Hong Kong Manufacturing SMEs: Preparing for the Future

83Datamatic has worked hard to develop a goodreputation and a good client network. Throughthese assets, Datamatic has advantages overMainland China owned competitors in obtainingbusiness, in implementing international businesspractices, and in maintaining good customerrelationships over the long-term.Datamatic moved into China to follow major clientswho began setting up significant manufacturingoperations in the PRD. The company identified apossible partner in Guangzhou and formed a jointventure in 1995. This helped reduce land and labourcosts and improved access to labour. Datamatichas found that workers from Guangzhou are lesslikely leave the company and set up as competitorsthan workers who come from other parts of China.Knowing them to be more stable, Datamatic targetsworkers from Guangzhou. Increasingly however,Datamatic is finding that it is difficult to attractworkers from Guangzhou. In recent times, thismeans that Datamatic has had to look to recruitstaff from the Northern part of China.The company knows that its staff make thedecisions and take the actions that will help itremain competitive. This means that the staffhave to be well trained so that they are capable ofmaking decisions and taking action as required. Tothis end, Datamatic has in collaboration with severaluniversities implemented a number of training andeducational programmes aimed at developing itsstaff.Quality accreditation is important to Datamaticas a signal to its customers that the company iscommitted to quality, and as a means of drivinginternal improvements. Datamatic has ISO9001:2000 accreditation and has adopted elementsof ISO 16949 in its manufacturing system. Thecompany has also instituted a Quality ImprovementCommittee to help review and improve productstandards. Datamatic has received an “OperationExcellence Award” as well as awards for “moulddesign” several times from the Hong Kong Mould &Die Council.Datamatic does no direct marketing these days,because it operates in a niche market in which allthe key players in the industry know one another.The number of major clients is “less than ten”and the number of firms that Datamatic counts asserious competitors globally in its niche is between10 and 15 companies. Datamatic has a smallercapital base than all the companies it considerscompetitors. If competition was based purely onfinancial strength rather than on other factors likequality, innovation, and reliability, then Datamaticwould have to fight hard to survive.The General Manager of Datamatic, Mr Leton Lee,thinks that the most important element of successis being aware of changes in market, changes intechnology, changes in business environment,fundamental changes to the industry, and change ingeneral. Companies have to learn how to managechange and how to respond quickly to shifts inthe factors that affect the business. Datamatic hasadapted to the need to deal with change by findingan “optimum size” and sticking to it. Datamatic’sbusiness is set up to afford maximum flexibility. Theproduction line, in particular, is designed to be ascompact as possible to enable Datamatic to be moreflexible and responsive to client needs.Future PlansDatamatic plans to maintain stable and steadygrowth into the future and does not intend doinganything “too aggressive.” This translates intoexpectations of revenue growth of around five percent each year for the coming five years, greaterthan five per cent increases in profit, and doubledigit salary increases for staff.