Airtronics Metal Products reinvents itself and earns The FABRICATOR's 2012 Industry Award as a result
February 1, 2012
The management team at Airtronics, San Jose, Calif., has seen the manufacturing landscape change greatly over the last 25 years. Plenty of computer and seminconductor work has gone overseas, and the fabrication work that remains is much lower in complex. That's why the company moved away from a contract manufacturer mentality to one of a shop that can provide expert design and value-added services. The results are paying off with new customers and hope for a bright future.Everything in California is a little different. Metal fabricating is no exception.
Whereas metal fabricating in the Rust Belt historically can be linked to “old iron” industries, such as automotive and appliance manufacturing, metal fabricating in the Golden State, particularly Silicon Valley, can be linked to more modern industries, such as computer and advanced electronics manufacturing. Those industries have pushed California shops to deliver complex, high-tolerance metal assemblies for the best possible price.
Oh, yeah. It should be noted that California fab shops have at least one thing in common with others in the U.S.: They have watched plenty of jobs go offshore.
“We used to do a lot more high-volume, low-mix [work]. Now it’s more low-volume, high-mix,” said Jeff Burke, president/CEO and 18-year veteran of Airtronics Metal Products Inc., a San Jose, Calif.-based fabricator. “A lot of business has gone off-shore. That’s where the volume went. Companies get acquired by other companies, and the acquiring company’s philosophy is [to source] offshore.”
Airtronics has been around since 1960 and witnessed the full cycle for a couple of manufacturing industry segments that grew out of the fertile Northern California technology soil. An industry builds to a boom, seeks cheaper manufacturing sources overseas, and ultimately comes back when these “legacy” products, as Burke called them, return to be made in the U.S. because the low volumes no longer justify overseas manufacturing. It sounds like a cycle that could drive a supplier of metal fabricating services to the brink of extinction, but that’s not the case for Airtronics.
The company actually has thrived in this more competitive environment, becoming an established supplier to the semiconductor and networking industries. It has grown to 85 employees (see Figure 1) and now occupies a 100,000-square-foot manufacturing facility just down the road from downtown San Jose. A strong management team (see Figure 2), the ability to offer a variety of ancillary manufacturing services (see Figure 3), advanced fabricating equipment (see Figure 4), and expert engineering and design skills have helped it grow to become a $16 million fabricating shop with a diversified customer base and big plans for the future.
“We solve customers’ issues,” Burke said. “Electrical, mechanical, functional—we will absolutely give it a shot.”
The efforts are typically successful. The work is well-done (with a customer acceptance rate of 99.5 percent). The future is promising.
Airtronics Metal Products also is The FABRICATOR’s 2012 Industry Award winner.
The steps taken to survive in this new competitive reality didn’t occur overnight. It’s been a gradual evolution for Airtronics. But Burke looks back at the launch of its electromechanical assembly business—or the value-added business, as it’s called within the company—as an early example of trying to do something that other metal fabricators weren’t offering at the time.
About 15 years ago, Burke went to the then-owner of Airtronics and inquired about expanding capabilities to include assembly. Burke had come from the electronics industry and recognized that companies had a desire to shed manufacturing work so that they could concentrate on product design. Burke got the OK, and he prepared a business plan to tackle the new opportunity.
The first customer was a manufacturer of manifolds. Airtronics had made enclosures for the company for years, but the manifold manufacturer wanted the fabricator to take over wiring and testing chores. The customer had decided those manufacturing activities were not part of its core competencies and wanted to contract them to a reliable partner. That launched the business.
It grew to the point where this assembly operation occupied a separate 20,000-sq.-ft. building only a couple of miles from Airtronics’ main fabricating facility. But like so many other manufacturing segments, the networking business has dried up a bit and so have the contracts. Airtronics recently consolidated its “value-added” activities into a separate, electrostatic and climate-controlled assembly area within its main facility (see Figure 5).
“This is not as unique as it once was,” Burke said in reference to his company’s assembly business.
But it is as challenging. And that’s where Airtronics thinks it can make a difference.
It has an 8,000-sq.-ft. machine shop that can provide high-tolerance parts for frames (see Figure 6a and Figure 6b) and card enclosures. Operators rely on six vertical machining centers, five vertical mills, and two CNC turning centers to produce those parts.
The company also prides itself on its engineering capabilities. Its four on-staff engineers always are looking to get more closely involved in design efforts so that they can offer suggestions to improve the overall design or make an impact on the part’s manufacturability, which can lead to cost savings for the customer.
An example of this problem solving was a new design that the company’s vice president of engineering, Jim Ellis, created for a customer’s network server system. Ellis designed a one-piece card guide assembly that eliminated electromagnetic interference and assembly work associated with having to connect each individual card to the cabinet. The new design, which is patent-pending, also reduced the cost per guide from $2.50 to 15 cents.
Outside-of-the-box part design can lead to cost savings for the customer, but so can production efficiency on the shop floor. Airtronics has recognized this for some time and has tried to invest in automation so that labor costs don’t create a problem with price-sensitive customers.
“If you do any volume work, you have to run lights-out,” Burke said. “It gives the customers a good price, so they don’t have to go overseas.”
Airtronics had been following that plan of attack even before the current ownership team took over eight years ago. For example, two lasers, which are almost 10 years old, are connected to a six-shelf material tower, which feeds the 2,000- and 1,500-W machines without human intervention.
That scenario is carried over to the punching department, where two of the company’s five punch presses also have six-shelf material towers. That material automation allows for two operators to stay on top of all punching activity during their shifts.
“We like to keep up with automation as much as we can,” Burke said.
Perhaps the most “exciting” addition to the fabricator’s equipment mix, according to Burke, is its Amada Gemini FO M2 3015, a 4,000-W laser cutting machine (see Figure 7). The equipment has a rotary index on one of three shuttle pallets, so the laser operator can switch from cutting flat sheet to tube in a few minutes.
This investment came about because Airtronics was laser-cutting tubes in such a laborious manner that some sort of a change had to take place. For one recurring job, for instance, the company’s manufacturing team had constructed a four-station fixture for one of its older 2-D laser cutting machines. The laser operator had to open the enclosure after the equipment had cut one section and then rotate the tube for laser cutting to take place on the second section. This would continue until cutting ended on the last section. It should be noted that even with the manual intervention the production team, headed by Vice President of Manufacturing Fermin Rodriguez, was able to maintain a ± 0.015-in. tolerance on the job.
Now with the new laser, the operator can cut not only round tube, but also square and rectangle shapes, C-channels, and angle iron. CAD software, which includes many shapes and configurations as part of the preprogrammed cutting library, helps to ensure that the four-station tube fixture can be retired permanently.
For the last eight years, Vantage enterprise resource planning software from Epicor Software Corp. has been used to coordinate production jobs. The software allows drawings to be attached to jobs, which are sent to individual workstations through a wireless connection. Paper travelers for the most part have been eliminated, with the exception of the welding area, where welding power sources create electrical interference with the wireless signal. The ERP keeps track of when employees clock in and out of jobs and the material used to complete those jobs: Management can call up any of this information at any time, whether to check on a hot job or to see if job costs are coming in close to original estimates.
“We had job travelers before [we went with a paperless environment], and they went with everything—full of prints. And you had to stamp it when you finished an operation before it moved to the next one,” Burke recalled. “[Operators] were supposed to write down how much time they spent on an operation. How accurate is that? How do you capture all of that data when you’re doing it manually?”
They don’t have to worry about that now. Burke is confident he has the information available to him that keeps his company on the profitable side of jobs.
“We absolutely rely on it. It ties everything together so well,” he said.
Even with the extra manufacturing capabilities and the most modern of metal fabricating equipment, sometimes a successful relationship with a customer simply boils down to one simple question: “Can you make this?” In most instances, Airtronics can say “yes” with confidence.
Just look at the customer breakdown. The semiconductor industry still is an important segment, comprising almost 28 percent of the business, and networking equipment represents 15 percent of Airtronics’ fabricating activities; however, those two industry segments are very traditional from a Silicon Valley standpoint. Burke said medical devices are a good example of the company’s diversifying customer base. That segment now represents almost 20 percent of the company’s business and will continue to grow with its recent ISO 13485:2003 certification, a major accomplishment for those looking to serve the medical device industry.
The company also recently obtained AS9000 certification for aerospace parts and components. That followed on the heels of becoming a certified supplier of welded parts for a major defense contractor. Companies spanning the manufacturing spectrum—even in the nascent green technology sector—are entrusting Airtronics with their metal fabricated parts.
The metal fabricator has even turned a one-of-a-kind fabricating request into a market opportunity: It designed and fabricated a mobile food cart that launched a new business and expanded its fabricating horizons.
About three years ago, a gentleman approached Airtronics about creating a towable food cart that would meet the stricter sanitation regulations that appeared close to becoming reality as a result of the exploding food truck business all over the U.S. The key to meeting these regulations was the distinct separation of warm water reservoirs for heating food, cooling areas for condiments, and a fully functioning sink.
Design work, led by Ellis, took place over the next year and resulted in a design that won approval from the Santa Clara County Health Department. In the meantime, the gentleman with the original product request lost interest and moved on. Airtronics did not, however, and actually exhibited the carts at a major catering tradeshow in Las Vegas in 2010.
The team made a return trip to the Catersource show in 2011, where it showcased the latest generation of the mobile food carts, this time featuring a modular design. Options like griddles, grills, fryers, ovens, and steamer trays—most of which are manufactured by Airtronics—can be inserted where desired.
“You look at the level of engineering sophistication that went into these products, it amazes me,” Burke said. “Any potential customer seeing that would have to feel the same way.”
In October 2011 Airtronics launched Metal Gourmet™, a wholly owned subsidiary, to assemble and distribute mobile food carts and trailers. One of the subsidiary’s earliest customers was Facebook, which took ownership of four of the carts in late 2011 so the social media giant’s culinary staff could bring inspired dishes to the workforce instead of hoping they find their way to a cafeteria located on the campus. To learn about another new recipient of a food trailer, see the Putting the Cart Before the Tamale sidebar.
Those aren’t the only trailers that the company is fabricating. Earlier in 2011 the U.S. National Guard contracted a Menlo Park, Calif., R&D firm to create a soldier-tracking system for use during field training exercises. The firm contracted Airtronics to design and equip two battery-service trailers, each capable of simultaneously charging more than 2,000 lithium-ion batteries overnight. The charging trailers ensure that guard troops have all their modern electronics equipment ready to go for field exercises.
The fabrication of the trailers didn’t present a huge challenge as the company was used to welding large fabrications (see Figure 8) and building the cabinets and racks. The real challenge was designing and planning the electrical systems to power the trailers and determining airflow so that each charging rack did not overheat.
Airtronics’ engineers were successful in figuring out a way to power the trailers using four external generators capable of supplying 150 kW of power and the cooling and venting requirements.
The trailer work, in general, has led the fabricator to seek a license to manufacture light- and medium-duty trailers. In December the company took the next step and achieved approval from the National Association of Trailer Manufacturers’ safety compliance program, which lets purchasers know that the trailers meet the industry’s manufacturing standards and comply with federal safety standards and regulations.
Airtronics actually looks to spin off some product lines in 2012. Much like the Metal Gourmet business did, company management hopes the new products will help to offset the up and down cycles that are typical in manufacturing. Burke is excited about the possibilities.
“I hate to get too cliché, but I have such a passion for this business. As odd as that sounds—sheet metal, value-added work, Metal Gourmet—I have a really great passion for all of it,” he said. “I don’t try the endeavor if I don’t feel it, and I feel all this stuff. I think it’s contagious. I exude it to the people around me that we can do this.
“Don’t get me wrong. I never forget the fact that I’m one of 85 people that need to be working. But there is a lot of fun that goes with that too,” he added.
Take the job seriously, but don’t let it kill the fun involved with solving customers’ problems. That’s the way metal fabricating is being done with plenty of success in California.
Alicia Villanueva has a newfound appreciation for the metal fabricating business, even though she’s mostly focused on tamale-making.
Villanueva, a mother of three, always enjoyed preparing her tamales for friends, but she had reached the point where she wanted to see if she could turn her cooking skills into a real business. She began by selling door-to-door, but the ultimate dream was to own her own tamale cart.
With the assistance of La Cocina, a nonprofit organization dedicated to helping low-income immigrant women start and grow their own food businesses, Villanueva developed a business plan and obtained the appropriate permits from the city of San Francisco to sell the tamales. The mobile food cart was the missing piece of the puzzle.
Airtronics Metal Products’ Metal Gourmet subsidiary became aware of Villanueva’s dream and donated a $15,000 cart to Alicia’s Tamales Los Mayas, the mobile tamale-making business. On Oct. 4, 2011, Villanueva began selling the tamales in Justin Herman Plaza in San Francisco.
Now the city’s foodies get a taste of Villanueva’s native Mazatlan, and a metal fabricator helped to make that culinary excursion possible.
San Jose, Calif., is the self-described “Capital of Silicon Valley,” which also means Northern California’s largest city could pass itself off as the “Innovation Capital of the World.”
Technology start-ups flourish among the many bright minds, seasoned business veterans, and joint-venture funds found in Silicon Valley, and with that potent mix comes ample opportunity for product innovation. The vision of what the future may hold is now a digital rendering on some computer screen somewhere in a San Jose office park.
The problem with innovators is that they sometimes overlook the basics of making an innovation a reality. They are envisioning the improbable, which can be difficult to turn into a reality.
That’s where Airtronics Metal Products believes it can make a difference. It has forged partnerships with mechanical engineering departments at San Jose State University, Santa Clara University, and Stanford University in an attempt to introduce tomorrow’s engineers to the reality of metal manufacturing.
The metal fabricator hosts class tours for professors and students to show them how an advanced manufacturing shop works. Airtronics’ personnel also go out to visit classrooms and provide design assistance to students when needed.
“The one and a half hours we spent with Jim [Ellis, Airtronics’ vice president of engineering] were more valuable than anything the students could have learned in a classroom,” Hee Man Bae, a mechanical engineering professor at San Jose State, said after a visit with his computer-integrated manufacturing class.
For those innovators who might need input beyond just manufacturing, Airtronics also participates in a Product Realization Group. A consortium of companies and consultants have come together to help other companies work through their product development process. It’s a sort of economic development effort, but with much more technical know-how and real-life advice made available to companies seeking help.
The group’s membership offers expertise in product engineering, design, development, and analysis, as well as knowledge about testing, manufacturing, quality assurance, and compliance with all levels of regulations. To promote its offerings, the group holds quarterly luncheon seminars, where business people, engineers, or anyone with a bold idea can come to learn about product development and network with very bright minds.
If it takes a village to raise a child, it takes a strong supply chain to foster continuing innovation. At least one metal fabricator in Silicon Valley is doing its part to make that a reality.