Johnson Health Tech brands see benefits from U.S.-based R&D center

Celebrating its one-year anniversary of operations this month, the U.S.-based engineering center for Taiwan-based Johnson Health Tech brands Horizon, Vision and Matrix has already begun to simplify and shorten the trans-Pacific development and design process.
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Celebrating its one-year anniversary of operations this month, the U.S.-based engineering center for Taiwan-based Johnson Health Tech brands Horizon, Vision and Matrix has already begun to simplify and shorten the trans-Pacific development and design process.

"We're bridging the gap between the United States and Asia," said Kent Stevens, Matrix Fitness vice president of sales. "Sometimes things are lost in translation. Now engineer-to-engineer communication is streamlined."

As a part of the establishment of the Johnson Health Tech North America (JHTNA) R&D center in Madison, Wis., Matrix Fitness is also moving its headquarters from Albuquerque, New Mexico, to the Madison area, where both Horizon and Vision are already based. Matrix President Ken Lucas will be the only one to stay in Albuquerque, where he will focus more on global sales.

"The company felt we'd be able to utilize the center more if we're next door and not across the country," said Stevens. "Face-to-face time does tend to speed up the progress."

Speeding up progress
Called a "think-tank mentality" a year ago by Tom Moran, who was hired to be the center's founding director and as JHTNA vice president of engineering, the center now seems to be finding its feet and beginning to function smoothly after about six months of settling in. (See SNEWS® stories, Oct. 27, 2003, "Johnson Health Tech R&D center nearing reality" and June 16, 2003, "Johnson to set up 'global center' in U.S." for background on the center.)

Moran, formerly of Precor, said one benefit of the center is the interaction, not only between engineers and product developers and managers, but also with model makers and the brands themselves.

"That's one of the beauties," Moran said. "Instead of one person designing it and pushing it into production, there's a lot of interaction."

That allows for changes in design to happen more quickly and without missing a beat in the process. Plus product mangers aren't forced to try to communicate with engineers, he added, or to do engineering tasks.

"In the end, it's allowing our product managers to be product managers, and our engineers to be engineers," said Chris Cox, Vision director of new product development. "Before the design center, our product managers were making a lot of engineering decisions and they didn't necessarily have the skill set to do that."

Allowing each person to do the job he or she is supposed to do can eliminate mistakes and do-overs and "get products faster to market," said Bill Sotis, director of marketing for Horizon.

"We're getting ramped up quickly," Sotis added. "We'll be able to launch more new and innovative products faster than in the past."

Spirited brand communication
The center, now open in a 12,000-square-foot building in a new industrial area minutes from downtown Madison and consciously placed square between Vision and Horizon headquarters, now has 23 employees. The management team includes Clint Myers, a former Icon employee who was Horizon's management representative at the center until he was sent to China temporarily as a liaison; Ron Carrinji, formerly of Life Fitness, who will manage both Horizon and Matrix development teams at the center; John Roessler, who is Vision's team manager and has experience at Quinton; and Mrako Fenster, who as the lead industrial designer will work with all three brands. Others include Becky Deutmeyer as office manager and Addison Pettis, who manages the model shop.

"It's really gelling now," said Moran, who with Pyles planned the center, hired the employees and got it up and running in the last 18 months.

About half of the space is for manufacturing of prototypes and models, while the three brands each have their own work area separated from the others. Knowing the friendly competition between the brands, Moran said a year ago that he expected some "spirited interaction" between groups.

"We're not the same brands," Cox said. "We have different management teams and we're competitive."

Each will of course continue to develop products based on its needs and will retain separate identities. But, Moran said, the importance is to use the strength of the group and the company to grow.

"We really are one company, and if we can operate as one company, we'd be stronger and better," Moran said. "The walls are coming down."

Sotis called the center "neutral ground" that can create the ability to communicate better.

What the future holds
With a development cycle that is at least a year, the first products to birth solely from the R&D center won't be shown until spring 2005. Even without the products on the floor, the gains are already evident.

"We're certainly glad we did this, and we're starting to see the benefits," Pyles said.

Pyles also said the mother company, Johnson Health Tech Co. Ltd., sees the center as a long-term investment – one that will help the company reach its growth goals. Johnson, with headquarters in Tai Chung, China, and a factory in Shanghai, has more than 1,900 employees in Asia and has said it intends to be one of the top three fitness companies in the world by 2008, relying mostly on organic growth. Founded in 1975, Johnson's revenues have grown about 30 percent or more in each of the last five years, with most of that growth in the United States. As of January 2003, the company is traded on the Taiwan Stock Exchange with the symbol JHT.

"The future is in our new technology," Moran said, "and in our new products group going out and finding the next new thing."

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