NEO Tech is a premier EMS provider headquartered in Chatsworth, CA. The company is less than two years old but is quickly establishing a reputation as being a quality services provider who goes the extra mile. We recently caught up with David Brakenwagen, the company’s Chief Sales and Marketing Officer, to find out more about NEO Tech: how it was founded and why, and what the company is poised to accomplish in the future.
David, we understand that NEO Tech is a fairly new company. First, congratulations on a successful year. Secondly, how did the company come together? What was the vision for creating NEO Tech?
NEO Tech today combines the strengths of three leading industry leaders: NATEL, EPIC, and OnCore, each with decades of industry experience. NEO Tech embodies the proud heritage of our roots and captures our combined value proposition, which is to be the technology and manufacturing partner of choice for OEMs requiring a complete suite of end-to-end solutions. NEO Tech is the integration of these three successful EMS companies into one company. With vastly expanded capabilities, a complementary manufacturing footprint, and similar market sector focus, NEO Tech has been successful in expanding our market presence and solutions to our customer base during our first year.
Our vision was to create the industry-leading Tier 2 EMS, offering unmatched excellence in electronics assembly and engineering solutions for the Industrial, Medical Device, and Aerospace and Defense markets. We believe these markets require high levels of flexibility and scalability with a specialized set of solutions not available previously.
Can you please tell our readers what NEO Tech does and what makes the company unique from other mid-tier EMS providers?
NEO Tech is an EMS market leader with a high level of focus on the Industrial, Medical Device, and Aerospace and Defense markets. We offer product realization services from conceptual product design services to making high-reliability microelectronic devices that are used in space or implanted in the human body, to supporting our many OEM customers with tailored manufacturing solutions for large and complex systems. NEO Tech offers unmatched excellence in electronics assembly and engineering solutions.
What makes NEO Tech unique in the industry is our ability to offer supply chain and manufacturing solutions that are complex and multifaceted but tailored to the needs of individual OEMs in the mid-market EMS space. We find our solution as a mid-tier EMS, with the toolset of the tier 1s – e.g. product conception to commercial realization, capable sourcing and supply chain architects, robust IT tools, complex system level integration, and post manufacturing services and product fulfillment. While none of these make NEO Tech unique, the combination of all of these elements along with our scalability and flexibility make our model unique.
Besides electronics manufacturing, what markets does NEO Tech extend into? Would you say that you are more established in any of these? What is the history?
We offer technology service solutions in the markets mentioned above. Market segment focus is key to our business strategy. Medical and the Defense and Aerospace market in particular require substantial industry know-how to navigate the market-specific regulatory and compliance requirements. Knowing the type of support an OEM needs when they are building devices that are US FDA regulated, for example, requires that all of the supporting supply chain and manufacturing processes also are compliant with the FDA reporting requirements. At NEO Tech, we have decades of experience supporting OEMs with the design and manufacture of highly regulated products, whether it is FDA for medical or ITAR for the US defense industry. About half of our business is in these two market segments with the rest supporting more diverse high-technology Industrial OEMs. Our culture and heritage is based in these highly reliability and regulated markets and as a result embedded throughout our employees, systems and processes.
Are there additional markets you hope to enter in the near future? What key trends are you seeing in these areas that would make NEO Tech a good fit?
We are expanding the breadth of the solutions we can offer into our target markets. Key to our strategy is to be selective and maintain our market segment focus. Many EMS try to hit all market segments, while at NEO Tech we are disciplined to serve these targets. We will not be diluted by trying to be everything to everyone. We have been successful partially by staying away from certain markets like high-velocity consumer products. For example, I don’t see us making a lot of cell phones or high velocity consumer products.
We are capitalizing on key trends like miniaturization of electronics for implantable medical devices. OEMs need design and manufacturing support to be able to commercialize the many new innovative medical technologies that significantly impact people’s lives. We can support these OEMs by helping them with concurrent engineering that connects their development process with experts in manufacturing and enable them to bring new products to market that are very compact and offer high reliability. Examples of things we build include implanted neuro-stimulation pain relief devices and cochlear implants that enable hearing for people who benefit from thee products.
NEO Tech’s motto is “we make amazing things happen.” What does that mean in today’s fast-paced manufacturing environment?
We want employees to maintain an innovative and entrepreneurial culture and challenge the status quo. We do this in practice through encouraging a continuous improvement culture that we deploy through LEAN practices and employee empowerment. NEO Tech is a leader in the deployment of LEAN manufacturing process improvement systems, a process that is modeled after the Toyota Production System. We work tirelessly to understand how to create enhanced value to our customers which proactively allows our customers to improve their end market competitiveness advantage.
We also demonstrate “amazing things” for our customers by continuously striving to exceed their expectations. An example of this is when Aerojet Rocketdyne selected NEO Tech to be their manufacturing partner on the Li-ion battery program being deployed to update the batteries on the International Space Station (ISS). NEO Tech invested in the production cell infrastructure to build, inspect and test the new batteries to meet stringent manned space flight requirements. NEO Tech processes were certified by Aerojet Rocketdyne and NASA, including process certification of production personnel. The speed at which we were able to launch this production has been recognized by both our direct customer and their downstream customer – NASA, helping them extend the life of the ISS.
How broad is your customer base at NEO Tech? What advantages does this bring customers?
NEO Tech has more than 100 customers, and our customer base is not highly concentrated within a single market or any single customer. This degree of concentration and market balance provides a great foundation because, while there is some cyclicality to the markets we serve, the defense, medical and industrial markets typically do not follow the same cycles. When new potential OEM customers are considering adding a new EMS partner, they often seek partners who don’t have too high of customer or market segment concentration. If an EMS has only a few very large customers, the loss of a single customer, if they are too large a portion of their business, can be very disruptive. Our customers find NEO Tech has more than enough diversity to support their needs without any financial risk that high concentration brings.
Another benefit for our customers is that our size allows for us to continue investing in IT processes, capital equipment, and leading edge technologies. We continue to invest in leading edge technologies which allow more efficient and reliable results within our core business of being a solutions services provider.
In today’s economy, successful companies have had to change their traditional ways of doing business. What are some examples of how NEO Tech has had to think smarter to stay ahead of competition?
Our business strategy is to offer tailored solutions to the needs of each customer, which challenges us to be innovative about how we manage supply chain and manufacturing. This breeds a culture of innovating creative solutions to evolving market needs. I hear from our customers frequently who tell us they appreciate how flexibly NEO Tech can respond to their needs.
Our LEAN leadership also is a key enabler of how we use continuous improvement culture to stay ahead of our competition. This is exemplified in how we have been able to improve our yields through focus on LEAN. One of our EMS sites in Mexico has improved over the last two years from 2000 DPPM to below 500 DPPM, a 4X improvement in yield performance after implementing the NEO Tech LEAN business systems. Another location with exceptional FPY with deep rooted LEAN experience is our microelectronics center of excellence in Chatsworth, CA that has been able to maintain below 10 DP per million $ shipped.
We have also acquired several key pieces that have enhanced our full service solutions set which allows customers to see enhanced competitive advantages from a flexible, full service provider. We continue to look at areas of innovation and acquisition to continue bolstering our service portfolio.
As the industry continues growing and companies continue reinvesting in new products and technologies, how will NEO Tech continue meeting/exceeding these needs? What is your growth strategy?
The key to growth in services for high-technology OEMs is speed — especially in the support required to achieve rapid time-to-market with new programs. Of course, our customers expect that we are investing in state-of-the-art SMT manufacturing, inspection equipment and automation, but the key to growth and exceeding expectations is having the right people and empowering them to offer creative and tailored solutions to the needs of each customer.
In the last 12 months, we have continued to expand our Engineering Services offering that is key to early engagements with our customers’ product development teams to launch new programs efficiently and quickly. Two areas are notable as we have enhanced our mechanical design capabilities significantly and also invested in a team that has deep experience in providing miniaturization technology for implantable electronics, an area of growth in the medical segment. We are committed to servicing the engineering prototype needs at our customer which fuels their product stability and commercialization to the market.
After speaking with you, David, it sounds like NEO Tech’s goal is to set the standard for engineering and manufacturing services. We know that awards, as well as earning various certifications, help accomplish this. Can you briefly describe the company’s most recent awards and certifications for our readers?
This year NEO Tech has been recognized by INC magazine as one of the fastest growing private companies in NA, ranking number 671in the INC 5000. We also recently received the prestigious Raytheon 4 Star supplier award for performance — and this is the third consecutive year that they have recognized NEO Tech with this award. We were also awarded the SMTA Global Technology for the large contract manufacturing category. Industry groups and customers recognize the market leadership we bring to the table.
In the area of certifications, of our 14 manufacturing locations we have 10 that are certified to ISO13585 for the medical industry, eight Certified to AS9100 for the aerospace market and two Space Qualified locations certified to MIL-PRF-38534 class H&K. Our high level of focus on these markets is unmatched in the EMS Industry.