Electric Eye on the Bottom Line

It's best to be nimble when you walk among giants. That approach best describes Scientific Technologies, Inc.'s (STI) way of manufacturing factory-automation equipment. The Hayward, CA, company deftly balances engineering creativity with manufacturing pragmatism. Business Week and Forbes call it one of America's best small companies. Its customers call it when they need monitoring and safety devices--fast.

Started with a $10,000 investment in 1971 by Anthony Lazzara, an attorney with a technical bent, STI has grown to a $26-plus million diversified electronics enterprise with three divisions: Optical Sensors, Control Components, and STD-bus computer-board-maker Datricon. Originally a family business, the publicly traded firm maintains the mom-and-pop virtue of a small management structure while paying close attention to the bottom line. At the same time, it embraces cutting-edge design and production techniques, strategic partnerships, and global competition.

"We want to be the number-one manufacturer of pulse-modulated infra-red scanners and light curtains," explains STI Vice President Jim Lazzara. In its market niche of safety interlocking devices, it's already number two and trying harder. The company has distributors throughout most of the developed world. A partnership with Guardmaster, Ltd., Wigan, England, a manufacturer of electromechanical safety relays, compliments STI's electronic safety products, making it a one-stop alternative for OEM designers.

World-wide perspective. The foreign connections help with technology development. "You've got to be in Europe," says Lazzara. "They're driving the industrial-safety standards for the rest of the world." STI's six different models of safety IR light curtains meet both North American and the more-stringent European standards. Each model includes sending and receiving units and a power supply/controller. The controller regularly monitors the system for faults. If it discovers a sensing-system fault, or if an object breaks the beam, the controller triggers a machine-stop signal in 45 msec or less.

Models range from the single-beam BeamSafe(R) through the OptoSafe(R) and OptoFence(TM) lines. The latter is available up to 96-inches high with beam spacing of 0.75 and 1.5 inches, respectively, with sensing ranges up to 100 ft. The modular FlexSafe(R) line simplifies machinery retrofitting. Its curtain segments interconnect with single cables to form appropriately shaped, continuous intrusion protection around punch presses, robotic workstations, or other machinery.

STI also manufactures a variety of profile-determining scanners, proximity sensors, pressure-sensitive floor mats, capacitive palm switches, and wireless communications equipment. For all its product diversity, the company's 20% average growth through the '90s came about through judicious acquisitions and empowered employees, maintain its officials.

Jeff Edwards, currently STI's MIS manager, illustrates the company's business technique. Edwards was one of five engineers to start Datricon, an STD-bus board maker for machine-tools. As he tells it, Datricon originally prospered, but got into financial trouble when it went public in the middle eighties. "Professional managers were brought in, but they were big-company types," he says. "They'd focus on reports, things that required more gloss and staff--things a small company can't afford."

Datricon was about to go into receivership when STI bought the company at a fire-sale price in 1990. Changes were swift. Layers of bureaucracy disappeared. "Everybody learned to wear four or five hats," Edwards says. Every task was flow-charted and examined to eliminate non-value-added activities. Today, the Datricon Div. is a profit center that nicely augments STI's portfolio of factory-automation electronics.

"Everything at this company revolves around reducing cycle time and boosting customer satisfaction," asserts James Ashford, vice president of Operations. Every product undergoes Pareto analysis to spotlight high-payoff design changes. Capital investments that lead to quality improvements receive quick approval. For example, STI was among the first U.S. companies to replace its bed-of-nails circuit-board testers with fully robotic equipment.

The company's flat management structure also contributes to production-cycle-time reduction. Practically every employee has a designated internal customer. Quarterly performance reviews weigh internal-customer satisfaction heavily. "It takes potential personality conflicts out of the equation," reports Ashford. With little bureaucracy, customer feedback can reach the proper person within the company quickly, often, says Ashford, within minutes.

For STI engineers, the open structure and emphasis on quick turn-around seem ideal. "We recognize that all your costs get fixed in design," says Ashford. "We develop a good product spec and target price that engineers need to meet, but don't necessarily restrict the technology they can use--that would stifle creativity."

The philosophy proves attractive. Jeff Edwards, the former Datricon manager, had just returned to the main plant from a satellite facility devoted to custom assembly. "I wanted work where design for manufacturability was more of an issue--a just-in-time, pull-type manufacturing process," he explains. "That's what we do here."