'One source' fits all: modeled as a "mini Flextronics," this group uses the latest equipment and the engineering practices for its competitive advantage.
But now some board companies are doing fine by giving customers what they want and being adaptable. Dallas-based One Source Group isn't just doing fine; they're hiring as fast as they can.
Suresh Patel, technical director and co-owner of One Source, says the company enjoyed "incredible growth rates" during the last three months of 2003. "You hire three more people and you find that you need to hire even more," Patel says.
One Source grew out of a seemingly simple business plan: Provide complete turnkey services, from design and fab through assembly, test, cable harnesses and fixtures. Anchor these shops within shouting distance of each other. Hire the best people. Keep overhead down. Use only the best, newest equipment. Be flexible. And work hard but have fun.
One Source includes DFM Design, Eagle Circuits, EM Solutions, Spectra Test Solutions (STS), National Testing Services (NTS) and Sava Circuits. DFM Design offers design and layout services. Eagle Circuits is a low volume, high-mix board shop. EM Solutions (EMS) provides PCB assembly, while STS offers cable assembly and machining services, ICT and functional test fixturing services. NTS is an electrical test services facility, and Sava Circuits handles high-volume PCB fabrication.
Gary Roper, vice president of quality, says One Source provides much more than boards, mainly out of necessity. "We're a turnkey and we recognize the fact that we're not selling a product, we're selling a service. If all customers want is a board, they can go to China," says Roper. "We focus on the customer."
One Source was formed at the end of 2002. This created an umbrella organization for the six companies already owned by a handful of investor-owners, including Patel and director Nilesh S. Naik, who have known each other for years. Of all the One Source companies, Eagle Circuits has been around the longest, since the early 1980s. EMS is about four years old, though its facilities could pass for new.
"The companies are tied together for insurance and accounting purposes," Roper says. "There are yew little One Source expenses. All of the companies take care of their own expenses."
Overhead is kept to a minimum by having only three One Source employees: one each in accounting, human resources and sales. The shops, Patel says, have strived to hire only the most qualified people, and he estimates that about eight of the 95 employees have one or more degrees in electrical engineering.
A 'Mini Flextronics'
Despite having six individual companies under its umbrella, the One Source companies cooperate and communicate as a single entity.
"We are modeled as a 'mini Flextronics,'" says Patel. And he's barely joking.
"What we didn't want to do was create a situation where we had a lot of layers of management. Any one of the companies can write an order for the entire group," says Roper. "I'm the quality guy for the whole group. Since we're all within a half a block of each other, if I have an issue, I can get to the root cause and work it out."
Most of One Source's orders involve Eagle, EMS and NTS, Patel says, though DFM and STS are also fairly integrated into the workflow.
"If you ask me, percentage-wise, Eagle and EMS have always been integrated very tightly, from the beginning," says Patel. "STS has now come on board and these three companies are running full turnkey. We're now promoting, 'Guys, we can do cable assemblies for you too.'"
Patel, an electrical engineer with 26 years of hardware design experience, says he and Naik drive most of the front-end of One Source's business, with Patel focusing on the technical aspects and Naik taking on marketing. At One Source, the engineer is king, and also the main client.
"Most of the people we meet are in engineering. We are not looking for contracts; we're looking for companies with engineering requirements," says Patel. "It's always been engineering, not contracting."
Naik says that communicating with the engineer every step of the way helps keep surprises to a minimum.
"If we're in the loop, we know when the files are supposed to come in, and what format they will be in," Naik says. "We've been known to come in late at night or early in the morning because that's when the files are going to be ready, and they've got to have the boards yesterday."
Roper agrees that communication holds it all together. The designers of DFM are subcontracted out, so at a weekly meeting the designers explain what jobs they're working on and which ones are likely to be problematic.
"That way we get visibility a lot further down the road," says Roper.
When a design arrives, the files go to Eagle and NTS. NTS provides blind verification of customer data for all of Eagle's orders. Eagle handles all of the prototype and low-volume fabrication, and is set up to build product on FR-4, Rogers, Getek, polymide, Teflon and flexible Kapton. Sava Circuits handles the volume fabrication.
Across the parking lot from Eagle sits EMS, set up for low volume but easily converted for large runs. New or almost new equipment includes a Mydata pick-and-place machine, a Heller Class 10 nitrogen oven and an ERSA wave soldering machine.
EMS was founded after Naik and Patel decided that Eagle could benefit from having an in-house assembly operation.
"But we did not want to just add assembly. [With some manufacturers] it's just an operation in a little corner of your floor," says Patel. "We wanted to set up an assembly house that's in its own right a very high-end [operation], set up in its own building and doing what it needed to do."
STS is One Source's mechanical group, equipped with a full machine shop and set up for custom work and large lots. STS primarily builds cable harnesses and test fixtures, but also designs and builds boxes.
One Source maintains partnerships with manufacturers in Asia, but the firm is a big believer in keeping IP in-house, Roper says. With customers like Texas Instruments, Silicon Labs, Raytheon, Motorola, Sandia National Labs and Tyco Electronics, Asia may not be an option.
"The sensitive stuff is all pretty much done here at Eagle. Anything we're 'subconning' overseas is pretty much mature," Roper says. "I don't think China is a bad place to go for mature products. But engineers don't like jumping on a plane and going 13 hours to find out why something doesn't work."
The Right Tools
Naik and Patel are also big believers in using the best equipment possible. You won't find any outdated equipment in any of the One Source shops.
"We continually replace equipment at a very fast rate; 25%, maybe 30%, of our volume goes to procuring new equipment. We spend a few million dollars on new equipment each year," says Patel. "That's one of the things we take pride in. In the technology markets we're in, the high end, we have to invest in the equipment we need. That's part of the partnership that we have with our customers."
Not only are the One Source shops well equipped, they're spotless. No need to wade through spilled chemicals here.
"I've been in the business since about '78 and I've seen some nasty shops. Bare 220 wires hanging down, you name it," says Roper. "I like working for a place that's clean. It makes you feel better about working here."
Roper says the best part of working at One Source is the way everyone works hard but plays hard too.
"It's just a fun place to work. We had a company barbecue in the parking lot [in November], and a Halloween party," says Roper. "It makes it a lot easier to work the extra hours if you enjoy the atmosphere."
Patel agrees. "If people enjoy working here, they'll have a better outlook. If you invest in people like you invest in equipment, every one of them will be a key part of our success."
Roper and Patel predict 2004 will be a great year for One Source. Patel advises companies to stay adaptable and plan for inevitable changes in their business model and in technology.
"Eagle started the year doing 0.006" lines and spaces. Now it's 0.0025" lines, 0.003" spaces," says Patel. "Now 0.002" lines are coming, and 0.0015" balls are coming, and we're working with 0.002" balls right now.
"Who knows what we'll be working on next year?"
ANDY SHAUGHNESSY is associate editor of PCD&M. PETE WADDELL is publisher of PCD&M.
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|Title Annotation:||One Source Group|
|Publication:||Printed Circuit Design & Manufacture|
|Date:||Feb 1, 2004|
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