Taiwanese Leading Fastener Company Creates New Momentum Through Digital Transformation

Small and unseen, fasteners hold together aircraft, machines, buildings and are a major part of Taiwanese export economy. Anchor Fasteners was founded in 1986. The company has been focusing on manufacturing a wide range of high quality fasteners and expanding product lines for the auto and bio-medical sectors over time.

Thompson T.H. Chang, the founder and board chairman of Anchor Fasteners, an industry veteran, has a mindset of leading the company to constantly evolve with the times. 

Situated at the Gangshan district, Kaohsiung, Anchor Fasteners is right at the central location of the industry where 70% of Taiwan's fasteners are manufactured. With their unique cold forging technologies, Anchor has been able to provide excellent products for clients’ needs. “The cold forging technology can improve 30% of the product strength and also reduce material costs,” said Chang. 

Chang’s vision for the company has proven successful and is reflected in the company’s sales. Today, Anchor Fasteners‘ main revenue comes from foreign exports and it supplies the most expansion bolts and rivet nuts in Asia and Taiwan. 

Witnessing the Fastener Industry Transition

Though Taiwan counts on exporting fasteners as a crucial drive for its economy, it’s highly affected by the international exchange rate and overall market conditions. Facing growing competition from foreign rivals, Chang believes transforming to a higher-value segment will continue to solidify Anchor Fasteners as a leading exporter in the sector.

In 2000, Anchor Fasteners turned to the auto segment. “It’s a lucrative market,” commented Chang. Auto fasteners now represent half of the company's production capacity. It also invested in automated optical inspection technology to increase yield.

Setting foot in the Vietnamese market was another major shift for the company. Since 2004, Anchor Fasteners has launched production lines in the country, manufacturing fasteners for scooters. Investing in magnesium alloy product R&D has also allowed Anchor Fasteners to enter into the bike industry and capitalize on its light metal needs. 

Chang has witnessed opportunities and challenges throughout the years and was determined to lead not only the company but also the whole industry forward. Facing the increasing threat of competition from China and Vietnam, Chang’s focus was on strengthening the competitive edge of Taiwan’s fastener industry.

“We have to develop more high-valued added products in order to get rid of the competition from China.” Chang emphasized. “It is why digital transformation matters! “ 

Covid-19 Accelerated Taiwanese Fastener Industry’s Business Transformation

The pandemic hit the Taiwanese fastener industry hard in 2020. In Q3 2020, Anchor Fastener had to deal with a series of difficulties including last minute orders from clients, appreciation of local currency, rising price of raw materials/international logistics and manpower shortage. As a result, Anchor Fasteners had to upgrade its business model considering 92% of its products are sold abroad. Considering this fact, digital transformation is a must instead of an option.

Pi-Feng Chu, the general manager of Anchor Fasteners described Chang's contributions to the company as a series of product and market strategy shifts as well as using digital transformation for the company to undergo an “internal upgrade.”

Digital Empowerment by the Cloud

“The advantages of digital transformation are immediacy, transparency and its accuracy.” Chu added. 

With the old ERP system, Anchor Fasteners could only trace production data through hard copies which failed to show detailed information instantly. Ever since the company started collaborating with Dot Zero, it has introduced a lean management system to its factories which connects to the existing ERP system and collects all the production data on the spot. It even gathers all the data from the production pipeline and runs analysis in the ERP system, “so that we can get hold of the exact cost of every work order”, Chu explained. 

The digital lean management system helps Anchor Fasteners to connect all the information together; from orders, worksheet arrangements, production, quality control, maintenance to product delivery. Adopting Microsoft Power Automate allows Anchor Fasteners to sync the ERP data to the cloud. Along with backup functions and security services on Azure, Anchor Fasteners can optimize the IT spending smartly. 

Microsoft IoT Edge sends on-premise data to the Azure Cloud and integrates with Anomaly Detection AI tools for preventive maintenance scheduling. Anchor streamlined the process and optimized unique workflows to get the visibility and agility the leadership needed for running a business.

“In the past, we used the traditional way to manage our staff. However, when the cost is increasing, we started focusing on improving our efficiency. This is where digital transformation came into play.” said Chu.

Anchor Fasteners has achieved some great results with the help of cloud technologies. In terms of productivity, it now only takes the staff around an hour to finish product inspection whereas it took half a day before. The overall equipment effectiveness (OEE) has increased by 15%. Managers also get a clear view of production line planning and optimization. “We can quickly decide when is the right time to relocate the production line overseas to boost the business performance.” said Johnson Chang, the vice general manager of Anchor Fasteners. 

In the meantime, the staff can spot problems on site with the instant data analysis and get alerts from the EMS system, decreasing the defective rate. Johnson Chang also added that empowering employees is one of the major advantages of cloud technologies, which allows the staff to work on more valuable and important tasks.

Connecting to the cloud has given Anchor Fasteners an enormous chance to streamline the process and products as well as internalize the digital-driven culture to the staff and the organization in order to provide better services to customers. However, it is not the end of its cloud journey. 

With every industry rethinking how a business is done, Anchor Fasteners has collaborated with Systex Software & Service and taken a stride to tackle issues such as net zero emissions, IT/OT security and digitizing the supply chain. 

The 36-year-old company is trying to adapt to a future-ready mindset and accelerating to a more modern business model. Daniel Li, director of IOT center of excellence at Microsoft said:” Microsoft considers Anchor Fasteners a crucial partner in the field of factory automation. In the future, it will continue to make an effort in AI and smart marketing. Microsoft will support and empower our partner through Azure IoT, Dynamics 365 and AI technologies to increase value and product quality.”