Building Better Boards

Steve Melito: Hey, welcome to New York State Manufacturing Now, the podcast that’s powered by FuzeHub. I’m your host, Steve Melito. Today we’re talking to Michael Allen, the president, co-owner and former director of engineering at Z-AXIS in Phelps, New York. Z-AXIS provides electronic, design, and manufacturing services all under one roof, a rare combination. This Western New York company also serves major manufacturers and works with startups. Again, a rare combination. Michael, welcome to New York State Manufacturing Now.

Michael Allen: Thank you.

Steve Melito: Michael. Z-AXIS really is a rare combination, in terms of both its services and its customer base. How else are you different from other companies in your space?

Michael Allen: Well, most contract manufacturers are strictly a contract manufacturer. In our case, we’re two businesses, a contract manufacturer and a custom power supply company. Each represent about half the sales, the business, and both been doing business for 20 years. And we attract two completely different customer bases by doing that. Most of our custom power supplies are medical, so seven or eight different billion-companies come and buy custom power supplies from us, and we design and build them for them. Where, on the contract manufacturing side, we go anywhere from startup companies to, indeed, billion-dollar companies, but nothing in the medical space.

Steve Melito: FuzeHub, of course, works with a lot of startups and there are undoubtedly some folks who are listening and they’re wondering if you, at Z-AXIS, would work with them. How do you decide whether or not to work with a startup?

Michael Allen: Well, the first key thing is if they are working with somebody like FuzeHub, they’re a certain level that you just don’t get with people walking and off the street. FuzeHub is very good at bringing these up and realizing the whole business side of it and et cetera. So they have a much higher chance of success and frankly, we don’t really want to spend a lot of time working with companies that we don’t think will succeed.

Steve Melito: That makes perfect sense. And you do work with a lot of great success stories, a lot of large, well established manufacturers. Names that we can’t mention of course, because there are NDAs in place. So Michael, how can a small and medium size manufacturer in Phelps, New York, support companies like this and why do they want to work with you?

Michael Allen: There are a lot of people out there that want a decent contract manufacturer and they want somebody that gives them the technology of somebody that would be a contract manufacturer of a thousand people. But they want to have somebody that they can talk to and be flexible, that you get with somebody with 50 people. And with us having slightly less than a hundred people, we’re a good compromise for that. Because of our medical side, we really act like a thousand-employee company at times, but yet we are still a small company so people can talk to us. And we’re willing to do things that are unusual or things that larger CMs wouldn’t even consider doing. And a million dollar order for us is a significant order, where a lot of the larger ones, if you’re not doing tens of millions, they don’t even want to talk to you.

Steve Melito: I should mention that you’ve made some significant investments in equipment over the last couple of years. Can you talk about some of them?

Michael Allen: In the last three years we’ve spent over $ 3 million on capital equipment. Our two high speed surface mount lines are a year and a half old, but they’re the state of the art. They haven’t come out with a newer model. We have modern wash lines, we have modern radial insertion, we invested in a selective solder machine that’s quite large and has three pots and does real selective solder, not prototype selective solder. So we’ve invested a lot.

Steve Melito: You’ve also invested a lot in people. And recently, as you mentioned in one of your email newsletter, you hired a new sales manager. And I understand that you finally found the right person for the job. What makes this hire different and why do you think you’ve found the person that you’ve been looking for?

Michael Allen: For the last 10 years, I’ve probably had eight sales managers that have been just not a good fit. I’ve had one a year, and then we have a gap. And each time I’ve been looking for a sales manager, and in which case I attract slick salespeople, or I hire a business development manager, which is somebody that’s more on a strategy type of line. They’re not managing. So this time I advertised for a customer service manager. In reality, Carmen is my customer service manager, my sales manager, and sales managers… She’s not out on the road every day. Matter of fact, she’s not been on the road once in the two months she’s worked here, because the customers want to come see us. So she’s certainly visiting with customers here, but she’s managing the sales department. And that’s so much more important. 99% of my business every year comes from existing customers. And I don’t have a single one of my customers want to be sold to, they just want to be served. “Tell me when I’m can get my product, tell me a good price, serve me, don’t sell to me.”

Steve Melito: Exactly. A lot of manufacturers won’t let their customers talk to their engineers. They say the engineers are too valuable, and so the engineers get hidden behind sales people and customer service people. That’s not the case at Z-AXIS. You’re engineering driven and you welcome these communications with customers. What’s it like working with the engineers at Z-AXIS?

Michael Allen: We have six design engineers at Z-AXIS, and they really are an extension of my customers’ engineering department. My typical contract manufacturing customer that needs help designing something either has no engineering department at all or has one and they need help. We have certain expert fields of expertise that we’re very good at and it’s impossible to put a salesperson between my engineer and their engineering departments. So it just works so much better that way.

Steve Melito: Let’s switch gears and talk about marketing. You’re an engineer, but marketing comes with the business. You’ve got to build awareness, and each month Z-AXIS produces a YouTube video and also sends out an email newsletter, and you’ve been doing this for years. A lot of companies I talk to, especially ones your size, really struggle to generate content. Internally, how do you at Z-AXIS come up with the ideas and then stick with your plan?

Michael Allen: We keep a list of three or four items that we want to do videos on, newsletters on. When it gets down to two or three items, we brainstorm and come up with items. Over the last couple years, when we’ve been buying equipment, that makes it easy. You buy a new piece of equipment, there’s a video. How does this thing work, why did we buy it, et cetera. And there’s a lot of change at Z-AXIS. We’re constantly improving and getting better and growing. And all that generates good videos for our customers.

Steve Melito: A couple of the videos have been about quality, and quality can be kind of a hard thing to capture in that format. Can you talk about the importance of quality at Z-AXIS and your QMS and just sort of where you’ve come from?

Michael Allen: We’ve been ISO certified for 15 years, 13 years, but our medical customers… ISO’s like learning the alphabet before you even learn to write something. It’s just at the fundamental basic levels. Our medical customers and our aerospace customers are much more demanding than any ISO requirement. So ISO’s really a breeze for us, but we have a great QMS system. I got an incredibly high praise… Two months ago we had our re-cert audit and the auditor came in and wanted to talk to me. And she said, “I’ve been doing this for five years and I’m auditing companies every week, and I’ve never come across a company like Z-AXIS, you guys are great.”

So many people come out with a system, a set of SOPs and work instructions, and then five years later, they haven’t touched one of them. Because we are constantly changing and getting better, we’re constantly looking at what we’re doing. And we’ve got a very strong internal auditing team. I have three or four people that do our internal audits, and it’s not uncommon for them to create internal corrective actions. And that just really gives us a very robust system. And that truly is a live system. It’s changing every quarter. And year to year, one of our metrics is what is our quality level. And every year, it has gotten better and better and better. And it gets harder because you’re finding smaller and smaller things that you can fix. It’s no longer solving 1% problems. You’re now solving the 0.1% problems.

Steve Melito: Michael, it’s been great to work with you at Z-AXIS, and I can say that because FuzeHub has been supporting your company, first with a website redesign and then some ongoing marketing services. And while I don’t want this question to sound self-serving, it inevitably will. But why work with FuzeHub when there are lots of marketing agencies out there?

Michael Allen: FuzeHub’s just been great. We’re we’re a symbiotic relationship. They introduced me to customers that need help. In turn, we also hire them for our marketing, writing our scripts and helping us with our newsletters each month. And a lot of effort’s been happening, working on our search engine optimization. Been huge improvements in our traffic coming to our two websites and just really makes a huge difference. The vast majority of our traffic, we’re not paying for it. Organic people are looking for either power supplies or contract manufacturers. And with the help of the FuzeHub people, have been great at making our modern websites even better. They’ve been great. Including you, Steve.

Steve Melito: All right, Michael, thank you. I appreciate hearing that and I’ve really enjoyed working with you, and I’ve learned so much about electronics, which continues to fascinate me even though I’m not an engineer.

Michael Allen: Well, I am, and it fascinates me too.

Steve Melito: Very good. Very good. Michael Allen, thank you so much for being on New York State Manufacturing Now. Thank you.

Michael Allen: Thank you.

Steve Melito: We’ve been talking to Michael Allen of Z-AXIS, a provider of electronic design and manufacturing services in Phelps, New York. Which if you don’t know, is just east of Rochester along the New York State Thruway. Springtime, a beautiful time of year to travel along that highway. And there’s a place I’d recommend visiting this June. It’s Herkimer, New York, and it’s in the heart of the Mohawk Valley.

Why Herkimer? Well, that’s where FuzeHub’s next big event, Vitality in the Valley, will happen. It’s where food, agriculture, and manufacturing meet. This manufacturing expo is scheduled for June 6th and 7th at Herkimer College, and we’re looking for exhibitors. What’s in it for you? Well, you can meet potential buyers and suppliers, talk to business and technical resources, and discover opportunities for grants. You can also network with peers at an amazing pre-event reception with local foods. So sign up at fuzehub.com/VIV2023. I hope to see you there. On behalf of FuzeHub and New York State Manufacturing Now, this is Steve Melito, signing off.