On one occasion, Foxconn Chairman Terry Gou, along with several key company executives, visited Wang Yung-ching at his residence to seek his advice.
“Chairman Wang, based on your decades of experience, I’d like to ask you for your secrets to success in business.”
“There are no shortcuts in business, no magic tricks. Only a down-to-earth approach, getting to the bottom of things, and a relentless, persistent work ethic until the goal is achieved.”
After a pause, Wang Yung-ching countered with a question to Terry Gou: “You’re a high-tech computer company, so you probably think your computer technology is superior to ours in traditional industries, right? On what day of the month do you release your monthly financial statements and performance analysis?”
Terry Gou replied with a mix of unease and pride: “They’re usually released between the 5th and 8th of each month.”
Wang Yung-ching bluntly said: “That’s useless.” “It’s hilarious! Computer companies ‘love to procrastinate until the whole week,’ while our entire Formosa Plastics Group, down to each business unit, delivers all sales settlements, profit and loss statements, operational analysis, and countermeasures to my desk before noon on the first of every month.”
Wang Yung-ching continued, emphasizing, “The factory that controls the entire world! We’ve been doing this for over a decade, not just in terms of numbers, but also in terms of all operational improvement strategies.”
Terry Gou immediately blushed, utterly humiliated.
Formosa Plastics’ monthly settlement on the first of each month was not something that could be achieved overnight, nor could it be accomplished in a few months or years. It took nearly 33 years of continuous effort to achieve daily settlement in 2000. It’s not something that can be achieved solely through computer speed and the efforts of financial staff; it involves putting the entire company’s management on track, simplifying forms, improving processes, streamlining operating procedures, and utilizing computerized operations. In fact, it reflects the overall management level of the company. Computerized management has become one of Formosa Plastics’ core competitive advantages.
In fact, in 1990, the Formosa Plastics Group could only achieve monthly settlements on the 7th of each month. At that time, Wang Yung-ching demanded monthly settlements on the 1st of each month, but senior management said it was impossible. Wang Yung-ching then instructed, since achieving 1-day settlements immediately was impossible, could it be done one day earlier each year? That is, for example, seven days this year, six days next year, five days the year after, and so on. Senior management said that with improvements each year, it could be done one day earlier. In this way, through gradual improvements year by year, they progressed from seven-day settlements in 1990 to one-day settlements in May 2000.
Wang Yung-ching said, “One-day settlements are an indicator of whether a company’s management system is on track.”
Besides the benefits mentioned above, another characteristic of Formosa Plastics’ implementation of computerized management is: absolutely no falsification of accounts.
Wang Yung-ching said, “With computers, every single transaction is recorded; it’s impossible to keep two sets of books. If a computer can falsify accounts, you can cut off my head.”
Acer founder Stan Shih, however, said, “Using computers to falsify accounts is faster than the human brain. With computers, not to mention two sets of books, even five sets are possible, and it’s faster than before.”
To Shih’s statement, Wang Yung-ching replied, “If people still falsify accounts to evade taxes after using computers, it can’t be called computerized management at all; using computers in the way of falsifying accounts is at best just inputting a fabricated set of data into the computer and letting it calculate the expected false business results; it has no management function whatsoever.”