Bright Future at Cree Lighting

By Michael Burke

(Taken from journaltimes.com)

A bright future at Cree Lighting: Now-private company making continual advances 

STURTEVANT — On March 15, in a bombshell announcement, Cree reported that it had sold off its entire lighting business for $310 million, a business that employs about 1,000 people here.

The reaction at Cree Lighting, 9201 Washington Ave., was applause, company Director of Operations Brian Kinnune said last week. Cree Lighting was going from a publicly traded company based in Durham, N.C., to fourth-generation-owned Ideal Industries of Sycamore, Ill. — Ideal’s 20th company.

The same day, Meghan Juday, vice chairman and part-owner of Ideal, told The Journal Times that her company would continue to invest in Cree Lighting and try to help it reach maximum profitability. She said Ideal’s philosophy is one of “patient capital” — meaning it invests for 10 years, 15 years, even for a generation.

Ideal has been true to Juday’s word. It is in the midst of investing more than $8 million in the local Cree Lighting, an investment expected to create about 100 new jobs: It is increasing component manufacturing and final assembly, currently performed externally, as part of a larger expansion effort that began last year.

In a news release, Craig Atwater, general manager and senior vice president of Cree Lighting, explained the rationale: “Vertically integrating manufacturing operations is an important part of the Cree Lighting strategy. By further investing in our industry-leading manufacturing capabilities at our (Sturtevant) facility, we can better serve our customers by reducing our lead times for these manufacturing processes from weeks to a matter of days.”

Cree Lighting grew, in a somewhat crooked path, from the former Ruud Lighting. It now has about 354 salaried and 635 hourly employees at its roughly 700,000-square-foot Sturtevant offices and plant. There, the company manufactures on three shifts, five days a week and produces close to 80% of Cree Lighting products.

Cree Lighting also builds some products in Florence, Italy, for the European market. That is done to reduce lead times to customers.

Cree Lighting also has a distribution center in Pleasant Prairie; it ships its lower-end product line, e-conolite, from there, Kinnune said.“

(Econolite) actually was started as part of Ruud, so it’s got a long history with us,” he said. “It’s always been kind of our bellwether protection against the undercut/low-cost (competition).”

Innovative new product

Cree Lighting says it was “the first company to bring LED lighting to the masses, deliver warm white light without compromise, break high-efficiency performance barriers and first to offer a one-button sensor-integrated intelligent lighting platform.” In 2008, with the LEDway, Cree Lighting’s foray into streetlighting, the company helped the City of Racine become the first in Wisconsin to install LED technology on its roadways.

About half of Cree Lighting’s engineers are in Sturtevant and the other half in North Carolina, Kinnune said. Late last year it announced a new product, the architectural-grade Cadiant Dynamic Skylight which re-creates the experience of being under a natural sky with remarkable realism. Using advanced lighting control and color changing technology, separate sun and sky panels create the east-to-west arc of the sun to create the sensation of natural sunlight and blue sky in interior spaces.

Cree Lighting says Cadiant “provides a valuable sensory connection to the outdoors in spaces where access to natural lighting through windows is improbable, impractical or impossible.”

Continuous improvement

On the manufacturing floor, Kinnune said, the focus — seemingly nearly an obsession — is on continuous improvement. All company leaders meet in the plant at 8 a.m. every day, walk the floor for an hour and talk about all the different areas, he said: “Every single day.”

A never-ending emphasis on becoming more efficient means that Cree Lighting ships five to six times more product volume from the plant now than it did in 2011, according to Kinnune — and with about half the staff.

Surprisingly, almost all of Cree Lighting’s products are made by hand — not robots. “We use automation when it’s critical to quality, reliability or repeatability,” Kinnune said. “We don’t use robots to replace a human.”

In one case, starting in this past October, he said, “we were talking about an automated line; we were going to spend $400,000 on an automated line. (Instead), we spent $2,500 on a fixture and moved some benches and got better just by how we put things together. And did that instead.”

The result of that project was an increase, in about 2½ months, from 156 products per 8-hour shift to 367.

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