Recession, But Firm Seized the Day to Do Better

By webadmin on 10:53 am May 05, 2012
Category Archive

Janice Heng – Straits Times

Singapore. The 2009 recession was an unlikely blessing for hard-disk maker Showa Denko HD Singapore.

Slow sales created the perfect opportunity to merge its two factories and become more productive.

But the streamlining did not see any of its 1,000 staff losing their jobs. Instead, the workers gained new skills and, in turn, a higher pay and better bonuses.

For the company, costs went down by 10 percent.

Yet the move was not just about hard numbers, but “intangibles,” like having ‘everyone together, so we can feel that we’re working together,” said Masanori Kudo, senior vice president of the business and corporate division.

Its efforts caught the eye of Prime Minister Lee Hsien Loong, who held the company up as an example of how firms can boost productivity in his May Day Rally speech earlier this week.

Showa Denko HD Singapore — a subsidiary of leading Japanese chemical engineering company Showa Denko — began operations in 2002, in a leased plant in Pioneer Road.

In 2007, it built another plant in its own building a few kilometers away, in Pioneer Crescent.

With production at full throttle at both sites, any plan to merge was out of the question — until the 2009 slump.

“Since operations were quite slow, we thought it was a good chance to move,” Kudo said.

The merger brought savings in rent, maintenance, utilities and transport.

At the same time, quality was improved as the first plant’s older machines were upgraded “to meet the customers’ higher requirements,” Kudo said.

The workers, in turn, had their skills upgraded too.

Workers from the first plant were trained to handle both the upgraded as well the main plant’s machines.

Also, about 10 percent to 15 percent of the main plant’s staff learned how to use the upgraded machinery.

As a result, workers can now be deployed across different production lines to meet shifting demand for each line’s products.

In addition, staff were trained to handle a larger job scope and more work processes. “We had to retrain anyway, so we decided to make it more in-depth,” division manager Oh Wai Some said.

The decision not to cut manpower, even with greater efficiency, was deliberate — and fortuitous.

In the latter half of 2009, business began picking up. Since then, the company has expanded its capacity by 30 percent, requiring it to even hire more workers.

The plant merger is one of two projects for which Showa Denko has tapped the Inclusive Growth Program.

The government-funded program helps finance productivity projects that share the gains with workers.

On top of pay rises, trained staff may get further increments and bonuses.

Ruzieyah Johri, who works in research and development, moved to the main plant last year. Her salary went up in March, thanks to gains-sharing and her work performance.

But the benefits are not just financial. She now has the chance to grapple with more complex and varied issues. Smiling, the 31-year-old said: “Every day is a different experience.”

Reprinted courtesy of Straits Times