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The lure of outsourcing presents a difficult dilemma for manufacturing firms. The possibility of slashing costs and boosting revenues is an irresistible temptation for many executives. But are the benefits to the bottom line worth the risk of compromised quality and alienated customers? For Leviton, they are not.
Founded in 1906 and headquartered in New York, Leviton is a leading manufacturer of electrical wiring devices, data connectivity solutions and lighting energy management systems. It is proud to be a manufacturer with an uncompromising approach to quality.
“Everything we sell, we make. We don’t contract manufacture, like a lot of companies do. We want to own that manufacturing because quality cannot be compromised, especially when dealing with electricity,” Daryoush Larizadeh, President and CEO of Leviton, tells The CEO Magazine.
“Our electricians know that if you put a Leviton product in, you’re not going to get a callback, you’re not going to have a safety issue installing it or using it.”
Across his more than 20-year tenure at Leviton, Larizadeh has been a central figure in the modern history of Leviton, which boasts more than 7,000 employees. He assumed the role of COO in 2006, before becoming President in 2014. A credit to his leadership prowess, when the company promoted him to CEO in 2021, he was prepared.
But along with the rest of the world, he was unprepared for the unprecedented economic shock of the COVID-19 pandemic. For an incoming CEO, there could hardly have been a more fiery baptism.
Despite the harsh business conditions presented by the pandemic, Larizadeh rallied his people, and Leviton managed to weather the storm; it now sees further prosperity on the horizon.
Although its roots will always lie in New York, Leviton is now a truly international company.
“We have 15 factories worldwide,” Larizadeh says. “70 percent of the products we sell are manufactured here – 50 percent in the United States and 20 percent in Mexico.
“We have a factory in China, located in Dongguan. And then there’s our factory in the United Kingdom, for our European market.”
“Quality cannot be compromised, especially when dealing with electricity.”
Leviton ensures every part of its global operation is geared toward producing specific products that best suit the demands of the different regional markets it operates in.
“Each factory and its equipment is purpose-built for the particular product that they’re making. So in the United Kingdom our factory makes copper and fiber cabling for the European market,” Larizadeh says.
“It’s the same thing here in the United States. All the products that we sell here are made specifically for the American market.”
Since 2021, Leviton has put their sustainability mission at the front and center of their priorities.
“Sustainability is a major strategic initiative in the company – we want to be smart about our relationship with the environment,” Larizadeh says.
He describes how this shift was triggered initially by the demands of its partners in Europe.
“At the time, our European customers were asking us, ‘What are you doing about sustainability? What are you doing to make sure your factories are using green energy, rather than coal, oil or gas?’” Larizadeh says.
“So from that point on, we really put an emphasis on our sustainability credentials, and announced our ambition to become carbon neutral by 2030.”
“Sustainability is a major strategic initiative in the company.”
Leviton has made impressive progress on this mission, notably integrating renewable energy into its operations.
“We now have solar in our factory in Scotland, as well as our warehouse in Chichester, in southern England,” he says. “I’m very proud to say that both of our facilities in the United Kingdom are now carbon neutral sites.”
Leviton is bringing the renewable energy transition stateside, too.
“One of our biggest factories here in the United States, in North Carolina, runs on nuclear, which is a really important source of clean power,” Larizadeh reveals.
This approach has been steadfastly championed by Larizadeh.
“Part of my own personal management objective is to be a better global citizen,” he continues. “Especially because our industry generates job site waste from packaging.
“We have employed a chief sustainability officer, who keeps us on track and is crucial to our mission to achieve carbon neutrality.”
As well as their focused sustainability objectives, Leviton’s factories are also embracing automation.
“Our factories in the United States and the United Kingdom are both very automated. In Mexico our factory is semiautomated, while in China it’s more semiautomated/manual,” Larizadeh says.
This has come about thanks to a bold, ongoing capital expenditure program initiated with the purpose of boosting Leviton’s efficiency.
“Since 2021, we have invested US$150 million into factories,” Larizadeh says. “This includes new automated machines, for everything from our cabling operations to all of our switches and receptacles, all of our plugs and connectors.
“We pulled forward all of our automation so that we have higher levels of capacity and throughput in our factories. Automation not only significantly improves our throughput because you get less touches, but the quality is also more reliable.
“Fundamentally, it gives you more efficient manufacturing.”
“We pulled forward all of our automation so that we have higher levels of capacity and throughput in our factories.”
As well as boosting efficiency, Leviton has leaned into new projects to adapt to the challenging situation presented by an upsurge in inflation and interest rates.
“Our business has definitely been affected by high interest rates,” Larizadeh admits. “It has caused a slow-down in commercial and residential construction, which has affected our business in these areas.
“But the good news on the other side is our networking business has seen a really good increase in demand, mainly because of data centers. Big hyperscale companies such as Microsoft, Google and Apple are building these centers, but we’re also seeing data centers being built by companies like Tesla and Nvidia,” he adds.
“Our cabling and our connectors are going to data centers, so we’re seeing an increase in demand for these cutting-edge projects, thanks to data center construction. This is happening in Europe as well as in the United States, but especially in the United States thanks to AI,” Larizadeh says.
As well as leaning into the development of data centers to adapt to the shift in market conditions, Leviton is also manufacturing innovative new products that are focused on making life easier for consumers, Larizadeh explains.
“We now have a new upgraded line of USB receptacles where you plug in your iPhone that now has the ability to charge USB-A as well as USB-C,” he says.
The company is also manufacturing products that cater to the shifting lifestyle trends of Americans.
“We’re starting to see more and more people in the United States embracing outdoor living, especially on Mondays and Fridays when they might be working from home,” he says.
“People are spending time out in their yard, and they want to be able to plug in their devices. So we are making our products weather resistant so that people can take their devices outside and still be able to charge them. We’re making sure our products can adapt to evolving lifestyle trends.
“Even though we are in a high interest rate environment, people are still upgrading their devices and upgrading their homes.”
“More and more, people want their products to be connected.”
As well as keeping a watchful eye on the demands of its end consumers, Leviton is conscious of the needs of its electrician customers, who fit their products.
“We’ve launched a very successful product range called Decora Edge, which actually won the Home Depot innovation award last year for its category,” Larizadeh says.
This easy-to-install wiring device was designed to make life easier for electricians, who are a vital part of Leviton’s customer base.
“There are less and less electricians about these days, so they require products that are going to allow them to be more efficient,” he says. “We spend a lot of time talking to electricians, asking them what they need and what would make their jobs easier.
“Innovation is really critical at a time like this in our environment, and we follow our customers.”
Larizadeh explains that a demand for ease of use is on the rise across the electronics industry, especially with younger demographics.
“More and more, people want their products to be connected,” he says. “Now pretty much every one of our products have smart versions that are wifi-enabled through our Leviton cloud.
“So for example if you’re in Sweden and you have an apartment in New York, you can remotely turn on and off your lighting, heating and devices.”
Another challenge that Leviton is tackling is the labor shortages that have hit companies across the business world.
“Post-pandemic, hiring became quite difficult because of the tightening labor market,” Larizadeh says.
A period of self-reflection followed.
“We spent a lot of time branding internally and talking about our culture, letting people know why they should come and work with Leviton and how it can be exciting to grow their career here,” he says.
Modifying their business culture to allow greater flexibility to their employees was part of this strategy.
“We focused on providing our employees a safe work environment coming out of the pandemic, as well as offering a hybrid work policy where you can choose whether to work from home or come to the office,” Larizadeh says.
“Innovation is really critical at a time like this in our environment, and we follow our customers.”
He is aware that no amount of branding can reverse macro-level trends that are happening in the labor market, but Leviton is still determined to attract and retain talented employees that provide irreplaceable value to the company.
“I’m not expecting people to come to Leviton and work here for the rest of their lives – the world has changed,” he says. “But we want to attract good talent and work with people who want to do great work and build for a better future.”
And thanks to this strategy, the labor outlook is now much rosier for the company.
“2021 and 2022 was a hard time,” Larizadeh says. “But we are in a much better place now because we have a brand that is enabling us to hire the right people.”
Rebuilding its supply chains in the three years post-pandemic has been a key priority for Leviton, which it has approached from various angles. As well as the US$150-million investment program to upgrade their manufacturing facilities, they have also bolstered their workforce.
“As well as some significant internal initiatives, we have hired consultants who help us with planning as well as forecasting our demand,” Larizadeh says.
“Now we better understand demand fluctuations in the market, and we can adapt our supply and manufacturing accordingly.”
“We want to attract good talent and work with people who want to do great work and build for a better future.”
“Then we looked at sourcing. We have commodity managers for each part of our sourcing; we have a manager for electronic components, for plastics, for metals. We went through each area, reviewing their commodity plans to make sure we had a reliable supply chain with multiple sources, in case one supplier cannot deliver.”
The aforementioned US$150 million of upgrades across all of its 15 plants worldwide also includes adding space to its facilities in North Carolina and Mexico, which will further boost manufacturing capabilities and its supply chain resilience.
Knowing the importance of aligning strategies and sharing visions and knowledge for continued growth, Leviton values its long-term partnerships.
Lily Transportation has been the designated contract carrier to Leviton for more than 20 years, with a designated team of 30 supporting Leviton’s operations. It provides more than 5.6 million kilometers annually, with real-time updates reporting every metric.
Easylink Fasteners, based in Taiwan, also has a more than 20 years of partnership with Leviton and supports the majority of its fasteners and fixings. The company collaborates closely in R&D to ensure their products meet the demands of Leviton with ISO certification.
“We want our partners to know what we’re doing and know where we’re investing so they stick with us.”
It’s not only with suppliers that Leviton values strong, long-term relationships. Larizadeh is proud and keen to protect its enduring relationships with its customers.
“We have very strong partners as our customers,” he says. “So we have a very strong relationship with our customers globally, our electrical distribution customers, our retail customers in North America.
“As much as it’s vitally important to maintain the relationship on the sourcing side, it’s just as important to be able to maintain that relationship on the customer side,” he says.
It is these relationships that Larizadeh is confident will lead Leviton to continued success, as it has done for nearly 120 years.
“We want our partners to know what we’re doing, and know where we’re investing so they stick with us. Even though we had major disruptions in the supply chain, as everyone did, we didn’t lose any customers,” Larizadeh says.
“I put that down to our ability to maintain fantastic relationships.”
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