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Local Production Aids Innovation in Industry with Quick Cycle Time

June 6, 2013
With new products expected every 18 months, HD camera manufacturer Avigilon, Inc. finds expanding its Vancouver location makes more sense that going overseas.

Ranked the fastest growing technology company in Canada on the Deloitte Fast 50 awards program and the eighth fastest growing technology company in North America on the Deloitte Fast 500, Avigilon needed to figure out how to quickly produce products to keep up with demand.

Over the past five years the manufacturer of high-definition video surveillance solutions has grown by 38,796%.

While many companies choose to produce outside of their home office, Avigilon wasn’t sure that was the route for them.

“We are constantly benchmarking against offshore locations, but we make sure that we factors in all the costs. We look at bill of materials, quality, freight and IP issues,” said Alexander Fernandes, CEO, Avigilon.

Fernandes explained that while lower labor costs often drive manufacturers overseas, Avigilon stays competitive by lowering his labor costs through automation. Instead of unskilled labors he uses robots. In addition to the cost savings, the real benefit is that this enables him to bring on board employees with more advanced skilled sets.

Vancouver, home to many colleges and universities, is able to provide the necessary labor talent. In fact the city is gaining a critical mass of tech companies which is attracting talent, Fernandes says.

The advantage of keeping talent centrally located at the home office is the ability to have functions such as engineering and manufacturing sitting side-by-side. A major benefit of this arrangement is that it’s much easier to produce prototypes for new products.

“Innovation is able to quickly move from ideas to manufacturing and then into fulfilling orders,” says Fernandes. And that becomes a competitive advantage for a business that has a cycle time of eighteen months.  

This business model is working as the company is currently expanding its facilities by 150%.

Another reason for domestic expansion, Fernandes explains, is the very business-friendly atmosphere in Vancouver. In addition to incentives programs and tax policies, Fernandes finds the environment is very good for raising capital.

In fact just this week his company acquired privately-held RedCloud Security, Inc., a provider of web-based, physical and virtual access control systems. The global market for electronic access control is expected to reach $6 billion by 2015.

Global sales are not new to Avigilon as the company has seen healthy growth in a variety of markets. From 2011 to 2012 revenue growth by region is as follows:

  •  Canada 100%
  •  Latin America 85%
  •  Asia Pacific 72%
  •  EMEA (Europe, Middle East, Africa) 68%
  •  U.S. 67%

And growth has continued into the first quarter of 2013. “Our strong start to 2013 demonstrates our continued success in capitalizing on the opportunities in front of us and gaining global market share,” said Fernandes.

“The transition from analog to high-definition surveillance technology is proceeding rapidly,” Fernandes added.“For the first time, our industry will see high-definition surveillance sales outpace analog sales, and we continue to be at the forefront, leading this shift. With that in mind, we will add to our global sales team, continue to expand our product portfolio and invest in marketing to increase brand awareness. We believe these efforts best position Avigilon to maximize revenue growth and long-term profitability.” 

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