Arcotronics is ahead of the game
Arcotronics Ltd is one of the world’s leading producers of EMC-RFI filters for suppression and filtering applications, wet tantalum capacitors and a UK market producer of power factor correction equipment.
Through its global operations, Arcotronics Ltd serves a diverse range of companies including Siemens Group companies, BAE Systems Group companies, Selex, Sagem, Alcatel, Philips Medical and a number of US military equipment and geophysical instrumentation manufacturers.
The company was formed in 1954 as part of the Plessey Component Group and originally produced wet tantalum capacitors for the military and aerospace markets. The Arcotronics Group has undergone several ownership changes including recent separation from the Nissei Group, resulting in American bank DB Zwirn taking possession. It remains part of the Arcotronics Group, which has 1200 employees and is headquartered in Italy. Arcotronics Ltd has 90 staff and its head office in Towcester, Northamptonshire has manufacturing premises with advanced EMC measuring and test facilities run by highly experienced technical personnel who advise on all aspects of EMC compliance.
Discussing the company’s new distribution centres, managing director Adrian Flynn says: “In order to compete on a global scale, we went to Bulgaria to give us access to a lower-cost labour market for some of our more competitive areas of EMC filters. We needed a centre producing high volumes at a reduced cost to complement our UK site and the move has been very successful. Establishing a new facility in Shanghai was slightly different – many of our main customers, such as Alcatel Bell Telecom, and several other Europeans had moved from Europe and set up manufacturing bases in China. So the reasons for going were two-fold; to be seen as a local supplier to these customers that had moved to China and to be able to compete against the local competitors for these products.”
Arcotronics has a varied client base and caters to a range of sectors, says Adrian: “The defence market for our military components is strong in the US and the telecommunications market, with our EMC filters, is going very well. Germany is becoming a very strong market in machine tools and industrial products, for consumer goods it is steady and the medical market is looking good with the demand for medical equipments where our components are widely used.”
Seizing an opportunity for further growth and expansion, Arcotronics began the demanding Mil Spec test programme in order to enter the US military market. After a year of working to achieve the required standards, six months of sample testing and a further 12 months of environmental testing, the company achieved MIL-PRF-39006C in November 2005. Since then it has progressed even further: “In February of this year we moved to a higher level of approval, to Level P, which involved additional programme testing up to a further 10,000 hours in order to open up a wider sector of the US military market to us,” says Adrian. “We supply a range of wet tantalum capacitors. With the first level, Level M, we were restricted to about 15 per cent of the market but this new level has widened this $38 million market to closer to 40 per cent now. We are continuing testing to get to Level R next spring, which if successful should be the final destination as it opens up the whole market.”
Alongside its focus on the military sector, Arcotronics has been concentrating on client specifications: “We’re customer driven rather than research driven. R&D is important but we’re more geared towards application engineering than straight R&D,” explains Adrian. “We find new products through applications we encounter and customer requirements often generate new product ranges. Customers outline a piece of equipment they are designing, provide a specification and expect a product very quickly – typically it takes ten days to produce a working solution. This short amount of time is a key strength that customers respect and keeps us ahead of the game.”
The company has achieved excellent results by implementing manufacturing efficiency initiatives in recent years: “We started to focus on efficiency with lean manufacturing, which opened up a new regime and network of cost control and product flow that was taking all the unnecessary transit and waiting time out of production processes,” explains Adrian. “Then we moved onto Six-Sigma, which enabled us to identify those elements that create a need for a rework cycle, and by analysing that small percentage it keeps re-work to an absolute minimum. We’re grinding out any inefficiency we can identify.”
In speaking about the future, Adrian describes the company’s commitment to its customers: “The main aim is to further improve using lean manufacturing and Six-Sigma, and respond quickly to customer demands. We receive an enquiry and the customer wants an answer within five days. We receive an order and the customer wants an acknowledgement within two or three days and if we can’t satisfy that demand, others will. Our strategy is to go deeper into the US market – we see this as a key growth area. It’s a matter of expanding and deepening into overseas export markets and continuing to overcome challenges from both local and international competitors.”
Products: EMC filters, wet tantalum capacitors and power factor correction equipment
Sites: UK, China and Bulgaria