The Times 100 : The Best Performing Companies in California : THE HUMAN FACTOR : Quantum Owes Its Productivity Leap to Crew of Robots : Some productive firms contract out much of their work. But at the Bay Area disk drive maker, it’s the nonhuman factor.

The secret of why Quantum Corp. is the most productive computer products company in California is immediately evident in its new factory: 11 robots.

They insert screws and torque them for the San Francisco Bay Area disk drive maker. They place clamps and thin film into the data storage units. They leave only the most intricate work to the factory’s 50 humans, such as soldering microscopic wires.

That level of automation helped Quantum’s 501 employees each produce $786,800 in revenue, almost four times the computer products industry average.

“Probably the most important contributing factors have been the quality designed into the drive and the high level of automation,” said Joe Rodgers, Quantum’s executive vice president of finance.

The key for Quantum was its Japanese partner. Rodgers said his firm used no robots until it hooked up with Matsushita Kotobuki Electronics Industries Ltd. In 1985, the highly automated Japanese manufacturer began making products for a Quantum subsidiary, then took on the parent company’s entire disk-drive line.

With the automation in place, Quantum did not have to add much staff even when its sales zoomed to $394 million last year. For instance, although sales nearly tripled from the March, 1988, quarter to the December, 1989, quarter, the firm boosted the work force by only 14%. As a result, its productivity nearly doubled during that period, from an annualized $325,000 generated by each employee.

“We learned a lot about the manufacturing process from our partner in Japan,” Rodgers said, “and we saw the importance of automation to improve the quality of drives we manufacture.”

He said the Japanese also helped his firm understand the importance of design for productivity: Simple designs and high-quality standards help boost manufacturing yields.

Although the Japanese factory accounted for virtually all of Quantum’s revenue last year, the firm restarted manufacturing in Milpitas in March, buying 11 robots and other equipment to pump out a new line of advanced disk drives.

Like Quantum, California’s other productivity leaders in 1989 all managed to find ways to shave their work force to minimal levels.

Both Armor All Products Corp. and WD-40 Co., productivity leaders in the consumer products sector, farm out all packaging to outside contractors. Company employees are used mainly for administration and to mix Armor All’s protectant against oxidation and ultraviolet rays and WD-40’s lubricant for squeaky doors and sticky hinges. As a result, Armor All’s 114 employees produced $1.4 million of revenue each, the third-highest rate in the state, and each of WD-40’s 96 workers generated $874,000.

“There are a lot of employees in the manufacturing part of it who are on someone else’s payroll,” said John Barry, WD-40’s president. “That’s probably the biggest zinger.”

Extensive use of telemarketing helped Amplicon Inc. hit the top of the computer services sector by allowing it to forgo costly field offices and centralize operations. The Anaheim firm, whose 142 employees produced $971,000 of revenue each, leases mid-range computer systems and other equipment.

Leasing big-ticket items with a lean staff is also the secret behind International Lease Finance Corp., which ranked as California’s runaway productivity leader for the third year in a row. The Beverly Hills firm, which leases commercial aircraft, hit a rate of $12.6 million for each of its 24 employees.

American President Cos. credits an advanced computer system for its productivity performance of $447,000 per employee, nearly four times the rate of the transportation industry’s second-most productive company. And J. M. Peters Co. led the productivity list in real estate again, recording $1.37 million per employee. Spokesman Brian Theriot said the Laguna Niguel home builder, which sold 775 homes last year, offers a flexible work environment and performance bonuses that can range from $5,000 to $20,000 for executives.

But high productivity rates don’t guarantee business success. First Executive Corp. topped its sector in productivity last year by offering higher rates of return to attract customers and then reinvesting that money in high-yield, high-risk junk bonds. When the junk bond market began to fall apart, it ran into severe financial difficulties.

TOP 100 EMPLOYERS

Companies ranked by number of workers worldwide. California employment also shown.

Total California % of total Rank Company employ. employ. employ. 1 Rockwell Intl. 108,715 35,000 32.2 2 Beverly Enterprises 96,000 9,348 9.7 3 Hewlett-Packard 95,000 26,000 27.4 4 Lockheed 82,500 43,400 52.6 5 Natl. Medical Enterp. 77,357 18,700 24.2 6 Pacific Telesis Group 68,452 66,204 96.7 7 Chevron 54,826 19,104 34.8 8 BankAmerica 54,779 40,575 74.1 9 Occidental Petroleum 53,500 950 1.8 10 Litton Industries 50,700 8,200 16.2 11 Walt Disney 45,000 25,000 55.6 12 Castle & Cooke 44,000 8,626 19.6 13 Pacific Enterprises 43,899 26,282 59.9 14 Teledyne 43,200 11,000 25.5 15 Amer. Medical Intl. 43,000 2,500 5.8 16 Security Pacific 41,099 25,000 60.8 17 Northrop 41,000 32,650 79.6 18 Consol. Freightways 40,800 10,000 24.5 19 Seagate Technology 40,100 3,899 9.7 20 Hilton Hotels 39,000 10,000 25.6 21 Carter Hawley Hale 38,700 27,300 70.5 22 First Interst. Bancorp 36,027 12,957 36.0 23 Vons 34,000 32,500 95.6 24 Amer Bldg. Maint. 33,000 14,000 42.4 25 Natl. Semiconductor 32,000 7,300 22.8 26 Times Mirror 29,000 12,526 43.2 27 Atlantic Richfield 26,600 4,730 17.8 28 Pacific Gas & Electric 26,200 26,200 100.0 29 Gap 23,000 4,865 21.2 30 Intel 21,700 5,049 23.3 31 Computer Sciences 21,100 3,500 16.6 32 Fluor 20,059 2,200 11.0 33 Wells Fargo 19,681 19,600 99.6 34 Transamerica 18,600 9,200 49.5 35 Collins Foods Intl. 17,900 7,500 41.9 36 Unocal 17,286 6,774 39.2 37 MCA 17,000 6,400 37.6 38 SCEcorp 17,000 16,900 99.4 39 Carl Karcher Enterp. 16,500 15,786 95.7 40 Magnetek 15,000 600 4.0 41 Mattel 15,000 1,450 9.7 42 Longs Drug Stores 14,200 10,900 76.8 43 Apple Computer 14,192 5,800 40.9 44 McKesson 14,000 3,665 26.2 45 Sizzler Restaurants 13,668 4,221 30.9 46 Great Western Fin. 13,023 8,678 66.6 47 Adv. Micro Devices 12,600 4,500 35.7 48 Intermark 12,500 5,000 40.0 49 Varian Associates 12,300 6,500 52.8 50 Price Co. 12,246 8,771 71.6 51 Fleetwood Enterp. 12,000 2,995 25.0 52 House of Fabrics 12,000 2,900 24.2 53 Avery International 11,715 2,904 24.8 54 Maxxam 11,500 2,900 25.2 55 Raychem 11,451 3,656 31.9 56 Rohr Industries 11,218 9,134 81.4 57 H.F. Ahmanson 10,819 7,085 65.5 58 Sun Microsystems 10,560 7,670 72.6 59 Jacobs Engineering 10,455 590 5.6 60 Caesars World 10,447 100 1.0 61 Xicor 10,025 10,025 100.0 62 Syntex 10,000 4,950 49.5 63 Tandem Computers 9,790 4,500 46.0 64 Pic ‘N’ Save 9,134 3,332 36.5 65 Applied Magnetics 9,000 1,500 16.7 66 Amdahl 8,200 4,800 58.5 67 Glenfed 7,400 7,400 100.0 68 Potlatch 7,400 150 2.0 69 Union Bank 7,376 7,310 99.1 70 Beckman Instruments 7,300 4,000 54.8 71 Craig 7,200 7,200 100.0 72 Grubb & Ellis 7,058 2,785 39.5 73 First Amer. Financial 7,000 3,500 50.0 74 Allergan 6,800 2,870 42.2 75 Guy F. Atkinson 6,704 630 9.4 76 Oracle Systems 6,701 2,110 31.5 77 Western Digital 6,394 2,150 33.6 78 Ross Stores 6,054 3,550 58.6 79 FHP International 6,000 3,900 65.0 80 Rykoff-Sexton 6,000 1,900 31.7 81 RCM Technologies 5,707 1,000 17.5 82 Calfed 5,660 4,760 84.1 83 McClatchy News. 5,641 4,100 72.7 84 Comm. Psychiatric 5,329 1,400 26.3 85 Clorox 5,300 1,500 28.3 86 Conner Peripherals 5,298 1,500 28.3 87 American President 4,994 1,500 30.0 88 Summit Health Ltd. 4,900 4,650 94.9 89 Landmark Land 4,800 2,214 46.1 90 Natl. Health Labs 4,700 316 6.7 91 HomeFed 4,591 4,591 100.0 92 San Diego G&E; 4,590 4,590 100.0 93 National Education 4,525 743 16.4 94 Pathe Commun. 4,325 240 5.5 95 Maxtor 4,200 1,000 23.8 96 MAI Basic Four 4,174 835 20.0 97 Whittaker 4,000 1,500 37.5 98 Businessland 3,908 1,210 31.0 99 Bergen Brunswig 3,782 1,482 39.2 100 LSI Logic 3,700 2,274 61.5

MOST PRODUCTIVE EMPLOYEES

Top companies in each industry ranked by revenue per employee.

Industry/Company: Revenue/Employee ($000s)

Aerospace & Defense

TCI International: 139.0

Northrop: 128.0

Lockheed: 119.9

Average for industry group: 106.82

Banking

Wells Fargo: 287.0

Imperial Bancorp: 276.1

Sumitomo: 262.7

Average for industry group: 202.97

Computer Products

Quantum: 786.8

Sigma Designs: 448.4

Tandon: 396.1

Average for industry group: 202.33

Computer Services

Amplicon: 971.2

Logicon: 85.4

Telos: 70.9

Average for industry group: 375.83

Computer Software

Adobe Systems: 316.0

Mediagenic: 272.9

Software Publishing: 217.4

Average for industry group: 167.15

Consumer Products

Armor All Products: 1,456.9

WD-40: 874.3

Lewis Galoob Toys: 565.0

Average for industry group: 366.76

Drugs & Pharmaceuticals

Herbalife International: 291.1

Leiner Nutritional Prods: 243.2

Genentech: 216.5

Average for industry group: 156.54

Energy

Tosco: 1,652.0

Unocal: 581.7

Atlantic Richfield: 577.1

Average for industry group: 744.59

Entertainment

MGM/UA Communic: 1,056.1

Spelling Entertainment: 376.6

Westwood One: 217.7

Average for industry group: 193.67

Financial Services

Foothill Group: 507.3

Broad: 435.6

Wesco Financial: 369.0

Average for industry group: 369.28

Food & Beverages

Erly Industries: 386.7

Dreyer’s Grand Ice Cream: 189.4

Farmer Bros: 161.7

Average for industry group: 168.04

Health Services

Safeguard Health Enterp: 184.1

FHP International: 116.5

National Health Labs: 85.6

Average for industry group: 79.94

Insurance

First Executive: 1,137.9

First Capital Holdings: 937.3

Unicare Financial: 682.2

Average for industry group: 536.78

Leasing

Intl. Lease Finance: 12,603.8

PLM International: 588.8

Electro Rent: 220.3

Average for industry group: 4,471.00

Real Estate

J.M. Peters: 1,376.2

Kaufman & Broad Home: 1,141.7

Centennial Group: 923.8

Average for industry group: 664.67

Retail

Traditional Industries: 415.4

Price Co.: 409.2

Businessland: 304.2

Average for industry group: 139.01

Savings & Loans

Columbia Savings: 1,451.3

Homestead Financial: 744.0

First Republic Bancorp: 730.7

Average for industry group: 528.09

Services

Adia Services: 295.9

Centex Telemanagement: 290.6

Robert Half International: 234.5

Average for industry group: 132.96

Transportation

American President: 447.3

Harper Group: 126.4

Consolidated Freightways: 92.2

Average for industry group: 151.01

Utilities

San Diego Gas & Electric: 453.7

SCEcorp: 406.1

Pacific Gas & Electric: 327.8

Average for industry group: 283.06

EMPLOYMENT OUTLOOK

Survey respondents’ plans to increase, maintain or reduce staff.

Total Total Total Total Industry increasing neutral reducing responding Aerospace & Defense 3 9 3 15 Banking 7 9 2 18 Basic Materials 3 11 0 14 Computer Products 37 30 6 73 Computer Services 2 1 0 3 Consumer Products 11 15 2 28 Drugs & Pharmaceuticals 4 7 0 11 Electronics 34 34 2 70 Energy 2 7 0 9 Entertainment & Leisure 9 15 0 24 Financial Services 17 13 0 30 Health Services 8 3 3 14 Industrial 14 18 0 32 Real Estate 4 12 2 18 Retail 12 10 0 22 Savings & Loans 7 10 5 22 Services 23 12 1 36 Telecommunications 1 1 0 2 Utilities 2 5 0 7 Wholesale 6 12 2 20 Total 206 234 28 468

Percent Percent Percent Industry increasing neutral reducing Aerospace & Defense 20.0 60.0 20.0 Banking 38.9 50.0 11.1 Basic Materials 21.4 78.6 0.0 Computer Products 50.7 41.1 8.2 Computer Services 66.7 33.3 0.0 Consumer Products 39.3 53.6 7.1 Drugs & Pharmaceuticals 36.4 63.6 0.0 Electronics 48.6 48.6 2.9 Energy 22.2 77.8 0.0 Entertainment & Leisure 37.5 62.5 0.0 Financial Services 56.7 43.3 0.0 Health Services 57.1 21.4 21.4 Industrial 43.8 56.3 0.0 Real Estate 22.2 66.7 11.1 Retail 54.5 45.5 0.0 Savings & Loans 31.8 45.5 22.7 Services 63.9 33.3 2.8 Telecommunications 50.0 50.0 0.0 Utilities 28.6 71.4 0.0 Wholesale 30.0 60.0 10.0 Total 44.0 50.0 6.0