Since its inception seven years ago, Pentair Electronic Packaging (PEP) has diversified its offerings to include both products and services – in the process establishing a significant global presence, Dan Harvey reports.
Pentair Electronic Packaging (PEP) boasts a Kong-sized footprint that can be easily tracked across the globe.
Headquartered in Des Plaines, Ill., PEP has developed into a leading international provider of standard and custom electronic enclosure solutions. A subsidiary of the international Pentair, Inc., PEP now offers both services and products to leading manufacturers in diverse industries. Its extensive product line provides the highest levels of technology, quality and aesthetics, and ranges from complex, progressive-tooled sheet metal components to cutting-edge, fully integrated advanced telecommunications architecture. This broad spectrum includes the Schroff brand of electronic enclosures, the Birtcher brand of rugged card guides as well as stamped chassis and custom aluminum enclosures.
Parent company Pentair, Inc. is a diversified corporation comprised of two core business groups: the Water Technologies Group, a leading global provider of innovative products and systems applied to water movement, treatment and storage, and Technical Products, a leader in the global enclosures market, designing and manufacturing standard, modified, custom and thermal enclosures that house and protect sensitive electronics and electrical components.
History: Three-in-One Package
Pentair, Inc. established PEP in the late 1990s to provide made-to-specification enclosures for direct sale to telecom and datacom OEMs. “At the time, Pentair, Inc. made several significant acquisitions that included three unconnected electronic packaging organizations,” recalls George Ross, director of marketing communications. “It rolled these businesses and their products into one new business, which it called Pentair Electronic Packaging. For seven years now, PEP has substantially grown as a business unit.”
As Ross suggests, the new subsidiary experienced substantial growth in a relatively short span of time – its sales more than tripled between 1999 and 2001 – a spurt attributable to development of services. “Similar companies had focused on standard modular enclosures. PEP differentiated itself by focusing on the build-to-print and value-added services segment of the market,” recalls Ross. “That segment wasn’t very well served by anyone in the industry. Therefore, instead of focusing only on individual products, we first looked to the value chains and then moved up that chain by increasing the level of system integration and technical services.”
At the same time, PEP developed numerous custom manufacturing capabilities, enabling the organization to develop a business model that enabled it to service the modular enclosure market with additional value-added services. “Also, for customers looking for much higher volumes and a lower product mix, we built facilities to address that segment of the market, which significantly improved their overall business performance,” adds Ross.
As the subsidiary grew, PEP expanded its customer targets beyond datacom and telecom customers to include key growth markets in the security/military, electronics and medical sectors.
Ross emphasizes that PEP is both service- and product-oriented. “We recognized a great opportunity in our market space, which was to lead with customer service,” he says. “None of our competitors was particularly good at it, which is sad to say, so we began focusing more strongly on service and the customer.”
PEP President Bill Biancaniello adds, “Where we once were a product oriented organization, we’ve moved into additional services, which we call custom, or build-to-print. Now, we not only bring our own product line to the table; we also have the capabilities to build our customers’ products. We also increased our design capabilities, so that we can design their products as well – that is, we can prototype.”
Moreover, with its extensive and increasing global presence, the company can effectively transition its customers into low-cost manufacturing. “As the business developed, PEP increased its global footprint, developing its manufacturing capabilities in low-cost countries,” explains Ross. “Globalization of our performance has been a significant milestone in our growth, and it represents something that many competing companies our size cannot offer: the ability to manufacture in low-cost regions in the world.”
PEP’s production facilities now span North and South America, Europe and Asia, as it has developed a manufacturing organization to support partners in all key markets across the world. “We have four main facilities in the United States, but we’re able to use the facilities of our sister companies within Pentair, Inc.,” says Biancaniello.
In the United States, PEP has a 113,000-square-foot facility in Warwick, R.I., a 160,000 facility in Chicago, Ill., a 945,000-square-foot facility in Minnesota, and a 126,000-square-foot facility in San Diego, Calif. In addition, PEP utilizes Pentair facilities in Brazil (170,000 square feet), China (220,000 square feet), France (205,000 square feet), Germany (577,000 square feet), Japan (40,000 square feet), Mexico (250,000 square feet), and the United Kingdom (88,000 square feet).
These manufacturing facilities, all ISO: 9001-registered, employ seamless communications platforms to design, manufacture, assemble, and test products, and manage logistics throughout the supply chain. Capabilities include aluminum fabrication, chassis assembly stamping, testing, finishing and system integrations.
Lean and Clean
Biancaniello points out that as customer requirements drive the need toward higher quality and lower manufacturing costs, PEP focuses on lean manufacturing as a core business process and a Six Sigma program as a quality initiative across all of its operations. “Lean manufacturing eliminates waste in all of our processes throughout the organization,” he says. “It’s not only a core competency, but it’s critical to our success. Along with that is something that we call the Pentair Integrated Management System, or PIMS. It’s a way of taking corporate goals, and then breaking them down to divisional and site goals and, ultimately, down to individual goals. PIMS ties whatever any individual is doing into the overall corporate goals, making their activities contribute to higher-level corporate goals. That is a major part of our corporate culture.”
Specifically, the encompassing PIMS employs value-stream mapping to identify non-value-added activities (waste). It also involves strategy deployment to drive accountability for company objectives at all levels through the monthly key performance indicators, entails lean manufacturing tools (e.g., Kaizen, one-piece flow, total productive maintenance, etc.) and promotes continuous improvement.
“In terms of lean manufacturing, quality and Six Sigma, we have business processes in place that make our systems the best-in-class,” comments Ross.
Services and Products
As far as the aforementioned services, PEP provides design engineering, test and validation, as well as sustaining, manufacturing and value engineering. At the same time, its product line is substantial, indicates Ross. “All electronics must be wrapped in some form of enclosure, and we produce those enclosures for our various markets,” he says.
For the datacom markets, PEP provides server cabinets, server chassis, telescopic slides and cable management. For telecom, it provides base station and battery back-up cabinets, and advanced TCA integrated systems. For the security/military sector, it provides cabinets, chassis, and subracks. For medical customers, it offers embedded controllers, chassis, and cabinets. Products for electronics OEMs include VME, compact PCI chassis, equipment cases, and subracks.
“We have a lot of modularity,” remarks Ross. “Several key technologies are driving our business. These include our Advanced Telecommunication Architecture (ATCA), which is known in our business as an open architecture. The core of our electronics business is built around the open architecture model and the enclosures that support open architectures, of which ATCA is the most up to date. The more traditional technologies are the VME and the compact PCI, which is used for process control in the business-to-business industrial world.”
In supporting the electronic packaging market, PEP embraces four pivotal elements: electronic enclosure, which is the metal proportion; backplane, which is the equivalent of a motherboard in a PC; design systems, and thermal management products. “As our business has grown, we now have a predominant market position in those four key product areas,” says Ross.
“In our industry, you have electronics parts suppliers and metal enclosure suppliers, and at PEP we combine the two,” says Biancaniello. “But we’ve moved up the food chain from building metal boxes to building smart metal boxes, from an electronics standpoint, and now we are able to cool those systems.”
Across its product line, PEP-which has experienced 25 to 30 percent growth each year since 2003-has become recognized as an industry leader: the uncontested leader in some areas and a top competitor in others. When you combine that with its large global footprint, it won’t be long before most of the competition is trampled underfoot.