Log on to the future

It was not easy for Kittichai Chuaratanaphong to turn his father's old-style auto-parts business in Bangkok's Chinatown area into a modern operation. But when he returned from management studies in the US 24 years ago, he had seen the light. Computers, he knew, would make the difference.

He had helped his father to sell auto parts since he was young, so Kittichai, the oldest son of the Chuaratanaphong family, realised that his future lay in the family business, Chin Seng Huat Auto Parts.

To pursue his dream, the young high-school student from Assumption College flew to the US to pursue higher studies in business and management at Oregon State University. But while he studied business as a major, he chose to study a minor in computer science.

He quickly saw how computers could help to improve a business operation, and that knowledge stuck in his mind.

When he returned in 1983 to begin his working life at Chin Seng Huat, he set himself a mission to make the company grow big enough to become one of the country's leading auto-parts distributors. Even then, he believed computer technology was the key to moving the firm one step ahead of its rivals.

"I believed that business and technology could not be separated, especially in a business like ours, in which we had to handle thousands of parts. So computers were to be my tool to help create better management," he says.

But his father, who founded the old-style Chinese business, resisted the need for such a big investment.

"It was not that easy to convince my father to invest in the new technology," he recalls, "but with back-up from my mother, I got a chance to try new things."

Two decades ago, computers were not only very high technology; they were complicated and expensive. Only large business organisations and banks were using them. Was it worth the huge investment for a small business like Chin Seng Huat, which at the time handled only Isuzu parts?

It was a question that haunted Kittichai. Even though he knew that computers were beneficial, he had to demonstrate the real benefits his business would receive from the new technology.

"I believed that if we wanted to grow in the auto-parts business, we had to have something to help us improve our working efficiency, and computer technology was the answer," he says.

Twenty-four years ago, Kittichai poured Bt5 million into the purchase of a mini-computer, an IBM System 34, to help run the business. In those days, it was a huge sum. But soon all the working processes like billing, inventory control and accounts receivable, hitherto done manually, were being handled electronically. Chin Seng Huat's staff could conduct sales processes, check product items, attend to inventory control, process accounts receivable and make sales analyses through the computer screen.

"At the end of the day, instead of clearing all the billing and calculating the total income manually, we could have the computer attend to such tasks," he says.

Then came the benefits. With the new technology, Chin Seng Huat became speedy, accurate and efficient. And these were key to lifting the business beyond its competitors.

"The new system helped us shorten the selling process, because it bypassed all manual work. Sales volume increased by at least 30 per cent after the computer arrived," Kittichai says.

From handling only Isuzu parts, the company expanded its business to cover Toyota, Nissan, Ford, Mitsubishi, Honda, Mazda, and Chevrolet as well, with more than 15,000 items on hand.

But the transformation was still a difficult one on the shop floor. Many of his employees were older-generation Chinese salespeople who still wore a simple undershirt and loose-waisted pants. They knew nothing about computers, and Kittichai had to struggle to make them understand.

"We had to change all their working habits to make the transformation go smoothly. It was a really challenging task," he says.

Kittichai was at pains to explain to his employees that the computer had not come to replace them but to help them work better. He spent six months training his older-generation employees to use the computer in the belief that if they saw real benefits from using it they would soon adopt the new technology.

And he succeeded. The staff was finally ready to set aside the old paper notebooks on which they had previously jotted down auto-parts orders and sales records and begin using the computer.

These days, technology remains a key factor in the 40-year-old company's business success. Kittichai has never stopped bringing in new technology. In 2003 he invested Bt15 million to build up the company's own storage area network (SAN). Last year, another Bt20 million was spent to upgrade the system's storage capacity from one terabyte of memory space to seven terabytes to serve the business's growth as well as expansion into new product lines and increasing sales volume.

The new storage capacity, Kittichai says, will help the company handle the increasing number of invoices, which currently number around 1,000 to 1,500 per day. He also plans to replicate each bill image into storage so that in the near future the company will allow customers to access their invoices electronically.

In addition, Kittichai has adopted a system that allows dealers to make online orders. Of a total of 1,500 active dealers around the country, about 100 can now use the online ordering system, and Chin Seng Huat plans to increase the figure to 200 soon.

The online ordering system is a new channel to help customers deal with Chin Seng Huat more conveniently, but to persuade them to use it the company has offered a PC terminal, installed at each dealer's site, so they can link with the company more easily to make online orders through the company's private network at no additional expense.

For Kittichai, technology has been - and remains - a tool to help him expand the business. "Without technology, I would say that Chin Seng Huat could not have expanded to cover all the major Japanese brands," he says.

With good management and the help of computer technology, Chin Seng Huat's revenue has grown continuously. In 2003 the company recorded revenue of Bt590 million. The figure increased to Bt700 million, Bt800 million and then Bt820 million in 2004, 2005 and 2006 respectively. Kittichai hopes it will reach Bt1 billion this year.

In the 24 years since Kittichai first brought computer technology to revolutionise his business, Chin Seng Huat has become known not only as one of Thailand's leading auto-parts distributors but also as a local smaller enterprise that has successful combined an old-style Chinese business with modern technology.

"To succeed in business, executives should concern themselves with the adoption of new technology," Kittichai says, "and it's essential that they should realise that technology is not an expense but an investment that can be used to generate new revenue."

Pongpen Sutharoj

The Nation