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Propelling a family business forward

Onn Wah Precision Engineering is powering ahead into Industry 4.0 with cutting edge technologies and innovation.

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From left: Brothers Lam Keng Yew and Lam Keng Wah. The next step for the company is to transform itself into a smart factory, where machines, automation and data analytics come together.

AT a time where many enterprises are still debating about making the move into Industry 4.0, local family business Onn Wah Precision Engineering is already powering ahead.

Ambitious plans that managing director Lam Keng Yew, a second-generation business owner, has in the works include 3D printing, data analytics, and smart factories - where robots and highly skilled workers labour alongside each other.

The firm may be taking a quantum leap into the future with innovation and cutting edge technologies, but not everything has to change, says Mr Lam.

Certain traditional values still prevail, and the 56-year-old company prides itself on a strong family culture where employees are treated as equals.

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It is this winning formula of the old and new that has served Onn Wah well, as the first-time entrant of the Enterprise 50 (E5O) Awards leapfrogged many of its peers to clinch the coveted number one spot.

Manufacturing is a competitive industry to be in, but Onn Wah has grown and changed significantly over the years to stay ahead of the competition.

Mr Lam shares that when he first joined fresh out of school in 1988, the business had only 18 people in total. Today, it is 235-strong with four entities under the Onn Wah umbrella, including subsidiaries in Suzhou, China and Taiwan. His brother Lam Keng Wah, who joined the business even earlier in 1981, is taking on the role of technical manager director.

When Onn Wah was first established in 1961 by Mr Lam's father, Lam Kok Luen, the business was primarily focused on producing drive shafts and propellers for small boats. He later moved on to more general engineering works.

"In the past we focused on general machining, and not high-precision engineering. We supported all kinds of industries for all kinds of parts," explains Mr Lam.

It was only around in 1985 that they started their first foray into precision parts, and semiconductors after that in 1997.

Their focus for many years now is to manufacture critical parts that are high mix and low volume, which are commonly seen in a few specific industries.

Today, Onn Wah's three main services include aerospace, oil and gas, and the semiconductor industry, which contribute more than 70 per cent of the total revenue. Revenue from the three industries is spread almost equally among them.

"Those are our three pillars," he explains. "If one goes down, the business can still depend on the other two."

Mr Lam adds that Onn Wah's diversification enables group performance to maintain steady growth regardless of market uncertainty and the ups and downs of any industry since 2009.

ALL FOR THE WORKERS

As far as Mr Lam is concerned, winning the E50 Award is not about benchmarking against competition, or gearing the company up for an initial public offering (IPO) like many of its peers.

He admits that the group had debated on whether to enter the E50 Awards, but it was the thought of his team that sealed the deal. "It's to give recognition to the staff. Because of them, we are among the best in the industry," says Mr Lam.

Subsidiary Onn Wah Tech had won twice at E50 previously and Mr Lam was around to witness the elation of staff and how it boosted staff morale. This led to his decision to take part in 2017.

The move has paid off handsomely as the group skyrocketed to the top at its very first attempt.

Mr Lam says that the company's biggest achievement is building a strong team of committed employees and engineers.

He reveals that an internal study has found that one-third of their staff have stayed with the company for more than 10 years, with 60 per cent who stayed above five years.

Mr Lam attributes this to the positive culture of the company. "There is no hierarchy as staff are treated with respect regardless of whichever job they are doing. We have a lot of communication with staff, and we will share openly if we are doing well or not. It's not top-down in terms of management style."

This has resulted in employees being unafraid to innovate, which is reaping benefits for the firm.

"The teamwork is quite strong and there is innovation from everywhere. They could be technicians on the shop floor, but they dare to take risks. We have this environment where they dare to try things out," says Mr Lam.

The company is also constantly in tune with what employees want in terms of their work environment. For example, Onn Wah has a nap room for employees to have a quick snooze in the afternoon to refresh themselves, which was done based on feedback from staff.

But like many other enterprises in Singapore, getting manpower continues to be a challenge as young Singaporeans are not keen to work in certain sectors such as manufacturing.

Mr Lam says it is proactively reaching out to fresh blood through internships and polytechnic tie-ups to meet their talent needs.

One new development that the firm is looking at to stay ahead of the competition is 3D printing.

Onn Wah is part of a consortium that started a 3D printing business in October 2015 to test out the market for 3D printing. It currently has three machines.

"We were afraid that 3D printing would replace machining, but we've found that it won't replace it as of yet," reveals Mr Lam.

3D printing has constraints mainly in terms of cost and the time taken. Instead of replacing machining, he sees it as complementary.

"If I want to use 3D printing, I would do it for parts that machining cannot do. The cost of 3D printing is still very high. This will change, but it won't be so fast," says Mr Lam.

The next step for the company is to transform itself into a smart factory, where machines, automation and data analytics come together.

"We need to go into Industry 4.0 to keep ourselves competitive, but we intend to do it step by step." he adds.

Currently, its subsidiary Onn Wah Tech has already started a pilot programme linking a group of machines together with sensors. The next phase of the programme is to put the data on the cloud with external analytic software to provide more useful information.

LONG JOURNEY

"We prefer to start small, verify it, before adopting in a bigger way. We believe this will be a very long journey before we can derive its benefits," he adds. Mr Lam explains that manufacturing currently produces a lot of data, but the problem is that it is very "scattered".

His goal is to gather all the data onto one common platform to use to their advantage. The company is currently working with a university to derive value from the data they are collecting as part of its project on smart manufacturing.

"We hope to find information that will make us more competitive, use less manpower, and drive further efficiencies. Now it's based on gut feel, and we want to know where we can improve further," explains Mr Lam.

Going forward, Mr Lam says that the industry will only get more competitive as cost will be a key concern. According to him, the demand for the industry will always be there, it's just a matter of who can deliver at the price point that customers want.

But while the future may be unpredictable, it is clear from him that the same spirit of innovation, far-sightedness and teamwork will continue to propel the business in the future, just like how it has done over the past few decades.

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