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March 1, 1999

3 Min Read
Purchasers Expect World-ClassQuality No Matter Where You Are

Injection Moulding International (IMI)asked a purchasing agent for a major multinational consumerelectronics company why his company did business in Malaysia."Sharp was the first into this area of Malaysia. Luster wastheir vendor. We came in late. They dig the well, we drink thewater," he answered, smiling. "It doesn't matter wherein the world we source our products, the quality must be the same.It must be world class."

We chatted while we were both waiting to see Lim See Chea, managingdirector of Luster Industries Sdn. Bhd. (Kedah Darulaman, Malaysia).Mr. Lim is very busy. That is because the Luster group of companiesis very busy. Customers like Sony, Philips, Sharp, Grundig, Thomson,and Sanyo will keep you busy, if you are good at meeting theirspecifications. At each of the three member companies of the LusterGroup, customer specification is the key criterion. Meeting customerspec is what the four directors and the 1,350-plus employees ofLuster have committed themselves to doing, six days a week, 24hours a day.

OO

Luster delivers
quality in high
volumes at costs
that are 30 percent
less than Japanese
prices.

As he stood to go talk with Mr. Lim, the purchasing agent turnedand said, "At my company, we have established our own internalquality mandates. We believe that purchasing world-class qualityhas a direct impact on reducing our own costs. If we are suppliedwith low quality, we have to increase our own quality manpower.We purchase all over the world. It doesn't matter where, the qualitymust be the same."

At the Luster Group, dedication to meeting customer spec startsright at the top. Mr. Lim and fellow directors are technical professionalswith hands-on, shop-floor experience. They know what it takesto do it right the first time. If there is any problem at anyof the five plants in the Group, any manager can directly telephonemembers of upper management, anytime, anywhere, even if they areat home. And that includes Mr. Lim. The directors assume fullresponsibility for any failures.

Privately held and 100 percent Malaysian, Luster is a growing,RM$ 100-million contract manufacturer with plants both built andstaffed for high-volume production. In total, it operates morethan 90 injection moulding machines ranging from 50 to 650 metrictons from JSW, Mitsubishi, Niigata, Nissei, Sumitomo, and Toshiba.

OO

‘We believe that
purchasing world-class
quality has a direct
impact on reducing costs.’

Most of its production volume is in audio systems. It has some650 active component parts moving through the shop at any giventime, using 400 out of its customers' 1,000 moulds moving througheach year. Yet, with all of this activity, in-house scrap is 1.7to 1.8 percent. Customer returns are only .4 to .5 percent.

Lim says that executive-level commitment and technical experiencehelp Luster deliver such quality in high volumes, just in time,at costs that are 30 percent less than Japanese prices and 50percent less than European prices. Production is for export, 100percent. Its labour costs are relatively low-about RM$ 580/monthdirect and indirect-but Luster has maintained its reputation withits exclusive multinational clientele by meeting customer specs.

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