Embracing change to achieve success

WITH 33 years of operation under its belt, precision manufacturer Team-Metal (S) has seen its fair share of change. But the company believes that embracing change is part of the formula for success.

Team-Metal is known today as a high-mix, low-volume manufacturer of precision parts for the life sciences, analytical instruments, medical, lifestyle and office automation sectors.

However, it was incepted as a buyer and seller of precision parts. As business flourished, Team-Metal went from middleman to manufacturer, switching gears to high-volume manufacturing of tape drives and office equipment such as printers, which gave it more control.

"It was a different ballgame," said Team-Metal managing director Chan Khai Seng. "We started buying a few old Japanese machines and set up a very small operation."

As Team-Metal evolved, its environment was also slowly undergoing transformation.

"About 25 years ago, we had a very acute labour crunch. So we started to look elsewhere," said Chan. Major customers were also moving to chase low-cost environments overseas.

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Tracking competitive environments and customer migration, Team-Metal opened its doors in Indonesia in 1997, followed by China in 2004.

With the global industrial shift, business orders for its tape drives and printers were also beginning to decline. With the longevity of the business in mind, Team-Metal turned to growing specialised industries.

Diversification to serve the life science and medical industries meant switching to high-mix, low-volume manufacturing, a transition that Team-Metal (S) general manager Mac Wee calls a "key milestone" in its history that required a "drastic change" in methods and mindsets.

"If we hadn't got through that obstacle, we would not be here today," he said.

According to Chan, before, it might have taken a few hours to set up a computer numerical control (CNC) machine that would run for three to four weeks, producing many thousands of pieces of one part.

"But today, we set them up in the morning, and they can complete the quantity by the afternoon. Then we need to do the set-up again. So the scale of skilled resources involved is tremendous."

Wee added that the new business model also required new technical considerations and changed the ways material purchases were planned.

Despite the challenges, the leadership believes that the shift has paid off. The life science sector in particular, Wee said, is stable. "You could actually predict what is happening next month," he said.

Chan added that demand from the industry is largely shielded from crises and recessions.

On the contrary, during the Covid-19 pandemic, some customers from the sector were building PCR (Polymerase Chain Reaction) devices, which resulted in a surge in demand of up to 300 per cent for some of Team-Metal's products. The company invested in new CNC equipment for turning and milling to meet its orders, Chan said.

With ageing populations and human illnesses, he anticipates that the business will thrive, even 10 or 20 years later.

Still, Team-Metal takes care to track key performance indicators developed in-house to gauge internal and external performance, monitoring areas such as human resource development, material controls, product quality and customer satisfaction.

To maintain its high standards, improve the work environment and give the business' image a facelift, all three of Team-Metal's facilities have undergone recent upgrades.

Wee said: "In this so-called 'dirty' or 'oily' business, we wanted to project an image that is synchronous with the life sciences and medical sectors because this is what the customer wants to see."

Anthony Chye, a director at Team-Metal and general manager of its Indonesian operation, notes that its facilities now have improved infrastructure and machines.

For example, sensors have been added to machines to reduce reliance on manpower and increase accuracy while providing real-time data for quick problem-solving, to boost productivity and efficiency, alleviating costs. The company aims to complete its Internet of Things implementation by mid-2022.

Recent renovations have also allowed the company to adjust the layout for better manufacturing flow.

Team-Metal has also dipped its toes into digital marketing in Europe and China to extend its reach, and ventured into online procurement of materials for greater accessibility and reliability, marking a departure from its word-of-mouth marketing and face-to-face meetings with suppliers.

In 2020, Team-Metal achieved year-on-year revenue growth of about 24 per cent, Chan said. He projects a revenue increase of 12 per cent on the year in 2021, with projects forming an expected annual growth rate of 10 per cent up till 2023.

The company continues to move forward. This year, it was contracted to reverse engineer and produce its first small assembly piece, rather than its mainstay of components.

In the future, the precision engineer seeks to collaborate with, or acquire, foundry shops to become a one-stop shop. It is also casting its net wider to venture to new regions abroad, with Malaysia in its sights as a possible target for expansion.

"We are constantly evolving," said Chye. "Our concept is very customer-centric. We look at what our customers are doing next, where they're going, how they are moving... as the demand changes, we have to follow and we have to evolve."