Vertical Integration & Investment in a Local Workforce make a Better Product

December 28, 2013

by Eric Goodman, Manufacturing Director, Light & Motion

In my job as Manufacturing Director, I oversee the Assembly Workers in all aspects of the product build. Working here in a vertically-integrated manufacturing company gives us many advantages.   By controlling more of what we do in house, we control all aspects of our product development, from design to prototyping to testing to finished product.

We experimented with the “box build” overseas but found that there were quality problems with the first few shipments. By assembling in house, if we find a problem, we can address it quickly without having to spend time and labor reworking inventory. If needed, we can go down to the machine shop, revise or fix an injection mold, shoot new parts in the mold shop, and implement the redesigned parts the next day. This is different than companies building their products overseas that may find that 5,000 products are defective and are already on a container bound for to Los Angeles!

Often companies move their operations offshore because they believe they can improve profitability by going with cheaper labor. We prefer to assemble our products in house because the quicker reaction time we have to address issues allows us to keep inventory rework /return costs to a minimum.

We also believe in paying a decent wage and reward innovation, teamwork and feedback from our assembly team.  The team members participate in an incentive program whereby they can earn anywhere from 10% to 40% more per hour if they achieve their metric goals. These include productivity, inventory accuracy, packaging errors, organization, warranty returns and electronics scrap. The productivity has the highest dollar impact and has worked out tremendously as the team is more motivated to speak up to management and engineering whenever they come across something that slows them down and reduces their productivity.

An example of this is how some of our painted metal parts are delivered. They were being shipped in individual plastic bags which required more of our time and resulted in additional waste. From the team’s feedback we worked with the vendor to ship us the parts protected with cardboard inserts which are more easily recycled and allow the assembly team to use the parts without preparation delays.

I don’t need to ask for feedback from my team – I often get too much!

By measuring and monitoring our productivity we are able to continually improve our operations here. It engages the production team and gives them more accountability for both the company’s and their own success. These incentives help our efficiency and quality which benefit everyone: the employee, the company and the consumer.

You can make a successful company by going to cheaper materials or cheaper workforce, but a large part of our success comes through finding more efficient ways to build our lights. We want to provide a quality product that has a good and lasting value.

For me it feels good to work for a company that invests where it matters. Our CEO and CFO are very rooted in the community and they believe in investing in a local workforce – it’s the first place where I have worked where the top people talk about company and human values, not just the bottom line.