New Quality Standards Mean Better Business For Taiwan's Auto Parts Makers

Spurred by manufacturers and buyers alike, Taiwan has achieved re-markable success over the past 10 years in the standardization and harmonization of basic quality-management systems and certification infrastructure. This is especially true in the island's auto industry, where safety and quality are the prime requirements.

Although more and more quality systems have been developed throughout the world, including common certification systems such as the ISO series and auto industry standards such as QS9000 (in the United States), AVSQ (Italy), and EAQF (France), a true global standard was lacking until the emergence of the ISO/TS 16949 standard a few years ago.

This standard was developed jointly by members of the International Automotive Task Force (IATV) and submitted to the International Organization for Standardization (ISO) for approval and publication. Members of the IATF include carmakers GM, Ford, Chrysler, Fiat, Citroen, VW, and Renault, as well as the national automotive trade associations of the U.S., Germany, the United Kingdom, Italy, and France. JAMA, the Japanese auto association, was also involved in the development of ISO/TS 16949.

The new standard does not replace other existing standards, but offers an alternative system for suppliers and their customers. Nevertheless, the ISO/TS 16949 standard is becoming increasingly popular not only with original equipment (OE) auto parts suppliers but also in the aftermarket, where manufacturers are aggressively upgrading their quality to OE level in the pursuit of more business as well as possible OE orders from first-tier buyers and auto manufacturers.

About 20 companies in Taiwan have gained ISO/TS 16949 certification so far, and have joined the approximately 1,700 qualified suppliers to automakers worldwide.

One of these local companies is Nan Hoang Traffic Instrument Co., one of the largest manufacturers of friction materials on the island. Chen Sou-yang, the firm's general manager, is confident with this new quality certification and a new series of products as well Nan Hoang will chalk up stronger sales in both the OE and aftermarket in the years ahead.

All Tests Passed
The company's newly developed AA series of friction materials have passed both dynamometer and real-vehicle road tests by automakers, as well as testing by the Greening Testing Laboratory of the U.S. This is clear demonstration that the new products meet all OE-parts quality requirements established by car and motorcycle makers.

Cheng says that his company? AA friction products include brake shoes, brake pads, and clutch disks for automobiles, motorcycles, bicycles, forklifts, agricultural machines, and all-terrain vehicles (ATVs). The new products use refined-material formulas that Nan Hoang has developed itself, using its strong R&D capability and the experience it has accumulated over the past 40 years.

Despite the slumping global economy, Chen reports, his company enjoyed double-digit growth last year, thanks he says to the outstanding teamwork of the entire Nan Huang crew. The company continues working hard to upgrade its R&D and manufacturing capabilities, and the ISO/TS 16949 certification system is playing a vital role in the upgrading of its production processes, quality control, and overall management.

In addition to constant efforts to upgrade the performance of its friction materials over the past few years, Chen comments, Nan Hoang has also been striving to localize its R&D capability and to use ?omegrown?raw materials instead of costly imported equivalents. The cutting of costs, he notes, is a decisive factor in attaining success in today's highly competitive market.

Toward that end, the company has invested significant capital in setting up its own R&D center and installing a complete line of state-of-the-art testing and measuring equipment to meet the requirements of local automakers, as well as in organizing a series of training classes for its R&D staffers.

As a result of these efforts, Nan Hoang claims the shortest product-development period in the industry and is able to develop a full range of friction-material parts for all kinds of transportation vehicles. Chen claims that the quality of his firm? Products parallels, or even surpasses, that of OE products.

The company has also poured huge amounts of money into advanced auto-formulating equipment from Japan. This high-tech equipment works totally in a sealed, dust-free environment with constant temperature and humidity; this not only boosts production capacity threefold, but also improves the accuracy of the formulation process.

Wide Product Range
The range of products offered by Nan Huang encompasses brake disks and drum brake shoes; friction materials for manual and automatic transmissions, continuous-variable transmissions (CVTs), and stepless variable clutches; and gear-tooth friction plates and brake linings, among others. These are used in both vehicular (including race cars and motorcycles) and industrial applications.

For motorcycles alone, the company offers about 300 models of disk-brake pads, over 100 types of drum-brake shoes, around 7800 different clutch disks, about 100 kinds of drive plates, and over 30 different CVT clutch disks.

The materials used in the production of these items include cork, carbon, friction-paper resin, asbestos, and low-metallic, semi-metallic, and fully metallic (sintered metal) materials. The company has developed more than 30 types of friction materials for use in pressurized, humid, wet, oily, or acidic conditions.

Item sizes can be up to l,200mm for round items and up to 999 sq. mm for square items. About 90% of the firm? Output is exported, mainly to Europe, the U.S., Japan, and Australia.

As safety is the top priority for friction products, Chen says, his company utilizes only top-end testing equipment for every step of the production process in order to assure the highest quality. Each Nan Hoang product, the general manager claims, has to pass more than 20 tests and inspections during the production process, as well as numerous road tests after production. "This is our core competitiveness," Chen says proudly. "Our products meet all of the requirements of both the OE and aftermarkets, and we even lead in the advancement of production and formulation technology."



Certification for the European Market
Another example of certification upgrading is provided by Yang Min Enterprise Co., a leading maker of shock-absorber coil springs and engine-valve springs for automobiles and motorcycles. Yang Min is an OE supplier to automakers such as Honda, Hyundai, and Daewoo for their Taiwan operations, as well as numerous manufacturers of motor scooters in Taiwan, Thailand, and Vietnam. It is also a key supplier of aftermarket and performance-tuning spring products to customers throughout the world.

To win more orders from Europe, Yang Min's Thai plant successfully acquired ISO/TS 16949 certification early this year, following about a year of preparation. Although this effort cost the company a great deal in terms of financial investment, the chairman, Liu Ching-liang, says that the gaining of ISO-TS 16949 certification has helped the Thai plant to achieve higher quality assurance and better overall management by making manufacturing, quality control, and administration more rational and efficient. "This certification is a must for an international company," Liu affirms. "It is also an indication of a company's commitment to globalization and quality upgrading."

With the success of the Thai plant under its belt, Yang Min now plans to introduce the quality standard to its plants in Taiwan and Vietnam. At the same time, according to the ambitious chairman, the Six-Sigma standard will be introduced at all of its plants.

Yang Min was established in 1972 and, according to its chairman, has unparalleled competitiveness and quality (thanks to its vertically integrated production facilities and its unmatched R&D capability) while its prices remain extremely competitive, even when compared with similar products from mainland China.

Liu says that his company is the only one in the line to produce its own raw materials (steel wire in various sizes), which meet all quality requirements throughout the world. Vertical integration has streamlined and rationalized the company's production processes, providing upgraded overall competitiveness resulting from high quality, low cost, and short delivery periods.

Also, Liu goes on, Yang Min is only one of a handful of auto/motorcycle coil-spring makers to adopt cold-forging methods in turning out its products. This helps achieve better quality stability in the manufacturing process, and gives the finished products better durability and loading capacity than hot-forged products.

Yang Min makes not only springs, but also the machines for making springs. According to Liu, the company has developed a comprehensive coil-spring production machine which has been patented in 13 different countries. Coil-spring production machines developed by his company, Liu says, can reduce the reaction forces of steel-wire materials and achieve much higher product quality. With these machines, he says, Yang Min's coil springs are twice as durable as required under OE standards.

The firm constantly develops new products and diversifies into new items that have higher profit margins and greater added value, but that require more sophisticated production technology. Among the new products are coil springs for performance-tuning auto-motorcycle shock absorbers and high-performance engine-valve springs. Some of these are even sold for installation on Formula 1 racing cars. Yang Min has developed over 50 tuning-coil springs for high-performance cars worldwide, and the number is increasing rapidly.

The company employs more than 400 workers at its plants in Taiwan and overseas. In addition to selling OE parts to auto and motorcycle makers in various countries, Yang Min's tuning-coil springs and valve springs are shipped to customers in North America, Europe, Japan, and elsewhere.