Milwaukee Electronics: Screaming-Fast in Pursuit of 'Perfect Products'
I had the pleasure and opportunity to talk with Jered Stoehr, VP of sales and marketing at Milwaukee Electronics, to learn more about the company and the innovative ways they are meeting the needs of today's OEMs through a dynamic mix of engineering and manufacturing solutions.
Judy Warner: Jered, nice to speak with you again. Can you start by telling me a little bit of the history of Milwaukee Electronics?
Jered Stoehr: Sure. Milwaukee Electronics actually began in 1954 in Milwaukee, Wisconsin, where we engineered, designed and manufactured a hi-pot tester. In those days, we were essentially an OEM. From there, our strong engineering, design and manufacturing abilities afforded us the opportunity to begin doing this for other companies—and now we are an engineering driven EMS company. In 1988, we designed our first microprocessor; in 1999, we opened our second facility outside of Portland, Oregon; in 2003, we opened our third facility in Tecate, Mexico. My father bought this company in 1985 and it is a privately held company. Although I’ve personally never seen one of the original hi-pot testers, we got a call earlier this year from a customer looking for a part—which is amazing because that machine is still in use after 40+ years!
Warner: That’s unheard of these days—nothing we make now is built to last!
Stoehr: Exactly! We have a driving principle here that we want to make a “perfect product.” Which means we build what our customers want, when they want it, and have no returns. That is what we aspire to.
Warner: That’s a lofty goal, but one I’m sure your customers feel and appreciate. Tell us about your product mix and how they fit into each of your facilities.
Stoehr: We are extremely diversified here. In general, we are a high-mix, low-volume manufacturer. The markets we serve include medical, industrial (which is very big in the Midwest), consumer electronics, aerospace and defense and material handling—just to name a few.
Warner: What certifications do you maintain to serve these markets?
Stoehr: All our facilities are ISO-9001 certified. Portland is pursuing 13485 now and expects to be certified in the fourth quarter. All our US facilities are ITAR registered. Wisconsin has a strong industrial base that we serve there. Here in Oregon, we do more medical, consumer and mil/aero. Tecate is more mechanical and production work.
Warner: What is the total size of the company now, Jered?
Stoehr: We have 420 employees, and we are an upper Tier 4 revenue-wise. We are small enough to be very responsive and nimble, but large enough to take advantage of economies of scale.
Warner: Last time we talked, you mentioned Screaming Circuits, your internet-based QTA turn-key assembly service. Is that work done in one facility, or in multiple locations?
Stoehr: Screaming Circuits is here in Oregon only—which we started in 2003 in response to what was going on in the late ‘90s when bare board manufacturers were starting to put quoting and ordering systems online. At that time, no one was doing that for assembly services.
Warner: I’m guessing this is just for quick-turn prototype work?
Stoehr: We deal primarily with prototypes, but there’s a lot of need for small-volume production that we handle also. Basically, it’s a transactional manufacturing model, so most of the jobs we do we will probably only see once. For those customers it’s all about speed and responsiveness – every order we get is hot and many of our orders are manufactured in two days. It’s a very challenging environment but our engineers love it and the variety it gives them every day.
Warner: So how does it work exactly?
Stoehr: We’ve invested heavily to develop our website to make it efficient for customers. Now, full turnkey orders are quoted and placed online. Customers put in the bare board information, upload their BOM and put together a quote and place an order in real-time. All the inventory at Digikey and Mouser is available to pull from. We work with Sunstone Circuits for the bare boards. With a click of the mouse they can place an order and save a lot of time and effort. We put our pricing right online—and it’s a firm price.
Warner: That’s an amazing model. What kind of resources do you put to work to keep that running?
Stoehr: We have about 100 full time employees working six days a week, 24 hours a day. When we started out, we actually patented a process and used fixtures that would enable us to machine place cut-tape parts. When living in a quick-turn environment, identifying and resolving issues becomes a critical success factor. All our employees are involved in documenting, communicating and resolving issues for customers so that orders don’t get delayed.
Warner: Well congratulations, it sounds like you’ve developed a timely and highly desired service. How much of the work is kitted product verses full turnkey?
Stoehr: Most of it is turnkey now. It didn’t start out that way—but it certainly is now.
Warner: What other kinds of challenges do you see customers facing in today’s marketplace, and how do you address these at Milwaukee?
Stoehr: Time. The time it takes to manufacture a product is always a challenge. So besides the QTA prototypes we do at Screaming Circuits, we have Kanban programs set up for customers. For example, in the case of one customer, they can order at 3 pm today and have assembled boards by 10 am tomorrow—because we keep two weeks’ worth of inventory on our shelves. There are about 30 different products we provide for that particular customer. We also work with suppliers to create custom programs for us so our standard lead time runs about two weeks, but we cut that down to about one week when required.
Warner: What other opportunities and challenges do you anticipate in the next year or so?
Stoehr: An opportunity I see is to expand the Screaming Circuits model into standard EMS products. So many customers these days have unpredictable demand because technology is changing so fast. That level of high flexibility that customers want appears to be underserved.
In regards to challenges, I would say attracting good engineering talent is a challenge. This industry is not as attractive as it once was, and fresh talent is hard to come by. It’s out there, it’s just a lot more effort to find it than it used to be.
Warner: How about trends you notice?
Stoehr: Three things come to mind. The first thing is reshoring, especially in Mexico. We’ve really seen a spike in increased interest in using Mexico over Asia. Port closures last year, logistics complexity, and other factors are making Mexico more attractive.
The second trend we’re seeing is how complex the compliance issues have become today. There are increasing regulatory issues that are making international sales more complex and costly. We expect this trend to continue, and there’s a larger burden on companies to provide much more data on compliance, while most companies have trimmed or eliminated their documentation and support departments over the last 10 years.
Finally, in the prototype market, the maker movement is an exciting one for us. Basically, it’s turning daytime engineers into night time entrepreneurs of hardware startups of all kinds. The maker movement, along with the open source hardware movement, has lowered the barriers to entry. Add crowd-funding websites Kickstarter.com and CrowdSupply.com, and we’re seeing a resurgence of the electronics hardware startup industry in this country.
A lot of these companies are moving so fast, they only build a few hundred or few thousand boards before changing designs. Traditional manufacturers don’t want that business, but it fits the Screaming Circuits model perfectly. It’s also refreshing to see more being invented, designed and built in this country—that’s something we should all be excited about.
Warner: Thank you very much, Jered.
Stoehr: Thank you.