Circatex - two months on - keeping it under control.
Aug 16, 2004
Two months have passed since Pete Starkey's initial interview of Steve Jones, Chairman of Circatex - the UK bare-board fabricator bought out of administration by a management team led by Mark Beesley, Neil Chilton and Geoff Allison.
Steve now reflects upon the new company's first two months trading, and gives an insight into the direction in which Circatex is being positioned for the future.
Peter Starkey: It's only a few weeks since the MBO, but the new Circatex is already being perceived as a mature company, and those "shackles of the past" you referred to have pretty-well disappeared into the mist. I'm sure it's been a hectic time for you. Can you give us an idea what has been going on?
Steve Jones: Yes - it's been a bit of a blur, but I won't be tempted to talk about "..our feet not touching..", they actually remain in very firm contact with the ground!
June and July have certainly flown by and we have made considerable progress. Our trading figures are well ahead of forecast, and our delivery performance is outstanding. For the first time in South Shields' history, we are 100% on-time, consistently! Zero arrears, zero overdue! We closed July 30% over business plan, and our current book-to-bill is 1.4, but we are not getting carried away. It's all under very careful control.
Peter: It certainly would appear that business is moving ahead more briskly than expected. What do you consider the main reasons?
Steve: There are some general market factors - we are still in the "summer silly season" and there is a drift of work back from China because of quality and lead-time issues. Specifically, we have seen a substantial demand for fast-turnaround work, and our ability to respond on three days to medium-volume batches - which most UK companies would probably consider "high-volume" - has brought us a lot of new work. Although our normal production lead-time is 10 days, three-day turnaround is now routine and, so long as we continue to carefully manage our growth and resist the temptation to become over-committed, we can offer it as a standard fast turnaround service. A 48-hour service is available to special order even with "higher" volumes.
Peter: How do you keep your customers informed of their order status in this fast-turnaround environment?
Steve: We have introduced a real-time WIP-tracking facility, which the customer can access over the Internet by his own password and get almost instantaneous reporting of orders in process and stock levels. Our MRP system updates everything automatically. It knows exactly what our cycle times are and it flags-up immediately anything in danger of drifting off-schedule. This is all part of our declared open-door policy.
Peter: On the subject of Circatex's open-door principles, how are you now being regarded by your competitors?
Steve: Mark Beesley and I accepted an invitation to present ourselves at a meeting of the Intellect PCB Fabricators Group, to explain our strategy and the business philosophy of the new company. Although we were apprehensive as to how we might be received, there was no hostility at all; our colleagues in the trade were genuinely interested in what was going on. They appreciated that we were prepared to be frank and open, and that Circatex's commitment is to become a responsible member of the PCB manufacturing community.
Also, they were relieved to learn that we have neither requested nor received any government aid - this topic having been the origin of a lot of bitterness in the past. Several members of the group have already been up to South Shields to see for themselves what we are about. We shall also be hosting an Institute of Circuit Technology technical symposium in November, on the subject of Digital Imaging Techniques. Fifty delegates have already expressed an interest in attending and the factory visit is considered a highlight of the day. Whilst we are thinking small, fast and agile, we remain one of the largest manufacturing facilities in Europe and the plant is very impressive.
Peter: Can you tell us what product developments you are presently working on?
Steve: I won't go into great depth today, but we see significant potential in the market for flexible circuits, and our manufacturing trials have given very positive results.
Our engineering capability is well established, and we have proven that our recently installed inner layer process equipment, which was designed with ultra-thin cores in mind, is well suited to the handling of flexible materials. This extra line is capable of processing over 50,000 flexible panels or thin cores per week. Our only issues are material availability, because of local demand in the Far East, and whether we collaborate with a mainstream flexible circuit producer. My views on the elimination of conventional printing by using digital methods are well known and we are investigating a number of interesting avenues.
Peter: And from the business point of view?
Steve: It goes without saying that, whilst endeavoring to earn the respect of the industry for our professional integrity, our primary objective remains to continue the steady build-up of our momentum - to carefully control the evolution of the business as a fast-response service-driven company, and to maintain the standards of quality and delivery performance which we have established. However, with our mass-production experience and front-end capability, together with the fast-turn performance which we are consistently achieving, we have an enormous potential to give a new dimension to the smooth ramp-up of new-product introduction from design validation to high-volume production. I will have the opportunity to expand on this topic at the EPC2004 conference in Cologne in a few weeks' time.
Peter: I shall be in the audience, taking notes! Steve, thanks once again for taking the time to let the outside world know how things are going at Circatex. All success for the future.