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JCS-Echigo: Cleaning solutions for the future

First published in The Business Times on 22 January 2020.

Elise Hong credits her grit and indomitable spirit to sports. "I used to play badminton for school," says the co-founder and CEO of JCS-Echigo. "Sports builds up a kind of resilience ... Sometimes you're far behind, but that doesn't mean you'll lose, you can still catch up and win. It trains your mindset."

This tenacious spirit is tightly woven into both the company's origin story and its evolution. The firm, which was established in 1999, started out in the business of manufacturing and supplying precision cleaning machines and services for the hard disk drive industry, but today thinks of itself more as a cleaning specialist.

"The company was like a car workshop then," says Ms Hong, before adding, with emphasis, "a very small car workshop".

And so when a representative from a Japanese tech company visited as part of their rounds to pick a potential supplier, they passed on JCS-Echigo.

"So I asked the local contact, why didn't they want to give us the order? Is it too expensive? He said the Japanese were worried that if they gave me the order, I wouldn't be able to deliver. So, I went to the customer and said 'Can you give us one more chance?' The customer said 'Okay, bring me to one of your customer's machines. I'll wash the part myself and if it's good, we'll consider again'."

She says with a laugh: "This Japanese customer was very careful. He brought his own parts, he cleaned the parts himself, and he went into the cleanroom side to pick it up - he did everything by himself! We were lucky, the results were quite good so he said, 'Ok, I'll buy one machine from you and one from the US'."

Ms Hong likely didn't know it then, but this dogged tenacity would land her a client that would help kickstart the business. Indeed, the customer was so invested in their success that even during the trial, where he pitted JCS-Echigo's machines against the machine he bought from the US, he sent engineers to help them troubleshoot when they met with setbacks.

"This Japanese customer really gave us a lot of support. Not only that, they gave us the first big order from a Japanese company. We learnt a lot, how they check particle count and airflow in the machines, how they check to make sure the machine is up to their requirements.

"They bought quite a number of machines from us after that. And from there, once the Japanese knew this customer buys machines from us, they started to buy from us too. I think maybe more than 50 per cent of our business was from the Japanese then," Ms Hong says.

Gearing up for change

But it was not to be smooth-sailing for long. In 2009, JCS-Echigo found itself at a crossroads. The company was still focused on developing precision cleaning solutions for the hard disk drive industry but they had received almost no orders from late-2008 to early-2009. While orders began to slowly trickle in again after mid-2009, the clarion call was clear - it was time to diversify the company's offerings.

The diversification would happen in two main ways - by targeting an industry which has growth potential but is not as volatile as the electronics sector, and by creating a proprietary product which can be easily scaled with minimal modification.

The solution? Take their expertise to the F&B sector. JCS-Echigo had previously built a cleaning system for a F&B company and so this felt like the most natural next step, says Ms Hong.

Their ware-washing machines are marketed under Evoluxe, following a branding project to help JCS-Echigo rebrand itself from a manufacturing company into a product owner.

The project was supported by Enterprise Singapore as it is in line with the Precision Engineering Industry Transformation Map, which aims to support companies as they move up the value chain. It was launched by S Iswaran in 2016. Mr Iswaran was then Minister for Trade & Industry (Industry).

The transformation map was the first industry-specific roadmap to be rolled out for the manufacturing sectors - through the strategies outlined, the industry's value added was envisaged to grow from S$8.8 billion in 2014 to S$14 billion by 2020.

Cleaning up

One of JCS-Echigo's unique strengths is they are not only a service provider - they also build their own machines. And so in the event of downtime, they are able to respond quickly.

"Because we are the machine maker ourselves, the machine downtime is very short compared to our competitors. They have to rely on a technical team or even outsiders to come in to repair the machine. For us, if there is a problem, we have the spare parts required, we have the technical knowledge and we can rectify the machine very quickly," says Ms Hong.

Their other strength lies in the fact that they came into the dishwashing industry from a related but different sector.

"Recently, we started to do tray washing," she says. "Honestly speaking, I've built more than 100 units of this for the electronics sector. We use the same concept but build a smaller version for the food courts."

Ms Hong is also clear that JCS-Echigo relies on automation and it is more of a means to an end rather than their entire business model.

"I will not say we are an automation company. What I tell people is that we specialise in cleaning, but our cleaning comes with automation," she says.

"We really like to have automation in our factory because when you have humans, human error will happen. When you start working, you have energy but then you'll get tired (and errors will happen)."

To this end, one of the company's products, for instance, is a conveyor dishwasher. Instead of loading the crockery and cutlery into a basket, they are put directly on a conveyor belt.

"It cuts down the 'double-job'. If you use a basket, you have to take out the basket, take out the cutlery, return the basket to the front and load it again. This way, you just load everything directly on the conveyor belt," she says.

According to Ms Hong, 90 per cent of the products they build are slated for export. "Mostly Asia, but recently, we sent a machine to Morocco," she says. "We send our machines to a lot of exotic places, like Brazil and Egypt."

In addition, more than 80 per cent of their business stems from repeat orders. New orders usually come in through referrals.

Elise Hong, co-founder and CEO of JCS-Echigo

"We don't really do a lot of roadshows or exhibitions because our machine is very specialised. So a lot of time, it is really through repeat orders or recommendations."

JCS-Echigo has since branched into providing centralised dishwashing services for the F&B sector.

"In 2011, Enterprise Singapore introduced us to Suki Group and Suki gave us a chance to run their dishwashing operations for them. We started very conservatively because we were worried if we start with a big volume, we may not do a good job. So we started with one outlet, then after one month, maybe three to four outlets, after two months, 10 outlets. Then after four to six months, we started doing 20 outlets," says Ms Hong.

The Singapore government has been encouraging F&B operators to outsource dishwashing to centralised dishwashing facilities as one of the ways to reduce reliance on manpower. The Republic's first centralised dishwashing facility located in a shopping mall (IMM) was set up in March 2015. Stallholders at existing hawker centres also receive subsidies under the Productive Hawker Centre Grant, which is designed to encourage them to adopt measures such as automated tray return stations which are integrated with centralised dishwashing services.

Today, service constitutes about 30 per cent of JCS-Echigo's business, while product contributes the remaining 70 per cent.

"Dishwashing to me is more of a volume business - a repeated, stable, volume business. If you ask me, in terms of profitability margins, product is always much better. But sometimes, it's up and down whereas service is more stable and consistent," says Ms Hong.

Game on

If sports helped develop that grit which shaped the firm's early days, Ms Hong's competitive spirit keeps the company on its toes and ahead of the competition.

"A lot of people may say that European or American machines are better than ours, but I don't think so," she says.

This confidence shines through in the company she keeps. According to Ms Hong, her customers are mostly multinational firms which require that they adopt rigorous standards. In 2016, the company achieved ISO 22000 food management system certification. It also established two separate cleaning lines for halal and non-halal crockery.

"For the smaller dishwashing companies, they may not have these standards because it's too costly for them to maintain. We have to do yearly qualifications, we have to maintain the machines," says Ms Hong.

"And we have halal and non-halal lines. It's not mandatory but we did it when we started this business because we wanted to be prepared."

Today, in addition to machine sales and centralised washing services, the company leases its machines to food courts and other food establishments.

JCS-Echigo leases its machines to food establishments

"We started with centralised dishwashing because we wanted to build our reputation first," says Ms Hong.

"We have a lot of ideas but a lot of customers say 'don't want, too expensive'. So, for the first three to five years, we just did whatever the customer wanted. Now that they know us better, they listen to us."

Meanwhile, the company has continued innovating within the cleaning space.

It has, for instance, appointed SIMTech as the technical consultant to provide training on designing and programming of an autonomous mobile floor scrubber.

SIMTech supports companies in the manufacturing sector through industry assist, technology transfer, knowledge transfer and manpower development. To extend the reach of SIMTech's technology transfer effort, the Technology Extension Partners (TEP) initiative was launched in July 2018. TEPs are companies which worked with SIMTech, and are intermediaries to transfer the technology to other end-users.

In addition to working on specific projects to help JCS-Echigo build on their capabilities, one of the company's engineers has undergone knowledge transfer through WSQ training and master classes. In addition, two engineers from SIMTech have been seconded to JCS-Echigo to help them further develop their capabilities.

"Of course, the floor scrubber is on our roadmap. I think if this one is successful, we can build up the volume," says Ms Hong.

The firm already has a more than decade-old customer base in Thailand for its sales of precision cleaning equipment, mainly for the hard disk drive industry. Moving forward, JCS-Echigo intends to expand its dishwashing and robotic floor-cleaning business into Thailand's F&B sector.

Constantly learning

According to Ms Hong, her mandate for the company is that they must roll out at least one new product a year.

"At least!" she says with a laugh. "I always like to develop new products because this is one of the ways we learn."

In order to capture opportunities when they present themselves, staff undergo regular training.

Indeed, the firm has a comprehensive training system in place to ensure employees are equipped with the right knowledge.

"We have adopted the Professional Conversion Programme for Engineers to train new employees to undergo skill conversion and move into our industry" says Ms Hong.

"Our head of the design department will customise the training for one year which comprises on-the-job training such as mechanical drawing using design software, and soft skills such as project management and effective communication," she adds.

"Our executive director will also provide supervisory guidance and coaching to new employees."

Ms Hong personally goes on one to two learning trips per year, whether on mission trips with Enterprise Singapore or with institutes of higher learning and associations.

"For me, it's two things. One is networking. As a business person, networking is very important to me. A lot of orders I get are from networking. And second, every time I go on these learning trips, they inspire me to do better."