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Reaping the profits from investing in productivity
FOR semiconductor testing and assembly equipment maker Onn Wah Tech, cost is not an issue when it comes to raising productivity.
Since 2013, it has spent close to S$1.5 million investing in equipment to boost its manufacturing capabilities.
The company automated the pin insertion process with a machine that it purchased with the help of Spring Singapore.
The machine has reduced the number of workers needed to complete the pin insertion process from four to one. The results have been so good that the company is planning to buy a second machine.
Onn Wah Tech also upgraded its computers and used new software which has allowed it to speed up the manufacturing process and reduced tooling costs.
Automating production processes have not only helped the company to raise productivity, it has also reduced staff turnover.
One problem that it had previously was that some job functions were laborious and unpopular, leading to many staff leaving the firm.
This prompted Onn Wah's management to automate these processes in order to help the staff.
"The simplification of jobs has helped Onn Wah Tech to cope with staff turnover. Tasks are made easier as they have been broken down into simpler processes," said managing director Leong Kwong.
Raising productivity and cutting operational costs allowed the company to remain competitive amid tough business conditions, said Mr Leong.
One problem that management has consistently faced is being able to attract new blood, especially young graduates. Most are not interested in joining the company because it is an engineering firm.
There is also the problem of price wars among Singapore engineering firms when they compete to enter overseas markets, said Mr Leong.
"(Engaging in price wars) drive out our local companies. Singapore companies are not hunting in herds like Taiwanese and Korean firms which has proven to be successful," he added.
Onn Wah Tech believes that the government can help small and medium-sized companies become more productive by linking them with bigger firms to form strategic alliances and joint ventures.
"(This will allow firms to) shorten the learning curves and adopt new technologies to expand their core businesses," said Mr Leong.