GALESBURG — One Southwest Michigan manufacturer of LED lighting plans to use lean manufacturing processes and internal technological expertise to beat out cheaper foreign competitors.
Based in Galesburg, TecNiq Inc. was formed in 2004 by Mark Pruss and Jeff Condon. After a period working as LED consultants, the duo launched the company in a bid to tap into the growing advanced lighting market.
While the concept for TecNiq can be traced back to one of the co-owners’ living rooms, the company has since outgrown its humble roots and now serves numerous customers in the marine, light- and heavy-duty trailer and several other industries.
TecNiq has grown at an annualized rate of 35 percent for the last five years, with the company generating between $20 million and $30 million in annual sales this year, Pruss said.
The secret to TecNiq’s success: a combination of lean manufacturing and product development infused with technology, according to Pruss.
For instance, the company “made its name” by developing proprietary light optimization technology that allows it to design lighting configurations to use the lowest number of LEDs.
“With the money we save by putting fewer LEDs in there, we can use higher quality components in there,” Pruss said. “We can use the best LEDs, the best plastics, the best circuit boards and provide our customer with a very cost-competitive, very high-quality product that competes against all the imports from China.”
The company’s LED optimization technology can effectively reduce by half the number of lumens required from a traditionally manufactured LED, which leads to significant cost savings, Pruss said.
Much of TecNiq’s growth strategy involves the company minimizing costs to compete with overseas suppliers of LED technology, which have steadily encroached on the market in recent years.
“At one point in our lifetime, because we were younger and smaller, we did all of our manufacturing over in China,” Pruss said. “But as we’ve grown, we’ve pulled all of our stuff back into the United States — or as much as we can into the United States. That happened about six years ago.”
A PHILOSOPHY OF OPTIMIZATION
The same philosophy TecNiq leverages to optimize its technology also carries over into its business operations.
In an attempt to lean out its operation as much as possible — therefore staying cost competitive with foreign importers — the company has developed much of its own internal software to keep the business running smoothly.
For example, the company has developed its own in-house software for material resource planning, identifying customer ordering patterns and projecting financial information.
Pruss is adamant that these processes absolutely are integral to maintaining cost competitiveness with companies that rely more heavily on cheaper foreign components.
“We’re competing against companies bringing their product from China,” he said. “If you want to employ American workers here, we’ve got to optimize everything we do. We have to bring in the material at the correct time, just in time. We try to optimize everything so we can minimize the cost going into our product so we can maintain competitiveness against our competitors that just purely buy from China and sell in the United States.”
CAPITALIZING ON A GROWING MARKET
First introduced into the market in the 1990s, LED (light emitting diode) technology has become nearly ubiquitous in recent years.
In 2016, LED lighting was a nearly $26.1 billion industry, according to a report from Sarasota, Fla.-based Zion Market Research. The report projects the market to reach nearly $54.3 billion by 2022.
Reports point to the broad opportunities with LEDs, including applications in developing technologies ranging from the Internet of Things to horticulture.
TecNiq’s growth throughout the years has largely mirrored that of the broader LED market.
This August, the company opened a new 123,000-square-foot manufacturing facility, located on a 32-acre lot. By comparison, the company’s previous facility was only 43,000 square feet.
Pruss expects the new facility and the extra space will give the company ample room to grow in the future.
“Moving a company is not very cheap — it’s expensive (and) it’s time consuming,” Pruss said. “We don’t want to have to move again.”
TecNiq invested roughly $6.6 million into the project, which it expects will create 120 additional jobs. The company currently employs 105 workers.
It’s likely that TecNiq’s growth will not slow anytime soon as the advanced lighting market continues to grow, according to most estimates.
“Our plan is to expand again hopefully in another five years with growth,” Pruss said of the company’s future outlook.
To achieve that goal, TecNiq plans to continue to trust the same lean and efficient processes that have made it successful thus far.
“Our philosophy here is to only put processes in place that improve the product or improve the success of the business,” Pruss said. “We try to put in a good foundation. The thing we talk about here all the time is putting the foundation in that works today and will work tomorrow.”
Made in Michigan: Galesburg-based TecNiq Inc. plans to continue to rely on its strict adherence to lean manufacturing and business practices to grow with the overall LED market. The manufacturer, which serves the heavy- and light-duty trailer, marine and numerous other industries, has grown roughly 35 percent per year for the last five years. TecNiq plans to generate between $20 million and $30 million in annual sales this year and currently employs 105 workers. A recent expansion should allow the company to add an additional 120 workers in the years ahead.