Vertically Integrated

Laneton Machinery Limited

My last factory visit was not what I had expected. I contacted Patrick Chen of Laneton Machinery, at the behest of Steel City Tools and our visit was set up. Laneton turned out to be the most vertically integrated factory of my entire visit. Vertically integrated is just a cool term that manufacturing folks use to say, “We make everything”. So instead of buying say, the plastic housings of a tool, they buy an injection molder and make the parts instead. This does a couple of things; it gives you more control over how precisely a product is made, and it keeps your “secrets” in house. In other words, your competitor won’t walk through your subcontractor’s plant and figure out what you are doing. As you might also deduce, investing in the equipment can be a big expense … so it adds a bit to the manufacturing gamble.

Laneton makes many products for Steel City Tools, and they basically construct them soup to nuts. Everything from making the motors (Laneton makes both universal and induction motors), to machining the cast iron, to stamping, bending and welding the sheet metal. In doing so, it is Laneton’s contention that by doing so, they have more control over both quality and schedule.

I have to say I was very favorably impressed with their facilities. The natural light was very impressive and the size of their buildings was remarkable. The buildings were clean and seemed very efficient. And the variety of tasks that they can do is something that I had not previously observed.

Qingdao Sightseeing

That afternoon I got to spend some time just seeing the sites in the city of Qingdao. It is a beautiful city on the coast. In fact, it will be the location of the 2008 Olympic sailing competitions. The old part of the city reflected influence of its German occupiers from the early part of the 20th century. Its new additions are modern and very well done. One reason I found it so attractive is that it is such a “small” city – only a million people. All in all it was a wonderful afternoon that I will remember for a long time.

Photos top to bottom:
Steel City jointers being assembled. Patrick Chen and your attentive editor. In the sheet metal shop. The whole gang at Laneton Machinery. The highest point in Qindao and the view from that building. Grace and your apparently tall editor on a Qingdao beach.

Two Continents -- One Team

Rikon Power Tools

What happens when a young woman from Vermont and a Chinese industrialist join forces? You get a power tool company. Erin Riley went to China several years ago to provide some marketing expertise to Robert Chen of QCR … a manufacturer who had been making power tools for some time. After a short while, Erin decided that she could run a power tool business as well as anybody – so she and Robert kicked off Rikon. Erin went back to Boston for a couple of weeks and then flew back to China and stayed for over four months. That was the beginning. I first met Erin in a small booth at the Chicago Hardware Show, and if I remember correctly, she had three tools in the booth. As Robert told me, those first years were very tough. Later, Steve Mangano was brought into the picture to provide insight into the woodworker’s point of view and some input into cool new tool features and the picture became clearer.

So in a few years, Rikon has become a tool company to be reckoned with. Their band saws have gained excellent reputations and they are moving forward with their own designs on many stationary tools. It seems to be working for them.

I was really impressed with the teamwork I saw between the US crew and the Chinese team. The true partnership with the Boston group and the people in Qingdao is unique in many ways from my observation. It removes the inevitable tension between two companies and their necessary primary concern of ensuring their own profitability over all else. In this case they are all in the same boat whether it is taking on water or steaming full speed ahead.

As I stated in an earlier entry, business is not conducted between companies, it is done between people. And I saw some great chemistry between the different folks at Rikon. No one knows better than Robert Chen that the power tool business is very competitive, but good teamwork always provides an advantage. Add to that a philosophy of constant product improvement and things start to look bright.

I’ve been told a couple of things to look for from Rikon, but I will let that cat out of the bag when the time is right. But if I were you, I’d keep my eyes peeled for new tools from the Qingdao/Boston team.

Photos top to bottom:
A long time QCR employee. Steve Mangano, Erin Riley, Robert Chen and your intrepid editor. Rikon band saw. 3D design work being done in the Qingdao facility. The Rikon crew ... plus a hanger-on.

Video Postcard

One afternoon, our hosts – May and Lily – took us to the Ling Yin Temple. While we were there, we were lucky enough to see ceremony by a large group of monks. Ling Yin is one of the most spectacular Buddhist temples in China. Here is a video postcard for your enjoyment. Click on the video postcard title (above) to see the video. If that fails cut and paste http://www.woodworkersjournal.com/asia/Video postcard.mov
Into your address bar.

Last Day in Hangzhou

Rexon – Taiwan to Hangzhou

A thought occurred to me as I was meeting with John Otto from WMH JET/Powermatic and Spencer Lin from Rexon: That not only are jobs being moved from the US to Asia … but from spots in Asia to China. Rexon is a manufacturing company that was founded in 1972 in Taiwan and became quite successful in the power tool business among other things. In 1996, in response to demands for more competitive pricing, Rexon opened its first plant on the mainland of China.

I was visiting the Hangzhou Rexon plant at the invitation of John Otto, to check out JET and Powermatic production. It is a truly impressive operation – more vertically integrated than the plants I saw in Taiwan. The quality control, implemented by both Rexon and WMH, was clearly evident as I toured the factory. In addition to some JET product, I got to see the very first production run of the new Powermatic drill press, designed especially for woodworkers. I think that John was only half kidding when he told his QC inspector, Jerry Wu, that he would have to stay straight through the night in order to finish his inspections by the next day. Jerry’s job was made a good bit harder after I decided to help out on the production line. (See photo) Note John’s response.

A Lovely afternoon and evening
After the plant tour, I spent a lovely afternoon with WMH’s May Lu and her assistant Lily. They were very gracious hosts taking me, and my photographer Donna to a super impressive Buddhist temple. It was really a once in a lifetime experience. Later we went to dinner and then shopping. Lily helped me negotiate (okay, she really did all the negotiating) as I bought some more presents for my family. I think Lily has a great future in business.

Hangzhou is a remarkably beautiful city, and May and Lily beautiful hosts. I will remember my last day in Hangzhou fondly.

Photos top to bottom:
Worker assembling the Powermatic drill press. Rexon's Spencer Lin. Your helpful editor on the Powermatic production line. The quality inspection room at Rexon. May, me and Lily at the temple site. Monks entering the temple. A vendor at a traditional market. Sunset over Hangzhou.

Video Anyone?

Here is my first attempt at a video journal of the trip. Please remember that I am an editor, not a film director. To check it out, click on the "Video Anyone?" title above.

If clicking on the address does not work, simply cut and paste http://www.woodworkersjournal.com/asia/Hangzhou.mov into your browser address bar.
Enjoy

Down-home in China

Skil In China

Skil has been putting out power tools for a long time, and the same can be said of Mike Graham, the plant manager for Skil tools in Hangzhou, China. I first met Mike years ago in Heber Springs, Arkansas … and in truth that locale seemed a bit of a more natural fit for Mike. His Southern drawl is pronounced, a fact that the Chinese people on his team seem to find a bit of a challenge.

Skil is moving to China in a big way, although it is nothing new to them. They have been in Asia since the mid 1990s. It is an inevitable move when the situation is looked at as a whole. Most of the parts that Skil is using in its power tools are made in Asia, so getting close to the source just makes sense. And there is hardworking dependable workforce as well.
When I asked Mike if Skil can build good quality tools in China, he said absolutely. “These folk are good workers and very diligent. There is no question that we are building very good tools here”.

The plant that I saw was very efficient, and remarkably tidy (much cleaner than my office). Skil is using the process improvement and manufacturing processes -- pioneered by Toyota -- that are now the gold standard in manufacturing systems around the world. As a frequent visitor to many woodworking tool-manufacturing facilities, I can say the Skil plant was a familiar sight.

And while it is clear that Mike Graham will always be more at home in the hills of Arkansas, it was also clear that he is moving Skil products forward in Asia with a sure hand.

Photos in this blog entry:
Mike Graham and your attentive editor. Mike Graham.
A group of Skil line-workers, meeting to improve the production process.
A happy forklift operator and a typical assembly line at the Skil plant.

Back to the Mainland

Back to China

Yesterday was a travel day, as we went from Taiwan to Hangzhou, China. I will visit a Skil manufacturing facility today and a Powermatic plant tomorrow. This time our travel was much smoother – all of our tickets showed up on the computer system and all the planes were on time. In the evening we had a walk around Westlake and lovely dinner.

The images here are to show some colorful scenes and characters that you might be able to find in Taiwan.

Enjoying Business

JET and Powermatic

As I spent the day with John Otto and Alan Huang from WMH – JET/Powermatic, something that my father taught me many years ago came to mind. “You don’t do business with a business, you do business with people”. From the moment that we stepped into the OAV Company, one of WMH’s key suppliers for about 16 years, I could see that maxim was absolutely true. OAV’s President, Mike Liu, started our time together by making tea. While we sipped, we chatted and learned about each other in a friendly atmosphere. It was clear that John and the folks at OAV were more than mere business partners – that a warm friendship cemented their relationship.

As I toured the manufacturing facility, Mike’s son, Dennis, explained their very modern and sophisticated systems. Whether they were making band saws, table saws, dust collectors or air filtration systems, they applied the same level of efficiencies and quality control procedures. An example of their sophistication is a weight-based inventory process, where when a bin of parts dropped below a certain point, their supplier – monitoring the weight via the Internet -- deploys a shipment to OAV. Just in time inventory, automated over the Internet.

Later, we were graciously allowed to see part of Mike Liu’s collection of Asian antiques. They were absolutely amazing. Everything from several carvings of “the happy Buddha” to exquisite ivory carvings.

Later, Alan Huang, Director of Product Development, took me to two more plants. Alan showed me the custom tooling and the extra steps taken to insure the quality of their products. A demonstration of balancing band saw wheels was very impressive. Even more impressive in my opinion was the level of testing and documentation that Alan showed me later at their Taichung office. Basically, if a problem appears with any JET or Powermatic tool, simply by means of a serial number, they can look at the quality inspection and testing results for that specific tool. Their record keeping is very impressive, documenting the products development process all the way through to the most recent manufacturing run and container shipment.

John, Alan and I ended the day by hooking back up with Mike and Dennis Liu at a lovely restaurant for good food and good fun. Mike was in a happy mood and made me promise to come back to Taiwan – next week! (I don’t know how I will explain that to my wife.)

Photos top to bottom:
Mike Liu preparing tea for his visitors. Dennis Liu explaining processes to your traveling editor and John Otto. The whole gang from OAV. Alan Huang explains the exacting band saw wheel balancing process. Alan and John Otto explain some details regarding the production of their PM2000 table saw. The support staff at WMH in Taiwan and a happy editor.