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Out of the Box Manufacturing: A Talk with CEO Budvarson
January 15, 2013 | Dan Beaulieu, D.B. Management GroupEstimated reading time: 8 minutes
I recently stopped by a company appropriately named Out of the Box Manufacturing. My friend Mike Lopez, who handles the Northwest region for Prototron Circuits, told me that I should check out the company and, with a name like that, persuasion was not necessary.
Once I arrived I sat down with Chad Budvarson, founder and CEO, to get the low down on the company, how it got started, and why his company is so special.
I think those of you involved in product development should take particular notice of this conversation. If you’re serious about getting your products to market as quickly and efficiently as possible, this is a company you should get to know.
Dan Beaulieu: Chad, it's a pleasure to meet you and get the opportunity to look around and see what you guys are up to. Tell me a little bit about your company and how you got started.
Chad Budvarson: Out of the Box Manufacturing was founded in 2008. After working in the electronics manufacturing industry for several years, I decided it was time to strike out on my own. I’d had enough experience with other companies to know what not to do and what I wanted to do when I had a company of my own. In some ways, this company started out as a pet project for an engineer (me) who knew he could do things better than the competition by thinking out of the box on standard processes and developing new ones that were faster, more reliable, and more cost effective for customers. I know that might sound a bit arrogant, but I don’t mean it that way at all. I just felt that there was a need for this kind of company and I decided to meet that need. Since then we have grown to become a small company doing everything we can to promote creativity, innovation, and dedication to quality from within. Things are working out pretty well.
Beaulieu: What important milestones have you achieved in the years since you started the company?
Budvarson: Starting the company in 2008 during an economic slowdown in the U.S. we were able to not only survive, but grow. We have been able to meet our customers’ needs while maintaining a very high level of quality and on-time delivery. Out of the Box Manufacturing has been able to maintain 100% on-time delivery while growing over 900% in 2012. Additionally we have only had four RMAs for the first 11 months in 2012. Two of the RMAs were due to damaged components on the customer’s side, but we believe in customer service and we repaired them at no charge.
Beaulieu: Before we go much further, I have to say that it is apparent that this is your baby so we should get to know a little about you. What is your background?
Budvarson: I have been in the industry since I was 17 years old. I was the third employee at a company called Visiontec in Spokane, Washington. During my eight years at the company, I grew from a solderer to a supervisor over multiple SMT lines, including machine programming, maintenance, prototypes, handling--just about everything. I then moved to Keytronic EMS and my position there was a true challenge to my skills in process engineering. At Keytronic, I flew to their manufacturing facilities in Juarez, Mexico and Shanghai, China to introduce new technology as well as refine current manufacturing process and improve yields. I moved on to a couple of other CMs as the engineering manager in charge of new product introduction, defect reduction, tooling development, machine programing, maintenance, etc. After leaving the industry for a couple of years, I decided it was time to open Out of the Box Manufacturing. I saw a niche in quick-turn prototypes and low-volume assembly that needed to be filled in the area and decided to take advantage of that need.
Beaulieu: What are the greatest challenges facing your company today?
Budvarson: One of the biggest challenges facing a small, but growing company like Out of the Box is staffing. Trying to attract top talent this early can be difficult.
Another challenge is keeping up with the high capital intensive business and obtaining the latest machinery in an industry where technology changes daily. Machinery for the electronics manufacturing industry is expensive and requires credit and experienced operators--all of which can present a problem for a small business. I have been able to draw on my engineering skills to scout out good preowned equipment and refurbish it so that it is as good as new. It's saved me a lot of money and also allowed me to have pretty up-to-date equipment at a fraction of the price.
Beaulieu: So, in addition to running your company, you also buy and update your own equipment?
Budvarson: Sure, I like doing that. Over the years I’ve learned how to not only update good equipment, but keep it in excellent condition. You have to wear many hats when you’re a start-up. Not to mention the added bonus that it keeps debt way down.
Beaulieu: Excellent, good for you. What are the biggest challenges facing our industry, especially in your market segment?
Budvarson: Keeping manufacturing local and in the U.S. With the global industrial market place able to offer lower costs for labor, continuous improvement and automation in manufacturing is critical. The strength of the U.S. economy and its ability to stay ahead in technological developments will be critical to the future of manufacturing in the U.S. This is a key ingredient to the makeup of our company. We not only want to be an American manufacturing company, but to also be successful here in the U.S. while providing jobs. We want to help our customers be successful as well. We are truly invested in our customers’ success.
Beaulieu: Can you discuss the global landscape and how it has affected your business?
Budvarson: The global business landscape has forced small companies like Out of the Box to rely on innovative prototype, quick-turn assemblies and low-volume production. Most high-volume assemblies go overseas for production due to the lower labor cost. We must continue to get the latest technology and automate as many processes as possible to be more competitive. We have to utilize the talent of employees and technology in the U.S. to our advantage rather than our disadvantage. We do this by tuning prototypes and low-volume assemblies fast with the highest level of quality. This is not only good for us, but great for our customers. Like I said earlier, we are in the business of making our customers successful. If we can do that we all win.
Beaulieu: What technologies do you find most meaningful for your business now and moving forward?
Budvarson: Continued automation of processes with high-quality equipment. As components and assemblies continue to push the limits of size and space on PCBs we have to stay at the cutting edge of technology. We have to push ourselves to do things no one else has ever done and be the first to develop new processes utilizing the ever-changing technology on the market.
Beaulieu: As you look to the future, what are your goals?
Budvarson: Out of the Box Manufacturing has high sales goals for 2013. We also want to become a major player in the manufacturing scene in the western part of the U.S. Other goals would be to include new machinery to increase capabilities and use continuous improvement philosophies to perfect processes and increase quality and on-time delivery. It’s all about speed, accuracy, reliability, and dependability. We want to be an extension of our customers’ business. We want them to consider us as a partner in their success. We want to continue to grow by adding key employees and by continually evolving into a great and rewarding place to work. We want to create a place with a culture that is all about exceeding customer expectations.
Beaulieu: What do you like most about your work? What is the most meaningful part of all of this for you personally and professionally?
Budvarson: The chance to help develop new products every day. We strive to help our customers manufacture products, faster, and at a lower cost.
Working in this industry has made us comfortable with constant change. The ability to switch gears at the drop of a hat, adapt to new parts, new technologies, machinery, or environmental requirements has been a learning curve we are proud to have been exposed to. Just when you are comfortable a customer will come to you with an idea and ask, “How can we build X?” We are there to take it from an idea on a napkin to a real product that works. I just love that!
Beaulieu: What are you parting words of wisdom?
Budvarson: Customer service has been lost in the low-volume manufacturing world. With the nature of the business in today’s market, it is a focus of Out of the Box to make sure that taking care of the customer is more than just a slogan. We want to create lasting partnerships with businesses rather than just develop a customer base.
We also embrace change and new technologies, we do not fight it. We know that change will happen, products and parts will evolve, and assemblies will get smaller. We want to continue to push ourselves and avoid getting bogged down in standard processes. There is always room to improve and better ways to build products. We want to not only foster this environment for our employees, but also for our customers.
Beaulieu: Chad, it’s been fun. I’ve enjoyed meeting you and talking about your company. It’s so refreshing to meet someone like you who had a vision and turned it into a reality. Good job. Thanks for taking the time to talk with me.