A Plan For Doubling Sales
Advanced Video Technologies, Inc., a VAR/vendor of customized touch screen monitors, has an ambitious goal of doubling sales from $9 million to $18 million this year by increasing employee efficiency and capturing new markets.
Business Solutions, March 1998
Soucek, a certified monitor engineer, worked in Europe for many years prior to starting AVT in 1988. Located in Marlboro, MA, AVT specializes in customizing touch-screen monitors in rack mount applications. Most of AVT's customers use rack mounted monitors in industrial applications. According to Soucek, his company is one of only a few equipped to custom fit monitors for such specialized industrial applications. Despite a small customer base, AVT ships approximately 10,000 monitors each year.
The First Step: ISO 90001
"We've moved very slowly up until this point," says Soucek, about his plan to double AVT's sales. He says AVT needed to prepare its employees for what he calls his "aggressive goal."
Putting his employees through the process of achieving ISO 9001 certification was the first step. The impetus for getting this certification came from AVT's largest account. According to Soucek, the customer wanted to work only with companies that had ISO 9001 certification. "Having the certification would help us attract other large accounts looking for the quality standard ISO 9001 represents," says Soucek.
For one year, the company concentrated on the ISO 9001 process. "It was a tedious, time-consuming, yet necessary process of getting the employees focused," explains Soucek. There were few formalized policies in place, and the company, being small, had been run somewhat informally, Soucek admits. The ISO 9001 process involved developing policies on all aspects of AVT's operations, from initial contracts to shipping products out the door. During this time, AVT's three-person sales staff had to reduce its sales efforts to concentrate on the ISO 9001 process.
The AVT employees had opportunities to visit other facilities as part of the process. Soucek says this was an eye-opening experience for many of them. "They saw how other successful companies were operating and wanted to do the same," says Soucek. He adds that increasing his sales volume is possible by increasing the output of his production employees (those that customize monitors for specific applications) by 20%. "The employees have become a team through the ISO 90001 process," says Soucek.
One example of increased efficiency is in the production area. Technicians, many trained by Soucek himself, have individual workstations. Each workstation accommodates five monitors in various testing and assembly stages. One production employee can customize five monitors at one time. This has shortened the time it takes to get a customized product out the door for an application.
Soucek has also streamlined service by keeping replacement monitors on the shelf for his large accounts. These too, are customized products, with touch screens and custom painted finishes. When a customer calls for a repair, a new monitor is shipped immediately. Soucek says being this responsive to his customers is helping AVT grow. "We can accommodate just-in-time schedules and 24-hour delivery, giving us an edge over the competition," he explains.
AVT's sales per employee far outweigh the industry average of $100,000 in sales per employee, a fact Soucek admits proudly. However, he says motivating and rewarding his employees is an essential part of his plan to double sales. In addition to educating employees through the ISO 9001 process, he has tied employee bonuses to AVT's total sales growth. This past December, for example, each employee received a cash bonus based on AVT's profits.
AVT employees work from 8 a.m. to 4 p.m. Monday through Friday. They have a 30-minute paid lunch break and a 15-minute breakfast break, also with pay. "Employees are paid for 8 hours, when in fact, they work only 7 hours and 15 minutes a day," says Soucek. But, he adds, employees work overtime without complaint when necessary. AVT boasts low employee turnover. Eight employees have been with the company for more than five years.
Soucek added two people to explore new markets to assist in meeting his goal of doubling sales volume. One person has experience in government/military applications. While AVT has supplied rack-mounted monitors to the government in the past, Soucek says there is potential to expand further in this market. "Providing flat panel display applications for military vehicles is a new area AVT will move into this year," explains Soucek.
The other person new to AVT had previously worked with Sony Corporation for 15 years. According to Soucek, this person will move AVT into two markets, healthcare and prepress/publishing.
Moving Into New Markets
Because AVT is so specialized, moving into appropriate new markets took some planning. While it specializes in touch-screen applications, the company's strength lies in its ability to customize products. Therefore, moving into more typical touch-screen monitor applications, such as hospitality, didn't make sense for the company. Servicing these types of accounts also was not feasible. Soucek explains that AVT does depot maintenance, not on-site service. It also refers software service calls to software companies or third parties.
"We wanted to stay close to our original business, but at the same time, use our capabilities in new areas to expand sales," says Chuck French, vice president of marketing for AVT. The company will target the healthcare and pre-press markets with a color management system application using touch-screen monitors.
"AVT customizes monitors to include the calibrating devices essential for use in pre-press applications," French explains. The calibrated monitors display the true colors of the materials in the pre-press process. For example, a magazine page being printed is displayed on screen in its true colors. What is viewed on the screen is exactly what is printed out. Any necessary adjustments to color can be made during production, using the touch screen monitor.
With the pieces of his plan in place, Soucek says he is on track towards his goal. By starting slowly and laying a strong foundation, he says his chance for success is good. His advice to other integrators/VARs planning for growth is simple: "Capitalize on your company's strengths, produce a quality product, and invest in the education and training of your employees," says Soucek.