Thai Fukoku Co., Ltd. is a manufacturer of anti-vibration parts for motor vehicles, air conditioners, and building elevators. For the automotive parts, it manufactures for many companies such as Toyota, Nissan, Mitsubishi, Isuzu, Hino, GM, Mazda, Suzuki and so on. In 2018, its sales reached 1,100 million baht. Thai Fukoku was established in 1983 as the first foreign branch of Fukoku Co., Ltd., Japan. Amid this year's unstable economy, Thai Fukoku is one of the entrepreneurs who have to face the changing market situation and do not meet the goal as set. In this situation, Thai Fukoku uses a defensive plan for management, but chooses an offensive plan for its production. 

The year 2019 may not be a good year for automotive parts manufacturers since many situations have a serious, direct impact on them. Under the negative factors of the world economy, automotive parts manufacturers have to find a way to cope with the situation. Recently, the automotive industry group has reduced its automobile production target in 2019 to 2 million vehicles from the original target of 2.15 million vehicles, which is 2.167 million less than last year. In addition, the production target for exports has been reduced to 1 million from the previous target of 1.1 million vehicles, while 1.142 million vehicles were produced for exports last year.

Reducing the target of automobile production is consistent with the continuously decreased car production volume. Since June 2019, due to the contraction in exports and the slowdown of domestic sales impacted by the economic situation, many large automotive parts manufacturers have had to reduce costs by laying off workers, ceasing to employ some workers temporarily, or cutting down working hours. All of these are the effects of the decreased purchase orders and reduced sales.

The afore-mentioned situations have been affecting not only the large auto parts manufacturers but also the small- and medium-sized ones. To survive, these companies will have to seriously adjust their plans to turn things around. Mr. Kazuhiko Kobayashi, the Managing Director at Thai Fukoku Co., Ltd., which has a major customer base in the automotive sector, has shared some ideas that will drive business forward in the midst of these difficult situations.

"At Thai Fukoku, the management team set the goals and a 3-year operation plan and we had one in 2018. However, in 2019, the troubled global economy and the plummeting global car trading has affected Thai Fukoku quite a bit. It was predicted that in 2019 sales could increase by 10% but so far it has not met the target,” Mr. Kazuhiko Kobayashi explained.

Mr. KAZUHIKO KOBAYASHI Managing Director Thai Fukoku Co., Ltd.

l  Be Ready for the Economy 

Thai Fukoku had a stable but flexible defensive plan according to its medium-term goals (3 years) planned in 2018. But the global economic crisis in 2019 was really fluctuating. Having a period of falling and disruptive sales affected by the decreasing orders from India, the company needed to adjust its goals by analyzing the current situation in comparison with the past situation and then predicting the future economic situation.

Seeing the increasing risks, Thai Fukoku has tried to position itself into the safest spot. The parent company in Japan is aware of the situation and willing to give a full support. If it has a lot of orders, it will consider sending them to Thai Fukoku to manufacture because the Thai Fukoku production line conforms with the production standards and the needs of the parent company.

In addition to the defensive plan for the automotive parts production line, which is the main product, Thai Fukoku also has plans to increase its revenues from other business lines, for example, by expanding more markets in the air conditioner and the building elevator industries. These are in the process of studying the business plans and learning about the production plans.

l  The Production Plan Must Be Offensive 

Thai Fukoku gives precedence to Kaizen making as its core value and has a dedicated team for the Kaizen operations. "Habits tend to make us think and work in the same framework of mind. But in reality, the environments and the market situations are changing all the time and so is the production line. There are many times we find that the work process that was once good and appropriate might not well serve our current objectives."

Kaizen is the concept that Thai Fukoku has adopted in management for efficiency in the production process, in which there is a collaboration of finding new approaches to constantly improve work methods. The important thing is that there must be continuous improvements. Kaizen drives the production process to improve while maintaining the original good standards. 

Technology Is Important to Maintain Manufacturing Standards 

Despite the decrease in orders in 2014-2017, Thai Fukoku expected to grow according to the market direction and its strong working model, which allowed the company to know the order volumes and the quality of products that customers need in advance, so it did not hesitate to invest in machinery technology to accommodate the forthcoming opportunities. In 2018-2019, some modern machines and technologies have been added to the production process, especially automated machines. It could be considered as another big investment, which was a spending of over 600 million baht. Our justification for that was to carefully choose cutting tools that will help enhance the production efficiency to serve the needs of our customers the most.

Milling Inserts: Important Helping Tools in Manufacturing Process 

The milling inserts are very important in creating quality workpieces. They define the quality of the work and create the uniqueness of the work.  They can be used to meet the needs of customers at Thai Fukoku.

The criteria used in choosing the inserts include:

1. They must totally and completely meet the quality standard of the workpieces.
2. Processing time is one of the factors that helps to compete in the industrial business because it can increase the productivity. 
3. The production cost must be within the determined criteria.

For the highest production efficiency, which will affect the quality of the workpiece and value for money, Thai Fukoku has considered to use the milling inserts from TaeguTec, a Korean cutting tool product for industrial applications, because it can meet the needs of working with metals in the manufacturing process. In addition, Thai Fukoku has also developed a solution to produce inserts customized to meet the needs specifically for Thai Fukoku production, which are not available elsewhere. These inserts, therefore, make the difference for Thai Fukoku products in terms of responding to the demands in the market very well.

"At Thai Fukoku company, we strive for your complete service satisfaction." We can plan the management of production costs such as supplies and inserts, give you the confidence in solving problems in the manufacturing process, and provide fast service in a timely manner without affecting the manufacturing process. We can also evaluate or create project line improvement for you to clearly see a concrete overall and worthiness of using our service. TaeguTec has been proven that it is able to meet the needs, especially in the "cost reduction", which leads to cost control plans. Additionally, TaeguTec has a team of professional engineers, who can provide you with technical advice. All of this ensures that the TaeguTec brand can be a significant production capacity, helping Thai Fukoku to meet the unique needs of its customers.

The criteria that Thai Fukoku used to evaluate the service of TaeguTec was QCD:

1. Quality - the quality of products must meet the determined objectives. 
2. Cost - the cost must be reasonable, and  
3. Delivery - the delivery must be done within the determined time frame. 

TaeguTec was able to pass all of the criteria above. That is why Thai Fukoku has been using TaeguTec with confidence.

With the offensive production plan, the focus on Kaizen making, upholding production standards with technology and searching for milling inserts to meet the needs of applications and a variety of needs that bring outstanding benefits, Thai Fukoku has been getting a lot of new projects that have made 1,100 million baht in sales in 2018 and it currently has 472 employees.

The increasing monthly production is a result of the cooperation of all employees who have been trying to find ways to improve work processes through Kaizen, 5S activities, as well as the vision of the executive plan of Mr. KAZUHIKO KOBAYASHI who sees the importance of technology and carefully chooses the milling inserts that help the production. Not only did Thai Fukoku withstand the crisis, but it has also made progress in its business.