were unusable. With the factory demanding payment even though the customer refused to accept the products, E Chain was left on the hook. To make matters worse, manufacturers began attending international trade shows to get orders for themselves, leaving trading companies with less room to operate. Hoping to remain competitive and provide customers with better service, E Chain invested in its own manufacturing.
“Trading companies are service oriented. Manufacturers are production oriented,” explains Chi. “E Chain is a service provider that expanded into manufacturing to enhance its strengths. Our experience as a trading company gives us a better understanding of customers’ product needs.” In contrast to a manufacturer focused only on production and delivery, “We’re willing to invest in expensive inspection equipment in order to assure quality on behalf of both our customers and ourselves, and we’re willing to go the extra mile in paying attention to whether customers’ drawings are feasible to manufacture,” says James Shiuan.
Shiuan basically started over. Assisted by business consultant Kevin Lin, who has been with E Chain throughout the transformation process, he found a factory site, bought machinery, got up to speed on the technology and trained up staff. The company’s understanding of customers’ needs helped it dial in manufacturing specifications like concentricity, strength of materials, and overall precision, all of which impact how smoothly customers’ own production lines run.
Most of E Chain’s clients are in Europe and North America, and are picky about quality. “European customers emphasize factory management. They believe that quality comes from management, not simply from final inspections of products. When manufacturing processes are tightly controlled, the resultant products naturally meet standards,” explains Lin.
The company makes a broad array of fasteners, with about 30% of its production going to the automotive industry, another 60% to the construction industry, and the remainder being a wide range of general mechanical fasteners. Its strategy for dealing with the international tiffs and economic cycles that impact the export market focuses on this diversity of products, as well as developing bespoke products, providing services, and generally forging its own path. While the Covid-19 pandemic caused automakers to halt production and reduce their fastener orders, rapid growth in the US home renovations market led to increased orders for fasteners for the construction sector. Shiuan explains, “Our customers are pretty diverse and our products are largely tailored to their specifications, so our risks are widely spread.”
The fastener industry also sees opportunities in US President Joe Biden’s US$1-trillion infrastructure proposal. Shiuan, meanwhile, recently invested NT$200 million in a second factory to get into the global market for fasteners for electric vehicles. No wonder Lin says, “The Taiwanese fastener industry has never experienced a bad period in its 60-plus years of existence. There have only been pretty good times and really good times.”
Though considered traditional manufacturers, Taiwan’s fastener makers have a per-capita output value several times higher than that of tech companies.
E Chain Industrial was a trading company before it went into manufacturing. Its strategy for managing changes in the market has been to focus on bespoke products for its customers.
Business consultant Kevin Lin (left) has been helping James Shiuan (right) throughout E Chain’s transformation. E Chain’s history as a trading company helps it better listen to customers’ needs.