Renting IT Equipment Generates More Profit For HICOM Diecastings, Allowing Them To Grow Faster And Meet Customers’ Demands Better.
A novel approach of renting for HICOM Diecastings’ IT department makes perfect business sense as it not only takes the headache out of the equation, but also generates cash needed for the fulfilment of customers’ orders, thus having a positive impact on the bottom line and morale of staff.
A proud adopter of Rentwise’s IT Rental Model, Rosdan explains how the IT Department has become a financier of HICOM Diecastings’ production line.
Varying Pressure Zones
HICOM Diecastings Sdn Bhd is among the foremost names in Malaysia’s industrialisation programme. The company was incorporated in 1985 by Heavy Industries Corporation of Malaysia Berhad (HICOM) to meet the need for top quality precision automotive, motorcycle and other aluminium-based components.
Based in Shah Alam, HICOM Diecastings’ quality policy is to ensure that its products and services meet the requirements of customers at all times. Head of IT, Rosdan Mohamed Rashid explains how the use of IT is helping the organisation achieve this goal, while many may think that mechanical engineering and technology is not a natural match.
The company offers low and high pressure castings. The earlier days of production saw them offering iron castings. Currently, aluminium casting is the focus of the company with future plans to move to magnesium.
New production technology also come with the need for sophisticated IT, spearheaded by Rosdan and his team of 5 male and 1 female technicians. According to Rosdan, the use of modern IT is one way of maintaining competitive edge and to further enhance the product offering.
An IT Department As Financier For The Production Line
“It is fascinating to see that the IT department can be a financier for the production department”, Rosdan states. He explains that the production department had a huge incoming order which requires a large investment in tools to fulfill that order.
At the same time, the IT department needs to replace PCs in order to ensure smooth running of the operation. “We faced a dilemma”, he elaborates, “Had we purchased the IT equipment we needed, we would have had to work according to a prolonged timeframe. However, we found a clever solution in renting the equipment; four servers among them, from Rentwise”.
When the rental agreement started, the most astonishing thing happened. The company had cash readily available to invest in the tools needed for the fulfilment of the job at hand. As the money was available for production works, the order could be fulfilled faster, thus allowing the company to invoice faster.
IT equipment was paid on monthly rental instalments while the production department benefitted from the available cash at hand. Through this practice, HICOM Diecastings generated faster returns on the investment, thereby accelerating and increasing profit generation.
New Department Brings New Challenges For IT
To provide better services, the company decided to integrate other functions, such as the provision of technical drawings. Typically, a customer would simply deliver a plan and HICOM Diecastings would produce according to the drawing.
Recently however, HICOM Diecastings has added a new department to provide this extra service and the number of staffs has doubled. There are now 84 engineers, all needing workstations, internet connection and support to perform their daily duties.
Novel Ways Of Thinking For Assets
Rosdan explains that the rapid growth of the company posed an issue as the purchase of IT equipment was very capital-intensive. Engineers working in the new department needed to have high-spec computers which cost a lot of money. To equip all of them with brand new PCs meant a lot of capital needed to be available.
To overcome this issue, Rosdan turned to Rentwise to develop a solution that allowed him to equip his staff with the technology needed without severely impacting the cash flow and adding other benefits at no extra cost.
The Beauty Of Renting: No Storage Cost, No Downtime
Renting some 170 PCs, HICOM Diecastings enjoys, what Rosdan calls, “Hassle free and easy service”. Previously, a faulty PC meant that the machine had to be repaired by the vendor, a process that took up to 4 weeks. Today, there is no more paperwork, other than a delivery note in case of a malfunctioning PC.
Rentwise has spare computers on standby and in case of an unlikely event of a faulty PC, the replacement is almost instantaneous. Rosdan says “My down-time has been reduced to virtually zero. What is more important is that we don’t have to do the trouble-shooting anymore”.
“While the number of PCs we look after has now increased dramatically, we are still having the same headcount and we have more time for strategic planning and project management, rather than having to spend time on fixing machines. The company does not need to spend money on spare parts that bind capital and take up space. All these concerns are taken care of by the IT rental partner, Rentwise”, Rosdan adds.
The Right Tool For The Right Application
Jointly with Rentwise, Rosdan and his team define the right PC specifications for each employee, thus ensuring everyone is well equipped for their job. While engineers for instance may need high-powered, full spec computers, admin staff may not need such powerful tools. Here HICOM Diecastings is using stringently refurbished PCs. Again, the company is saving, as these PCs don’t come with the high price tag a new computer comes with.
Information Technology As Art
His passion after school was really in arts, but having consulted with his family, Rosdan Mohamed Rashid finally decided on a different route. From the early days, he’d recognized the increasing importance on the role that IT and technology have to play in our daily lives.
His first PC was a cobbled together clone. Today he is in love with IT and is aiming at infusing his technological skills into the work of a mechanical engineer. His efforts in the IT department have not gone unnoticed and other subsidiaries within the group are looking at his clever solutions that have enabled the company to generate higher profits. These implemented solutions have made operations run smoother; thereby increasing the morale of staff as they can now work continuously without hassles of equipment failure.
His philosophy is simple. In business, time is money and one needs to ensure all potential obstacles that hinder execution of important tasks leading to time wastage are effectively curtailed.
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