Look at any list of lighting manufacturers, and you’ll see that the majority of today’s LED solutions are not produced in America. And for the first five years of doing business, that was true for NEUTEX Advanced Energy Group (dba NEUTEX Lighting) as well. Headquartered in Houston, TX, NEUTEX has become one of a list of companies that have recently moved operations to the U.S. from overseas. Today, the company is developing its Houston presence as it positions itself as a leading manufacturer of LED lighting.
“You really need to think outside the box to make things happen,” says John Higgins, president and CEO of NEUTEX, “and we’re firm believers in the LED business.”
Building A Middle Class
It was a typical quality control check at the company’s Shanghai facility that led Higgins to notice a new store was being built nearby. After learning it was a typical middle class American store – “not a Wal-Mart and not a Louis Vuitton,” says Higgins – he and colleagues began to wonder if costs were starting to go up to the point that they were helping to develop the middle class of China. Upon further inspection, they realized that “we had five people doing the job of one in the states,” says Higgins. And all of the work in that China factory was done by hand—no automation, which affected both the production output and quality.
“We had quality control issues,” Higgins says, and he adds that the language barrier made “actually trying to get things done” difficult. “We found ourselves traveling ten times more than we should have to travel than if we were doing it in-house.” Manufacturing anything abroad, he says, is difficult because he lost the ability to walk to the production floor and “see what’s going on” – whether the wrong color LED is being put in or something else is being done incorrectly on the assembly line. The company had also noticed that when NEUTEX management would go to visit their factories, production would go up. “We’d leave, production would go down,” Higgins says. Another long distance cost of manufacturing abroad, says Higgins, is paid by the four employees who are in the office at 2:00 a.m. in order to communicate with the facilities in a different time zone. “Those trends, no matter how small you think they are, over time they start to cost you a lot of money,” he says.