KTCC - An Interview with the Boss on Pay Day


2009-04-01
KTCC - An Interview with the Boss on Pay Day /Report by Greg Niederhaus Most of the woodworking machinery industry does its manufacturing in central Taiwan. It is an easily accessible spot (just an hour and a half south of the airport) so most western buyers looking to procure machinery gravitate quite easily to that region. A bit further south is Kaohsiung, where machine manufacturers cater predominantly to serious heavy duty industrial needs, and there are a few that specialize in woodworking machines for that sector. The two manufacturers that wfd interviewed recently had similar comments about their influx of foreign visitors to their facilities, the gist of which amounts to: "Times are tough these days. Most buyers are so exhausted by the time they get to central Taiwan and visit those factories that they don't want to make the 4 hour drive down here to see what we have to offer." Neither did we, so we hopped on the High Speed Rail and found ourselves there in 43 minutes. The First Machine is Still in Action ************************************** KTCC WOODWORKING MACHINERY built their first clamp carrier machine way back in 1983. That was the item from which the company's prowess was launched, funding the successive launching of rotary composers, cut-off machines, double end tenoners and finger joint systems. Typically we prefer to bring technical insight to the reader about specific machines. But KTCC is a tough and leading industry player, and in times like this they prefer to keep their cards close to their chest. Ambrogio Delachi, President of Acimall, asks "How can we survive this sort of 'ice age' of economy that has struck the global industrial system?" We asked the same question of Mr. Acme Chen, who's background is in mechanical engineering and mould design. He mentioned that the company has made some dramatic changes in their production line. "We are not projecting changes we plan to make over the next year because action needs to happen immediately. The market is getting smaller all the time and we find ourselves in a position where local manufacturers are fighting tooth and nail to swipe orders from each other. It's a sad thing to say, but it's reality." Technically speaking, the MERLIN 180DC is a model of high speed horizontal finger jointers that pumps out an impressive 180 pieces per minute, with adjustable glue application and jump functionality as example innovation. And the high speed double end tenoner yields 120 pieces per minute. These figures contend with some of the best in the world. How the R&D department managed to pull off performance like that is a closely guarded secret, not only due to this "ice age" but also because of increased numbers of Mainland Chinese companies that specialize in reverse engineering. Fair enough. As long as the job gets done, far be it from wfd to compromise a company's technology. But that original clamp carrier machine from nearly 3 decades ago is still in action and producing revenue, a fact to attest to the serious quality that KTCC clients profit from. Slashing Prices without Risking Suicide ********************************************* Along side assistant G.M. Acme Chen, set general manager of KTCC Mr. Kevin Chen. His 40 some odd years in the industry stemmed from hands on experience actually making furniture, which evolved into the engineering of machinery that replicates the skills of a craftsman. The efficiency of his machinery is derived from that background. "The economy is in a downward spiral which is only getting worse. The trend you will notice among woodworking machinery purchasers now is that they go for machines that will do the job but don't cost a fortune. When a Volkswagon will get you comfortably to your destination, why waste hard earned cash on a BMW?" One problem the company is considering is how to offer machines with the right price tag. If you slash prices to match fleeting economic recession so that business can continue, how do you adjust those prices to match the economy when it recovers? Clients simply won't play along. Acme Chen described this phenomenon as "corporate suicide” because "you cut your price to be able to compete, but actually you devalue yourself. It's not the right way to do business, but we have to do it to survive." So what KTCC is doing is a compromise, by developing machines that are lighter structurally with functionality that allows them to perform more tasks. Basically it comes down to less models to choose from which cost less to produce, yet they still get you to your destination. And when the economy gets back on its feet and clients have more cash, the higher end series' like RHINO and MERLIN will still be available. Paying Back Mother Nature ****************************** On the way in to our visit with KTCC we noticed various types of scrap metal organized neatly out in the yard, and jokingly asked if times were so tough as to rely on recycling for income. "Why not?" responds Acme. "We can sell it for money!" But this got the man on another train of thought. "We recognize that we supply an industry with machines that are not kind to Mother Nature. Putting the consumption of non-replenishable metals aside, what they do in essence is kill trees." The lightening of the machine structures is one way KTCC counteracts its environmental impact, as well as making advances in the optimization of lumber usage and glue. He commented that most Asian furniture and flooring manufacturers like to see lots of excess glue oozing out of fresh joints, while western professionals prefer to minimize its use. "Asian woodworkers will feel more confident that it is a strong joint. Part of this may be due to the dubious precision of their machined joints. But what happens is that glue gets wasted which is money, and secondary processing like re-sanding has to happen. That all increases overhead." With KTCC systems the level of precision provides for very tight joints, and the aim is to determine what amount of glue is reasonable so as to save on the costs aforementioned. Extra glue tends to gum up the machine, yet another source of time wastage in the form of maintenance. "For Asians, they can turn up the volume as high as they want on our systems. But for Europeans, they can dial it right down to exactly how much achieves a strong joint." Origins of the Names ************************ We asked KTCC about the origin of the names they attach to their product. "We see 'MERLIN' and we think the machine can do magic. We see 'RHINO' and imagine it can kill everybody. With 'ELEMENT' it's got to be about precision. Are these assumptions correct?" "In fact they are", laughs Acme. "Each customer has a different production requirement. For example with the MERLIN series we offer five models to choose from so that clients don't have to buy extra units with functions they don't need. In central Taiwan there is mostly light industry. But in Kaohsiung it's all about heavy industry. Our finger jointing systems can handle anything from super fine parquet flooring, all the way up to structural pre-lam beams used in big construction." Once Bitten, Twice Wise ************************** The boss and founding father of KTCC Mr. Kevin Chen made a comment on company policy, because we asked him what he thought of Ambrogio Delachi's advice to industrialists that it is a good time to analyze past mistakes and benefit from lessons learned. "No mistake at KTCC happens more than twice because we make sure to learn something from them." Indeed, mistakes happen because they have something to teach. Later, as we were departing on to our next visit with FORMOSA KY, Acme warned us not to make the mistake of getting too close to the big black dog chained up against the factory, because he bites. It turns out that the beast has bitten at least three people so far so we asked, "He's made that mistake more than twice. Shouldn't you put him down?" The response was classic: "He guards our corporate secrets, so he's the only exception to the rule." Mr. Chen was hospitable enough to drive us on over to FORMOSA KY. En route there was some light dialogue about the grueling economic situation that many companies are facing, about layoffs, survival, restructuring, etc. The boss of FORMOSA KY happily invited Mr. Chen to come in and have some coffee. "Sorry I can't", says Mr. Chen. "It's pay day today, and I need to go back to the office before it closes to collect my salary!" All in all, our visit with KTCC was definitely worth the trip.
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