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DIALOGUE: Talking with Leo Liu about OPERATIONS OPTIMIZATION, SVP & Managing Director of TriVista
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dia01By Darren Grosvenor

TriVista China Leader summed things up quite well he noted that his team started their firm to be able to help companies with a Greater China presence achieve operational excellence and support them with their operational strategies globally. As the corporate environment here evolves, Chinese companies will need to continue to adapt their strategies and compete on a global level. They must deploy the same type of operational best practices that Western companies are utilizing in higher cost regions. That is what we focus on.

Can you describe yourself and your expertise to our readers?

Tianjin is my hometown. Since I grew up here, I knew I wanted to have my career here. I am currently the Managing Director for TriVista, here in Tianjin, which is our Asian Headquarters. Prior to joining TriVista, I worked in various industries and business covering different functions of the senior leadership team, and eventually found that my Lean and Six Sigma Manufacturing experiences might help a lot of other western companies as well as Chinese companies in operations performance improvement.

I set up TriVista Tianjin in 2008 while my partners worked with me in Tianjin since 1990's. And we all believe that Tianjin is a great industrial center for operations consulting market

The reason I want to be a consultant is simply because this is how I can help other business improve their performance, and the consulting industry is a new and growing industry in China.

dia02What is Operations Consulting and which industries and geographical areas does TriVista support?

TriVista management consulting is assisting businesses in several different areas of expertise: Operations Continuous Improvement, Mergers and Acquisition Support, Supply Chain Management and Footprint Optimization, just to name a few. We have offices in Tianjin, Shanghai and Shenzhen that support Greater China. This allows our team to provide Lean and Six Sigma operational best practices across a number of industries throughout the Asia Pacific region. We also have global locations such as in the USA, Singapore and in Manchester, England.

How does having a Global Team help you support your customers?

By being a global organization, we can assist clients from various private equities and other entities in many parts of the world to not only choose which factories to buy or to setup, but also help them to do the due diligence required. I am not talking about the financial part but rather the manufacturing part. We have coined the term: Quality of Operations (QOO) which means Operational Due Diligence. By our team visiting and evaluating the factory we can see that the production ability and other factors match the financial numbers. Our team members are not just students that graduated from college, we are professionals that have held high-level management positions in the manufacturing sector with decades of expertise and we know what the operations (suppliers included) must look like to generate certain production output.

What can companies do to foster efficiency and cost savings in manufacturing while still maintaining the best quality control efforts?

By using operational consultants, an organization can apply the benefits of Lean to optimize the manufacturing process. Sometimes there is a cost associated with the change, but the long-term effect is a cost savings.

dia03Six Sigma has been around a long time. Is it still able to get the best results?

It has been around since the Jack Welch, G.E. days, but still works well today. By digging deeper into the collected manufacturing data, weakness can be exposed and this allows the organization to focus on the root cause of their defects in production. Organizations like NASA, which just can't afford a defect, use Six Sigma.

Do you feel Lean is a replacement for Six Sigma or should they be used together?

It is not a replacement but rather a different way. As I mentioned, Six Sigma looks at a large amount of data to hon in on a particular part of the operation that needs to be dealt with to make the quality improve. Lean, on the other hand, was invented by Toyota and looks at ways to make the organization more efficient, ergonomic, and reduce costs or waste. For example, if the production line is too spread out and the time it takes the unit to reach the next station is too long, that is not only waste of labor but also of time. By bringing the stations closer together, the waste is reduced and possibly the communication between the two stations is increased as well. Lean is focusing on waste reduction which six sigma is focusing on systematic quality assurance and improvement.Lean can be used on its own or together with Six Sigma as they achieve different outcomes.

I see that ITT started out in Tianjin back in 1992, what are the challenges faced in the manufacturing sector today versus back then?

Back in that period, manufacturing had a lot of investment since the returns were quite high, but today with the Real Estate market being so strong, there is less investment into the factories.

Do you see manufacturers expanding their footprint in China or consolidating?

Consolidating is the right word because, you know it is quite interesting that many people in China say we are going down and down. They think we are losing many opportunities to India. But, in fact, China is just slowing down and not in a freefall. Existing footprint is consolidating. In some cases, back to the USA as their customers may be within that country or there might be incentives to bring it back.

What do you think of when you hear this statement by Steve Jobs: "You always have to keep pushing to innovate"?

The U.S. is the innovator and the structure is setup to facilitate that. The US culture instills the desire to be entrepreneur. Within China, there is only certain regions that have this desire. The current inventions cultures within China are not real inventions that lead a new industries or a new technology. China is building the foundation for future creative inventions.

Can you describe the Human Resources situation for manufacturers within China?

Several organizations have moved their operations to Indonesia or other countries to try to reduce their labor costs, but they are finding that the overall costs are the same or higher. Here is why: The other undeveloped countries do not have the same amount of trained labor, lack of infrastructure and lack of industrialized supply chain. The raw materials or sub-parts of the products may still come from China. So even if the labor-intensive industry is moved to another country, the per hour labor cost may be less but they might take longer to produce the product with higher logistic and material cost.

It is true that the labor cost in China is increasing, but the big problem is that the labor is becoming more picky about the work they do. They just do not want to do the tougher labor work like cut-and-sew and granite production industries, etc.

Higher labor cost should not discourage investment within China since there are other factors and favorable Government policies that can make the overall cost (logistic/supply chain, etc.) nearly the same as in other nations.

Can you describe the future business environment in China?

The educational system needs to evolve to foster innovation and creation. We are training operators and not managers or inventors.

I hope that the domestic market will be more creditable so the investors will see the pay-back is similar to the real estate investment. Also, this credibility can help the investor to get their money back.

Chinese customers can afford higher quality items and they can see the difference so the future suppliers must have the high-end quality not only for the export market but for the domestic market as well.

In the next 5 to 10 years, since people here need to consume and will make China become the biggest market. I hope the manufacturing within China will learn from the U.S. and then the private equity investors will invest.

In a world filled with many uncertainties, it is refreshing to see a fellow consultant, like yourself, that is focused on inventing the consulting paradigm within China/Asia and improving the world we live in.


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