Everlight Electronic Co., Ltd.
Leadership through Precision
Keeping an eagle eye on every detail has made Everlight Electronic the profitability leader among LED packagers. With its "tough love" leadership, what will Everlight's next step be along the road to "green lighting"?
Leadership through PrecisionBy Hsiao-Wen Wang
From CommonWealth Magazine (vol. 423 )
It's 5:00 a.m. on a drizzly morning and Robert Yeh, Everlight Electronic Co. Ltd.'s 58-year-old chairman, is already out on the National Taiwan University track for his customary 40-minute run, as he has done every day, rain or shine regardless of season, for the past 20 years.
Three hours later Yeh arrives punctually at Everlight's Tucheng headquarters, ready for work.
Like a tightly disciplined military unit, Everlight's 500 employees arrive at 8:00 a.m. sharp and gather en masse in the 7th-floor cafeteria for roll call and 15 minutes of calisthenics before each department heads off for their morning meetings, at which the day's key assignments are delineated.
Twenty-seven years ago, Yeh founded Everlight with NT$5 million in capital, initially operating in leased plant space, producing indicator lights for home electronics. Since then, he has counted on discipline and perseverance to turn his company into Taiwan's leading LED packaging enterprise, with a monthly production capacity of 800 million units.
Despite cutthroat competition from major Japanese and South Korean manufacturers and beset with patent pitfalls, Everlight has managed to maintain its grip as the world's number-seven LED packager.
"I'm not any more gifted than anyone else, I just work harder," says the native of Yuanli Township in Miaoli County. More than 30 years ago, he left rural Miaoli with NT$2,300 in his pocket and headed to Taipei, working part time while studying at Taipei Institute of Technology.
Incessantly Meticulous Management
Outsiders often mistakenly believe that the technological threshold involved in LED packaging is low, that it is the "underclass" of the high-tech industry. What they don't appreciate is that for an LED packager to achieve a low defect rate and minimal luminosity loss requires not only the appropriate materials, machinery and chemical engineering processes, but also a highly meticulous managerial process.
And Yeh's hands-on supervision is incessantly focused on ever greater levels of precision.
"I want to see every number out to the third decimal, labor expenses, inventory, once a week," he says offhandedly.
More than 10 years ago when Everlight was brought into Sharp's supply chain as a supplier of LED bulbs, Yeh began to demand a defect rate of one percent, recalls Liu Pang-yen, general manager of Everlight's production business group, a close colleague of Yeh's for 23 years.
"At the time we could only achieve five percent. We were feeling the heat for quite some time," Liu laughs.
"I won't even tolerate one percent," Yeh says firmly.
Everlight demands that production line employees memorize the standard operating procedure front to back. The chipset specifications, luminosity, dimensions and materials of the housing all must be known by heart. Employees must also memorize external specifications and luminosity requirements for finished products. They take regular monthly written exams.
Everlight's meticulous production management, although painful, has yielded a reputation for quality, and solidified its position as Taiwan's most profitable LED packager.
Tough Love Makes a Profit Leader
Even as the bottom fell out from under the boom times in Taiwan's LED packaging industry last year, Everlight managed to maintain an operating net profit margin of 13 percent – five percentage points higher than competitors Harvatek, Bright LED Electronics and Unity Opto Technology.
Yet Everlight has a long way to go on the path of "green lighting."
LED backlights for cell phones currently account for nearly 40 percent of Everlight's operating revenue, and at the end of 2007 the company began producing LED backlights for notebook computers. But Everlight now has its sights set on the more demanding LED TV market, with its 50,000-hour lifespan and higher luminosity requirements, to drive its next stage of growth.
Everlight is also looking to try its hand at downstream lamp/lighting fixture design, as Yeh proudly reveals he has retained the services of Demos Chiang, designer and chairman of DEM Inc., to produce a line of LED lamps that will be donated to charitable organizations, giving back to the community while testing consumer acceptance.
"Prior to 1995 Taiwan was merely a secondary contractor for others. With this LED lighting, Taiwan has a real chance to compete on equal terms with big international companies," Yeh says excitedly.
He may be right. He still doesn't contemplate retirement, always happiest down on the front lines.
Translated from the Chinese by Brian Kennedy
Everlight Electronic Company Profile
Employees: About 4,000
Main products: Cell phone LED backlight packaging
Notebook computer LED backlight packaging
2008 revenue: NT$11.32 billion
2008 operating net profit margin: 13.2%
2008 EPS: NT$3.73
Chinese Version: 0.001％的競爭力