Value Creation - Experience - Commitment
Industry Week Growing Companies, (9/98)
Gerald Chamales attains success, sobriety, and the satisfaction of helping others do the same.
By Diane Lindquist
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."