The Industry Has Effectively Moved up From OEM to ODM

Following decades of development, the industry has effectively moved up from OEM (original equipment manufacturing) to ODM (original design manufacturing), and has consolidated its competitiveness in the global market with products that measure up to DIN and ANSI standards and are well received in Europe and North America. Hsu indicated that the industry’s success is attributable to a variety of reasons. First among these is a well integrated supply chain composed of manufacturers and related companies, mainly in Taiwan’s central regions of Taichung and Changhua, which provides the industry with a base for sustainable growth. Benefiting from a mature manufacturing system, hand tool manufacturers are able to focus on their core competencies while saving money by outsourcing mold production, thermal treatment, surface finishing, and packaging services. Over 800 manufacturers and subcontract suppliers are currently clustered in Taichung and Changhua, relying on each other to compete globally on the basis of prompt delivery, reasonable price, and reliable quality. The island’s manufacturing network not only enables Taiwanese suppliers to achieve better production flexibility and increase product variety, but also gives foreign buyers easy access to the industry. Hsu noted that unremitting efforts to improve production technology are also among the reasons why Taiwan’s hand-tool industry has outdone most competitors. To fend off the price-slashing rivalry by emerging rivals offering lower-end and DIY-caliber tools, Taiwanese manufacturers have worked consistently to improve their production in cooperation with local R&D bodies such as the Metal Industries Research & Development Centre and the Industrial Technology Research Institute. This has enabled them to develop high-end, professional-caliber hand tools with reliable precision and digitalized functions, and thus build a higher profile in the global market. Digital torque tools, which require better electromechanical integration technologies to provide higher torque precision, are a striking example of this kind of improvement. These tools have been intensively developed by Taiwanese makers for use in auto production and repair as well as electronic production, and a couple of local companies, including Eclatorq and Stand Tools, have forged an international reputation with their digital tools. A hand tool’s durability hinges mainly on the quality of the materials in it, and Hsu explained that the high-quality steel supplied by the China Steel Corp., the largest steelmaker in Taiwan, provides the industry with another competitive advantage. Over the years, Taiwanese makers have dedicated themselves to the development of special materials that enhance the value and quality of their products. For instance, specially coated steel jointly developed by China Steel and industry manufacturers has been widely applied in garden tools to keep plant sap from blade surfaces, and plastic mixtures and composite materials have been used to make tool handles with comfortable, non-slip grips and resistance against oil and chemicals Source: hardwareshow.com.tw