Reading time ( words)
Gardien Group is one of those companies that are always looking out for their customers. The company is, without a doubt, the last word when it comes to bare board quality assurance, focused on helping customers deliver the most electrically sound boards in the business. Gardien’s technologists are experts at testing and other quality assurance disciplines. For more than 30 years, Gardien has been in the business, originally as the equipment manufacturer Mania.
My impression when I sat down recently with Gardien COO Roland Valentini was that most of Gardien’s business was via their more traditional OnDemand service, where customers outsource their testing requirements to one of Gardien’s local service bureaus. But that is not exactly true.
I discovered that, in many cases, Gardien will actually run a customer’s test area or test department on their behalf. They take responsibility for the independent validation of a product’s quality, the space, the people and the equipment, and keep it in perfect working order. They train staff, update and maintain existing equipment, and when needed, bring in additional equipment to provide a solution that is perfectly aligned with client needs. And the best part is that their fee is based on revenue—a small percentage of revenue—so that in a sense they actually have skin in the game. Their success is built entirely on how successful they can help their customer become, which is very intriguing indeed.
In fact, it’s so intriguing that I decided to focus this interview on this facet of their business. In these highly competitive times, I believe board shops need more vendors like this—companies that can provide the engineering expertise that shops don’t have or can’t afford.
Dan Beaulieu: Roland, thanks for taking the time to talk to me today.
Roland Valentini: No problem, Dan. I always like talking about the company.
Beaulieu: So, I really want to talk about how you integrate, as you call it, into someone’s facility. How does that happen and how do you decide who would be a good fit for this service?
Valentini: The first thing we look at are the customer’s intentions. What are they trying to accomplish? Is it an attempt to lower costs? Are they trying to produce a more reliable product? Maybe they’re looking at the suitability of their existing equipment for a higher technology play? We have a conversation with the client to determine their goals. Obviously, we have to make sure that we’re able to accomplish what they want us to do, or more appropriately, what they actually need us to do.
Beaulieu: Is there a difference?
Valentini: Yes, there absolutely is a difference. Take lowering costs for example; more often than not the client’s perceptions of their test costs are significantly different than the actual cost of test. It’s challenging to overcome this as obviously it’s a very sensitive subject. So we undertake a comprehensive site survey prior to offering the service, which covers everything from general production to equipment maintenance programs. Part of the survey includes a financial analysis that shows them exactly what we believe their actual cost base to be, taking into account accurate cost allocation, depreciation, even corporate charges. And most of the time it’s considerably higher than they thought.
Beaulieu: Okay, that’s a little technical. Can you give me an example that illustrates your point?
Valentini: Sure. During the last week of the month, when it’s all hands on deck to ship boards and you borrow some guys from production to help out in ET, did you allocate their cost to test? We’ve seen cases where the QA head count swells by 20 people in the last week of the month, and the costs weren’t allocated to QA. Obviously, that cost was accounted for somewhere else; most likely back in the production area, but the result is you’re underestimating the real cost of QA.
Beaulieu: Let’s back up a bit. Tell me exactly what you provide when you offer an “Integrate” service to your client. Is it fair to say that you take responsibility for their test department?
Valentini: Yes, that’s exactly what we do.
Beaulieu: And what does that entail?
Valentini: We are responsible for 100% of their QA needs, whether it’s testing, final inspection, or both. We provide this type of service through one of our service centers if we’re nearby, or we can physically locate in the client’s facility.
Beaulieu: So basically, you can set up shop inside the customer’s test department?
Valentini: Yes, that’s right.
Beaulieu: And how does that work?
Valentini: Well, part of the beauty of our Integrate service, is that it’s a fully customized solution focused on the needs of the customer, so in reality no two contracts are exactly the same. That being said, we typically sign a long-term agreement, usually for three years, and built around our client conversations, site survey, and review of current and future product requirements. We take over the client’s existing equipment and either buy it from them or pay rent for its use. Where necessary we’ll install our own equipment to ensure we have a fit-for-purpose test floor. Similarly, when it comes to personnel, we have a huge amount of flexibility available within the Integrate framework, and in conjunction with our customer, we agree on the most appropriate way of moving forward with their existing employees and provide additional training and support from our side where needed, to drive best practices and productivity.
Beaulieu: How do you charge for this service? We are all in business to make money, right?
Valentini: It’s pretty simple actually; we charge a small percentage fee based on customer revenue. It’s what makes the service unique and beneficial to both parties; it really shifts the nature of our relationship from one of a supplier to that of a partner.
Beaulieu: So you actually have some skin in the game.
Valentini: Yes, absolutely. We are completely aligned with our customer, and rise or fall based on their success or failure.
Beaulieu: How does this alignment work in reality?
Valentini: I’ll give you a couple of examples. If our customer makes prototype boards for free in order to win new business, guess what—we don’t charge for QA. The boards sold for zero dollars and our percentage of revenue model means that we get zero dollars. Similarly, it’s in our interest to help customers improve yield rates and drop rework rates. Poor quality for our client means more cost for us.
Beaulieu: Do you already have customers who are taking advantage of this program?
Valentini: Absolutely, we have been doing this for a number of years now. In fact, nearly half of our revenue comes from the Integrate service offering.
Beaulieu: But I bet they’re all large companies. I cannot see this working with the smaller ones.
Valentini: No, not at all. As I said earlier, this is a fully customized solution so we can adapt it to a large or small fabricator, who produces locally or internationally.
Beaulieu: Really? How small can you go?
Valentini: Well, we have a couple of facilities where there are only four people in QA, and equally, we are present in facilities that generate over $100 million of revenue. Really, we can and do work with companies of all sizes.
Beaulieu: So you can figure out how to work with all companies then?
Valentini: That’s not exactly what I said, Dan. Size of operation doesn’t determine whether our Integrate service is a good fit for a potential client. What drives suitability are a combination of factors, ranging from customer needs through to their expectations.
Beaulieu: Allow me be a skeptic here for a minute. I understand how you go about offering your service, and I get that the pricing mechanism does align you with customers, but what value or benefits do fabricators experience from working with you? I’m sure a lot of the companies you talk with think that their test department operates just fine. Like the old saying goes, “If it ain’t broke, don’t fix it.”
Valentini: That’s a fair point, Dan, and one I’m pleased you asked about, because it’s typically the opening question we get when visiting new clients or promoting the service. In truth, there is no silver bullet reason that turns this from a carefully considered decision into a no brainer. But equally, there are a multitude of areas that we deliver genuine customer benefit and value and I think this reflects the customized nature of the service. The areas that customers identify as their primary drivers during our discussions are where they typically realize the greatest benefits.
Beaulieu: Can you share some of these areas of benefit and value with me?
Valentini: Sure, let’s start with visibility. You don’t know what you can’t see. When was the last time you undertook a review of your test floor or final inspection area? From the moment we engage in a site survey, the client benefits from improved visibility of the QA operation—its processes and its costs. And that’s before they’ve even signed up for the Integrate service! Talking of processes, ET/FQA practices probably aren’t reviewed very often. All Gardien does is QA. We have exposure to multiple markets, technologies, volumes and industries, and we apply that knowledge and expertise to identify and correct process inefficiencies. The benefits we deliver from a financial perspective include the ability for a client to reallocate capex from QA to value-add areas of their business. Gardien is responsible for delivering a fit-for-purpose test floor and that extends to providing, at our cost, suitable equipment to carry out the service.
Our custom written ERP system, called OnTrack, seamlessly integrates with a client’s IT infrastructure and drives all our CAM data handling, operational processes, quality documentation, product traceability and proactive equipment maintenance schedules.
We generate all our own data, which provides customers a useful alternative viewpoint when looking at their operations and processes, and OnTrack can even automatically output customized customer dashboards and KPIs.
We use the system in all 26 of our international service centers, which means that customers experience a globally consistent quality of service. This is of enormous benefit to our clients that operate cross-border facilities, as they benefit from low-cost country production without the worry of compromised product quality.
Beaulieu: So the service is more than just testing boards?
Valentini: Absolutely. It includes ET, AOI, special services such as HiPot, 4-wire Kelvin, board repairs, automated and manual final inspection. In a nutshell, we assume responsibility for our clients’ quality, through their system and beyond.
Beaulieu: And beyond?
Valentini: Yes, of course. We are responsible for independently validating our customer’s quality, so if it turns out that there’s an escape or an issue on our watch, then the RMA is our cost.
Beaulieu: So you are there for them if there’s an issue once the board is shipped?
Valentini: Absolutely. As I said earlier in the interview, this really is a transformative relationship, from supplier to partner. We are in this together. They have trusted us with their quality assurance and that is something we take very seriously.
Beaulieu: Roland, thanks for sharing this very interesting information with me today.
Valentini: Thank you, Dan.
To reach Roland Valentini, click here.