First published on The Business Times on 16 November 2021.
CABLES and wires. That is what local manufacturer Tai Sin Electric has built its brand on over the past 40 years. Their tag line, "our cables are simply safer and longer" is perhaps the purest testament of their commitment to this specialisation.
Indeed, they have made a name for themselves in the industry, with their cables powering MRT lines, Jewel Changi Airport, and even Gardens by the Bay.
"Cables are very essential products that help power up the entire building. It's like the brain of the building; without power, nothing works. So these are very essential and critical components," says Willy Chua, head of group corporate development at Tai Sin Electric.
But come 2022, Tai Sin is going to be unveiling a new tag line. "We are more than cables" is going to be marketed throughout the South-east Asian region, says Chua. And believe it or not, this happened largely because of Covid-19.
A tectonic shift
When the second run of Enterprise Singapore's Scale-up SG was launched in December 2019, the leadership team at Tai Sin had their eyes set on the export module, designed to help them further expand and strengthen their footprint in South-east Asia.
Scale-up SG was launched in July 2019, with the aim of helping mid-sized companies with high-growth potential scale rapidly. The 21/2-year programme matched companies with partners such as McKinsey & Company and PwC Singapore to learn from one another to strategise and execute business acceleration plans.
Tai Sin was one of 18 local enterprises brought on for the second run and they were particularly excited to get started, having previously worked with McKinsey & Company in 2018 when they embarked on the Digital Transformation and Job Redesign programme.
"The Scale-up SG programme was especially rewarding for us as our anchor partner had been consulting with us since 2018. We were happy to be able to engage with them in this programme as they are very familiar with our processes and systems and they were able to advise us on how we can transform to improve our processes further to be more efficient," says Chua.
Back then, Tai Sin was still on the tried-and-tested path of internationalisation. But when Covid-19 made its impact felt in this part of the world, Tai Sin realised they had to scuttle their plans.
"When the pandemic hit in early 2020, it hit us hard like other companies. Coupled with the lockdowns in many countries, the export growth plan became unviable," says Chua.
"We had to go back to the drawing board to review our plan and think about how we can still achieve growth with the pandemic looming over us."
The decision was subsequently made to build a new product family and widen their electrical power distribution solution with the introduction of busbar trunking systems.
Within 14 weeks, the Tai Sin team conceptualised a business plan and started a new subsidiary called Tai Sin Power Distribution, solely focused on the development and sales of this new product.
This technology is not new, having been introduced to Singapore in 1950 by established brands like Square D, Telemecanique, Schneider and General Electric.
But going down this route was still revolutionary for Tai Sin.
On the big picture level, the company needed to look beyond the self-cannibalisation aspect of going down this route as busbar trunking systems are a direct competitor to the cables and wires that Tai Sin traditionally specialised in.
The second way this new venture was revolutionary was that Tai Sin was, as Chua puts it, changing the way the game is played.
According to Chua, all busbar trunking systems marketed and installed in Singapore were previously foreign-owned and manufactured.
Tests to ensure that the newly manufactured and packaged equipment meets its intended purpose were also run overseas.
He says: "This was a key pain point for the industry. Customers who wanted to purchase the busbar trunking have to fly overseas to conduct a factory acceptance test (FAT). Further, when there was a breakdown, customers often had to send the system back overseas for repairs."
Covid-19 exacerbated the situation as flights were grounded and borders closed.
"With the setting up of Tai Sin Power Distribution, we are the first and only busbar trunking system manufacturer that has the facility to provide localised repair, replacement and quality control tests in Singapore," says Chua. "Having a localised service centre helps facilitate urgent repair and replacement requirements thus eliminating long downtime in the event of failure."
Chua credits the many consultants they have worked with over the years for instilling this ability to engage in out-of-the-box thinking.
"The original plan was for us to go with the export module but because of Covid, we couldn't do export. So we went with the new business building module. And as of January, our company was formed. Now we have a factory and if you have a breakdown, I can fix it for you within 24 hours. It's not groundbreaking (technology or a new product), but it's changing the game."
A different lens
Like others in the manufacturing industry, Industry 4.0 is by no means a term alien to Tai Sin.
But while the term "Industry 4.0", "automation" and "Internet of Things" more often than not conjure the notion of hefty investments and shiny new gadgets, the team at Tai Sin decided to take a few steps back to consider their options.
"Tai Sin is a very old company and we have a lot of legacy machines. So for us, the question is: how do we link up the machines without needing to upgrade all the machines?" says Chua. Instead, Tai Sin decided to sensorise all their machines, allowing them to capture and subsequently analyse the data captured.
"We measured how efficient we are at the factory level and the machine level, and we then we started tweaking our processes," says Chua.
"Our machines are, on average, over 20 years old and they're still running! So we put new technology on top of old machines," says Chua. "A lot of people have the misconception that when you talk about digitalisation it's about big investments.
"The most fundamental step is to measure and collect your data. Don't just think: 'Oh, if I buy a new machine, my productivity will increase overnight'."
With McKinsey's help - Tai Sin had embarked on this Industry 4.0 upgrade as part of the Digital Transformation and Job Redesign - they created a dashboard "to turn data into information, and turn information into insights".
These insights have helped Tai Sin adopt flexible manufacturing techniques so that they are now able to switch between low-mix-high volume (production of a large quantity of a few types) and high-mix-low-volume production (or make-to-order manufacturing) without compromising on efficiency.
"In the past, we did a lot of high-volume-low-mix production ... (but now) because of digitalisation, we can plan and tweak our processes to optimise," says Chua. "Because of this we can do more customisation and capture smaller deals."
Indeed, the company has focused almost exclusively on smaller deals over the last 20 months.
"With smaller deals the turnaround time is faster. So if you can't match that speed, you will lose it," says Chua.
"Without visualisation it's difficult. Now, every shift, the production team will run through the dashboard. All the section heads will sit down with the factory manager for a short 30 minutes to run through the data and optimise our production so we can run as efficiently as possible."
He continues: "Industry 4.0 also helped us to maintain our production capacity and efficiency despite a reduction in workers during this period as some of them returned to their home country. This has enabled us to keep our costs down without compromising on production efficiency.
"Through these efforts, we managed to make a modest recovery this year as compared to last year."
Happy employees = Healthy company
One of the key takeaways for Tai Sin from their engagement with McKinsey was the importance of checking in on the "company's health".
"Employees are actually the most important component of the success equation," says Chua. "You can have all the best strategies and business plans but if your employees are not in it with you, your plan will fail.
"Scale-up SG balances both - strategy on one hand and on the other, the company's health, be it leadership, skillset upgrading, or ways to incentivise employees - which was a very good learning point for us."
Indeed, talent development has been an important frontier for the group. Tai Sin previously sent three of their senior management staff back to school to pursue a Masters in Business under the Management Development Scholarship Programme (administered by then-Spring Singapore). These staff now head the finance, IT and corporate development teams.
In addition, they have an on-the-job training programme which allows them to train and assess their workers and operators. Employees are then rewarded as they learn to operate more machines.
"In the past, a worker can be very good at running one particular machine, but he could not operate another machine. That's why we needed the headcount to run all the machines. So even when there was no demand for a particular cable, they will still run the machine because they are employed to run that particular machine," says Chua.
"Now, I'm able to do smart scheduling in a way that I will schedule which machine to run, who will run it, for which process, and for which cable. All this is possible because of upskilling, Industry 4.0, and the visualisation (that the dashboard provides)."
An eye on the region
With their operations spread across South-east Asia with three factories in Singapore, Malaysia and Vietnam, Tai Sin arguably has its hands full.
"Over the next five years our focus will still be in this region so I would say we're looking more at regionalisation rather than internationalisation," says Chua.
"We see a lot of potential in this region, especially countries like Cambodia, Vietnam and Indonesia which are still developing. The combined US$1.3 trillion GDP of these countries is very attractive for our business."
But while the company may not be looking far geographically, they are bringing a new Tai Sin to customers both current and new.
"We're not stopping at busbar," says Chua. "If everything goes well we will have another new product within the next 12 months."
"We want to give the customer a complete solution so it's a one-stop shop. When you come to Tai Sin, we provide the entire power distribution solution and you can find whatever you need within one house."
"The Tai Sin brand is so ingrained in the minds of customers as a cable company. But now we're more than that. So starting next year, we're going to market our new tag line throughout the whole of South-east Asia," he says.
While Tai Sin's stint with Scale-up SG may be winding down, the mentality has been "infused" into the company's DNA, says Chua.
"Scale-up SG started this thought process - how can we grow? So even after this programme ends, we will continue to think in this manner - how can we expand our business? And we will always remember these few ways of expanding."
He adds: "I was pleasantly surprised with the level of involvement of Enterprise Singapore throughout the whole programme. Their personnel accompanied us throughout the entire programme and they were there to support us in every single workshop, training, and clinic session.
"We are the largest cable manufacturer in Singapore. Now, we want to be the main player in this region. That's our aspiration."