Building steadily on a reputation for supplying high-tech components, Eimac has found a way to link its past with its present. Consider: The Klystrode IOT devices being shipped from Eimac in 1999 are the most technologically advanced high-power output devices for HDTV and UHF television transmitters. The low-voltage-transmitting vacuum tubes produced by Eimac in 1934 were the technology required by the then new radio broadcasting industry.
The common link is that Eimac has never stopped being a technical innovator and producer of superior products. Today Eimac is one of six divisions of communications & Power Industries Inc. (CPI), headquartered in Palo Alto, Calif. Eimac contributes about $45 million of CPI’s $260 million annual sales. John Allan, Eimac’s vice president of marketing, says the company’s products are sold around the world using both direct sales and a distribution network. The primary distributor, Richardson Electronics Ltd., has 20 international offices, providing Eimac “with a very powerful sales organization,” according to Allan.
Eimac has carved out strong market positions in communications; medical; industrial products including material processing, instrumentation and voltage generation; radar; electronic countermeasures; and scientific areas including reactor-fusion, programs, and accelerators, plus microwave and power grid devices. One of Eimac’s largest growth areas is UHF television, particularly digital TV. According to Fred Koehler, Eimac’s president, the digital TV market is almost exclusively domestic at this time because the Federal Communications Commission is driving the conversion from analog to digital. When asked if it is one of the company’s major profit centers, Koehler quickly replies, “Absolutely. Sales into this market this year are already more than double last year’s, and we expect substantial increases into next year.”
The industrial product group includes components for dielectric heating and water-processing equipment. Eimac vacuum electronic devices are also found in plastic welding equipment that is used around the world by thousands of manufacturers. With an engineering staff of about 40 employees, Eimac continues to pioneer new developments. It developed high-power vacuum electron devices (VED) incorporating innovative Pyrolytic graphite grids for short-wave and UHF television broadcast. By achieving power output levels in excess of 2.5 MW, Eimac rates as the technology leader in high-power gridded VEDs for scientific research.
Capital Intensive Business
Much of the equipment needed to produce Eimac’s products is highly specialized and “exists in only one or two other factories in the world,” Allan notes. Koehler further explains, “If you set out to recapitalize this business, first you couldn’t afford it and, second, you couldn’t do it. It is so specialized, with custom equipment having evolved over the 65 years Eimac has been in business.” Annual expenditures tell more of the story. Annual re-investment in capital equipment averages $1 million a year. Koehler places the investment in equipment maintenance and support at another $1 million. Tooling costs alone average $25,000 per month.
Production is centered at Eimac’s San Carlos ISO 9001-certified facility, consisting of 320,000 square feet on 18 acres. Several clean rooms throughout the plant are used for the critical final assembly stages of the production lines. “Much of the production is process oriented, with a lot of brazing performed in special fixtures,” explains Koehler. The company has an extensive parts-forming operation working with exotic materials including molybdenum, nickel and very high-purity oxygen-free copper. Eimac’s in-house fabrication includes a machine shop with both CNC and conventional machine tools and equipment for the forming operations. Tool engineering and initial production of new tooling is an in-house operation, with follow-up tooling built by vendors.
Good vendor relations have long been important at Eimac, both in the company’s role as a supplier to its customers and as the customer for its vendors. Demand-flow technology techniques have represented an area of training for Eimac employees, and that philosophy has been modified to meet the company’s needs. “We pull products through the manufacturing system. We don’t push them,” says Koehler. Key vendors are brought in early in the engineering phase of new product development and, where possible, Eimac seeks strategic alliances with vendors. One close cooperation example: Divaricate Inc. supplies machining operations for Eimac from a facility at the Eimac site. “It’s a very unique relationship,” says Koehler, adding with a laugh, “Talk about linked, they are on our phone system.”
Relatively long production runs can be made to stock Eimac’s distribution network.. But other segments of the market, combined with the trend toward just-in-time deliveries, can impact Eimac and its suppliers with very short runs. Plus, says Allan, delivery times demanded by the idustry have come down dramatically from 120 days to 30 days. Eirmac’s solution is simple: Be very responsive. That concept will help Eimac meet some future challenges. Koehler sees the need for a bigger share in the global markets by overcoming subtle trade barriers that often keep Eimac from even bidding on sime work in western Europe, Allan recognizes the “need to retain the support with oru installed base and, at the same time, be responsive enough to get into new markets as they emerge.”
With Eimac’s technical and business expertise as a foundation, turning those challenges into growth opportunities seems assured.