May/June, 2012
www.us-tech.com
Page 19 Manufacturing: Bringing it Home By Arnold Fletcher Z
eeVee, Inc., a developer of high definition video distribution products, recently moved its
overseas contract manufacturing operations to Massachusetts from China, where it had been manufac- turing since introducing its first-gen- eration products about five years ago. During the initial product devel-
quality improvement process or introduce product variations. According to Vic Odryna, co-
founder and CEO of ZeeVee, the infrequent manufacturing operations also meant the company had to tie up huge amounts of cash each quarter before manufacturing even began, on products that would not be brought to market for months. Then, the products might be on a ship for two or more months, tying up cash for even longer. “It’s almost like a pre- payment — paying for products even before we have them in the building,” he says. Other related issues includ-
ed customer fallout due to damage incurred during ocean transit, and the headaches of dealing with replacement costs and insurance.
Shipping Logistics Issues The situation led to shipping
logistics issues. Planned orders could be shipped by boat at a reasonable cost, but large, quick turnaround customer orders required use of expensive air freight options, which boosted costs considerably. Eventually, Odryna asked him-
self if it might be time to reassess the actual cost-effectiveness of manufac-
turing in China. At the same time, he also took a hard look at what benefits might accrue from manufacturing close to their headquarters in Lit - tleton, Massachusetts.
Seeking U.S. Partner The company was eager to gain
product flexibility, rapid prototyp- ing, and design for manufacturabili- ty, which would help to sustain the company’s high growth rates while achieving continued customer satis- faction.
Continued on page 32
Suntron employees assembling ZeeVee products.
opment phase, ZeeVee had deter- mined that U.S. manufacturers couldn’t adequately support their business model. As the product line evolved, ZeeVee management re - assessed the decision after factoring in scale and total cost of procure- ment. While generally satisfied with the relationship with its Chinese manufacturer, a product shift from consumer to commercial gave ZeeVee an opportunity to reconsider the best type of manufacturing arrangements for its business. After extensive re- evaluation, ZeeVee partnered with Suntron, a North America-based manufacturing services provider whose capabilities matched those of Chinese manufacturers, while also offering serious logistical, cost and manufacturing benefits. Eventually ZeeVee halted Chi -
nese manufacturing and shifted its operations to Suntron, which has manufacturing facilities in Massa - chusetts, just a few miles from ZeeVee’s headquarters. The jobs creat- ed were a real boost to the local com- munity, and the successful switch has given the fast-growing company lower overall costs, simpler logistics, and faster shipping time, as well as improved communications, rapid pro- totyping, and better response-time on manufacturing issues.
Started with China ZeeVee was originally founded
in 2006 to connect home entertain- ment, computer and the Internet. As the company matured, its focus changed from the consumer market to commercial HD video distribution within hotels, airports, restaurants, bars, schools, hospitals, and other areas high quality video is shown. Before too long, the shift from
consumer to commercial products began to have an impact on the com- pany’s high-volume manufacturing business. In China, product builds were only performed every month or two, and the units produced were enough to last for long periods of time. The large, batch-oriented nature of production — required to keep costs low — limited ZeeVee’s agility, making it difficult for the company to implement a continuous
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