Keytronic: The Key to Competitive Manufacturing

Keytronic: The Key to Competitive Manufacturing

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Craig D. Gates, President and CEO, KeytronicCraig D. Gates, President and CEO
Keytronic is proudly celebrating 50 years of success. Starting in 1969 as a keyboard manufacturer, Keytronic has sustained extensive growth over the years and an unbroken string of operationally profitable quarters for the last 15 years. What started out as a successful Original Equipment Manufacturer (OEM) has transitioned into one of the most successful design and manufacturing service providers in the industry today. Keytronic provides a rare combination of global pricing, engineering, vertical integration and worldwide manufacturing only found in much larger multi-billion dollar Tier I contract manufacturers, with the “next door” customer service typically found in a small local contract manufacturer. Every one of their customers is very important and receives their full attention and support.

Keytronic has been manufacturing products overseas for over 25 years, first as an OEM, now as a design and manufacturing provider. They have facilities in the U.S. (Oakdale, MN; Fayetteville, AR; Corinth, MS), Mexico (Juarez), China (Shanghai) and Vietnam (Da Nang). Keytronic’s unique design engineering and vertical integration of PCBA, mechanical, electromechanical, precision metal stamping, fabrication and finishing, and plastics tooling and molding, along with their advanced supply chain management solutions, allows them to provide their customers cost savings and time to market advantages, while still providing superior customer service and flexibility not found in a larger contract manufacturer. Keytronic also has a Proto Shop within their metal shop that can provide quick turn proto services. One of the major challenges of customers today is the rising prices of several products caused by the tit-for-tat trade war between two of the world’s economic titans, China and the U.S. The tariffs that the U.S. had imposed on a huge number of Chinese imports dealt a crushing blow to the metal manufacturers in the U.S.

Unfazed by this escalating back-and-forth trade friction, Keytronic is able to buy components at Chinese prices as they have an International Purchasing Organization (IPO) in China. “Even before the tariffs came into existence, we factored in the cost of getting metal products that were made in Asia shipped to North America,” says Craig Gates, CEO of Keytronic. “We offer products at affordable prices out of our Mexico facility.”

We offer products at affordable prices out of our facilities

Even with the tariffs the company is very competitive with metals that are made overseas and shipped to the U.S. The company also has a purchasing group in Spokane. Their metal shop provides products in the markets of gaming, computer equipment, servers, outdoor and indoor kiosks, and signage.

Gates notes, “When making something in Juarez or North America, as opposed to Asia, it takes six weeks to eight weeks out of the ship schedule, so we can be very responsive to upsides and downsides from our customer.” Also, being in Juarez mitigates the distance problem for their customers. If they need a prototype to be built, or want any manufacturing or design changes to be made, Keytronic is only a short flight away, unlike vendors in Asia who are a day or two away. When you factor in shipping and other ‘landed costs’, Keytronic’s price in many cases is considerably lower from their Juarez facility.

One of the main reasons the company can satisfy its customers so quickly is the single point of contact that they have, which is their program management team based in Spokane, Washington. No matter where in the world manufacturing is located, the program managers in Spokane supervise the process in terms of customer and factory interface. “Customers don’t have to work through a bunch of people to get an answer or action in place, one phone call to their program manager gets it done” says Gates.

A perfect exhibit of this would be when a client of theirs that had been working with a Chinese contract manufacturer for both metal fabrication and final product assembly won a big contract in the U.S. There was no way they could afford the transportation costs for an 800 pound large metal product from China. The customer approached Keytronic as they needed someone in North America that could interpret the still incomplete design, which was being made differently than what the prints showed, and could ramp up the product quickly. Keytronic worked with the customer to recreate the design, sourced all of the various components, develop a manufacturing process, and ramp production of the product very quickly.

In most of the products they manufacture, Keytronic is not just making the metal parts; they make a completed unit which may include plastics, electronics and various other components. This is how Keytronic provides the best value for their customers. Their customers do not have to coordinate multiple contract manufacturers to make the metals, PCB, and the plastics, and one to finally build the product. Keytronic can do it all, and save the customer money as well.

Keytronic is very busy right now satisfying all of the quoting and demands for customers who are being affected by the tariffs. The company has recently completed a $6 million addition of laser turrets and other equipment. “With all that installed, we are now working on adding the business that’s coming at us,” says Gates.

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Spokane Valley, WA

Craig D. Gates, President and CEO

Keytronic provides customers with superior manufacturing and engineering services at the lowest total cost for the highest quality products, creating long-term mutually beneficial business relationships. Keytronic has the capabilities and skills needed to assist clients at any phase of the product development cycle. The company can provide complete product design that begins with a sketch from their marketing group, or it can assist in completing designs the clients' engineering group has begun or we it can provide that last bit of DFM advice that brings the product to successful production launch