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SCMP Reporter

An overhaul of manufacturing and delivery systems paid dividends for Integrated Display Technology (IDT) and earned it an HKPC Productivity Award.

   'We have had terrific performance with 56 per cent growth over the last three years,' IDT's Joseph Lau said.

 The company manufacturers a range of consumer products, including personal organisers, clocks and electronic barometers and altimeters, using liquid-crystal display technology.

 The main elements to its success have been the introduction of turnkey contractual manufacturing and MRPII - a manufacturing resource planning system.

  The former involves subcontracting the manufacture of low profit and mature products out to smaller firms.

 The move has improved productivity, providing flexibility to cope with in creased sales without the need to expand internal labour resources, production space and equipment.

  'After internal production capacity has been fully utilised, excessive orders for lower end items will be contracted out to qualified subcontractors who have been well trained by us on quality standards and production know-how,' Mr Lau said.

  'They have become our satellite factories. We concentrate on research and development while the firms have clear instructions on how to manufacture more mature products.'   As a result of this initiative, IDT's production output has increased 56 per cent without the need for costly internal expansion.

   While the number of production lines has remained the same, the increase in production means the percentage of labour costs has decreased from three per cent to 2.5 per cent over the last three years.

  These productivity improvements have been underscored by MRPII which aims to enhance the smooth planning and control of materials and improve the processing of orders.

  Since the new system started in July last year, IDT has seen a raft of improvements. The most spectacular has been the reduction of delivery times which have been slashed from 2.5 months to just one week.

  Inventory stocks have been cut from a 158-day reserve to 73 days and the backlog of outstanding transactions has been totally eliminated.

  The turnkey manufacturing approach, together with MRPII, have spearheaded a range of other improvements to boost productivity levels. These include the implementation of training programmes for workers and all levels of supervisory and managerial staff on the mainland which are supported by weekly operational and management meetings and an annual staff awards scheme.

  IDT has invested in state-of-the- art production processes, including bonding, injection moulding, tool making, spraying and silk-screen techniques.

  The company is also expanding its research and development capabilities to support new product development and upgrade the existing product range. This is done through teams in Hong kong and the mainland.

  Locally, the research and development group is responsible for product and graphic design. The mainland team re-engineers products. In addition, all software development, mechanical and electronic circuit design is done in-house.



'Satellite' factories contract scheme pays big dividends for IDT