LCC's main bank(Shinhan) branch manager visited LCC Factory and asked me "I would like to know the special know-how that why LCC still increase the sales turnover and profitability during this depression, even though LCC is manufacture factory not Venture or IT type of business." He seems to have no idea why exports are increasing and sales and profits are improving even though the minimum wage is soaring and the business environment, including 52 hours of working hours per week, is getting tougher.

These days, most of the Managers of small and medium-sized manufacturing companies say they want to close down their businesses. Also worry about continuing sluggish sales and chronic deficits, lack of management funds and loan recovery from the financial world.

In contrast, the LCC proceed to a vision of "Being a one hundred year company through export "by pioneering new overseas markets by diversifying export markets and supplying flawless products based on quality management.

Since the start-up population is one in five people in Korea and the restaurant business is 65 percent of them, it is estimated that more than 5 million people run restaurants and cafes. It's no wonder that there are so many people out there that it's hard to find a good restaurant to eat in rows for a long time.

The know-how of these restaurants is that first is their food taste is very good. Secondly, their price is very resonable. Also, they have unique recipes and cooking techniques that stimulate people's taste and always remember and visit frequently. The restaurant atmosphere is clean, bright, and comfortable, as the employees are well-served and receive guests with a bright face.

If, apply this to the small and medium manufacturing industry, we have to be able to ensure the perfect quality, and the factory should be clean. It will also have to be automated and eliminated of labor. And the logistics flow will be smooth, also the manufacturing costs should be low. As a result, if we are competitive in quality and price, we will easily to find customers without having to engage in a separate sales activity. Then it will lead to consign one product to another. Also easily connect to new customer.

In the case of LCC, customers from home and abroad visit the factory and look around the production site which having a perfect computerized system in clean environment, and they decide to make a contract with LCC.

The price competitiveness of the company is the most important factor in determining the perpetuity and viability of the company, and the absolute standard for determining the possibility of a transition from domestic to export.

A company cannot exist if it loses its price competitiveness. First of all, small and medium-sized manufacturing businesses should invest a lot in automation and elimination of labor. The first of price competitiveness is increase productivity of production line. In addition, to reduce manufacturing and general management costs, the company needs to transform into a smart factory through computerization, and the "system management" should be root in company through standardize the internal business processes such as sales, production, and purchase to create mutual synergies.

For Instance, establishing and implementing monthly and weekly production plans, from order>purchases>production and supply, is a system in which employees regularly gather and decide on their own without any outside interference.

In order this system management to be established, Empowerment (authority transfer) to team manager and employee must be realized. Empowerment will be possible when the company establishes their Vision and one-way alignment with all employees. Also it is possible the ethics management and clean and honest corporate culture are established. In addition, for personal reliability and mutual trust, the environment of the Empowerment will be created when both job training and mind education are combined.

Another important variable to ensure price competitiveness is to lower the unit cost of purchasing raw materials with variable cost nature. Since selecting the business partners is a major variable for securing competitiveness in quality and price. Therefore private factors should not be involved, especially the CEO should not be tempted by the participation of relatives and acquaintances.

Management of representative directors of business partners should also be checked closely as it is the most important variable. The decision on unit price should be made in the form of open and non-public bidding. We should __select 1 or 2 excellent companies to drive the volume and to ensure profitability even at relatively low unit prices. The new products and Renewal product's cost should be in logic to reduce the mutual friction and work load.

Also, we should pay attention about increase of sub-material cost due to the increase in domestic labor costs. The pump, cap and mechanic, which are small volume and requires a lot of manpower, should be actively imported. Most of the cosmetics ingredients are imported, so we should switch to direct imports and continue our efforts to reduce the unit price of raw materials by integrating suppliers.

What is the best way to secure new customers and increase sales is put our factory image to customer "the company that produces flawless products, and the company that practices enterprise quality control (TQC)".

Recently, large companies have become more prone to outsourcing to a trusted professional company as much as possible, rather than investing in-house investments. Therefore, quality management should root in management philosophy. it could make all staff think the quality is top priority. It helps to make the fundamental measures do not recur even if the quality claim occurs.

The fundamental method of quality improvement should focus on the "mainstream management" that finds and removes causes of defects, and the "process management" that values processes rather than results, and the continuous quality improvement activities based on 5S should lead to independence of field employees.

Our LCC carries out Quality control by computer systems called ERP and MES system with hugh investment about 4million dollars. According to this system, LCC export its major products, Mouthwash and Cosmetics, to Japan and US Markets which are picky market about quality. It seems that LCC quality is gaining a high profile in these market.

Another key to success in small and medium-sized manufacturing is having a "self-brand." It must be limited to Niche Market. For now, OEM and ODM production may be stable due to quality and price competitiveness but considering about the future of company, it is not guaranteed future possibilities.

Although it is ideal to develop the self-brand but we should never snoop around in Mass Market which make the inevitable conflicts with major companies that having the large organizations, funds, and manpower in product development, promotion, and marketing. The competition should be decided at Niche Market where we can take full advantage of the strength of quality and price competitiveness and speed, not just brand power. If we find a niche market and keep effort more than a decade, you can grow into a "Leading Brand" in Niche Market.

In order for the company to remain competitive in price and quality, it must have a corporate culture such as internal training. Just as the common characteristics of successful people are honesty, sincerity, passion and consideration and supply around them. The blue chip companies are keep developing and succeeding to create and accumulate their corporate culture.

We need to expand our investment in reform of consciousness and job training to foster human resources like "corporate is human,". Also expand the opportunities such as overseas business trips to nurture global talent who is suitable for export companies.

Education programs such as "Seven Habits of Successful People" should be developed to enhance individual character and ability, and boost the individual satisfaction with "award a prize culture" with praise and encouragement. In addition, it should be fostered and promoted internally to make a manager rather than recruiting talent outside of the company.

To secure competitiveness in quality, it is possible when the total quality control (TQC) and principle-based quality management are implemented with the MES computer system. The cleaning culture with 5S activities is the first step in quality management and the self-inspection at the production site is the last step in" secure the high-quality" with the loyalty from the employees.

Improving quality and preventing production loss with suggestion activities also play an important role in maintaining quality and price competitiveness. And the light gymnastics which is conducted every morning, protects our health and safety. Also, the reading of our company's mission statement, enables employees to "one-way alignment" for realize of the vision "Being a 100-year companies through exports."

The growth and development of manufacturing industries and the rise and fall of companies are bound to be limited, and even in Japan, where there are many long-term companies, there is a harsh rule that life expectancy of companies does not exceed 30 years on average.

The life span of small and medium enterprises in Korea is also very short, with a survival rate of 10 percent in 10 years, 1 percent in 20 years, and 0.1 percent in 30 years. Now that it's more than 22 years old, LCC is wondering how long it can survive

The "Lindy Effect" can help you find answers to questions about how long the company will live. The Lindy effect, which is defined as "if you are not corrupt, the longer you have been, the longer you will be," can be summed up as "the business activities so far can predict future activities." We believe that we can at least add two to three times the life span of a company so far if our LCC recognizes the purpose of its existence as a market and a customer, and places it in the global overseas market. Also, if we have the DNA that continues to change and innovate we could being a 100-years company.

In order for a small and medium-sized manufacturing company to survive and develop into a long-lasting company, the CEO's mind is also very important. First of all, running a company is hard and difficult, but you have to have faith and confidence that it is the most rewarding and valuable thing to service of gratitude to your country, and the best way to live longer in your life.

In addition, it is preferable to predict and promote the success or failure of new projects in the long term as possible, and to develop them based on the Global Market to balance domestic demand and exports.

Finally, a CEO should be able to enjoy corporate management such as "Anyone who tries more than a smart person, who more enjoys than more tries person will succeed." Happiness arises not from the "satisfaction of a moment" at the top of the mountain, but from the hope of climbing the mountain. I should be able to enjoy the current corporate management with Not from "Becoming," but from__ the "being" in mind.

CEO BAIK, SUNGCHUN