Cameras, sensors offer EmbedTek a return to growth

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EmbedTek LLC

N7 W23700 Bluemound Road, Suite 100, Pewaukee

INDUSTRY: Embedded computing

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A license plate reader is assembled at EmbedTek’s facility on Bluemound Road.

Pewaukee-based EmbedTek was one of the fastest-growing manufacturers in the region in the first part of the decade. The company went from just a few employees in 2010 to more than $20 million in revenue by 2014.

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EmbedTek grew by combining engineering with manufacturing touchscreen display and controls products. Growth, however, has slowed over the past few years as U.S. military budgets for training and equipment have been consumed by operations, said Dan Aicher, chief executive officer of EmbedTek.

“We didn’t shrink as a company, but that consumed other growth,” Aicher said, noting the company’s military-related business, which represented about 30 percent of sales, was basically zeroed out.

But EmbedTek has been able to return to growth by continuing to emphasize its engineering and manufacturing capabilities.

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“We’ve won a lot of new business, particularly in medical equipment and some of the industrial and security spaces where we’re leveraging our expertise in cameras and sensors and analytics,” Aicher said.

Examples of newer products include license plate readers and a high-speed counter that replaces a laser-based system. In some ways, the products the company designs and builds haven’t changed that much. They are still often a non-descript box with an embedded computer. When they’re coming together in EmbedTek’s manufacturing cells, it is hard to see the three years of work that went into making the product a reality.

“We’re just much deeper into the creation of the technology itself,” Aicher said.

For cameras in particular, the past several years have seen a steady decrease in prices, combined with improved performance, resulting in more potential applications for the technology. EmbedTek has been able to use commercial off-the-shelf cameras and sensors instead of sourcing proprietary systems, making the buildout more affordable and opening up more potential applications

“You stack up these royalties you have to pay and all the sudden your camera is $8,000 (but) when you peel back the core technology, you have $100 of material in there,” Aicher said of the more proprietary systems.

EmbedTek specializes in creatively using components and optimizing them for particular applications, but Aicher said building in software and analytics behind those components is the key.

“We can leverage on success to another in a way that we continue to build on the expertise that we have and it makes for a pretty compelling story,” he said.

Combining manufacturing with development and engineering capabilities has helped EmbedTek. The company primarily serves businesses in the industrial automation, medical equipment, and military and security markets, each of which presents opportunities for EmbedTek to bring its expertise to bear.

“We know that there are applications in those markets for a lot of the capabilities that we have,” Aicher said. “These are difficult capabilities to find. I’ve tried to find companies that do what we do and it’s really kind of difficult.”

EmbedTek goes after not just the engineering or design work, but also the opportunity to build ongoing revenue with manufacturing.

“We look at applications where there’s scale and volume to them and that’s part of how we select what engagements we’ll take on,” Aicher said. “Our business is predicated on sustainable revenue, that we win programs and they stack on each other and we build the scale of the business.”

Even though EmbedTek works with customers that have sophisticated manufacturing operations of their own, the company has invested in being able to assemble, test, package and distribute for customers, Aicher said.

“We’re doing it because of the nature of the technology in there, the complexity of it, and the supply chain is something we’re more adept at managing and manufacturing,” he added.

One frustration for Aicher has been the inability to source the components EmbedTek needs domestically, much less locally.

“Even cables, film layers, adhesives for adhering panels, there was no supply chain to support this kind of business in the United States and what there was was very poorly informed,” he said.

Aicher said he is hopeful the arrival of Foxconn Technology Group, with which EmbedTek has long done business, will bring component suppliers to the U.S. and make it easier to source components domestically.

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