What follows is an extended version of the “Crown In The 21st Century” article from the June, 2011 issue of Pro Sound News, more than twice the length of the version that appeared in print.
Matthew Bush, senior director of operations for Crown Audio Elkhart, IN—“We design, we market, we sell, we manufacture, we service, we distribute. Everything happens here.” That’s how Matthew Bush, Senior Director of Operations for Crown Audio sums up the operation at the Harman International’s headquarters in Elkhart, IN. In a largely suburban area best known for the Fighting Irish of Notre Dame, and as the RV manufacturing capital of the world, the company that became Crown was founded by minister Clarence C. Moore in 1947 to provide reliable tape recorders and other equipment for missionaries working in remote areas, Crown took a leadership role as a power amplifier manufacturer in the mid ’60’s with the introduction of the DC300.
Until relatively recently, all manufacturing operations for Crown took place in Elkhart in the substantial Crown complex. “We’re in the middle of a project to realign our business and our operations to our current strategy, which is all about innovation and new product development,” says Bush. “We’ve got to reinvent and replace our products at a fast enough rate to keep up with the demand, but also add new products at an even faster rate to grow the business. And honestly, the operations of the past just could not keep pace with that.”
Competing in multiple vertical markets and with eight different product lines, Crown needs to be able to “drop new products out faster than we’ve been able to,” explains Marc Kellom, Director of Marketing for Crown. Bush adds that Crown’s new product introduction rate has been four to eight products a year in recent times. The immediate target is a minimum of one new product a month, with an ultimate goal of at least doubling that pace. “In order to get there, you really have to have everyone in the organization pulling that way,” says Bush. “In the past, we had hundreds and hundreds of people doing day-to-day manufacturing and support tasks, producing products that we had already introduced, some of them years and years ago. Therefore, activities really got caught up in kind of the pressures of today and not worrying much about tomorrow.”
In such a scenario, engineering needs might take a backseat to production, particularly in fitting prototyping of new designs into the workflow. Crown’s mantra for evolution, Bush explains, is to say, “We got here by being good at building products; let’s use that expertise now to show some others how to do our work.” That allows a day-to-day focus on product development at the headquarters. The parts sourcing teams can now focus 90 percent of their time on new products. When engineering is ready for the prototyping stage of the process, says Bush, “Our target is 24 hour turnaround. Not a matter of weeks and ‘get in line,’ but 24 hours, and that’s a big shift.” Instead of being “a big behemoth worrying about mass production,” Crown has become engineering driven and agile in prototype development.
In the earlier days of fewer competitors, such as when the Crown DC series amps were ubiquitous, Bush says “You had a solid, reliable, well-supported product and you could just cruise on that. But you can’t cruise anymore…We’re going to have to go into different formats than we were in before.” As opposed to standalone amps—not exactly a large growth market—amps are now smaller, inside speaker cabinets and mixers and in commercial hybrid products. Kellom reports that Crown’s biggest growth markets are the “lower end of the install market and, maybe surprisingly, portable PA.” While he says the portable PA amplifier market has been shrinking overall the last few years, “we’ve grown really substantially in that market. It’s just a matter of us bringing really innovative products into the space.” Crown’s portable PA focus is on the upper end of that market, offering high power products with rich feature sets.
A tour with Bush of the factory assembly line vividly illustrates the changes afoot at Crown. For example, on the surface mount board assembly line, four operators have replaced many, overseeing the automated placement of up to thousands of parts per board in this “core process.” While manual component insertion is still necessary for large parts like power components, heat sinks, large capacitors and connectors, “Even if we decided not to do mass production, only prototypes, it’s still a required technology,” Bush explains. Laser tracking, x-ray inspections and automated testing are all a part of the process, says Bush. “It doesn’t have to be about ongoing process control; it’s all about getting it right the first time.”
A complete metal shop, followed by a powder coat electrostatic finish painting line, are part of the facility’s capability. “All of our chassis metal is done in house,” says Bush. “I wouldn’t consider the mass production of that necessarily at full confidence, but I would consider the design at full confidence. We’re actually really good at metal design.”
Traditionally, the same large final assembly lines, which include testing of sub-assemblies and final units, have been used for both small and the biggest product runs. Amps have been built, cleaned, tested and boxed all in one room, including custom foam-based packaging sprayed into polybags to expand and snug up to boxed products at the end of the line (which means vats of the necessary chemicals rather than storing pre-manufactured packing materials).
These traditional lines have been good for large runs, says Bush, though “if we’re in really low run situations, they’ll want to do a run for 20 pieces for engineering. The entire line is occupied doing that and you have to empty it out and re-set up, so it’s not a very effective way to do small runs. This is a fantastic way to do large runs. If you want to build 1,000 of something, this is an amazing line for that…at one time we had several of these final assembly lines, several surface mount lines, several insertion lines and a lot of high volume production.”
At the peak, the Elkhart facility produced 6,000 to 15,000 amplifiers per month. “While we’re good at it and can do it here,” says Bush, “we decided that we can either afford to be a mass producer or we can afford to maintain our manufacturing capabilities and our speed. What we chose is to maintain capability. We can always invest in the latest equipment, but that equipment isn’t for capacity; it’s for capability to be able to keep up with new technologies and speed of design.”
Bush says if a company chooses to do mass manufacturing in the U.S., with its higher labor costs than in other countries, that “then limits the amount of money you have for reinvestment in the business.” Crown, he says, has decided that it knows how to do manufacturing, and deliberately maintain that expertise, but chose to show others how to implement that prowess, making better margins by manufacturing in other global regions that have a lower cost base, then using improved profit margins to fund ongoing business and product development. Crown’s “core competence,” he explains, is in “knowing how” as opposed to necessarily doing all the manufacturing itself.
While Crown currently manufactures only about 30 percent of its products inside the headquarters facility, Bush reveals that “that 30 percent equals approximately 40-50 percent of our revenue; we’re making the higher price, more complex units in house.” Over time, Bush expects that that mix will change further towards outsourcing, with more like 80 percent of manufacturing being done outside of the facility.
“Every product we design here, though, will be launched in this factory. And that’s a key difference between an all-or-nothing model.” Crown, Bush says, has decided that the “best approach is saying ‘if we can give engineering the resources they need to get parts sourced, prototypes built, feedback on best practices on how to build the product? That capability, we want to maintain.’ As long as we maintain that expertise and can work with our engineers here, we’ll get better products at a lower cost, faster to market. And then I can maintain a long-term advantage in lower cost, just like everyone else can, by outsourcing. Anyone can do outsource manufacturing. What they can’t mimic is what we do in here.”
Bush began his tenure with Harman some 20 years ago, initially with the Harman Music Group based in Salt Lake City. He’s served eight years in engineering, 12 in operations and two in sales, yielding a unique perspective of engineering, production and client interests. He was tapped to replicate the processes he introduced in Salt Lake to Crown, which is resulting in a major shift away from the massive linear assembly lines to a pod approach, just being implemented when PSN visited the factory. Bush predicted that if the visit was repeated in six months time, about half the manufacturing equipment would have been moved to another Harman design center.
At full capacity, 22 individuals manned the final major assembly line at Crown. That paradigm is being replaced by a “final assembly cell” approach, where four to five operators will take the place of 22. “Obviously, it won’t work as fast,” says Bush, but will have all the capabilities of the long line. “The difference is we don’t have to set up to do runs of a thousand or hundreds. It can actually do five products as efficiently as it can do 100.”
The cell model is being replicated three additional times within the Crown production area. “This one cell doesn’t replace a line of 22, but four cells will,” Bush explains. “And, instead of being able to only run one product at a time, we can now run four products at a time and we can do them in smaller volumes. With fewer people, each one obviously has to be able to do more steps in the assembly, which means that the overall knowledge base of an individual assembly person’s going up.” This increased knowledge base and the flexibility of the cell approach means Crown can more easily accommodate customization of products, including interface and DSP options. “The best functioning cells are where every operator in there knows every step—not only can they work share, but they can scale.”
While the pod approach was implemented in Salt Lake City about eight years ago, the design at Crown is a generation evolved. Key to the process is also a line facilitator that keeps the necessary parts flowing to the assembly crew. “It’s kind of a continuous cycle of being able to build. So, whether they’re going to build one or 20, the materials just keep flowing and the simple trigger is ‘the bin’s empty, fill me up.’” Final full power testing stations, with massive dummy loads, are located near the pods and remotely connected. Crown’s new CT1U multichannel amp series is the first being manufactured entirely on the new line.
People are still key to the process, says Bush. “We take care of our employees…I can absolutely say that we have the best employees, but when I’m paying $25 an hour, then I want them to be focused on the activities that are highly leveraged and that’s new product development. That’s making sure we know how to build this stuff, getting the designs right, getting the process right and then we’ll show somebody else how to do it.” The remaining 70 percent of Crown’s manufacturing is largely outsourced to China, though Harman is manufacturing in Brazil, primarily for that regional market, and India is seen as a country with future potential for manufacturing.
In addition to manufacturing, Kellom sees business growth opportunities for Crown internationally, although with challenges. In countries like India, the fees levied when shipping a device out for repair are very high, so local infrastructure is important for international growth. Harman’s dedication to build such infrastructure is evident in creation of an India-based development center (with $100 million slated for further development in India over the next three to five years), the acquisition of Selenium and its transformation into Harman Brazil, and in China, where there’s now a local Harman design center in Shenzen. Kellom notes, “We now have local teams who are defining products that make sense for the Chinese market.”
No tour of the Crown manufacturing facility would be complete without a visit to the lair of International Senior VP of R&D, Gerald Stanley, who originally joined the company in 1964 and shortly after designed the venerable DC300 amp. His design contributions continue into the digital age, including work on the development of, in conjunction with Texas Instruments, the exclusive DriveCore IC that is allowing Crown greater efficiencies and miniaturization in design by blending the amplifier drive stage and power amplification stage into a single pinky nail-sized chip. The Class D DriveCore chip is employed in Crown amps like the ComTech and XLS series. Crown Marketing Manager, Andy Flint, whose responsibilities include the portable PA market, calls the DriveCore device “Gerald Stanley’s brain on a chip—it’s everything he’s learned from 60 years of building amplifiers on our own proprietary chip. That’s something that no one else has in this industry.”
From his unique, decade-spanning perspective, Stanley reveals, “I love to see transformations in how we do things; that’s what keeps engineers employed.” A vast assortment of conventional and esoteric (often eBay-sourced surplus) test equipment fills the space in Stanley’s lab—collecting them and finding ways to apply them somewhat of a passion of his, as is collecting patents as evidenced by hallways lined with plaque after plaque commemorating numerous patent awards, most bearing Stanley’s name and including key Crown amplifier technologies. Test equipment, where possible with custom computer control programs developed by Stanley, are used to characterize components, including temperature tracing and new semiconductor CV plotting so they “know a lot about what devices do dynamically.” Stanley’s vast experience is also frequently sought after by semiconductor manufacturers to critique new components during development. Beyond Stanley’s personal domain, the overall space devoted to engineering at Crown is substantial, with room after room graced with design workstations, audio test gear, and prototype amplifiers in various stages of test. Also within the facility are customer support and repair staff, along with management, sales and marketing.
As with many manufacturing operations, shifting to usage of offshore manufacturing and miniaturization has shrunk the footprint of the operation, in Crown’s case leaving plenty of elbow room in the building. Taking part of that space, for the past couple of years, is the operational base for Harman’s audiophile lines, including Mark Levinson and Lexicon consumer (Lexicon Pro is based with the Harman Music Group in Salt Lake City). While Kellom calls the “critical mass…really difficult,” in the high-end of hi-fi, Harman’s focus on the high end of the market has left them “surprisingly resilient” through the economic downturn. The HQ houses an elegant and comfortable listening room, rebuilt recently into a LEDE styled home theater configuration for demonstration and evaluation of the hi-fi lines. At the time of the tour, the space was being outstandingly filled by a $60,000 pair of JBL Everest monitors, powered by massive (100 lb and $25,000 each) Mark Levinson Nº53 mono block amplifiers—employing Class I technology (as in the Crown iTech amps). Inside the Nº53’s, four switching amps are interleaved for an effective 4 MHz switching frequency, yielding a 100 kHz bandwidth and a kilowatt of audio power at four ohms.
It’s not all hardware at Crown—during the visit, Brian Pickowitz, Market Manager for Tour Sound, demonstrated the new “Powered by Crown” iPad app, offering basic amplifier control of Crown amps connected by Ethernet to the same network as an iPad or iPod Touch, and complete set-up and monitoring, as well as custom panel capability on any Harman System Architect network. Also previewed by Pickowitz was the new Harman HiQnet Performance Manager software, a task specific iteration of System Architect 2 offering streamlined and simplified yet still sophisticated graphical-based amp to loudspeaker system configuration, control and monitoring. Presets are available for Crown’s high-end amplifiers, including the various VRACK pre-configured amp racks, and JBL Pro VerTec line arrays.
With an aggressive implementation of a reasoned plan in place, Crown appears intelligently poised to stay competitive in a troubled marketplace. “We’re a technology company,” Bush concludes. “We actually invent amp technology, so what we’re trying to maintain is all of the elements to keep that competence, not just engineering, but also how to build and produce that amplifier.”