NEWS & REVIEWS

"WITH STRONG BASES": Latin America's Música & Mercado magazine visits the HERCULES factory

The Hercules factory inTianjin produces 4 million units a year

By Luis Alberto Tuculet
(For the original Spanish version, click here.)

Differentiated products and attention to details, passwords for the growth of the international Hercules brand

Situated 25 km from the center of Tianjin and 70 km from Beijing, KHS Stand Factory has produced instrument support systems (stands for wind instruments, guitars, keyboards, etc..)  since 1994 in a plant of 10,800 square meters. Due to high production capacity and a large number of employees, the KHS stand factory is among the five largest instrument stand manufacturers in the world, with a 10% market share.

This stand factory currently produces about 4 million pieces a year, offering a full line of multifunctional products. More than 600 employees produce over a thousand different models.

The process of ingenieraría has produced results

The seeds of success

While KHS production in China began in 1994, the story begins even earlier. Previously the plant was located in Taiwan. In total, this amounts to just over half a century of experience in the field.

The move was a point of influence for the company. Previously, production was about 40,000 articles per year. In 1996, two years after their settlement in China, production reached 800 000 pieces per year, 20 times as much.

Innovation also found its space in the new plant. A system was implemented whereby the company makes prototypes for distributors who can then see them and evaluate them. This system allowed them to receive suggestions first hand from people with more contact with the end consumer and who seek to satisfy those needs.

And for the future, the company plans to use non-traditional materials and new products, released in part from the limitations imposed by the metal in design and production.

For example, the TravLite series was launched two years ago where the trumpet and clarinet stands occupy a minimal space and fit into the musician’s case, an indicator of the horizons searched for by the company.

"Instead of saying that we are different, we are simply who we are," says Wenn Cheng, marketing manager of Hercules.

The brand

Nothing is as important as a good name, and Hercules managed to position itself as a star of trademarks for KHS. And as it always happens in these   cases, what is hidden behind the story deserves to be told.

The company had a reseller world at the time, that meant enough for the segment. When they started production in China in the late 90s they did not produce in large quantities, but two years later were able to supply the needs of market. "We had everything ready.” Cheng says they were very active in finding distributors and also were in partnership with an extensive personal in Taiwan at the time. She adds, "Thus, the most experienced were brought to China. Based on our experience, we soon decided to build our brand, Hercules Stands. We launched in 2002 and started the distribution process at the global level. "

In the same year the company received ISO 9001 certification and between 2005 and 2008, began a process of resource integration that allowed them improve the production system and improve efficiency. This allowed for a significant adjustment in the speed of deliveries..

"Because of these systems and our commitment, we have a more stable and controllable supply of the market, " Cheng says. .

Throughout 2009, growth in installations, the number of employees and business, created a sustained increase in Hercules’ production. This is reflected in the choices of models; in just seven years there have been a total of more than 150 updates that are distributed in almost 90 countries, with considerable success with sales.

Well-oiled Organization

Working with different distributors indifferent countries implies a significant effort to coordinate tasks.

The company was organized by the clear leadership of Taiwanese general manger, Wendy Hsiao, who is a specialist in organizing tasks, and of particular supervisors.

Different divisions were developed and one of those was the factory, which handled assembly and processing. “Quality control was established, which checks all processes on the assembly line to ensure the integrity of the products. Even when they receive gross materials, they are checked before entering the production area. And for this feature with some machines and samples for comparison, if there are rejections, materials do not enter."

"Another section is the R&D, the most important department in the factory, where we have about 60 technicians responsible for creating proposals," she says. "We also have the production planning area.” This is very sensitive area due to the large number of different products produced, and can be as varied as a TV stand a guitar stand or a trumpet stand.

Differentials

One of the indisputable points for the success of any business is differentiation from the rest of the competition in the market. Whether to specialize in a particular type of product or as the case of Hercules, to specialize at all! "We have a full product line, if you need a different model we have it. We are multi-operational.” Cheng enthuses. "If you want to become a distributor, we can talk more beyond that we generally have exclusive distributors in all the countries we serve. If you want to have your own brand we can do it together and if you want to create a business with our designs, we can help too."

Hercules regards itself as fast and innovative. And obviously if a company survives more than half a century in a highly competitive market it is necessary to be so. "We have great experience in designing and producing stands," says Cheng, "but we also want to meet consumer and market needs and, therefore, we arrange special visits with distributors so they can evaluate and comment on products.” To get even more "inspiration", the technicians attend music conventions so they can hear directly from the consumer what he needs and to get an overview of the market.

"Beyond quality control, in the factory we also  have people who monitor employees to avoid unanticipated delays, " says Cheng. production is very dynamic, it should be flexible and yet meet the deadlines of delivery of orders. "Our usual term is 30 days, but if you urgently need a product, we can deliver in 10 days. We are very flexible," she argues.

A matter of price?

It is commonly thought that the success of a particular business model is subject to the final price of products sold, but this is not always true. Hercules products, by their own admission, are among those with an "Average price that is a bit more expensive." "But they present a flawless finish without gaps, being completely polished products. High quality, as well as careful design, and customer service. The product are tested and approved, just the opposite of the typical product made in series, without concern to quality, "argues Cheng. The wages paid are also higher than average. Keeping satisfied employees and producing more, with good quality, requires economic recognition too.

Strategic plan

An indicator of a corporation’s success is the ability to increase the business time parameters framed in a wider strategic plan. This is confirmed by a long list of successful companies with decades and centuries of life.

Hercules can be considered a member of this group in their own right. "Our company has vision and stability, we need not worry about the danger of extinction; we have always planned for the long term, and we are very serious in relation to this business, beyond our long history," Cheng explains. "We service even small orders as urgent,” she adds. “When our dealers have problems, we contact them to find a solution and to resolve it within one month. "

Música & Mercado Latin American trade magazine

All services

Hercules is aware that in a globalized world where distances are virtually eliminated via the Internet, they need to put special focus on customer service. The site has an area to receive e-mails from customers and the final consumer, through which the company can "hear" the needs of a specific consumer. "Generally, we ask for simple things, but that really work.  Even some designers create projects that, if they work and demonstrate an acceptable cost, can work with us.” Cheng says, "Our idea is to open a market window. We know the general scenario but if we do not talk with the consumer, we will never know what he needs."

But the R&D service also passes on to the client the possibility of saving money. In this sense, Hercules developed  a line of saxophone stands with a number of accessories that also holds a clarinet. That is, two for the price of one. The reasoning is "You deserve better support, "Cheng says.

Another major design concern is portability. The sine qua non is to be compact and take up a minimum of space. This charge has resulted in a catalog of comprehensive product offerings that are durable, lightweight and meet  more than 80 international standards. "We invest a lot in design, not just support,” Cheng notes. “Our stands are functional, surprising and exclusive.

As evidence, the company has planned a release schedule of close to 20 new products per year. This is one factor responsible for the company’s market share growth. The equation is simple: product design that  gains visibility , a strategy that has paid off since it was implemented in 2005. And stop thinking. The "I Stand" for guitars, for example, is like a frisbee (Oval disc) of simple yet striking metal and plastic, which seems indicate that in terms of design, Hercules  still has much to say.