Strata-gee’s Exclusive All-Access Tour of AudioControl
When invited to visit AudioControl some time back, I was intrigued. While AudioControl is a secondary supplier, one step below the major electronics manufacturers, it has carved out a unique niche for itself with a solid and growing hold on the AV and mobile audio installer and integrator segments. They’ve had a long record of success, which in the last three years or so has actually increased in intensity with impressive double-digit annual sales growth, according to CEO Alex Camara.
When the stars – and our schedules – finally aligned, Camara offered Strata-gee unprecedented access to the company, including granting me the opportunity to be a “fly on the wall” and sit in on operations meetings, a company-wide CIP meeting, and even an engineering meeting to discuss current and future products – no holds barred. What I learned made a big impression.
See what we discovered in our visit to AudioControl…
Early on a recent Monday morning, I exited the elevator at the Hotel Bellevue (Bellevue, WA) and as I approached my driver for that morning, AudioControl’s Chris Kane (VP of Sales), I was taken aback. He greeted me wearing a jacket. Just past him I could see through large glass windows of the hotel lobby the gray, cold, rainy day outdoors. “Are you kidding me,” I asked. “Didn’t anybody tell you guys that it’s summer now.”
Kane laughed, and when I suggested the rumor about it always raining in Seattle must be true, he explained that they have mild and changeable weather in the summer. He assured me it would clear up later, and he turned out to be right about that. With that, we were off to spend the day at AudioControl’s headquarters and main factory. I was full of anticipation.
Two U.S. Based Factories
AudioControl has two factories, one outside of Seattle, and another in the Eastern Washington city of Spokane. I was headed to the facility near Seattle, as this is the company’s headquarters. We turned into a fairly large industrial park area and after a turn or two, pulled up to a fairly nondescript two-tone beige building. There were no exterior signs where we parked, but on the entrance door, you could clearly see the AudioControl logo. A quick aside – I noticed that there are two parking spaces reserved for visitors right by the main entrance…a nice touch of civility and hospitality.
Just inside the entrance is a small-ish reception area, with both fixed and digital signs to welcome visitors. In front of the visitor is a counter where several industry awards for AudioControl are displayed. To my right was a small waiting area with a handful of chairs. Between the chairs is a dummy that is kind of a mascot used by AudioControl as part of their marketing for the mobile electronics division. The dummy is affectionately named “Spike” according to AudioControllers – and he exudes kind of a “cool” factor.
The Operational Heart of the Company
Beyond the counter is a large open office area, which is home to several cubicles with desks, computers, and cabinets. This is the operational heart of the company, with desks for accounting, marketing, and customer support. Employees told me that the company is very committed to supporting its products and it is common for customer support and technical support to work together to get through all of the calls that come in on any given day.
It was in this open office area that Alex Camara, AudioControl CEO, came out of his office to greet us. Camara is a smart and often witty Brit, running an all-american company. Camara first came to AudioControl several years ago as a consultant. He liked what he saw…but also perceived tons of opportunity that, for whatever reason, existing management was overlooking. So Camara bought the company and began chasing those opportunities.
Targeting Residential AV to Grow Revenues
Previous to Camara’s arrival, mobile audio was a much stronger division than residential AV for the company. But Camara recognized the opportunity that residential AV offered – and he began exploring ways to grow the AV side of their business. It was under Camara, that the company decided to enter the AV receiver market – offering high-end receiver solutions to integrators that not only exceeded the performance of many of their competitors, but came from a company integrators could rely upon…with stable programs and policies. Entering the receiver segment was no small decision, but from all appearances, one that seems to be a success.
Personality-wise, Camara has that at-times cutting British wit…often tinged in sarcasm. He can also be intense and driven, traits that likely came in very handy as he sought to reinvigorate a decades-old company – turning it into a more modern growth company. I never visited the old AudioControl, but this new AudioControl was obviously well-organized, with a strong sense of we’re-all-in-this-together attitude coming from the employees.
“You picked a good day to come,” Camara told me. It turns out that several meetings that are held on different rotations have coincided with today. Camara reviewed an agenda created for me, telling me that I would be welcome to sit in on all of these meetings – on the condition that nothing confidential gets revealed in this article. I agreed to these terms. No other factory visit that I’ve made has offered me this level of access. It was refreshing and gave me the opportunity to see how the inner core of AudioControl really works.
Runs A Tight Ship
Camara runs a tight ship, telling me – after I joked about one fairly messy work station on the production floor – that AudioControl has a “clean desk” policy. This means that by the end of every day, every desk must be spotless. That includes, he assured me, the workstation I commented upon. This kind of discipline might seem like overkill to some, but holds everyone to the same high standard of expectation.First up on my agenda was a weekly Operations Meeting. Held in the break room on the main floor, all operations-related personnel attended. This meant it was SRO (standing room only), as a total of 15-20 attendees were more than the break room could accommodate. Still, everyone could hear the meeting, and full participation was encouraged.
Weekly Operations Meeting – Communication is Clearly Encouraged
After an introduction by Camara, presentations were made by Linda Caballero (Manager of Manufacturing), Chris Kane (VP of Sales), and Chris Bennett (Director of Sales – Mobile Audio). Topics included reviewing last week’s production numbers with a detailed breakdown into categories; issues surrounding new computer software the company is running on; info on the status on the beta testing of a new model that will soon be ready for mass shipping, and more.Anyone who wanted to speak was welcome to do so. Several did raise questions which were discussed and answered right then. Communication is clearly encouraged at AudioControl.
Facility Seems Much Larger on the Inside, Than It Looks on the Outside
After the Operations meeting, Camara took me on a tour of the facility. It is deceptively large – even larger than it looks in my photos. The production floor is basically broken down into two sections, one section for the AV residential products, the other section for mobile electronics. We started on the residential AV side.I’ve toured many factories over the years, and they are generally more similar than different. AudioControl works with several local vendors for select parts of the process, but unlike many in the industry who rely on suppliers elsewhere (principally China) to do their engineering for them – AudioControl does all of their own engineering in Seattle. Certain parts and sub-assemblies can come from elsewhere in the world, but the units are assembled here in the USA…something the CEO is quite proud of.
Facility is a Mixture of the Old With the New
In our tour, I saw a mixture of the new and the old. For example, they had an auto-insertion machine to automatically insert components (especially micro-components) into printed circuit boards (PCB). And although their Amistar insertion machine is an older model, there are many secondary brand factories that don’t even have that – they either outsource that process…or do everything by hand, an exceptionally tedious process.But I also saw lots of hands-on work by technicians, some of whom have been with the company for a decade or more. Chris Kane told me that Seattle’s vibrant technology industry has been going through many changes. This is especially true of the audio segment, which has seen many companies go out of business or scale back their production to shift it overseas. Kane identified Carver, Rane, Mackie, and Phase Linear as once vibrant companies that are either gone or have shifted their production overseas.
Not Just Technicians, Skilled Craftsmen
This changing technological landscape has allowed AudioControl to snap up many highly qualified engineers and technicians. I met some of these tech pros on this tour. After observing these technicians work a bit, you come to the conclusion that they are really more like skilled craftsmen (and craftswomen) who were taking obvious and patient care with their process. I think you can almost get the same sense I did, when you look at my photos from there.
Everywhere I looked, I saw stacks of open chassis waiting to be stuffed with boards and components. I also saw stacks of printed circuit boards waiting to be stuffed into their new metal box home. I also saw finished goods waiting to be boxed, and stacks of boxes ready to be shipped.What is truly one of most unique aspects of AudioControl is that they are NOT shifting their manufacturing overseas. Almost all AudioControl products are built in America by Americans.
AudioControl is in Full Control of the Manufacturing Process
AudioControl’s Spokane facility manufactures and stuffs the PCBs. Camara told us that these boards are completely tested in Spokane before they are shipped to their main factory outside of Seattle. Here they are assembled into products and tested again. So every AudioControl product has been tested multiple times before it is shipped to the local integrator.When walking through their factory, I really got the feeling I was walking the factory of a high-end audio manufacturer. This is mainly because high-end audio manufacturers often rely on precise hand-building of products to better ensure consistency and high performance.
Was I Supposed to See That?!?! The ‘Powered by AudioControl’ Story
Take a close look at the photo below. Do you see something out of place? Yes as I strolled around the factory, I saw a stack of panels with loudspeaker manufacturer Leon’s logo on it. So I grabbed a quick shot of it and wondered, “Was I supposed to see that?” Finally, I approached Camara to ask why I was seeing a Leon logo on a stack of AudioControl panels.
It turns out the AudioControl has a “Powered by AudioControl” program. This program is in partnership with other manufacturers – primarily loudspeaker manufacturers – who need things like a high-quality subwoofer amplifier, for example. AudioControl makes and supplies the amp for them, with the Powered By AudioControl logo on the amp. You can see the logo in the photo printed on the left hand side.Following this tour of half of their production floor, I attended a company-wide CIP meeting. AudioControl’s Continuous Improvement Program offers various incentives for the team to improve their efficiency and quality of work and processes. If certain milestones are hit, bonuses are paid out.
Company-Wide Meeting to Discuss CIP
When I say this was a company-wide meeting, I mean company-wide. The team at AudioControl’s Spokane facility were video conferenced in so they too could participate in the meeting.Again Alex Camara kicked off the meeting with a review of several topics including sales performance and new models that are arriving soon. Both sales managers also spoke about sales and products in their divisions, keeping everybody up to date on what is going on. Chris Bennet talked about a pilot program with a major retailer that is being expanded into more of their stores, a big win for the company.
Interestingly, Chris Kane, speaking directly to the residential side of the business, explained to the whole company why AudioControl chose to participate in the InfoComm trade show for the first time. It is clear that many in company feel some pain in the extra duties that come as part of preparing for a major trade show, so Kane wanted to share the benefits of doing so.
Why We Did InfoComm for the First Time
Kane told the group that since InfoComm they are selling more 1U and 2U (rack space) stuff in one week, then they used to sell in a month. He also reassured the staff that the company had a full schedule of meetings at InfoComm that portended to greater growth in the commercial space down the road – “plus” business for AudioControl.
Then Alex Camara returned to address the group on the company’s performance relative to the goals for the CIP program in June. Camara mentioned there were positive trends in many areas, but specifically in the case of their margin goals, the company had hit the trigger point (the point in which bonuses can kick in) in June. In addition to margins, backorders were steadily declining, another element in bonus calculation.
‘We Love CIP’
As a result of this, all company employees will receive a bonus check for June, Camara said to appreciative applause. Bonuses are paid on the basis of a percentage of the employees rate of pay. According to Camara, the average bonus amount for employees is $704, or a total of $32,000 paid out by the company for June.“We love CIP,” Camara said to the applauding employees. “Let’s build on the momentum.”
After the meeting, I asked Camara more about the CIP program and he told me – perhaps unsurprisingly – that it is a very popular program with employees. The key is to set meaningful goals for the company, but goals that can be achieved with effort by employees. The company regularly pays out CIP bonuses. So far this year, the company has paid out $93,000 in CIP bonuses.
A Total of $2.5 Million in Employee Bonuses Have Been Paid
“We’ve paid out a total of $2.5 million in employee bonuses over the life of the program,” Camara told me, with obvious pride in his voice.
After lunch, my next stop was the engineering department for a tour with Brandon Cook, AudioControl’s Technical Product Director. In the main engineering space, I saw three large cubicles, with a desk and impressively large amount of test gear. There also was a separate desk space for another engineer who specializes in software development. The company also has an outside local engineer they work with on projects.
A Robust Engineering Department
Not only that, but they have a new engineering intern (named Vlad) who is helping them out. So that makes a total engineering department of five internal engineers (including department head Brandon) and one external engineer for a total of six engineers. That’s a lot of engineering muscle for a company the size of AudioControl.You might think that with so many engineers, surely a couple of them must be spending their days playing computer solitaire, but you would be quite wrong. Cook told us engineering is slammed most days with a myriad of tasks.
“If you’re in engineering [at AudioControl], you’re a multitasker,” Cook said.
‘Engineering Has To Bless Everything’
Engineers at AudioControl work on multiple factors, such as: supporting service on technical matters – working with people around the world – testing failed products for potential design flaws, testing assemblies and sub-assemblies for issues (such as a faulty part), etc. Sometimes, parts suppliers change some component, and engineering is tasked with testing the replacement part to determine if it works like the original part, or if we can otherwise use that replacement part. Or, on the other hand, purchasing may decide to change vendors for a particular part, and once again, engineering must test the new part out to see if it will work properly in the AudioControl unit.
“Engineering has to bless everything that comes up for a change,” Cook said. “At least 40% of their time, however, deals with new products,” he added.
Engineering gets involved from the very beginning of a new project, Cook tells me. “It’s great when somebody has an idea for a product,” Cook said enthusiastically, “But it’s up to engineering to determine if it can actually be built.”
Engineering Meeting on Future Models
So engineering gets involved in providing “feasibility sheets” for the PRD (Product Requirement Document). The PRD is the first step in developing any new product.
And once a new model is scheduled to be manufactured, engineering is there for the first run, to make sure everything works correctly.“At any one time, we have about twenty open projects,” Cook said. “It’s all about dovetailing in all the work…” which is Cook’s primary responsibility to keep the engineering department running smoothly.
My tour of engineering ended with an actual Engineering Meeting in the main conference room, where Alex Camara, Chris Kane, and Chris Bennett joined us. In this meeting, headed by Cook, several topics were discussed, including issues about current products and issues surrounding new models that engineering was working on. It was all highly detailed and very specific…and very confidential.
But I’ll say this, AudioControl is working on some very interesting products…and initiatives. More on that later…
Tracking Thousands of Parts for Hundreds of Models – Supply Chain Management
After the Engineering Meeting, I met with AudioControl’s Supply Chain Manager, Kyle Schaffer. Shaffer is young, enthusiastic, and totally committed to the challenge of maintaining a full parts inventory for their manufacturing processes.
“Right now, we maintain a supply of around 2,600 parts for our approximately 100 sku’s,” Schaffer said energetically.But it’s not as easy as you might think to keep track of so many parts – and if you run out of one special screw or bolt, the whole line shuts down. Given that any employee can walk up to any bin at any time and take a part or parts out of it, monitoring parts levels, even with computer assist, can leave you short of stock. And while he orders and maintains everything from a large chassis and transformers, to tiny resisters, capacitors, and screws,,,the company has developed a combination or hybrid manual/computerized tracking system. It took them a while to design the system, but it’s working well for them now.
It’s Fun to Work For A Company That’s Winning
Throughout the day, I peppered employees with all sorts of questions about AudioControl. I was especially interested in talking to longtime employees who were with the company before Alex Camara bought it, to see how the company feels now…as compared to under the previous management.
For the most part, they all said the same thing – AudioControl feels like a company on the move. Camara is credited with bringing a new energy and drive to the company. Camara also brought new resources to bear, investing heavily in engineering. And it is that investment in engineering that employees recognize has brought more product updates, new products, new categories, and an overall stronger product roadmap to the company.
Employees feel the momentum…it is fun to work with a company that is winning.
See more about AudioControl at: www.audiocontrol.com.