Getting a Big Charge From Capacitors : Manufacturing: Owner of ceramic electronics plant has strategy of making more efficient units, charging more.
Casey Crandall measures success by the ten-thousandth of an inch. It’s just such razor-thin tolerances in his products that have attracted a substantial increase in orders this year for his ceramic electronics company.
Even differences of a tiny fraction of an inch can dramatically alter how well a fingertip-sized ceramic part stores an electrical charge. As owner of Wright Capacitors Inc. in Santa Ana, Crandall has developed a following of customers who need precision within those tiny tolerances, producing electronic components to the extreme specifications required by large electronics, aerospace and defense companies.
“Other (ceramics) companies will roll their parts out by the millions and charge two cents for each,” Crandall said. Instead, he focuses on parts that sell for an average of $3.50 each. “I thought doing fewer pieces and charging more was the way to go.”
This year that strategy is paying off. After averaging slightly more than $1 million in revenue in recent years, Crandall said he expects to do about $1.6 million in business this year.
With 20 skilled workers and a customer base built mainly on reputation, Crandall’s company is an ideal example of a successful small-to-medium size manufacturer in Orange County, according to local industry observers.
“We’re a prime area for research and development and design, but we’re (only) an OK area for manufacturing, from a cost standpoint,” said Philip Beaudoin, regional director of the area council of the American Electronics Assn., a trade group in which Crandall is active.
Rather than compete on volume or on price, many smaller manufacturers in this region focus on continually raising the quality of their products, he said.
Of course, that advice is nothing new for many businesses. Crandall said his company is only beginning to see the payoff from product development efforts made during the last 10 years.
“It’s a long curve, especially where you have to keep updating your product,” Crandall said. Without protection such as patents, product improvements are crucial for distinguishing a business. Crandall said he doesn’t seek patents on his chemical compounds, because he thinks his competitors would learn too much from the application alone.
“I’ve seen my own designs turn up” in others’ products, he said. “There’s only so much you can do.”
Crandall’s capacitors begin as large cans of grayish muck, called slurry, in a back room of his company, in several adjacent suites at an office plaza near the Costa Mesa Freeway.
Once the slurry--a mixture of ceramic powders, mainly barium titanate--is cast and dried into thin, wide strips, workers print electrodes made from precious metals onto the ceramic.
The sheets are then stacked on top of each other to build up the capacitors, which range in size from bits the size of ground pepper to blocks the size of a big toe. The spaces created between the electrodes by the precise ceramic layers give the capacitors their specific storage ability.
After several rounds of baking, small wires are soldered onto the ends of the capacitors, readying them to carry the electrical charges used by more active electronic parts--such as computer chips--for high-speed processing tasks. The more efficient the capacitors, the faster the chips can run.
Capacitors were formerly made of less-efficient materials, such as paper or aluminum, but ceramics have taken over about 80% of the market in the last decade, according to Mark Rosenker, a spokesman for the Electronic Industries Assn. in Washington. Total sales of capacitors boomed to $1.7 billion in 1993.
The more efficient ceramic capacitors are among the advances that have allowed more compact consumer goods, such as palm-sized cellular phones and laptop computers. But they are also more difficult to build, and larger manufacturers often won’t bother with orders of less than tens of thousands.
Joe Colangelo, an engineer at Texas Instruments in Dallas who often buys capacitors from Crandall, said he appreciates the owner-engineer’s flexibility in working on smaller quantities.
“At a bigger company, you may work with a couple of engineers, but they don’t have the flexibility,” Colangelo said. “With Casey, he can do any damn thing he wants. . . . He can do the smaller batches” that companies like Texas Instruments need for its prototypes, Colangelo said.
Crandall, 41, earned a master’s degree in ceramic engineering at UCLA and was working toward his doctorate there when he decided to switch to a business career.
“I thought I was going to be a professor,” he said. “But some of my professors were telling me that I worked well with people, and I started thinking about what else I might do instead.” In 1978 he joined San Fernando Electric Manufacturing Co., in northern Los Angeles County, a mass-production capacitors company that has since closed.
In 1982, the founder of Wright Capacitors, Curtis Wright, encouraged him to move to the Santa Ana company with the idea of gradually taking it over.
It was a difficult decision, Crandall said. “I was a division manager, and I felt like I was still learning,” he said. And just after he took the new job, a glut in the personal-computers industry depressed the capacitor market, putting Wright’s business into the red.
As manager, Crandall said, he helped return the company to profitability within two years. In 1984 he agreed to buy the company from Wright. That deal was completed in 1989, the year Wright died of cancer.
For the last 10 years, the company has been profitable with about 15 employees and revenue that “bounced between” $900,000 and $1.2 million, Crandall said.
This year’s anticipated revenue increase to $1.6 million is, in part, a reward for survival; several competitors folded during the recession, he said.
“I had some sleepless nights,” Crandall said of the period from 1990 to 1992, when sales fell below $1 million for the first time in a decade and he had to lay off three employees. He was also forced to make his employees work during some scheduled vacation days to get through that period, he said.
His site in the Santa Ana Enterprise Zone has also helped, he said. A close competitor moved from Orange County to Nevada in 1992, but Crandall said he has no plans to leave.
“He’s always raving about how much money he’s saved, but I guess it’s loyalty to the employees that keeps me here,” Crandall said.
Most of Wright Capacitors’ employees are trained for various assembly tasks and are paid an average hourly wage of $9. The average employee has worked at the company for about seven years.
Crandall also recently hired an engineer, whom he hopes will free him to devote more time to the marketing and sales side of his operation.
But it is the many sides of his business, all happening at once, that keep things interesting, he said.
“It’s very satisfying to see a design go out the door, after it started out as a customer’s sketch,” Crandall said. “In a larger industry or a larger company, you only get to see one portion of the pie.”