VirTex Assembly is an electronics manufacturing service provider, assembling printed circuit boards, system level builds and chassis assemblies for OEM companies that aren’t set up to do their own manufacturing. The company was founded in 1999 by Brad Heath, the company’s CEO, to fill a gap in the marketplace. Heath identified a need for a service designed to support the low volume / high mix manufacturing needs of OEM companies that weren’t getting the level of support they needed from the larger tier one companies. The goal of the company has always been to be a highly qualified and highly certified contract manufacturer focused on the low volume / high mix market.
The function of an electronics manufacturing service, or EMS, is to manufacture electronic components for OEM companies to use in their products. What Heath recognized was that these companies were turning out individual parts in very large volumes, which wasn’t well suited for OEMs that required smaller volume runs of many different parts. VirTex was created to fill this gap. The result is a very flexible production line that can produce smaller lots and make changes very quickly based on demand.
The company primarily services the aerospace, defense, industrial, automotive, and medical sectors. Larger tier one EMS outfits service these industries as well, but they seek the large volume / low mix orders. Often, these larger companies will call on VirTex to help service that part of the market for low volume orders that are better suited to its profile. This is the niche that VirTex has carved out for itself, and over 18 years, the company has developed an expert ability to work within it.
Today, VirTex employs roughly 300 people across three facilities. The company was founded in Austin, Texas, but as it grew it expanded into a second facility in Menomonee Falls, Wisconsin, and a third facility in Juarez, Mexico.
The rise of automation
Recently, the company was honored with a 2017 Frost & Sullivan Manufacturing Leadership award in the Big Data and Advanced Analytics segment. In modern manufacturing facilities, there are mountains of data points being generated all the time from sensors throughout the operation providing real-time information about every step of the process. This award is given to the company that is best able to turn that data into meaningful information and take actions based on that information in order to gain a competitive advantage in the marketplace. VirTex demonstrated this capacity to such a degree that it was awarded this honor over some of the world’s leading manufacturing companies. It is a relatively small company, but its tech-forward approach is on the cutting edge of American manufacturing.
VirTex has invested heavily in automation and state of the art equipment to be able to offer competitive solutions from within the United States. This commitment to investing in technology has enabled it to lean out its process and make its pricing competitive enough to convince many customers to bring their offshore operations back onshore, despite America typically being seen as a high-cost region. VirTex offers all the benefits of American manufacturing, but competes on cost with offshore operations.
Contrary to the popular conception that the addition of robotics spells the elimination of jobs, automation has created a lot of jobs at VirTex. While the company does employ robotic solutions in its manufacturing process, a lot of higher level positions have been created as a result. VirTex works closely with the technical schools, universities, and colleges in the region to bring in the skill sets it needs to operate its advanced technology.
The company’s unique approach to manufacturing, and the success that has resulted from it, is generating a lot of recognition throughout the industry and beyond. In the last year, two congressmen and one senator have visited the company’s facility in order to get a sense for how VirTex is creating jobs while incorporating automation and robotic solutions.
In addition to its employees, VirTex also cares about community. The company was recently recognized by Goodwill of Austin, Texas with a Hall of Honor award. This was the result of a partnership between VirTex and the Goodwill Staffing Group to develop training programs that would prepare prospective employees from less than ideal circumstances to eventually be work-ready for VirTex’s manufacturing operation. The company has staffed many positions including data entry, quality control, assembly, shipping, logistics, maintenance, and more through this program.
The company is also involved with a similar training program offered through the Texas prison system. VirTex sees these programs as opportunities to provide low-risk positions within the company to people who want to rejoin the workforce, and this commitment to community reflects the overall culture within the company.
Another way that the business has worked to help the local community is through efforts to support local startups. VirTex has worked closely with many startups in order to support them through the challenges of their infancy; those companies that grew into successful organizations have maintained the relationship as a result.
A focus on quality
From its very inception, certification has been a key aspect of the value provided by VirTex. Over the course of its existence the company has made a dedicated effort to achieve accreditations that are typical of billion dollar companies, while VirTex earns roughly 80 million annually. The company boasts an AS9100 certification, which is a quality management standard for the aerospace industry, meaning that VirTex is certified to build flight-deck avionics for both commercial and military grade aircraft. It is also certified to ISO13485, which enables the company to work with customers in the healthcare industry on medical devices.
These are just a few of the many industry standard certifications that VirTex has achieved. Not only do these certifications demonstrate the quality of the workmanship present in all VirTex products, but the company’s dedication to seeking out these certifications shows its commitment to offering customers peace of mind and confidence in its products. This is one of the ways that the company has differentiated itself from competitors; another way is in its effort to help customers reshore their offshore manufacturing operations.
Many companies that moved production to Asia in the past have become very familiar with the challenges of having products built in a remote location. There are frequent issues related to quality, intellectual property, lack of flexibility, extensive delays in transporting the product from the manufacturing facility into America, language barriers, and an inability to easily adjust or customize designs. “We’ve had a lot of success,” says Brad Heath, CEO and President, “in showing customers that the total cost of manufacturing can be very close in the United States to having parts built in Asia. We can do that because of automation, investment in technology, a high degree of focus on supply chain management, and operational excellence.”
In considering the pros and cons of offshoring production, the company recognized that many of the disadvantages related to some low-cost regions do not apply to Mexico. VirTex decided to open a 40,000 square foot facility in the low-cost region of Juarez, Mexico. Having an offshore operation like this is a feature typically reserved for much larger companies, but VirTex has been able to accomplish a lot with less as a result of its clever and innovative approach to business. The company chose to expand into this region as it offered a number of advantages over other low-cost regions. Hourly manufacturing pay is half the rate of Brazil or Taiwan, one third of the rate of Korea, and one eighth the rate of the United States and Canada, but despite the low cost, the workforce is well educated and highly skilled. Beyond this, transporting product between Mexico and the United States takes just 22 hours by truck, as opposed to 19 days from China.
VirTex Assembly is a company with more than 18 years of experience manufacturing electronic components for OEM companies. It has found a great deal of success in a highly competitive market place by being highly certified, far beyond what is typical for manufacturing operations of its size, demonstrating a capacity to build exceptional quality into the components it produces. It invests heavily in technology in order to stay at the forefront of innovation in manufacturing, and as a result it has American facilities that can compete with offshore operations.
These are just some of the features that enable VirTex to stand apart in the markets it serves – but the true key to what makes VirTex so successful is its ability to find and solve supply chain challenges for customers. “A lot of our customers are very large companies that typically do business with multi-billion dollar manufacturers,” explains Brad Heath. “We’ve really carved out a niche with these folks to take on medium volume projects, and give them the care that a tier one can’t.” For small to medium volume projects, VirTex is leading the way.