Delta Chairman Yancey Hai Focuses on Continuous Innovation and Development for a World-class Manufacturing Business Strategy

Delta Electronics, Inc. just exhibited its own-brand energy-efficient solutions at Techno-Frontier 2014 in Tokyo, Japan, in July under the brand promise "Smarter. Greener. Together." At the exhibition, Delta Chairman Mr. Yancey Hai was interviewed by the widely read Nikkei BP magazine, which covers business, economy, industry, electronics, architecture and more in Japan. He shared his business management philosophy during the interview.

Delta Electronics is the world's leading switching power supply and brushless DC fan provider. With its headquarters located in Taiwan and 114 operation branches worldwide, Delta has more than 70,000 employees around the world, including 7,500 engineers. Before serving as Delta's chairman, Yancey held the post of CEO from 2004 to 2013, and Delta's market capitalization grew more than six times in this period. He talked about Delta's business strategy in the following interview.

Investing 5%-6% of Sales on R&D Creates Delta's Advantages and Business Territories

Delta has developed many green technology related products that are divided into “power electronics”, “energy management”, and “smart green life” for current energy issues around the world. Facing the world's energy crisis, Delta's power solutions are making a great contribution and have saved 11.9 billion kW of electricity (equal to reducing 640 tons of CO2 emissions) for global users from 2010 to 2014.

The key to Delta's success is continuous innovation. The company spends 5%-6% of its annual sales on R&D investment, even during the economic tsunami of 2008. Yancey indicated that the three main success factors of Delta are: fast strategy making and execution, high production efficiency, and having 56 R&D centers worldwide.

Of the three success factors, fast strategy making and execution comes from Delta's corporate culture which strives for customer satisfaction. Take after-sales service as an example: Delta's one-day response policy is to efficiently fulfill customer's demands. In recent years, Delta has sped up the development process and shortened the life cycle of many products in response to customer requirements.

Delta continues to evolve. Like many companies in China, Delta is facing difficulties such as increasing wages and labor shortages. As a result, Delta has taken advantage of its own technologies and products to build automated production lines at its production bases. This has effectively helped Delta reduce three quarters of its labor force and improved production efficiency.

56 R&D Centers Close to Customers in Global Markets

To serve global customers such as manufacturers and service providers, and to be close to their local markets, Delta has set up 56 R&D centers in different countries and regions. It helps Delta gain a deeper understanding of local market trends and customer requirements, interact more closely with customers to satisfy their needs, and recruit more research talent.

Some people might have second thoughts about this multiple R&D center strategy, but Yancey insists it is the only way to “be on the same page with customers”. The success of this strategy is proof.

Delta is also planning to enhance a market research system that covers all R&D centers and Delta's headquarters. The system will support product design and development, and add value to products and services for customers.

As Delta is going through a major change and transforming from component supplier to solution provider, strong technology and the understanding of customer needs are its two priorities. Delta will continue providing cost effective and easy-to-build solutions for global customers with its strong technology and product variety.

Sustainability, Long-term Operation and Reliability are Issues for a Solution Provider
As a solution provider, high quality products and outstanding technologies are key factors to success. A reputation for reliability is very important and takes time to build. Delta has faith in its product quality and technologies and values reliability to the customer.

To increase reliability to customers, Delta delivers constant sales and turnover growth by emphasizing its human capital, corporate governance and corporate social responsibility (CSR). For example, Delta highly values its human capital. During the global economic crisis of 2008, Delta did not lay off any labor, which resulted in faster business growth after the economic storm.

In the Japan market since 1989, Delta recently built a technology center at Shinagawa, Tokyo in July 2014. Yancey thanked Delta's Japanese partners and customers for their stringent requirements which have greatly improved Delta's technology and product quality. Delta will continue working with partners in Japan on research and development, and it hopes to raise its current return on equity (ROE) from 22% to 25%.