Before conducting my Zoom interview about the Heath Company and Heathkits with Chas Gilmore – formerly the VP of product development, marketing, and sales at Heath – I sent him a written list of questions so he could review and organize his memories of working at Heath. We covered most of my questions during the interview, which appear in the first five parts of this article series, but we did not touch upon or only partially discussed three of my written questions.

After I’d written the 5-part article series covering the information that we discussed during the interview, Gilmore sent me written answers to those questions in a subsequent email two weeks after the interview. Gilmore provided some in-depth insight into Heath’s kit-development process that I’d not seen before, and I thought it would be a shame not to include his answers to these questions, so they appear below in this additional, sixth article.

Chas Gilmore: Before addressing those questions, it is good to note the company name was Heath Company, and Heathkit was a trademark for the electronic kit products.

Steve Leibson: Tell me about the kit development at Heath during your twenty years with the company. How did product ideas appear? How did projects get approved? How were the kits developed?

Chas Gilmore: By the time I arrived at Heath in June, 1966, the product development process was well established and remained pretty much intact throughout my two times at Heath.

There were two main organizations involved in the product development process: Product Line Management and Engineering. They had a lot of support from all the other areas of the company – almost everyone was involved one way or another.

I have in prior questions [during the interview] discussed the structure of the Engineering department. To summarize, it consisted of multiple Design Engineering sections, each devoted to a particular product line, for example: Instruments, Ham Radio, Audio, etc. Each department was managed by a Chief Engineer. These departments’ job was to execute the product design (electronic and mechanical) from the feasibility stage to the final design validation and documentation of that design. In addition to the Design Engineering sections, there was a Component Evaluation section, which qualified part vendors, a Drafting section, which produced part documentation, and the Manual Department consisting of writers, illustrators, and editors who were responsible for the assembly manual.

The Product Planning Department, a marketing function, consisted of a department manager and multiple PLMs (product line managers). There was a PLM responsible for each of the major Heath product categories. Each PLM also had responsibility for several minor product lines. The PLM’s job, as an individual contributor with no personnel management responsibilities, was to manage the life of each product in the line from concept, thru development, thru active product life, and finally the product’s removal from active sales (often by its replacement). The PLMs were the sole people with cradle-to-grave product responsibility.

The Product Planning and Engineering organizations were supported by many other organizations such as Advertising (catalogs and trade show exhibits), Retail Stores, Order Entry, Technical Support (telephone, email, mail customer support), Service, Manufacturing, Quality Assurance, Purchasing, Finance, Administration, etc. When I arrived in 1966, the company had some 650 employees, and target sales were $50 million. At that point in time, Heath was a cash-with-order business (a very small portion could be financed through the Heath Company). Initially, all of the business was mail order, and sales volumes were such that Heath had its own ZIP code. By the 1970s, the business was split between Mail Order and Retail Stores. For some time, the Retail Stores had their own catalog with slightly higher prices than Mail Order. Of course, the retail stores did not charge shipping. Eventually, the Mail Order and Retail prices were the same.

A new product (unique or replacement) was proposed by the PLM, who maintained a list of products to be developed as part of the marketing plan for that product line. The product idea came from the PLM’s knowledge of the market and many conversations with other Heath employees. Engineers were often a source of product ideas, especially of the “I use these products, and this would be a great idea, and I know how to design it”. Customers would also suggest products. Of course, some products were developed because a competitor had introduced a product of that nature.

Once a PLM firmed up the product concept (functions, specifications, selling price, market forecast, development cost, return on investment, etc.), again with a lot of consultation with Engineering and other departments, the PLM presented the concept to the XPDC (Executive Product Development Committee) and requested authorization for the first phase of development (design feasibility). The XPDC met every Tuesday, typically from 10 AM to Noon, to consider the PLM proposals.

As the product progressed to later stages of development, the XPDC reviewed the development progress and authorized those next stages. The number of stages and required approvals depended to some extent on the size of the development process. Typically, the stages were: Feasibility, Design, Manual Development and Proofing, and Initial Production. The XPDC consisted of the company president, the president’s direct reports, and a wide selection of department managers – basically anybody who would impact or be impacted by the new product. The XPDC assured that the new product pipeline was well known to the company management, and all members were encouraged to participate in the new product authorization process. As products became more complex, a greater number of products did not go beyond the Feasibility stage, often because the functional/specification requirements could not be met at the desired cost.

One of the unique characteristics of Heath products (Heathkits) were the renowned assembly manuals. The accuracy and attention to detail was ensured by a rigorous proofing process. Manual development started when the design engineer completed the product design. The transfer from Design Engineering to the Manual Department consisted of a prototype accompanied by the engineer’s written circuit description, including notes on suggested assembly and testing as well as five sets of parts. As the manual writer developed the assembly manual, one or two sets of parts were used. Additionally, parts and prototypes were used by the Illustrators to create the set of line drawings the customer would use to see exactly how the parts went together.

It is interesting to note that photographs were not used as assembly illustrations although that approach would have been more economical and faster. Early in the Heath story, it was realized that the line drawings (which took much more time) were a much clearer way to show how the product should be assembled. When the writer had a draft manual, two or three sets of parts and a draft manual were given to key employees (typically, the relevant engineering department Chief Engineer, the PLM and others). These people took the draft manual and the parts home and built the kit on their own time (often evenings and weekends as a customer would) in accordance with the draft manual. When they finished building and testing the product in accordance with the manual, they were expected to put the product into use.

Each builder kept copious notes on the build process, including the accuracy of the parts count, the number of hours needed to build the product, how much solder was used, how well it performed its intended function, etc. This was called the Pre-Proof stage. Upon completion of the Pre-Proof build, the builders and the manual writer gathered for a detailed page-by-page review. The manual writer then created a composite manual incorporating the Pre-Proof comments. Once the results of the Pre-Proof had been incorporated into a final manual, development moved to the Proof-Build stage. A Proof-Build consisted of some 25 sets of parts packaged by Manufacturing, using the packaging intended for production.

These 25 Proof-Builds were passed out to Heath Employees who took their Proof-Build kit home and assembled it under the same conditions that customers were expected to have. In other words, if the product was to be assembled without access to certain pieces of test equipment, the Proof-Build was constructed without use of that test equipment.

Following the same process as a Pre-Proof build, all the proof-builders gathered with the writer, the engineer, and others to incorporate all the comments into a final composite manual. By then, the assembly process had been quite thoroughly checked out, and there were now nearly 30 assembled versions of the product. The development engineer (and later a separate department called Evaluation Engineering) thoroughly tested the Pre-Proof and then Proof-Build products to make sure the products met the product technical functionality and specifications.

Occasionally, there were sufficient issues noted with the Proof-Build that a similar cycle called a Post-Proof was conducted. As a reward for the effort of completing a Pre-Proof or a Proof-Build, the product was returned to the employee after evaluation for their permanent personal use. Very often the Design Engineer posted a signup list where employees could indicate their interest in participating in the Proof-Build process.

Many popular products had very long signup lists as many, many Heath employees were avid users of Heath products! As part of the Proof-Build process, there was an effort made to have one novice kit builder and one senior kit builder as members of the Proof-Building team. It is interesting to note that the time required by Design Engineering and the time required by the Manual Department for a particular product were often about the same number of hours. The manual was a very significant part of Heath’s success.

Steve Leibson: Which companies competed with Heath in the kit business during those years (and earlier)? Why were they not as successful or as well-known as Heath, do you think?

Chas Gilmore: During the 1950s and 1960s, there were numerous significant competitors: EICO, Knight-Kit, Radio Shack, and Dynaco, as well as a number of smaller players. Other than EICO, for most of the other competitors, electronic kits were ancillary business (for example, Knight-Kit was part of Allied Radio, which, at the time, was a very large electronic parts distributor). Many of those companies faded, as the kit product was not a primary focus. Dynaco, on the other hand, focused on audio kits and remained an active company into the early 1980s. The name remains as a brand name, and a new audio kit company, Dynakit, markets audio kits and parts.

In short, the same factors negatively impacting the Heath kit business impacted Heath’s competitors. Today, there are multiple electronic kit companies. Most are small and therefore nimble with low overheads and are not publicly owned.

Steve Leibson: During that time, Zenith bought Heath. I recall there were many changes at Heath after that acquisition. Tell me your recollections about the company during those years.

Chas Gilmore: Zenith’s acquisition of Heath Company impacted Heath in multiple ways. Schlumberger was a very hands-off owner. Heath certainly did not fit with Schlumberger’s oil well services business but was profitable and ran with little or no attention. Zenith, as noted earlier [during the interview], acquired Heath because Heath had a solid foothold in the emerging personal computer market (for both kit and assembled computers). This meant that Zenith immediately adopted a very hands-on approach to Heath. Secondly, Zenith did not have much interest in the non-personal computer product lines so nurturing them while market forces were changing the electronic kit business was not in the cards.

As noted earlier [during the interview], Heath’s development of personal computers in kit form, went from designing a personal computer explicitly for the kit/hobbyist market to “kit-izing” Zenith Data Systems personal computer designs. These became mostly mechanical assembly and inserting pre-assembled and tested PC boards.

Zenith’s personal computer business left the design and manufacturing functions at the Heath facilities in St. Joseph, Michigan. Sales and marketing quickly grew in Chicago facilities near the Zenith corporate facilities. As Zenith’s personal computers grew, the engineering and manufacturing functions grew in the Heath facilities, and it very quickly became nearly impossible to separate the Heath business functions from the Zenith Data Systems functions. The building became quite crowded.

In the late 1980s, I spearheaded a project to move the Heath/Heathkit business from the St. Joseph facilities to new facilities dedicated to Heath located in the adjoining city, Benton Harbor, MI. In the very late 1980s, we separated the Heath Company from Zenith Data Systems and moved approximately 170 people to the new Heath facilities in Benton Harbor. By then, we also had a Heath facility located in Hong Kong where we managed the Heath/Zenith passive infrared lighting, wireless doorbell, and some kit product manufacturing.

The full Heathkit history series on EEJournal:

The Rise and Fall of Heathkit – Part 1: Early Days

The Rise and Fall of Heathkit – Part 2: The 1960s through the mid-1970s

The Rise and Fall of Heathkit – Part 3: The Microcomputer Kit Era

The Rise and Fall of Heathkit – Part 4: The Demise of Heathkit

The Rise and Fall of Heathkit – Part 5: Final Thoughts

The Rise and Fall of Heathkit – Part 6: And Yet More Final Thoughts