A Transnational Invests Millions To Reduce Time to Market

Palo Alto Manufacturing Group (PAMG, Taipei, Taiwan) was formed in January1997 when it merged with Palo Alto Design Group (PADG, Palo Alto, California,USA). Prior to the merger, PAMG was an independent company with an exclusivecooperative agreement with PADG for mould design and manufacturing andfor coordinating manufacturing subcontracting. Today, a year after theconsolidation, PAMG has an annual sales turnover of US$ 100 million andis merging all of the company's tooling, injection moulding, and assemblyactivities in its new US$ 30 million manufacturing campus. Company officialssay this large investment will reduce the time it takes to go from productdesign to first trial from two months to two weeks.

John Hsu, vice general manager of the tooling department at PAMG, saysof the merger: "We are one company now. Before, if PADG customershad a problem, they could not reach us directly. Now they can come to uswith their problems. We can quickly provide them with solutions. It strengthensour cooperation both with PADG and with our customers."

The parent company of the two entities is called Palo Alto ProductsInternational, based in Singapore and truly a transnational operation.It designs, engineers, and manufactures enclosures for the global informationtechnology (IT) market. A specialty of the company is computer housingsin moulded PVC. Reducing time to market is vital for customers like Dell,Micron, Motorola, and U.S. Robotics. After all, the product life of a computeris said to be only about 18 months.

Hsu believes that by consolidating manufacturing, PAMG will reduceits lead times by a third: "Before, when dealing with a number ofvendors, we moved information around from shop to shop. This introducesa greater chance for human error to enter into the process. Our vendorsare very good, but we want to make our products perfect, so we decidedto do it all ourselves. It will improve responsiveness, customer service,and quality control, while reducing lead times."

PAMG will have three facilities on its manufacturing campus in TaipeiCounty when it opens for business early in 1998. The 3,600-sq-m toolingplant represents US$ 6 million in capital investment. PAMG is purchasingthe latest models of DNC mouldmaking equipment from the likes of Agie andMakino for its tooling plant, which will employ 20.

Its 1,207-sq-m injection moulding plant also will employ 20. PAMG hasalready purchased 14 new Toshiba machines, ranging from 90 to 1,300 tons.

Presses are equipped with robotic parts handling and other automatedperipherals, and will be expected to run about 8,400 tons/year of Geonand Kaneka PVC. "We have access to 50 more machines through vendorswe still use, should there be capacity restraints," Hsu adds. PAMGhas upgraded to ISDN-line communications with its vendors. The three-story4,800-sq-m PAMG assembly plant will employ 360 workers, 40 per line. Padprinting and decorating secondaries also will be in the assembly plant.

Design and engineering departments will remain at PAMG headquartersin San Chung City, Taipei. The company runs 30 sets of Pro/E there on workstations.Its CAD/CAM/CAE systems and databases are fully integrated with computersat PADG in California. Data files are exchanged across the Internet. Underone "virtual reality" roof, the company hopes to improve qualityand reduce lead times from art to part, affording its customers more opportunityto generate revenue.