Industry Week Growing Companies, (9/98)
RECYCLED LIFE
By Diane Lindquist
Gerald Chamales attains success, sobriety, and the satisfaction of helping others do the same.
Omni Computer Products combines telemarketing and
manufacturing operations to sell remanufactured laser printer cartridges to
corporate customers. Inexpensive and environmentally friendly, its Rhinotek
label replacement cartridges and other computer consumables are gaining
ground in corporate America. Omni's cartridges, its major product, consist
of original housings with new parts inside, and are remanufactured up to 10
times each.
Since 1994, Omni's performance has accelerated,
separating the company from a pack of small and medium-sized remanufacturing
businesses that have carved a $4.4 billion niche in the U.S. computer
industry. Omni sales have risen 20% over the past three years to $30
million; profits are up 90%; and employment rose from 190 to 250 workers.
What distinguishes Carson, Calif.-based Omni is the quality of its service
and products. Rhinotek laser-printer cartridge performance routinely exceeds
that of original manufactured models. To sustain that level of achievement,
all Omni departments respond to customers' questions immediately and
directly. At an operation motivated by slogans and inspirational sayings,
the basic mandate ruling all actions and decisions is "Quality,
Availability, Efficiency" --in that order.
Employees closely monitor customer comments to avoid
trends or repetitive problems; returned defective units are disassembled,
evaluated, and diagnosed; and staff work together to modify the production
and inspection processes as quickly and smoothly as possible. The efforts
have helped the company's telemarketers -two thirds of the workforce- build
an 80% repeat rate among corporate customers.
Omni's success derives directly from its founder,
president, and CEO Gerald W. Chamales. One step up from homelessness and
struggling to overcome drug and alcohol addictions, he started the business
in a studio apartment in the beach community of Venice, Calif. Using his
telephone to peddle products recycled by a separate manufacturer, Chamales
set the structure of the current operation, eliminating middle marketers and
distributors and gaining efficiency of salespeople's time and greater
geographic markets. As business grew, he added manufacturing operations.
With Omni, Chamales not only reformed his own life, he
also restored the lives of many of his workers. Chamales has made a special
effort to hire from halfway houses, work-furlough centers, and recovery
programs. One of every three Omni workers is an ex-convict or former
alcoholic, drug addict, or other societal castaway. Several of these
employees are among the Omni's top executives.
At least $1 million
is spent annually to recruit and train workers. Moreover, because so many
employees are ineligible for credit, the company offers its own financial
programs.
Along with its other successes, Omni's employment policies
are considered a model for other small and medium enterprises, particularly
with today's low unemployment rates and government-mandated transitions from
welfare to work. Chamales says his employment practices are worthwhile
because, once rehabilitated, the workers are motivated and loyal. "This
is not philanthropy. This is a sound business principle that started out
because it was the right thing to do and now we realize it's the smart thing
to do."
These days, Omni's image is exemplary -- growth,
profits, product quality, customer service, and employment policies seem too
good to be true. The company even shares profits with the LEWA Wildlife
Conservancy in Northern Kenya in an effort to save the rhinoceros -- a
tie-in with the company's Rhinotek brand. The contributions mesh with a
strategy to help distinguish Rhinotek products in a market expected to
explode as price cuts and new uses expand printers into homes and small
businesses.
Omni already is reinvesting profits in an aggressive
effort to confront growing competition. Professional managers have been
added to increase productivity, expand product lines, introduce new
technology, upgrade training, and expand markets domestically and
internationally. A new call center, when fully staffed, will quadruple the
size of the sales staff.
Peter Guichard, vice president and general
manager, plans to sell Rhinotek products 24 hours a day in retail stores and
through the Internet, capitalizing on the company's brand and social
commitment: "We think we can really position our product to get the
buying population to embrace us because of our uniqueness and pricing."
By 2000, Chamales wants Omni Computer Products to be a public
company. Stock proceeds, he says, will finance a consolidation of regional
competitors, either by merging with them or buying them out.
"We've got to hit our numbers and we've got to have a very focused plan. ... If
we go that route, we've got to have an ironclad, fail-safe program to
succeed," Chamales says. "We're just getting ready for prime time."