Thursday, September 23, 2010

What We Think is Unique About Us….What Do YOU Think?

VMI has been around for thirty years. We’ve outlasted many of our competitors, who’ve been bought and sold countless times. So what makes us different, (and so darn lucky!)?
Here’s what I think –

First, VMI is privately held. That gives us a huge advantage. We’re not traded on the Stock Market, and that means we can focus on long-term goals. Taking the long view sometimes means sacrificing a percentage of profitability in the short run. That can affect quarterly profits, and if quarterly profits are not maximized, Wall Street throws a fit. So, basically, because VMI is a private corporation, we are not as susceptible to the same corporate whims as, say, other high voltage manufacturers.

Secondly, VMI has great customer service. Regardless, VMI strives to be fair in all transactions, including tooling, NREs, and returned material. Related to customer service is our Product Guarantee Policy. If it doesn’t work, return it. There are, of course, some exceptions, but when there is any doubt, we would rather err on the side of customer service.

Third, VMI’s strength is our ability to work with customers to solve complex problems. No other company will go the distance to make sure the product meets the customer’s need – especially if the design cycle is a long one.

Fourth – we are constantly striving to improve our products and services. We listen to our customers, to their suggestions, comments, and complaints. And we try to do something about them. Always, we try to make it better.

So basically, we think we’re pretty unique because we really are customer focused. Without our customers, we wouldn’t be here.

What do you think is unique about VMI?

Friday, September 17, 2010

Who is Liable When Customer Supplied Materials Fail?

One of VMI’s strong points is our ability to work with the customer on custom designs.

Every once in a while there is a need for ‘customer supplied materials’. The reasons are varied, but usually have to do with material availability, timing, ease of shipping, or economies of scale.

Sometimes material will be shipped to a customer’s facility where they make a modification to it. That same material is then shipped to VMI to be used in the manufacture of products for the same company supplying the material.  At that point, we've come full circle.  The customer is the supplier, is the customer......  

Questions of product liability can get complicated quickly.

One of the big questions is, “What happens when you build a part with customer supplied material, and that part ends up being scrapped?” Related questions include, “How do you handle the loss in material and labor?”, “What if we damaged the material they supplied, and caused the part to fail?”, or, heaven forbid, “What if they supplied us with defective material, and we built parts with it?” Those are just a few questions, off the top of my head!

Determining liability for a failed assembly can be difficult. Just the process of performing a failure analysis requires resources that may or may not be split equitably. The problem may even be indeterminate. Then what!?

Dealing with situations like these requires a good, solid relationship between companies. Accurate and timely communication is a must.

How does your company handle situations like these where your customer is also your supplier?

Tuesday, September 14, 2010

Sometimes We Have to Say “No Bid” – Four Determining Factors

VMI has been in business going on thirty years. Way back when, VMI made voltage multipliers. (In case you didn’t know, VMI is short for “Voltage Multipliers, Inc.”). When the world’s supply of high voltage diodes joined the endangered list in the 1980’s, VMI invested time and resources in manufacturing their own. The intent was to keep the supply going so they could continue to build assemblies.

Then, a funny thing happened on the way to the future. With the advent of LCD displays during the 1990s, demand for voltage multiplier assemblies took a nose dive. Fortunately for VMI, by that time, high voltage diodes had become the mainstay of business.

Today, VMI boasts several product lines, many of which came about as a result of VMI’s ability to find solutions to customer’s unique applications. Almost always, the applications were technologically challenging, fast paced, and definitely not mainstream.

Some projects are clearly not a good fit, and entering a ‘No Bid’ is a no-brainer.

But what about the borderline cases, the ones that don’t fit neatly between the lines? The ones that, maybe, with a little bit of tweaking and a lot of hard work, might clean up nicely…? Sometimes the calls are pretty tough.

Rarely do one or two factors flag a project as no-bid. Frequently it is the compound effect of several factors. In the end, a project has to be profitable in one way or another. The profit may be tangible or intangible, but it has to be there.

There are many factors that influence the decision to bid or no-bid. Here are four of them, in no particular order -

1. Resources - Based on the estimated complexity of the project, do we have the resources necessary to deliver a design within a reasonable amount of time? Are there minimum buys on materials? If so, how much? Minimum buys, and lead times, can make a project less attractive, and are often things VMI has no control over.

2. Need By date – If the need date does not allow a sufficient amount of time for design and verification, it’s a red flag. Power supply applications take significantly longer than typical rectifier or multiplier designs. The turn-around time on a simple rectifier or multiplier might be as short as 24 hours. In any case, there has to be sufficient time allowed for design, test, and possibly multiple iterations.

3. Life-time quantity – There are no hard and fast rules about life-time quantity, but a certain amount of potential - future business opportunities, developing a relationship with a new customer, or even supporting an existing customer on a financially negative project – has to be present.

4. Target Price - Is the target price reasonable? If we can’t meet the target price, how close can we come, and how soon can we get there? Often prices come down after the prototype stage. This can be attributed to design stability, taking advantage of scale – i.e. purchases made in volume, continuous process improvement, and NREs that may have been amortized into prototype pricing. If the target price is $5 for a 100kV power supply for a life-time quantity of ten, it is apparent up-front that a project like this is not a good fit. However, if the unit price is $500 for a monthly quantity of 10, it may warrant a closer look.

In the event VMI no-bids a project, we do it with great regret. It pains VMI to have to no-bid a project. We love a good challenge. Solving technical problems pushes the limit on our comfort zone and helps us grow.

In the event we “no-bid” a project, we will do everything possible to steer the customer in the right direction, even if it means sending them to one of our competitors.

As they say, "Timing is Everything"....

Wednesday, September 8, 2010

Challenges of Off-shore Outsourcing

Outsourcing is a common corporate cost-cutting strategy. Many of us live in fear of losing our jobs to call-centers located in other parts of the world, or cheaper, imported products.

It's not going away any time soon.

When it comes to manufacturing, outsourcing key components can be especially troublesome. If, on the other hand, the component is established, supply is stable, and multiple sources are available, out-sourcing may not be much of an issue.

When problems crop up, as they invariably do, accessibility to the supplier is the key to finding a solution quickly and painlessly. There are many reputable companies worldwide, but, hey, let’s face it. Communicating with a company a few time zones away is difficult enough. As the number of time zones goes up, communication becomes almost impossible. I haven't seen any scientific data, but for every increase in time zones, I'll bet there is a corresponding increase in difficulty of communicating with the supplier. Anyone care to hazard a guess? Does it double? Triple? Quadruple?

Off-shore outsourcing gets complicated very quickly. Tariffs and trade restrictions change fast, and you practically need a legal department to stay on top of things. Cultural differences and language barriers add a whole new level of complexity.

The bottom line is, if delivery and consistency are important, keep it in-house.

If it is one of your core competencies, don’t even think about out-sourcing it.

Anything else is fair game.

Friday, September 3, 2010

More on Opto-couplers

Opto-couplers are optically isolated devices. They come in handy when systems of different voltage levels have to be coupled together, and when controlling noisy inputs or outputs. They are often used to provide system isolation, or as a remote system control.

Specific applications include
  • high-end instrumentation
  • lab equipment
  • linear regulators
  • high voltage switches.

The idea is pretty straightforward – forward current through LEDs generate smaller leakage current in a photo-diode. The leakage current is linear, and can be monitored and controlled.

VMI manufactures several styles of opto-couplers in several breakdown voltages.

• The OC025 features the lowest breakdown voltage, and also, not coincidently, has the smallest foot print (approximately .46” x .46” x .33”, (11.7 x 11.7 x 8.3mm), excluding leads.

• The OC100 family has a Vrwm of 10kV to 15kV, depending on the selected product. Dimensions are approximately .45” x 1.0” x .32” (11.4 x 25.4 x 8.1mm), excluding leads.

• The OC250 has a Vrwm of 25kV, and comes in the largest package, measuring 1.4” x 2.1” x 1.0”

For more info on applications, visit our website.