Kittichai Chuaratanaphong : Chin Seng Huat Auto Parts

It was not easy for Kittichai Chuaratanaphong to turn his father's oldstyle auto parts busi¬ness in Bangkok's China Town 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 coun¬try's leading auto parts distribu¬tors. Even then, he believed com¬puter 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 man¬agement," he says.

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

"It was not that easy to convince my father to invest in the new tech¬nology," he recalls. "But with backup from my mother, I got a chance to try new things."

Two decades ago, computers were not only very high technolo¬gy, 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 bene¬fits 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.

Twentyfour years ago, Kittichai poured Bt5 million into the pur¬chase 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 process¬es like billing, inventory control and accounts receivable - hitherto done manually - were being han¬dled 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 calcu¬lating 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 a key to lifting the business beyond its com¬petitors.

"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 in hand.

But the transformation was still a difficult one on the shop floor. Many of his employees were oldergeneration Chinese sales people who still wore a simple undershirt and loosewaisted 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 trans¬formation process go smoothly. It was a really challenging task," he says.

Kittichai was at pains to explain to his employees that the comput¬er had not come to replace them, but to help them work better. He spent six months training his oldergeneration employees to use the computer in the belief that if they saw real benefits from using it they would soon adopt the new tech¬nology.

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 40yearold company's business success. Kittichai has never stopped bring¬ing 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 busi¬ness's growth as well as expansion into new product lines and increas¬ing sales volume.

The new storage capacity, Kittichai says, will help the com¬pany handle the increasing num¬ber of invoices, which currently number around 1,000 to 1,500 bills 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 adopt¬ed 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 fig¬ure to 200 soon.

The online ordering system is a new channel to help customers deal with Chin Seng Huat more conve¬niently. 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 com¬pany more easily, to make online orders through the company's pri¬vate network with 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 expand¬ed its auto parts business to cover all the parts of 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 compa¬ny recorded revenue of Bt590 mil¬lion. 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 help revolutionise his business, Chin Seng Huat has become known not only as one of Thailand's lead¬ing auto parts distributors, but also as a local small or mediumsized enterprise (SME) that has success¬ful combined an oldstyle Chinese business with modern technology.

"To succeed in business, execu¬tives should concern themselves with the adoption of new technol¬ogy," Kittichai says. "And it's essen¬tial that they should realise that technology is not an expense, but an investment that can be used to generate new revenu.

Pongpen Sutharoj

The Nation