As Singapore’s market leader in pneumatic automation products and years of solid growth behind it, SMC Corporation Singapore is in a sweet spot. But rather than basking in this hard-earned glory, Managing Director David Wong prefers to be proactive.
The company’s upward trajectory is in line with that of parent company SMC Corporation, which was founded in Japan in 1959. Now, it has more than 500 offices in over 80 countries around the world offering 700,000 product variations. Its ranks count 20,000 employees including 6,600 sales staff and 1,600 engineers.
It established its Singapore operation in 1974 as one of its first international outposts, assembling knockdown cylinders. “We were one of the first subsidiaries overseas,” David tells The CEO Magazine. “We grew from a very small set-up – a small trading office at Goldhill Square. And then from there, we continued to grow.”
It now commands about 70 per cent of the Singapore market. “We dominate the market right now,” he adds. “But that doesn’t mean we are complacent. We are doing what we can to defend our turf and continue to grow.”
Indeed, the company is achieving an all-time high track record in annual sales for the past two years. So it’s unsurprising that David is upbeat – even in the face of challenges such as the supply chain issues stirred by the pandemic. “Nobody can escape from this,” he admits. “Everyone has been impacted in one way or another.
“We’re still trying our best, not by ourselves, but together with our head office and our manufacturing bases. I thought supply chain issues would kick us very badly, and they did. But somehow we’re more than managing.”
It’s a calm and collected approach that has developed over time. When the pandemic first came to light, with so much unknown about both the COVID-19 virus and its impact, David adopted a defensive stance for SMC Corporation Singapore, like many other companies. “After a couple of weeks, I decided that maybe that wasn’t the right way to react to the pandemic,” he reflects. “Instead, we should be looking at how to get out there more aggressively, looking for more opportunities and being more assertive.”
People need to know what’s going on. In situations where things are uncertain, it’s important the staff all know what is happening so we keep them updated regularly.
With competitors retreating into the restrictions of lockdown, David took steps to help the company become “more daring”. If it could become more proactive and accept the new status quo while still respecting the rules and guidelines set out by the Singapore authorities, then he saw great potential for growth.
“We tried to accept that this could be the new norm and that maybe we should change our viewpoint and mindset,” he recalls. “We knew we couldn’t neglect our customers and felt that we could even gain some customers.”
And so the company began to evolve, finding new ways to communicate with its customers and with its own staff. “People need to know what’s going on,” he stresses. “In situations where things are uncertain, it’s important the staff all know what is happening so we keep them updated regularly.”
Catering to this whirlwind of needs while still ensuring the company progresses has been an unprecedented challenge, David admits. “The most important thing is that we still need to be a business – that focus is critical. Our management staff still need to be thinking about how to get more business, how to get the sales, how to motivate the salespeople to keep moving,” he says.
“The problem with working from home is that you can switch into a very relaxed mode, so we have to be very careful not to let that happen. SMC Corporation Singapore has reached a point where the only fear we really have is complacency, that we have become so strong in the market that we take too many things for granted.”
To fight this, David has created a system of rewards and sales management to keep salespeople motivated and “on their toes”.
In charge of keeping the lines of communication open and abuzz with activity is the company’s human resources team who have been “more active” than ever in recent years as they have transitioned to an increasingly online way of working. Staff training has also moved online as have management meetings, which have been easy to keep up because he also ensures they don’t drag on for too long.
“It’s common in Asia for people to have management meetings that last two days, but I just don’t think that’s practical,” he points out. “For us, it’s half a day maximum. Beyond that, if I can’t finish, I just stop there – we move on and do something else.”
Although both the company’s customers and its own people have embraced recent changes, David still believes there will be a swing back towards the old way of working as the pandemic subsides, driven by the undeniable value of face-to-face interactions. “Companies work well when their people know each other and feel for one another – whether it’s through sitting down, drinking coffee and talking about anything under the sun,” he shares.
In the past two years, we’ve performed better than ever before. We have hit new milestones in terms of sales volume and our market share is continuing to expand.
“These are the ways that people should be bonding and that even includes the relationships between our management and staff. I’m still very much in favour of bringing people back into the office, as long as we don’t break the rules.”
Taking a flexible approach is key to achieving this, David stresses, as is the implementation of strong in-house safety measures. In fact, the company has formed a dedicated team to ensure that all of its ducks are in a row so that the transition is as smooth as possible.
“Overall, we have responded well to the pandemic,” he sums up. “In fact, in the past two years, we’ve performed better than ever before. We have hit new milestones in terms of sales volume and our market share is continuing to expand. Business-wise, that’s very good for us.”
One of the major contributing factors to SMC Corporation Singapore’s overall success has been its profound understanding of the importance of a business continuity plan, according to David – something which he says many other companies are only just realising. The past few years have seen the corporation work incredibly hard to ensure it is in a strong position to take on any further setback.
“As a corporation, SMC has started to invest very heavily in increasing its manufacturing bases and even increased the number of data centres we have,” he reveals.
SMC Corporation Singapore is “very involved” in these plans, with one of the data centres based in Singapore and set up to cover a number of Asian countries. “You can have a situation that is totally out of your control as we have seen, so being prepared and investing far more heavily than ever before, that’s a very good thing that the corporation has done,” he says.
Although well established in Singapore, SMC Corporation is a relative newcomer in many of the other South-East Asian countries that David looks after. But he is harnessing the company’s learnings of the past 50 years and using them to its benefit. “We have lots of experience in Singapore so I’m able to enhance their chances of success by telling them that they don’t have to reinvent the wheel,” he explains.
You must form a team to run your business with. If you try to do it all by yourself, you will burn out. I think anybody who tries to do it all by themselves is not being realistic.
“That is a big reason why we have grown very quickly in those countries. In many cases, they can just tag onto what we are doing and become a part of it – whether it’s ERP, policies or strategies and how markets typically grow. They can learn from it all.”
Indeed SMC Corporation Singapore is flourishing in these markets, with Indonesia and Vietnam performing particularly well with expansion of the number of branches in both countries on the cards, While this ramps up operating costs as compared with its lean Singapore operation, it is still good news for the company, particularly as the market shifts, according to David.
“The global market is very dynamic,” he stresses, highlighting the growing importance of the semiconductor wafer market. “We started off with most of our business coming from factory automation, but the Singapore market is moving away from that now the wafer industry is getting larger and larger. So the supply end of the business is getting larger and if we had not been prepared for it, we could very well have missed many of the opportunities.”
David’s own leadership style has certainly been an important piece of the puzzle, helping in no small part to guide the company through these tricky times. For him, this means really understanding the market he operates in on a deeper level. “That ensures that you know what you are doing, whether in terms of a business plan or sales strategy. You have to be very involved and spot anything that may have been overlooked,” he says.
“Besides that, you have to earn your team’s trust and respect. They need to know what you’re doing and that you’re not just doing it because you want to show them who is boss.”
Treating each member of the team with respect and taking an interest in who they are as a person is essential, he insists. By recognising their strengths and weaknesses, then establishing a good balance, David believes you can organise people in such a way to effectively drive the company towards greater success – a win–win for all concerned.
“You must form a team to run your business with,” he warns. “If you try to do it all by yourself, you will burn out. I think anybody who tries to do it all by themselves is not being realistic.”
David predicts that this year will see SMC Corporation Singapore continue to grow strongly on last year. But for him, that growth won’t be down to working ridiculous hours or letting his health suffer for the sake of work. It is rather about finding the “right balance” and allowing others to shine too.
“If you don’t provide people with opportunities, the good people will move. So we try our best to provide internal growth, we train them, we give them opportunities and empower them with what is necessary for them to do their job well.”