Feb 18, 2014
Colorado Springs, Colorado
Electronic components for aerospace and medical
By Becky Hurley
CEO and Founder: Jay Palace
At the car wash, a Linear Manufacturing-produced controller will digitally transmit your credit card information directly to the bank. Or it may help deliver sound waves through earphones to help soothe an autistic child. Wastewater systems use its circuitry to regulate the release of powerful enzymes that clean sludge from drinking water.
“What we do today is dramatically different from our initial business model,” says CEO and founder Jay Palace, just back from the Consumer Electronics Show in Las Vegas. In the early days he called on local high tech companies to find out if they needed prototypes. In the late 1990s, however, high tech manufacturers began moving most work offshore, and the company was forced to shift gears.
By 2000, the operation refocused on quick-turn manufacturing and began -- as a subcontractor -- to build specialized components for other manufacturers. Linear Manufacturing’s book of business today includes Design for Manufacturing (DFM); turnkey materials purchasing, scheduling and product assembly as well as product testing and box-build assembly.
Its 35 or so different clients represent industries ranging from medical device and consumer electronics to aerospace and energy. Some have become strategic partners.
And almost all are located outside the Pikes Peak region.
“We’re a boutique operation so we get special attention from other manufacturers,” Palace says. Examples of original equipment manufacturer (OEM) teaming include working with a medical device company to develop an electronic tracker for assisted living communities or building greenhouse watering systems for another.
That ability to adapt to the changing high tech landscape has not come without challenges. Palace says his organization’s technology update window is every six months. Fortunately his 40 employees are willing to change with him. Employee retention averages about seven years.
It’s a good thing because manufacturers will need them as technology surges ahead. Smart phone technology is becoming a sort of master controller, linked by specialized circuit and chip technology to a long list of shopper behaviors and consumer needs, Palace says referencing the CES show’s latest gadgets.
To compete with cheap overseas circuit board manufacturers, Linear Manufacturing has also implemented an “open book” policy. That means the company’s profit and cost to the client is disclosed upfront. That’s a key selling point in a highly competitive field that includes overseas players.
“Companies that depend on Chinese manufacturers for products like ours have no recourse if they fail,” he points out.
Palace is also a big believer in information sharing, and for the domestic manufacturing industry to survive, he believes in mentoring or joining forces with other electronics engineering companies.
Currently in a joint venture with Colorado Springs-based KS Technologies, he believes a lot of small companies have great ideas for a product, but don’t have the financing or connections to take it all the way.
“I’m not a bank, but I’m willing to help by linking a promising start-up with investors or with groups that can help and share a vision.”
Opportunities: There’s a tremendous opportunity to share information and market updates in this industry. We need companies to participate in a manufacturer’s forum – a way to mentor and help each other. Face time with each other and our clients still counts.
Challenges: The constant changes in electronic technology. You have to be willing to embrace rather fight change. Locally we also need to work with the University of Colorado, Colorado Springs, the Colorado Springs Technology Incubator and others to make sure there will continue to be jobs in manufacturing.
Needs: A stable economy, a strong coalition of electronic engineers and a government that promotes innovation at the small business level.