Building Resilience for Machinery Manufacturing
in Uncertain Times

Chien  0:03  
Hello, everyone. Welcome to another episode of Spark Your Vision where we invite business leaders across various industries to share with us their experience and their insights on trending topics that's currently shaping the business world. So before we begin, let me introduce the team. My name is Chien, I will be the host for today. Along by with me, we have two talented co-hosts, Alice and Wendy. Without further ado, let me introduce our guest today. We have a special guest today definitely Andrew Huang, CEO of Six Star Machinery Industry. Six Star is one of the top gear manufacturers in the world, with a focus on precision gears and gearboxes. And the company offers solutions for a wide range of industries, including machine tools, aerospace, robotics, transportation, and industrial machines. Andrew, please introduce yourself and you know, briefly an elevator speech of what your company does.

Andrew  1:05  
Yeah, thank you, Chien. Hello, everyone. My name is Andrew. It is a pleasure to join today's show. I'm from Six Star Machinery company. We are located in Taichung and in Changhua. And just like Chien say we provide very high quality customized gearbox solution to the global customer. Our company founded in the 1975, we have like 48 years of gear manufacturing experience. Now we are one of the top gear manufacturer in Taiwan. So, you know, our gear has been widely used from the underground, now like an oil drill machine; on the road, like your car, and even to the air.

Chien  1:44  
A very critical component of the products. Before I start the show, I always like to discuss some of the non-business side.

Andrew  1:52  

Chien  1:53  
And, you know, when I was looking at your profile, I mean, definitely very diverse. And I'm gonna use, you know, a couple of key words to describe you, right? Engineer, business management, fashion trendsetter, right? Industrial influencer, as well as author. Does that sort of wrap up closely to describing you with some of the main keywords,

Andrew  2:17  
You think, um. Yeah, you know me very well.

Chien  2:20  
Definitely, I think you your diverse background plays an interesting role in the succession process. You know, because you as a second generation business leader. You know, what type of role does that play, you know, with your diversity and background? And furthermore, how does that help? In terms of the future success of Six Star.

Andrew  2:37  
It did help me a lot. Our family business is about machinery, and I applied to college, you know, only one department I can apply that is mechanical. So I have a very solid mechanical background. But when I apply the master degree, I thought what I learned in the college might not be useful in next 10 years. And you know, as the second-generation, we need to, in the future, you need to run a business. So I though we need something more than mechanical. So at that time, I try to have more diverse background. 15 years ago, when my father assigned me to one of our China factory. That factory is about leather products, not about mechanical, and I need to manage the factory. So I think if I don't have that diverse background, I won't be able to run. So to run a different factory, you need a diverse background. And even now, when we talk about like a digital transformation, 10 years ago, you never learned this in, in even top school. Like I joined the Taiwan University, MBA degree that gave me the that give me a lot of different thinking as a business training. That diverse background really helped me to understand what digital transformation means for our business.

Chien  3:55  
Yeah, no, definitely. I think with the technical background with the non-technical business background, I think that is, yeah, I think your dad was very smart in giving you that opportunity to test your diverse background in that leather factory experience.

Andrew  4:09  

Chien  4:09  
Yeah, It was very good. Very good. So I understand you're a, you know, the founding members slash president of the G2 Machinery Organization Association, which is, I believe, the largest association for second-generation of this kind here in Taiwan. Is that

Andrew  4:24  

Chien  4:24  
Okay. No, no, that's awesome. And as a successful second-generation business leader yourself. You know, usually we like to say, you know, what are some of the recommendations you'd like to give? Right? What I want to take is the other side of it, you know, what is one thing maybe you would recommend, you know, the second-generation business leaders, which I'm pretty sure there's a lot here in Taiwan, what they should watch out for and maybe what they shouldn't do when they are beginning that succession process.

Andrew  4:47  
Yeah, you asked me a very interesting question. What not to do, right? I think I would suggest the second-generation not to think you are the successor of your family business. I've ever read the L'Oréal's founder, he ever say, "Even you are a general son, it doesn't mean you will be the general." There's many kinds of different model you can transfer or success in your business, for example, you can transfer to second-generation, but you can also transfer to some unrelated professional managers. So there are several way the second-generation when you plan to go back to your family business. First, you need to stay humble. You need to learn everything about your family business. Secondly, I think you need to think why you can add value for your family business. If you cannot, I was suggest even you should hire someone you know, even better than you to run your company, you can just stay on board and you don't really need to run by yourself. So anyway, in the end, we all hope our business can keep growing and be sustainable.

Chien  5:53  
SoI think sometimes it's better to be truthful, and you know, have someone else do it right. If someone else can do a better job, yes, right. That's the purpose of all or any business is to sustain.

Andrew  6:05  

Chien  6:05  
And adapt and thrive, moving forward. Speaking of sustainability, I mean, Six Star I mean, transformation has, to some extent been the norm, right. Over the years, the company has consistently been transforming since the foundation of 1975, with the initial focus on gear wheels, and then the next the following 10 years focusing on the vertical transformation. And then the later the 10 years focusing in or even entering the US market and even the recent transformation, which is to really enter the aerospace industry. So change, like I said, has been rarely accepted in Six Stars. However, I mean, these past three years, we've have experienced pandemic, which honestly, is a black swan, no one really expected it. So how did the pandemic affected Six Star?

Andrew  7:01  
Okay, I think, of course, pass three impact everyone. Well, we did in the past two or three years, we tried to build, we called a supply chain resilience. At first, we tried to lower risk of our own supply chain, that's important, because if you only have one resource from like China, and they cannot ship out, then your whole factory might stopped. So, so that's how we analyze all our suppliers, we make sure we have more than one supplier for every critical, you know, materials. And we make sure we can get from different location maybe from U.S, from Taiwan from China, other country, that's an important thing, because that makes sure we can keep delivering our gears to our customer. And the second thing for the supply chain resilience, we also tried to build up the our supply resilience for our customer. So now we are not only have factories in Taiwan or China, we are also expanded to another country. We want to make sure we have a very safe supply chain for our customer. And also our customer will feel very safe to work with Six Star. I think that's what we did in the past three years.

Chien  8:19  
No, that's very, very, very good. I mean, from an internal perspective, you guys were able to sort of reevaluate, you know, and make sure that there are, you know, backups and other options, if something does happen. And so and also from an external perspective, from a manufacturing perspective, you guys are also diversifying in various locations, you know, so that you don't have these geopolitical factors come in play. That's, that's wonderful, especially during pandemic, I think it's sort of helped push that. I know that the next 10 years is coming up again, right. I don't know, maybe give us a sneak sneak peek. What's the next transformation for the next 10 years at Six Star?

Andrew  8:55  
Yeah, Time flies, nest 10 year. Actually, we are doing now and for next 10 years. So I think there's three things. First is about digital transformation. And second is about ESG by we may, we might talk later. And the third thing is about our group diversification. We now start the digital transformation inside our factory. So for example, we we upgrade our machines so we install DNG machine, those machine, they have digital signal, digital control, digital monitoring. So we start from single machine, then we try to connect we call it an IoT connect all machines, it could send back signal to our major machine like a major machine we're feedback correction data to the machining machine so they could communicate.

Chien  9:51  
It's like becoming smart.

Andrew  9:52  
Yeah, last debut is just we are developing the advanced pioneer system that we call APS system. So. the system could automatic to arrange the work for every machine.

Chien  10:03  
Okay. Okay, so it's digital transformation internally.

Andrew  10:06  
Yeah, in the past 40, 50 years, our family business is more about a B2B business, OEM and ODM business. But now we start in a new leather product company with our own brand. And this new company is called Stella Forza. They would customize our product for our customer. So we want our customer could be very closely connected with us. So we call C2M, your customer directly connect to your manufacturer. They could be very closely work with us. We are now trying to do this branding thing may be something about ESG we call it a sustainable fashion, or we call slow fashion, that means we don't ever design a thing. And we even design one bag with 10 type. So you can just buy one, and you can get 10 types of bag. That's, that's a new thing we are now doing.

Chien  10:24  
So it sounds like I mean, the pandemic has accelerated the digital transformation process at Six Star from the internal perspective of upgrading your the product development process as well as the supply chain analysis and diversifying, you know, the risk analysis, I think that's, that's great, I think, you know, digital transformation. These past three years, a lot of companies are forced to really reconsider this topic. But however, I mean, many are forced to do it. But you actually went a step further and actually wrote a book about it. So which is something that I would like to sort of understand the reasoning behind that and maybe share with the audience, you know, the purpose of the book itself?

Andrew  11:37  
Yeah, for this book, resilience is about G2, you know, the group I found up. This group was founded in 2009. So it's been 15 years. And in the past 15 years, we try to learn a lot of things together for like business succession. In the recent year, we try to learn the digital transformation. We always try to learn a lot of thing together. I just think I want to write the book is about solving the second-generation in Taiwan, they should also know this or we can share those with other just not only G2 group but your G2 friends, so I write this book with the two Taiwan University, business school professor. And we think the best concept to cover whole these is called resilience. So only business, they can continue to build resilience, and you can be sustainable. That's why we write this book. And it's very honor because last year, we win the Golden Book price.

Chien  12:42  
Oh, wow.

Andrew  12:43  
In Taiwan.

Chien  12:45  
Okay, yeah. So, you know, through this book, hopefully, maybe the readers of the book or the second-generations can maybe learn, as well as maybe be more successful and maybe not go through some of the obstacles and challenges maybe you have gone through, as we all know, like you mentioned before, I mean, ESG is one of the hottest topics in business right now. And we like to usually start this session with some trends and statistics to share with our audience. So, Alice.

Alice  13:13  
Yeah, one of the central thing of ESG is reducing carbon emission, which is also another way of reducing waste for traditional manufacturing. So, a small manufacturing platform name Troy-based Plex system, has found that among global manufacturers, about 24% has implemented a small manufacturing initiative and another 22% has on the pilot stage. So we would like to know how has six star successfully accomplished this? And do you have any goals that you're aiming for in the near future?

Andrew  13:54  
I will say we are still learning for this new challenge ESG. So, first thing we did is we have some internal training inside our company. We also learned from outside like KPMG, we learn what is ESG second thing we starting  ESG form reduce the waste immediately inside of factory this also come by our concept, lean production. Lean Production also asked the factory increasing your efficiency and not to waste your resource. So we need to combine ESG with lean production concept so. And then third thing is we upgrade our machines. For example, we recently installed a DNG machine so you can see every hour how many you know, carbon emission, our plane is of course we were upgrading all our machines so we can know every machine inside our factory. Once we know we can try to improve that. All of these is what we're doing right now. Last thing, now we recycle in our gear factory actually will recycle or waste about our oil, our supplier always recycle oil so actually in our gear factory, I can say we have very few waste. So that's what we are doing right now,

Wendy  15:19  
As for the social aspect of ESG, according to a survey made by Supply Chain Management Review, 61% of procurement leaders suggest that social issues will be a critical part of their strategy in the next two to three years. And it looks like six star invests a great deal in local university provides to students who facilitate their education process. So my question is, what's the mission behind this? And could you share a specific example with us?

Andrew  15:52  
Sure, I just give you examples I think. First, Six Star has actually we have started cooperation with the local university, even in 25 years ago. So one of our very important prime manager, you know actually 25 years ago, was an intern in Six Star, but now he become our very top prime manager, you know, now we work more with local university, and actually now we call this pool education, you produce what your customer need. So now we call this pool education means that the university always discuss with us, say what kind of student or what attitude or what criteria you need. And then the school will adjust the program when they intern in our company, in Six Star or even the back to school for learning. After four years, they actually have been very well prepare some of them even after graduated become our small leader in the company. Actually, we cooperate with more than 10 local university and for training program, they will have like a six to seven different programs to cooperate. So that makes you we always have talents inside our company,

Chien  17:09  
Working with schools, as well as building them, you know, training them internally. And then furthermore, continuing their career within Six Star, I think that's, that's definitely a very important aspect of ESG, especially the social aspects, going back to the company itself. I mean, in Taiwan, there's a phrase, you know, what we usually call it, you know, invisible champion, right, or Yin xing guan jun. And I think Business Weekly actually gave it a more formal name, which is enterprise backbone enterprises. And in fact, they also gave it a a set criteria. Yeah, I think there are three specific criterias that a business must meet to be considered to be, you know, sort of the backbone enterprises. The first one is, you know, you have to be a top three in a specific market. Second, your current revenue does not exceed $5 billion in EU in Euro. And then of course, your brand recognition right now, it's still bubbling not not as well known yet. So it's, that's why as you know, there's that invisible aspect of it. I understand, you know, six star is fits those three categories, right, those three criteria. So you guys are actually one of the backbone enterprises here in Taiwan. Can you share with us? What are some of the key advantages to Six Star? And how does the company itself sustain its leadership in the industry itself?

Andrew  18:33  
Yeah, thank you, Chien. Well, we, we were really one of a backbone, say gear company in Taiwan. Yeah, but we might not be the champion. But yeah, we try to do do the very best. So I think four thing four advantage of our company Six Star. First is we always do customize, we do customized gear and gearbox, in our company, we don't have any standard product. The second thing is that we provide a total solution, all with an one stop shop for our customers. So whole process whole gear processes inside our factories, a customer know we can control every process and control the quality. Third thing is we always in search of excellent quality. So maybe like you know, we have an aerospace product. And now we also prepare in TS 16949 standard to make sure we provide customer very high quality and last thing is we have more than 45 years reputation almost 50 years.

Chien  19:39  
Okay. Okay. In addition to being the backbone enterprise, you know, in business, we often hear a phrase blue ocean, which essentially means business in a big market that's profitable. However, most of the times these markets are very, very competitive and extremely challenging for a lot of the business, especially Taiwanese businesses to succeed in the long run. So how the six star navigates in these waters and furthermore, ultimately achieve sustainable success.

Andrew  20:11  
I think blue ocean or even red ocean is still ocean, that means a lot of players were trying to go to their market. So most of our Taiwanese company like Six Star, we are more like blue lake strategy or blue lake market. What is Blue lake means the even smaller size, but very niche market. A lot of Taiwanese companies are, you know, in that kind of market. So that kind of market size, there will not attract big players to join. So you can dominate their market and be the best supplier in that market. So for example, for our company, we are the best pump gear supplier in even in the world, but only one is not enough. Usually you need to navigate more lakes. So then you collect more diverse market for your company.

Chien  21:02  
So just like a nature where a lot of the lakes ultimately funnels into the ocean itself. Yeah, so with Six Star through the accumulation of these different lakes, ultimately, it is potentially hopefully as big as ocean itself. So yeah, that is, you know,

Andrew  21:19  
Don't go to the ocean. Stay in the lake.

Chien  21:22  
Stay in the lake. It's much safer, right? There's um yeah, no sharks and everything. Okay, I understand. I mean, one of the reasons why we're having this show is also, you know, to showcase some highlights on the upcoming TIMTOS event. And the event itself is just around the corner. Actually, it's in March. So can you maybe give us or give the audience a sneak peek of what can they expect and see, especially in terms of Six Star technology and product showcase.

Andrew  21:48
I think want to share two things for the audience. First, our product main products about gears. So we hope our customer they could come to our booth just like a one stop shop, they can find a gear solution they need even more now is ESG coming. So we develop more we called that green product, green gear for customer that is with much higher efficiency for our customer. So for example, the pump product, they usually the efficiency will were like 60, 70%. But now our gears can reach like 96% efficiency. So that will help a customer save the energy save the waste. Second thing try to digitalize our machine. So our new IC forming machine. There used to be the manual you know, operation machine but now we transfer them to the digital control machine and also user friendly window operation system so our user they can easily to get start to learn this machine. So that's the two thing we want to share with our customers.

Chien  22:58  
No thanks for sharing, you know, it's definitely a sneak peek. And you know this year 2023 is a special year for events right? Essentially the borders are opening up the Taiwan government has relaxed on the quarantine policies. Is there a maybe a short invitation or shout out you would like to give to welcome these international buyers to your booth this year?

Andrew  23:21  
Global customers if you want find the high quality customized gear solution, welcome to visit the Six Star. Our booth is located in Nangang Exhibition Center Hall One and our booth number is M1002. We're in the fourth floor.

Chien  23:40  
Oh yes, definitely don't miss Six Star booth at this year's TIMTOS 2023. I usually like to conclude the show sort of on a softer end, yet one of your life models is "building resilience", which I think is awesome, because especially with all the news about the uncertainties and in 2023 as well as you know, the pandemics that we've just gone through what are three advices you would give to businesses not only just in Taiwan but around the world. And you know, to help them build resilience in the new normal.

Andrew  24:15  
You know, it is still about our new book. We talk about resilience, six forces. So today I want to suggest three forces to to everyone. First, you need to stay aware of risk, still a lot of uncertainty and the risk will happen in 2023. Make sure you know the risk. Second advice well you need to stay connect world is changing, industry is changing even industrial foundry is changing so you need to stay connect with more different people, different industries, and you can respond faster. That's a second thing. And last thing I would suggest you stay innovative, even now it's the economic situation is not good. You still need to keep creating new products, try to find new market and even think in new business, just like what I mentioned about diversification. So that's what I suggest for everyone. Yeah.

Chien  25:17  
Awesome. Andrew, appreciate all the insights and experience sharing for today. And once again, thanks for your time and coming on the show. Anyway, so that's all for today's show. And thanks for you know, all the audience out there listening. And also make sure to subscribe to the podcast channel. And you know, for more trending insights from business leaders around the world. And so also do leave your comments and feedbacks, if you would, like, you know, like our show, and then, you know, give us five star ratings and so forth. So, you can always follow us on LinkedIn and Facebook and the latest episodes. Thank you all. I'll see you all again.

Andrew  25:54  
Bye bye. Thank you. Bye bye. Bye bye bye.

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