Wilco Wire Technology Making Best "Better"

As featured in the March/April 2001 issue of

Wiring Harness News

By Fred Noer

Talk to Judy Wilson about her company Wilco Wire Technology, and frequently you
will hear her use the word "best" in describing aspects of the firm she started more
than 25 years ago.

By using that superlative word, you might assume Wilson is trying to make her company
appear better than it is. Because of her persistence, soon you realize she hardly is bragging:
Her claims of outstanding company performance are based on achievement rather than
hype.

Most of all, she realizes Wilco never can stop trying to make its best even better,
especially since the firm is located in Fremont, Calif., in that mecca of electronic
technology known as Silicon Valley. "There's so much competition here that you
must be the best cable company, and we are that,"  Wilson said. "I will put our record
against any other company here for on-time delivery and the amount of customer-
accepted products."

Keying on those two factors forms the basis for Wilson's straightforward philosophy
for high achievement. "Our goal in each of those areas is 100 percent. I feel if you work
out those two things, the rest will happen," she said. "That is a true core belief of mine."

The philosophy is put into effect when Wilco manufactures products according to
contracts from customers in the semi-conductor and telecommunications industries.
Wilco fills orders for cable and harness assemblies, pneumatic tubing harnesses, wire
wrap boards and box builds.

Wilco Wire's 32,000 square foot facility in Fremont, California

Wilco's diversity enables the company also to become involved in CAD integration,
which is done on a TriSen Augmented Reality System. The computer analysis and
development program enables a designer to build a harness precisely according to a
customer's specifications. Wilco also is capable of electro-mechanical assembly,
injection molding, fiber optics, patch panels, engineering design support, flat ribbon,
RS232 D-subs, RF coax, SCSI and hi pot work.

Jobs are completed on an array of Amp equipment such as an Ampomator CLS IV+,
stripper/crimpers, K-presses, G-presses and Champomators. The company also has
Cinch telco terminators; presses by 3M, Molex and JST; Artos, Eubanks and Komax
wire-processing equipment; Newberry 30-ton overmold; Schleuniger automatic strippers;
automatic testing, labeling and packaging equipment; and ink-jet printers.

Operation of the equipment is done by some of Wilco's staff of 86 part-time and
full-time employees (40-45 of them assemblers), down slightly from a high of 92.
Working flexible hours between 7 a.m. and 7 p.m., the employees enable Wilson to
tout the superiority of the company's products and services. "There is a high pride
factor here due to the fact that we make the best and ship on time," she said. "We
appreciate and acknowledge people and their efforts."

Finished Custom Cable Assemblies enroute to final inspection and shipping

Part of the structure for high employee production and pride is provided by Wilco
adhering to total quality management (TQM). It began with training all employees in
empowerment. For the past six years a TQM bonus program has been in effect. "It is
what sets us apart from other companies," Wilson said.

Every employee, regardless of department, is rewarded with a monthly bonus when
Wilco's on-time deliveries and customer-accepted products are 100 percent. Based on the
company's monthly profit, each bonus ranges between $150 and $500. For instance, since February 2000 the average monthly delivery rate has been 99.33 percent, so Wilco workers
have benefitted nicely from their diligence and determination.

"If employees see an error somewhere, the bonus program makes them want to bring
attention to it and have something done about it,"  Wilson said. "It could mean the
difference between $500 each month or not. Plus, the whole team is affected.
Everyone talks about having on-time deliveries and no rejects, but when you put money
in people's pockets it makes it a little more interesting in terms of their buy-in to their
work." Wilson noted that the program also accentuates the effort put into finding and
fixing the source of a problem so it does not recur.

Another bonus is available to employees in the kitting, cutting and shipping departments.
Each employee receives $100 cash when the department does error-free work for 22
consecutive working days. If an error occurs, the 22-day cycle begins again. "Our error
rate is almost zero, and efficiency has climbed high,"  Wilson said. "You can't stand and
look over them, but bonus programs such as this have everyone checking their own work
and monitor what others do. People are conscious.

"This has taken us from a good company to an excellent company," she said. "People
ask me about it taking away from the bottom line, but I say it doesn't. That's because products are only going through one time instead of having comebacks that result in extra
costs."

Automatic stripper/crimper equipment combines stripping and
crimping into one operation that was previously two.

Production quality also depends on how well inventories are maintained. "The key to the
process is ensuring that the inventory is 100 percent accurate in components, bulk wire and
finished goods," Wilson said. "We pay the traffic person a $300 bonus every quarter
when those inventories are maintained."

Besides the money paid to the employees, Wilson stressed that "the pride factor is the best
motivator," she said. "Hundreds of thousands of kits go out the door, and people like to be
able to say they are successful in building error-free kits 12 months out of 12 months."

Employees also are recognized at award luncheons and with banners hung in the plant.
A Most Valuable Asset Award is given to someone or a department for exceptional work.
The award has been presented only four times in three years.

Investment in the staff extends beyond awards and bonuses. Longevity is rewarded with a
gift unique to the individual to match his or her interests. A five-year worker recently was
sent on a long weekend to Disneyland that included staying in a luxurious hotel. An
employee with 10 years of service was given a seven-day trip to London, and a person with
15 years went on a Caribbean cruise. "We want to make them all feel first class because we
think they are first class," Wilson said.

All the employee programs made Wilco first class according to the national consulting firm
Arthur Andersen & Co. Three years ago the company gave Wilco an honor for motivating
and retaining employees.

Awards also have been received from Nortel Networks recognizing Wilco as a preferred
supplier and 10 other companies for Wilco's excellent service. Wilson has been runner-up
in the balloting for Silicon Valley Entrepreneur of the Year, and for the past five years
Wilco has been honored as the fastest-growing privately held company in Silicon Valley.

While TQM has contributed significantly to Wilco's growth, it would not have been
possible without meeting ISO 9002 certification. It was gained in 1993, and Wilson
pointed out that the company became proficient at meeting the standards in 1994.
Wilco was the first cable assembler in Silicon Valley to receive certification.

The Augmented Reality Harness System guides the harness maker
by showing exactly where each wire should be routed

"Being ISO certified totally turned the corner for us," she said. "We experienced
growth from $3 million to $10 million in less than 18 months. If we couldn't tell
anybody about ISO and what it means, we would still do it in a nanosecond.

"It has meant the difference between being a mom-and-pop shop and a world-class
company," Wilson said. "We were able to get customers in China, Ireland, Canada
and South America. You are never going to grow and attract those types of customers
and maintain them without 9002."

Sales peaked at $12 million in 1999 and fell to $10 million last year. Wilson is hoping
to hit $15 million, but her goal has been compromised by Wilco customers, most of
whom are in Silicon Valley, moving out of state to the South or to Canada.

She pointed out Wilco's biggest threat is large contract manufacturers with their own
cable-assembly shops, enabling the firms to offer cable production to complement their
boards and cabinets. "They can build assemblies cheaper than we can," she said. "
It's hard to fight against such an operation because it's a not-for-profit shop.

"There's a tremendous amount of consolidation because the low interest rates have
resulted in companies buying others," Wilson said, adding that one company owns
practically all the connector and cable production. "I know it's part of a cycle of
business, but it makes it more difficult for more companies to compete because of
the buying power of larger companies."

Modern electronic automatic cut & strip equipment has, for the
most part, replaced greasy mechanical equipment at Wilco Wire
and other harness manufacturers.

Such formidable challenges, however, do not intimidate Wilson.  Just the opposite,
in fact: She is energized by "trying to make the impossible happen," she said.
"That's one thing I like best about what I do."

Wilson, 63, has met -- and conquered -- numerous obstacles in her business life.
She began in the early 1970s selling screws, nuts and bolts for a company that
eventually went bankrupt. Her next position found her working at an inside order
desk for a company selling wire from a catalog.

After that job she worked three years for a wire and cable distributor. Her tenure
ended when company officials did not share her same commitment for maintaining
customer relations. "When I make a promise to a customer, it is paramount that I
keep it," she said. "I found it hard to work for a company with red tape and politics
and decided to do selling myself."

In 1975 she started her own company in San Jose, Calif., and became a manufacturer's
representative for wire companies. Her first major sale occurred after learning about a
special wire needed by the nuclear power division of General Electric. The wire was
available from Teledyne Thermatics in North Carolina, but she was not taken seriously
when she first proposed repping for the firm.

After three months of badgering the company's executives for an opportunity, Wilson
was given one account. It was GE Nuclear, and seven months later she ranked No. 3 in
the United States in wire sales, selling $1 million in cable the first year. She repped for
Teledyne Thermatics 10 years.

"At first there was a lot of resistance by men in the industry," she said, "but by the
second year they were supportive. Some reps were even happy with a woman being
among them, and the complexion of the sales meetings totally changed to being more
informative and less of a party atmosphere."

At the same time she was a manufacturer's rep, Wilson expanded her business in
1981 to include cable assembly. Large companies served by her firm decided to
outsource the work, so she lost their business in one way but eventually regained
some of it another way.

Obtaining contracts was slow and difficult, much like the progress she and her
few employees made in learning cable assembly. After hiring and firing several
people supposedly well-versed in cable assembly, Wilson finally obtained two
knowledgeable people. They taught her and Joe Shepherd, current company vice
president and Wilson's husband, all about the assembly business.

With Shepherd handling the technical aspects of assembly and Wilson the
administrative functions and customer relations, the business grew. The most
growth occurred after Wilco gained ISO 9002 certification.

Part of the growth over the years has resulted from reverse engineering services.
Wilco does the work at no charge. Also, prototypes will be constructed for companies,
but Wilco will not bill for its labor.

"Those are ways we can establish ourselves with engineers and suggest to them
how easier it can be to manufacture a product," Wilson said. "Engineers in our
areas move between companies, so they actually do us a favor because when they
move word gets around about us. We get a lot of new accounts that way."

Besides reverse engineering, Wilco began offering Kanban in which customers'
finished goods are stored on Wilco's shelves. Also, a sales campaign for fiber
optics was launched March 1 after Wilco invested heavily in fiber optic equipment.

Sales and marketing are handled by Wilson and Shepherd, who depend on a large
number of referrals. Two years ago the firm staffed four outside salespeople and a
manager, but the department was dismantled due to poor results.

"The hardest part of this business is finding good salespeople to fit our niche," 
Wilson said. "Every sale is a long, hard road, and it can be seven months before
you get one single bid. Not a lot of people can wait that long. They would rather
go work for distributors and only write orders."

Wilco Wire does a final inspection on cable assemblies.

To make sure Wilco is serving its customers well, Wilson has sent them a
questionnaire every 15 months for the past six years. The survey addresses such
areas as delivery, quality, service, product knowledge and engineering support.

 "If we are low in one area, it is a big wake-up call," she said. The information is
analyzed by Wilson and Shepherd as well as Don Smith, vice president of
manufacturing, and Shannon Blaydes, operations manager.

Recently all of them have been looking at forecasts for the first and second quarters
of this year. Although Wilson reported a strong last quarter of 2000 and a record
number of orders for the first quarter, she has grown concerned about companies
delaying deliveries to the second quarter.

As for 2002 projections, Wilson hesitated to make any. "Silicon Valley is changing,
so we constantly have to watch and see what happens," she said. "The biggest
companies and largest accounts we had 10 years ago are gone.  And, since we have
global accounts, if Japan or Brazil has a bad day, that affects us."

Among Wilco's accounts, the four largest are Nortel Networks, Advance Fibre
Communications, Cisco Systems and United Airlines. Wilco makes telco products
for all four corporations.

All work is done in Wilco's leased 32,500-square-foot plant in Fremont. Until five
years ago the company operated out of its own facility in Santa Clara, but the
11,000-square-foot space was inadequate.

Wilco Wire Technology, Inc. is located at 1035 Mission Court, Fremont, CA 94539.
Visit Internet: http://www.wilco wire.com

Judy Wilson and WHMA

Just as she does for her company, Judy Wilson has high expectations for the
Wiring Harness Manufacturers Association (WHMA).

In her position as the organization secretary, Wilson intends to provide leadership
to help WHMA become increasingly important and beneficial to the members.
"It's possible for WHMA to become a large, viable force in the industry," said Wilson,
who owns Wilco Wire Technology in Fremont, Calif. She joined WHMA four years ago
and has been the secretary three years.

The association's viability will be increased significantly by setting industry standards
for engineering and manufacturing, according to Wilson. She stated many companies in the
industry follow military, commercial and personal standards, so she sees the opportunity for WHMA to set standards, too.

Many of them may be established by WHMA's committees. As association secretary,
Wilson oversees the nine committees by staying in contact with their chairs so the committees function well by setting agendas and meeting goals.

Including the committees, Wilson's vision for the board and the association consists
of focussing on all its members. "At first the association was 80 percent automotive
suppliers, but there's a broader mix now," she said. "We have to be as balanced as
possible because we all have the same problems and we all have to provide the right
parts on time to our customers."

She also would like to see greater connection between WHMA members and the
board officers, directors and advisors. "Sometimes it seems like the board is a separate
little group that is too removed from the members," she said. "We need to be closer
to the mainstream."

Vice versa, Wilson sees a need for association members to be committed to
completing projects. "We need to be more focussed in this regard," she said.
"Maybe we should be doing only half the things we do instead of all of them.
Are we too scattered?"

Such concerns voiced by Wilson will be addressed by the association because
of her assertiveness. She has developed a reputation for making sure people
handle their duties and responsibilities.

Because of her persistence, Wilson is affectionately known as "The Nag," a
nickname she accepts good-naturedly. However, her contributions to the
association earned her an Outstanding Member Award.

Wilson enjoys attending WHMA meetings and conferences because of the
camaraderie with WHMA members. "WHMA is a great idea for getting together
and talking to people with the same problems I have in my business," she said.
"It's a tremendous benefit to get more personal views of their businesses and
learn about such things as new technology and government regulations."

She also noted the WHMA Web site has proved beneficial to her business.
"I've learned about excess inventory other people have and new sources for parts,"
she said. "It's like a personal Internet, and it's in its beginning stages so it can
become even more valuable."