In the Crisis of Global Chain Disconnection, Taiwan has Become the Most Reliable Fastener Supplier

Products with fastening functions such as screws and nuts are collectively referred to as fasteners, which generally refer to tools with fastening functions such as screws and nuts. Fasteners are basic industrial products that are often highly positively correlated with global industrial demand.

An Overview of the Current Situation of the Fastener Industry in Taiwan:

Taiwan is the third largest exporter of fastener products such as screws, nuts, and bolts in the world. Since 2005, it has maintained an average export ratio of 93% for 15 years. It is an important high-output industry in Taiwan that earns foreign exchange. time. At present, there are about 1,860 screw fastener factories in Taiwan, enjoying the reputation of the screw kingdom in the world. With good quality and fast delivery, it occupies a place in the global screw and nut supply market.

Under the impact of the epidemic, the metal and its products industry are still on the rise. Growth from steel, fasteners (screw nuts) to hand tools. The high market demand has driven industrial suppliers to work overtime. In the crisis of global chain disconnection, Taiwan has become the most reliable fastener supplier. However, most foundries have low bargaining power, and profit margins are compressed by exchange rates, raw materials, freight, and labor costs.

In 2021, the fastener industry will be reactivated, and the growth rate of Taiwan's steel export value will increase from -14.6% in 2020 to 70.7% in 2021. The fastener industry also rose from -8.1% in 2020 to 34.1% in 2021. Hand tools rose from -1.0% in 2020 to 27.4% in 2021.

Due to the shutdown of European and American car factories, I followed the "lay flat" and did not recover until the end of the third season. Then it entered a high-speed growth period for a whole year, and the industry started to move again, and the overtime work situation was very enthusiastic. Amid the wailing of the world's broken chains, Taiwan has become the most reliable fastener supplier.

The Epidemic has Accelerated the Growth of Orders for Automobiles, Electronic and Construction Fasteners:

1. Take Automobile Fasteners as an example:
   Global automotive chips have been out of stock in recent years. Before the outbreak of COVID-19 in 2020, the global auto market had been in a slump for a long time. Coupled with the changes in consumption habits driven by COVID-19, long-distance business opportunities have risen, and the demand for automotive components and chips has recovered faster than expected. The automobile industry is facing the crisis of chain disconnection, and the order of automotive fasteners has also been reduced due to a lack of labor and materials.
2. Take Electronic Fasteners as an example:
   Quarantine measures and border policies under the epidemic have brought many negative impacts on life and work patterns. However, with the promotion of zero-contact and long-distance, the demand for various consumer electronics and medical services has accelerated, such as home blood glucose testers, forehead thermometers, ear thermometers, TVs, entertainment audio-visuals, video game instruments, laptops, remote Video, etc., have accelerated the growth of electronic fastener orders and have made a breakthrough change.
3. Take Construction Fasteners as an example:
   Construction fasteners include steel structure bolt assemblies, wood screws, gypsum board screws, expansion anchor bolts, chemical anchor bolts, internal geckos, external geckos, etc. Due to the impact of the epidemic, people's activities and life were mostly changed to home, which stimulated the demand for building repairs, and orders broke out. Furthermore, because European and American century-old buildings or bridge piers have exceeded their service life, the demand for large-scale foundation projects has increased greatly, and more and more attention are paid to certification that meets safety and environmental protection. For example, EU CE certification is a must for building fasteners sold to the EU. Certification.

Disadvantages and Crises of Taiwan's Steel Fastener Industry:

1. Low bargaining power of foundries:
   Most of Taiwan's fastener companies are small and medium-sized enterprises. Large state-owned enterprises have been affected by the disruption of the production chain, and small and medium-sized enterprises have weaker resilience.
2. Exchange rate fluctuations:
   As the exchange rate fluctuates in the economic market, it affects the cost of raw materials and the gross profit of processed products.
3. Shipping costs rise:
   Since the outbreak of the epidemic, the freight rate has continued to increase. The container to Europe has risen from US$2,000 to about US$16,000, and the US-East route has soared from US$4,000 to US$15,000 to US$18,000. The Asian part, from $800 in September last year to $1,300 now, continues to rise. Taiwanese businessmen often use a one-stop service to contract freight. During the epidemic period, when the freight and shipping costs increased due to a shortage of containers, manufacturers had to absorb the cost of transportation by themselves, and profits decreased accordingly.
4. Production cost increase:
   In the face of the continuous influx of orders, the industry cannot find workers to manufacture, so they must raise wages to rob people, resulting in rising labor costs.

Fastener Industry Digital Transformation Direction:

1. Reduce costs and improve efficiency, and build stable advantages:
   By expanding the scale of operations, introducing smart manufacturing, unifying the production supply chain, controlling production costs, and facing the competition head-on.
2. High quality and high value, expanding the niche market:
   Transform professional customized products, strengthen industrial supply capabilities, and create high-value fasteners with high gross profit, high unit price, and high price plus value to avoid price cuts in the competitive market.
3. Cross-industry transformation to explore growth opportunities:
   Develop high-value-added products such as automotive, construction, aerospace fasteners, and medical fasteners (tooth roots, bone nails), widen the competition gap and develop a niche market. And to apply for certification, and strengthen the market foundation.

Key Projects for the Digital Transformation of the Fastener Industry:

1. Production and sales model:
   How to prepare and control inventory, whether it is produced to order or planned inventory. The information is transparent, it is not difficult to control whether the process is implemented or not, and whether the estimated inventory is accurate or not.
2. Dual unit management:
   Fastener manufacturers often need to convert the quantity of incoming, outgoing, and warehousing according to the weight of the scale. How to accurately control the conversion method of each process is the focus of quantity management.
3. Schedule dispatch:
   Progress control of the overall production comes from the scheduling plan, the planning of the expected start and completion time, whether the mold is sufficient or whether the mold life can support the current scheduling sequence, everything is accurately grasped under the transparent information.
4. Mold and carrier management:
   The transparent information process can quickly collect the mold status and quickly respond to the life cycle of the mold.
5. Furnace batch number traceability:
   When the fastener industry wants to pursue high quality, whether customers are doing reverse or positive traceability, they should do real-time information, so that information can be obtained smoothly and easily.
6. Outsourcing progress control:
   In the control part of the outsourcing progress, the fastener industry has constructed many processes, such as wire drawing, electroplating or heat treatment, and surface treatment, which may be done by the outsourced manufacturers. The delivery time of these outsourced manufacturers directly affects the delivery to customers. Therefore, through the inspection of the process, we can track the progress and decision-making of outsourced manufacturers.