Yu Chee Leak, founder of electronics design manufacturer DES of Sg Petani, says two things are imperative for a business to stay competitive. One is to ensure quality and the other is to be able to move up the value chain. LIM WING HOOI reports.
IN a world where margins are tight and economic prospects aren’t exactly looking rosy, everyone is thinking about cutting cost. Many are tempted to go for a lower price quotation in everything and take a more “liberal” stand on quality, be it regarding materials, manufacturing processes or QC.
But for Databitz Electronics Service (DES) founder and managing director Yu Chee Leak, cost is just one aspect of manufacturing.
To him, what’s more important is the quality of the final product.
To allow quality to slip would be anathema to him. After all, as the saying goes: A small leak will sink a great ship.
Yu, who founded his electronics original design manufacturer (ODM) concern in 1999, says it’s not uncommon that customers come back to him even when his prices are higher than the competitors’.
“Sometimes our prices are higher by over 50%, but then again we use higher quality materials. There have been customers who have come back to us and shared that they had encountered defect rates of up to 80%.
“But with us, they are satisfied,” says Yu, who quips that DES stands for “design everything successfully”.
DES has been helping companies ranging from SMEs to multinationals to design various physical products — from home and office retail appliances like audio-visual amplifiers and half-boiled egg-makers to healthcare equipment and elevator controller testers.
Yu started DES in 1999 with a few partners after about a decade of employment when he held various jobs, ranging from being a technician in a computer shop to a service engineer with various electronic manufacturing companies.
“It wasn’t easy. We started by supplying electronic components and perfoming tests on electronic printed circuit boards (PCB),” he recalls.
Yu says he chose this business because it was a continuation of his interest in electronics and its possibilities.
With RM10,000 in capital and just one clerk, he started the company in a rented 1,400 sq ft office in Sungai Petani, Kedah. Back then, that was all he needed, and he could practically run the whole show all by himself.
Subsequently, the company started to do more testing work for manufacturers, including testing computer hardware, CD players, audio amplifiers and other electronic equipment.
Thanks to his exposure to various electronic appliances, Yu was able to understand how each one worked and was able to design different test jigs for these appliances.
However, the company has had to adapt along the way as the business environment evolved.
As more testing jobs moved to China, for example, DES moved on to doing assembly and testing work from 2001 to 2005.
To this end, Yu invested about RM100,000 for an assembly line and hired a few factory operators. Then in 2007, he took another step up the value chain by turning to design work.
According to Yu, the company had no choice but to move higher up the value chain because the margins for assembly work were low. On top of that, when assembly work slowed, he still had to worry about payrolls.
Today, DES operates on the premises of a brand-new 8,000 sq ft two-storey semi-detached factory that they own in Sungai Petani, Kedah, with 32 workers to cater to more design work for SMEs.
Yu says he invested about RM2mil into the new factory, incorporating more sophisticated testing and manufacturing equipment to ensure they would be able to function as a one-stop centre for the design, assembly and testing of ODM products.
“We are now able to cover the whole cycle of an electronic product — from designing it from scratch to when it becomes a functional and marketable product,” he says.
The range of work that DES does include hardware and software design, PCB assembly, mold fabrication, test designs and more.
The contracts that the company takes on range in value from just RM4,000 for simple development works to RM1mil for jobs like printed circuit board (PCB) assembly. Yu says these are mainly low-volume products for niche customers.
“One recent example that we are working on is LED lighting that is durable and stable enough for heavy vehicles, which we manufacture for a client. This client subsequently exported the product to the US,” he reveals.
Another example is a wearable device that is able to detect a hypoglycaemia attack in diabetic patients and subsequently sends a message via the smartphone to caregivers.
According to Yu, the device, which comes in the form of a wristband designed by his company, has the ability to detect the cold sweat associated with a hypoglycaemia attack via a sweat sensor.
Once this detection has been made, the wristband, which is paired to a smartphone via bluetooth, makes a phone call or sends an SMS.
This is made possible thanks to the software in a mobile application that makes decisions based on threshold settings.
“A lot of testing needs to be done as it is a medical product and it has to have high reliability,” Yu stresses.
He adds that when companies behind the devices are able to secure large orders, they would then engage large manufacturing companies to mass-produce the products DES helped to create.
Currently, the company is helping another company to manufacture a multi-function Islamic clock.
The clock, apart from having a backup battery which prevents it from shutting down during a power outtage, also allows users to programme Quran readings to be played according to prayer times.
“Users can also change the colour of the clock display according to their mood,” he says.
When asked about his move to invest in a new factory in this challenging times, Yu says simply that he is here for the long term.
The company’s revenue has been steadily growing from just RM100,000 in 1999 to RM6mil in 2015.
“Our customers have been with us for more than 10 years. And they are banking on our expertise in testing equipment. We work vigorously on the products we manufacture to ensure reliability,” Yu says.
Of course, just like any other business, Yu’s outfit needs to keep costs down. And this he does by leveraging all in-house resources to work efficiently together, especially in the area of testing and trouble-shooting.
“Design involves functionality and reliability as well,” he says.
And just as he has done over the years, Yu will continue to add value to his business by moving up the chain.
“We will develop our own products with our own branding in the near future,” Yu declares.
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