The Focus is Cooperation. LEADERMAC Sets an Example


2014-01-03
One of the humblest men I have interviewed found time today, to complete our previous interaction. His time is limited. Instead of me going to him, he came to me with a steak lunch involved. That is rare, just like I like my steak.
 
Mr. Michael Chang is a man that has taken a company called LEADERMAC to a worldwide status, based on his father's establishment. This is a story of wisdom from a 45 year old man who harnesses many more years of insight that your typical person. He is more than equipped to share guidance with the Taiwan industry, but he problem is this: He won't admit it.  At any rate, let's look at the way the runs things at a time when industry is changing.  There are many Taiwanese woodworking machinery manufacturers that may benefit from the example that LEADERMAC sets. Michael emphasized that he is happy to share his thoughts, but by no means is he trying to give advice.

 
The Cake is Big in China
 
Naturally, the past two years have been a period of economic stress on a global level. From Michael's perspective, the impact on woodworking machine manufactures across the world has been quite challenging. At the LIGNA exhibition this year in  May the effects of economic downturn in across the world were quite apparent. Many European companies are not  prepared to procure and invest, largely due to banking crashes there. Woodworking machinery manufacturers had overproduced, which led to  a swarming of competition over the smallest of orders. This led to a viscous price war which drove prices lower and lower.  As far as Taiwanese companies are concerned, his suggestion is to recognize how massive the market in China will be for the next 20 years, and assess carefully where they ought to focus their development. If they are battling amongst themselves in Italy, Germany, The US or wherever, it might be wise to stay out of those warzones and do business where things are peaceful and abundant. LEADERMAC itself has been investing more energy in China with good results. The trick is to develop good agents, invest in innovation, customization, automation, etc. China is facing rising labor costs. Everything is costing more. This means good opportunity for Taiwan. "As long as we adapt to their evolution, invest in keeping our machinery a step ahead, and always put the customer first, the next 20 years can be great for Taiwan in China."

 
"Star Alliance" Means Survival 
 
He pointed out that comparatively speaking, Taiwanese companies are small. This is, in fact, a strength for Taiwan. What they are starting to do is learn to work together. The thing to do is find out what production lines are needed in China. Be it flooring, chairs, tabletops or whatever, consider all of the machines that are necessary in a particular line and have applicable companies cooperate to offer complete production lines under a single banner. As an example, the W-TEAM in Taiwan recently put together a flooring production line dubbed W1. LEADERMAC itself is already forming what they call "star alliances". One stop shopping is already happening in Europe and the US. That is what is needed in China. LEADERMAC already has star alliances set up in South America, The US and Europe. They offer various complete production lines. Lamination, flooring, material preparation, furniture and molding lines are some examples.  This is LEADERMAC'S  approach.  But many Taiwanese companies still believe that they can survive selling individual machines. It would be better for them to work together, share their information, develop automated production lines as a team and share the wealth rather than fight over it. What is going to work best for the future of Taiwan is to focus on offering automated turnkey projects. It saves costs and worries for the end user if they can come to one entity for their production needs, have the line set in place and dialed in, all by a single team.

 
SWOT Matrix 
 
Predominantly, Taiwanese woodworking machine producers are specialized in single equipment, and this is fine for catering to smaller clients. But the future is with big companies, and the key to that business is turnkey projects. The beauty of Taiwanese producers is that by focusing on single equipment, their professionalism is very strong. The way LEADERMAC sets up its numerous turnkey projects is to first, embrace "SWOT analysis" (or SWOT Matrix). He explained that the technique is credited to Albert Humphrey and involves evaluating the Strengths, Weaknesses, Opportunities, and Threats involved in a specific venture. LEADERMAC gets every department in the company to submit their analysis of the internal and external factors that are favorable and unfavorable to achieving the objective, how they would approach the tasks involved and how to work together to create the most productive line possible. Those involved range from R&D, sales reps, agents, production, procurement, and many more.
Budget for Innovation
I saw LEADERMAC moulders in action four years ago, and it is hard to imagine how they could possibly be improved upon. Michael explained that his company is constantly thinking of how to save its clients time and money. Set up time is a key factor. Tooling. Computers are another factor. As an example he said that the production line I witnessed in action required 8 people to run it, and tooling set up took 2 hours. Now, the same line requires just two people to run it and tooling set up takes just 20 minutes. Imagine the costs that the vender is saving. Again, he emphasized that building strong relationships with your overseas partners is vital in keeping abreast of where improvements can be developed. Frequent visits to international trade shows are very important for LEADERMAC. 

 
Internal Management
 
Every year the trends of industry change. Sales, R&D, design, procurement, QC, production and packaging are usually performed individually by most companies. LEADERMAC makes their whole system extremely clear to all parties involved. It's all structured out very clearly like a pyramid, or family tree. Every component of the system is integrated and organized so that no leaf is left unturned; all bases are covered. Any glitches that may arise are easily traceable, identified and dealt with. They make sure that everyone is familiar with ISO / SOP standards. Regular meetings and video conferences also play a big role. "The key thing is the mapping out of positions and responsibilities."

 
W-TEAM, What's Next?
 
The W-TEAM came together much in the same fashion that LEADERMAC does and created a flooring line complete from the in-feed of raw boards to the out-feed of finished flooring, all synchronized as a complete system. Next, they are working on W2, a project that will focus on finger jointing. They expect to produce around 50 cubic meters of product per day. Dimensions will be approximately 25mm thick by 900mm wide in lengths ranging from 2 to 6 meters. LEADERMAC is heavily involved in this project. Multiple rip saw maker Kuang Yung is leading the project and other companies include CKM and PMC. When asked about the different challenges involved, he said that one major factor is material selection. Here is where a scanner is critical. Once the multi-rip saw cuts the boards to width, the infrared scanner identifies the flaws in the wood and tells the optimizing cut-off saw how to get the best yield out of any particular length. All boards are unique. It also decides which lengths are ideal for what kinds of end products, be they chairs, tables, doors, etc. The kicker sends longer lengths elsewhere, and sends shorter lengths (250-300mm) to the moulder, then to the finger jointer, then back to another moulder, and finally, off to the composer. (Depending on the customer's need, both butt jointing and finger jointing are possible).  After the lengths are glued and pressed, there are many alternatives for further processing with thickness planers and wide belt sanders. He pointed out that the only two companies that produce infrared scanners for this application are Wan Yi and Wood Eyes, and that their contribution to Taiwan's finger jointing industry are very important. The difference between W1 and W2 is a master control which governs all CNC machines and conveyers, as speeds, angles and other factors vary. It also immediately identifies where a particular piece of wood may have jammed. This eliminates the possibility of a mechanical crash. "If a machine gets damaged, that is costly, but these lines are going to Europe and North America. Personal injury is not an option." The W-Team aims to complete this project by next September.

 
Cinema Time
 
When training his sales reps, Michael has created a series of motivational movies to help familiarize them with his machinery and motivate them. He showed us various movies of different turnkey lines LEADERMAC has in action throughout the world. Flooring, moulding, furniture, building materials... the list is long. One line in particular produces "hand-scraped" wooden flooring. Compared to regular flooring, this type lends a very natural feel to the atmosphere. Traditionally, this style has been produced by jail inmates where they use different hand tools to randomly mar the surface of the wood. This particular production line mimics this sort of processing. As the pieces travel along 16 rows below the 16 spindles with various cutters/abrasives spinning above, the carriage they are mounted on shifts back and forth to create random texturing. Having done the math, that means that there is not a single repeat within 246 pieces and a single speed. Change the speed, and you can create infinitely unique texturing. "We are the only manufacturer of this type of machine in the whole world. We have a patent." 

 
Teamwork with Independence
 
That's as far as we got in our first session, and after our steak luncheon with Michael a week later we commenced round two. As a director of TWMA, Michael has watched the association grow for 8 years. It's time for economic independence. Up until 2003 TWMA was a subsidiary of TAMI, but now they are independent. This presents new challenges for TWMA, but greater opportunity. As an independent association, they are entitled to more government financial resources. TWMA is now more equipped to promote their industry more effectively on a global scale. More frequent visits to international trade shows play a big role here. They see more potential to develop markets in South America and Europe as well as develop stronger ties with ACIMALL and EUMABOIS. 

 
Expectations and Advice
 
We asked him what expectations or suggestions he has for TWMA, and what advice he has for the industry in Taiwan. "None. I am happy to share what I have learned in the last 20 years, but what works for LEADERMAC is by no means meant as advice." He went on to explain how his values of reliability, customization, reliability, strong service and continuous improvement help his endeavors. He described his business activities as training for the Olympics, and stressed the importance of "Total Management". With large-scale companies already existing in Asia, the promotion of relations with mainland buyers is one of his goals. NC will grow faster, advances in automation and increased customization are bound to materialize during that process. In closing, here are a few things that he said that work for LEADERMAC: "End users are my best sales reps." "We always strive to build our brand." "I understand market needs and meet them." "I value my friendships with my agents." And finally, "I love my company like I love my clients." 
We thank Mr. Michael Chang for his hospitality and making the time to visit with us. It was a "rare" occasion, and very educational. Hopefully, his insights and optimism may serve to benefit others in the Woodworking machinery industry.
 
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