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A new boss finds the inspection company hungry for a rebound.

RVSI's Kevin Maddy

A year ago this month, an investment group bought the assets of the Semiconductor Equipment Group of Robotic Vision Systems Inc. (rvsi.com). Ancora Management paid $5.4 million in cash and assumed RVSI's obligations and liabilities.

Seven months later, Ancora named Kevin Maddy president of the maker of metrology and inspection gear. A veteran of manufacturing - he logged 25 years at Ford, Unisys and United Technologies, among others - Maddy came with a long track record of turnarounds, having played a key role in the restructuring of Pratt and Whitney. Of late, he has focused on turnarounds of manufacturers with sales under $200 million.

In an interview with Circuits Assembly in January, Maddy described RSVI's improvements to date. (The full interview is online.)

CA: You have several years experience in company turnarounds. What's unique about the challenges you face at RVSI?

KM: You do enough turnarounds and you find that it's scary how similar they are: loss of customer focus, poor shop floor practices and an unfocused technical group. That's the norm. What's shocked me at RVSI is how easy it is for us to improve the performance of the product with respect to speed and reliability. We are demonstrating incredible improvements that already have been released to the market.

We expect to be at back to our traditional position of speed leadership on our lead scanner product within the first half of 2006, and twice as fast as the competition on the wafer scanner within a few months. Our plans for 2007 are already on the drawing board with additional enhancements ready for execution.

CA: What are Ancora's plans for RVSI? Has a timeline been put on the turnaround?

KM: Ancora Capital is an investment company. As such, it will divest the business at the appropriate time and we really don't know when that will be. It depends on the availability of interested buyers. Ancora has held companies for anywhere from three to nine years.

Ancora is different from many investment funds, however, and it is important for the market to know that. Charlie Evans, the managing partner, tells people that his business is providing the funding to enable businesses to get fixed. And toward this end, RVSI will be a dramatically improved company with respect to providing a quality and cost competitive product. Ancora clearly wants its companies to be the supplier of choice.

CA: You mentioned at Productronica that RVSI is forecasting growth of more than 60%. What are the sources for your optimism?

KM: At Productronica, I forecasted sales growth to be 60% from the third quarter to fourth quarter of 2005, which we hit dead on. The forecasted sales growth for 2006 from 2005 is 150%. So far, we are right on track to hit that number for Q1.

My confidence is based on the fact that what we are projecting is a relatively conservative share growth. This means that we are in control of our destiny and I am totally convinced that we can turn things around in the factory. We are not relying on any great boom market nor do we need any dramatic new developments. Our 2006 developments are significant, but these efforts are largely in the bank already. A solid 2006 and a successful operations turnaround is all we need. I also visit our major customers every quarter to get updated information on intentions and to gauge our performance.

CA: How is the company's transition to Lean manufacturing going?

KM: The transition to Lean is on plan. The team at RVSI is hungry to learn new, more efficient ways of satisfying the customer through reduced lead times, improved quality and on-time delivery. Every person in the plant went through a training event to understand what Lean is (and is not). So far we have completed three Kaizen events that yielded a 50% reduction in floor space and more than $1 million in annual savings. In January we completed a Value Stream Mapping event of our business processes and a significant amount of opportunity was identified and will be addressed.

Our intentions are clear and well communicated. We will cut lead times by over 80% while simultaneously increasing inventory turns significantly.

CA: RVSI designs inspection equipment for wafers and packages. Which is your bigger market today, and what are your three- to five-year expectations?

KM: Our market is nearly split 50:50 between the lead scanner and wafer scanner today. RVSI's Lead Scanner has over 2,000 units installed worldwide - higher by far than any competitor's. The market is strong for upgrades. The market is also strong for new units because of recent product improvements. The wafer scanner was introduced in 2000 and does not have the installed base of the lead scanner. However, new sales are strong and will continue to grow exponentially because it is faster than any comparable 3-D machine in the market.

I see RVSI aggressively pursing the 2-D (surface defect inspection) wafer scanner market. We have an excellent platform with our current WS3500 wafer scanner, which is the industry standard in 3-D inspection. While we have had some success on the 2-D side already, we intend to leverage our platform to enhance our 2-D capability very rapidly.

CA: RVSI's LS-8000 model for package inspection is said to be 150% faster than previous lines. Are the gains due to mechanical changes or software improvements?

KM: The gains are due to speed increases in the inspection engine itself and are not reliant on mechanical improvements. Unlike competitive systems, RVSI's method leaves the part in the tray while inspecting. Therefore, speed can be gained with an upgrade to the core inspection technology and can even be offered as an upgrade to the previous two generations of lead scanners. This type of speed increase is typical for RVSI and our customers have come to expect it. Probably the bigger news for the LS product line, however, is the speed of our defect inspection, or Package Visual Inspection (PVI) function.

The PVI system has long been the rate limiter of the LS tool. It has not been unusual for our customers to see a four to five times speed difference between the 3-D inspection and the PVI step. By increasing the PVI speed by as much as four times, we have not only closed this gap, but also have made this latest generation PVI capable of keeping up even with the new speeds of the LS-8000. – Mike Buetow

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