Leviton: Labor of Love

  • Bob Gulla managing editor, Reason, FM Global

Leviton’s winning case for sprinklers in industrial China

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The factory floor at Leviton China is humming. Several banks of customized machines wheeze and pulsate in Wonka-like fashion. The high-decibel rhythm makes talking difficult, so the only option is to observe with fascination.

Workers on the factory floor, women mainly, sit in rows. Dressed in blue shirts and jeans, each one labors dutifully, performing a specific role in assembling some small part of the company’s well-known electrical components. Rapidly, one worker finishes and moves her work down the bench to the next, who does something slightly different to the same component. Some of the staffers operate specialized machines. Some punch out molds, attach casings or affix screws. Some tend to packaging, all in a joined effort to assemble, encase and ship Leviton products worldwide. The work is monotonous and requires focus, so they can’t easily look away. Though when a stranger passes, a hint of a bashful smile appears.


This type of manufacturing operation is by now familiar to the West. It has become an economical, nearly de facto way to produce goods for so many multinational corporations. But Leviton’s site, located in Dongguan, China, is different in many respects.


As a family-owned company, Leviton has always taken great pride in its emphasis on safety. Beginning with its founder, Isidor Leviton, in the early 20th century, the company has relied on family to staff and run its production. This close-knit approach to business resulted in an early focus on life safety. Of course, says Chief Financial Officer Mark Baydarian, safety comes at a cost. “Prevention is what we focus on. If you prevent the loss, it never happens. It sounds obvious, but that’s the way we approach safety.”



Leviton today
Leviton has come a long way since its founding. Today, Leviton employs more than 6,500 people and its products are sold in 80 countries. The Dongguan site employs its biggest workforce, and produces the company’s bread and butter product, the ground fault circuit interrupter, or GFCI.


A drab industrial burg home to many manufacturers, Dongguan is two hours or so north of Hong Kong across a mountainous pass. Leviton’s manufacturing complex here sprawls across a few acres, and consists of a production and distribution site, large dormitories for its workers and a cafeteria.


Dongguan is critically important to Leviton’s business. In keeping with that vaunted profile in the Leviton portfolio, Leviton China is impeccably organized, efficient and spotless. A close look also reveals that the facility boasts a state-of-the-art, retrofitted sprinkler system.


A man for all people
Swee Leong Lim, president of Leviton China and a seasoned commander, strides purposefully down a central aisle. Dressed in jeans and a polo shirt, Lim chooses to blend in rather than stand out among the staff he oversees. “I believe in my people. I believe that people are at the heart of this organization and that if I treat them well, they will do a good job. It’s simple.”


In his five years as president of Leviton China, Lim has managed to treat his people well. Since coming into leadership, he has provided staff with comparatively roomy living conditions, a higher quality of food and safe working environments. In doing so he has also managed to increase worker retention, which is famously low in China’s factory world. He runs a democratic, non-authoritarian business and abides by an open-door policy. “I don’t care who it is,” he says, proudly. “Anyone who has something to discuss with me knows they can speak with me at any time.”


Lim is so proud of his operation and how he’s changed the culture of his organization that the sentiment hangs from the lanyards his employees (and visitors) wear while on the premises. “China Organization Culture,” it reads, “Culture of Commitment, Culture of Transparency, Culture of Teamwork, Culture of Continuous Improvement, and Culture of Unquestionable Ethics.”


I think FM Global introduced a new dimension of safety for us and our team here. The engineers and the support that came in were really important. They taught us how to do things differently in terms of safety, not just with sprinklers and fire protection and all that. They shared lessons they had learned with other companies, failings in other places, that convinced us we should be as tight as we could be.

Swee Leong Lim, President, Leviton

The sprinkler upgrade
Leviton has been a client of FM Global’s for 13 years. In that time, field engineers have conducted risk assessments at all of the company’s key facilities. The conclusion was that Dongguan was the most critical location in the company’s risk profile, says Grace Ries, the account engineer on the project and a key player in FM Global’s relationship with Leviton. “It is one of the most important locations by many matrices.”


As CFO, Baydarian identified Dongguan as a mission-critical plant. “It produces GFCIs, which are a safety device, and it’s a very important product for the company. I knew it was an important location.”


Lee Raynor, the company’s director of risk management, also knew it, and in 2010 entered into discussions with company executives about the site’s outstanding safety recommendations. FM Global Account Manager Aimee Sienkiewicz and Account Engineer Ries assisted Raynor with loss data for his presentation, including comparisons between protected and unprotected facilities and the differences between highly protected risk (HPR) locations and non-highly protected ones. “We were able to offer compelling information that demonstrated the value of investing in this type of risk improvement,” Sienkiewicz says. “Lee did a great job with his presentation and made the business case for risk improvement to reinforce the sprinkler protection for this location. This was exactly what we needed going into what we knew would be a complex and challenging project.”


Raynor downplays his success. “I really just pointed out that there were a lot of issues we needed to take seriously,” he says, “and the fact that the company was starting to realign its manufacturing was resulting in the plant becoming more critical.”


Steve Pierce, the company’s environmental health and safety consultant, also had improvements at the Dongguan site on his radar. “Leviton has always taken the stance that we provide the most stringent protection or requirements, regardless of where the facility is. Whatever organization defined the best protection standards, that was what we wanted.”


Given the situation, Leviton was willing to commit funds to improving Dongguan’s risk profile to highly protected risk (HPR) standards, or FM Global’s own demarcation for risk quality. But before that happened, there were many hurdles to overcome. “Before we built this site out to HPR,” Ries explains, “the location had a standard water supply and a sprinkler system at the ceiling level. Even though they did have some level of protection—they had not passed our rigorous fire testing—we strongly recommended that they upgrade their sprinkler system. We knew that would work.”


This was not your average sprinkler upgrade, with all the buildings on its campus and the local regulations to work through, so a financial commitment was involved. But Leviton, according to Ries, is one of those clients that understood the importance of addressing risk improvement recommendations. “We had to do something to improve their risk quality; upgrading the sprinkler system would improve that exponentially. A lot of times clients are hesitant to pursue sprinkler projects in China because management there thinks loss prevention is a Western philosophy. But, really, fire doesn’t know whether you’re in the United States or China. Leviton gets that.”


“The decision to undertake the project was a ‘no-brainer,’” agrees Baydarian. “We don’t like to use that word around here, but that’s what it was. It just revolved around cost and not spending too much money, but spending enough to make the plant safe.”


Prior to installing the sprinkler upgrade, Pierce knew the site as well as anyone. “There’s several stand-alone buildings,” he says. “There are four basic high rises that are situated over a single floor. The single floor houses the cafeteria and the kitchen, which means you have a potential exposure from the kitchen and anyone living above it. Part of the project that was identified was that the kitchen did not have any automatic extinguishing system: nothing that would extinguish a fire if something were to happen in the kitchen area, and considering the amount of frying that is done in Chinese food, there is a definite need for that kind of protection.”


Another required improvement involved early warning and early attention in case of fire. “We wanted to make sure that people had plenty of time to evacuate in case of fire,” says Pierce. “People, not product, are the most important thing we have.”


Lim was on board as well. Anything that improved the working conditions for his employees deserved the green light. “We never even talked about money,” he says. “Management just said, ‘We have to do it,’ and we went ahead and plotted the whole program. We put it in the budget, put in the proposal, and we did it. That shows me true commitment from the corporation, top management and shareholders that they really care about our people sitting in this part of the world, thousands of miles away.”


Codes and standards
Before diving in, Leviton had to deal with local regulations. That responsibility fell to Pierce, who had been traveling monthly to China to facilitate the project’s progress. “The Dongguan project was unique in that we were dealing with a country’s regulations. Although in writing, they are not consistently enforced. Everything we found engaging in the project had to have some kind of governmental approval, and not only with one agency, but with multiple agencies—whether it was the fire department, the building department, a national contact or a provincial contact. We worked together with all of those regulatory agencies in China. The key to success was the tremendous support I had from FM Global. That’s what made it work.”


Engineer Jackie Ma, China Country Manager Fred Cai, and Codes and Standards Consultant Rachel Yin all worked hand in hand with Pierce and Leviton to ensure any and every obstacle was addressed.


According to Cai, Leviton knew those obstacles before they happened. “There are many challenges associated with replacing sprinklers at a facility like the one in Dongguan, and they can end up dissuading a client from pursuing a project,” he said. But Leviton knew the challenges—interruption to site production, adapting the new system to the existing facility’s capacity and structure, cost control, risk of damage to existing equipment and adhering to local and current codes and standards. Fortunately, they weren’t deterred. “They believed in our engineering services,” says Cai, “and they trusted us. They simply wanted the most resilient facility.”


According to Raynor, Leviton confronted local regulators with confidence. “There were some issues that came out during the assessment and scope definition that showed we needed to make some changes in the plant because we were not in compliance with local codes. But we were also striving to meet or exceed those local codes and bring it up to our own highly protected standard.”


At the time of the project, Cai was the field engineering group manager. “Every year, the Shanghai office handles about 130 new construction and/or expansion projects, but not many sprinkler replacement/retrofit projects like Leviton’s,” he says. “That’s why the project was so extraordinary.”


Four phases and a few detours
Pierce, contractors and FM Global engineers worked on a four-phase type of approach to installing the sprinklers, similar to the original construction of the buildings. Together, for phase one, they defined the scope and described the role of the contractors, including what requirements they would have to meet in order to work on Leviton’s site.


Phase two was implementation. Testing was phase three and final approval, phase four. “Success is only as good as the people involved on the project,” says Pierce. “You may reach the end of a project, but is it going to be successful? That’s the big thing. To make it successful, you had to have the right people in the right place doing the right job, and that’s what we had on this project.”


Along the way, the team encountered a few roadblocks. Or, as Pierce calls them, “detours.” “The detour from the government perspective came in the form of changes to existing laws,” he says. “We were no longer grandfathered in under existing fire protection standards, so we had to upgrade a handful of areas in terms of life safety.”


Other roadblocks included the size and location of the reservoir, or water source, to be used. They had considered putting the 7,000-cubic-foot (200-cubic-meter) reservoir underground and using a vertical pump, as well as the possibility of putting it on the roof.


“In the original proposal,” Pierce recalls, “they were going to use two 200-cubic-meter stainless steel tanks. But the big question we had on that was, ‘Could the roofs support that type of weight?’” The uncertainty prompted them to switch their thinking to a single concrete tank, which the contractor proposed sitting on a single column. “That was unacceptable, too,” Pierce says, “so we wound up building a concrete tank over eight support columns: more support and a better distribution of weight.”


Of course, one of the biggest concerns for Leviton on any level was the interruption of production. That is, the facility had to operate at capacity during installation. “When you want to maintain production, you have to coordinate very carefully with operating people to make sure not to interfere,” says Pierce. “We had to do hydrostatic testing, and then wet testing of the sprinklers, to make sure there were no leaks, and that we hit the minimum requirements of 14 bars for two hours. We had to make sure we coordinated that so that these lines were either temporarily relocated or we actually shut down the lines during the tests, so that, if there were a leak, it would not interfere with or damage the equipment.”


Again, the testing and execution went off without a hitch. “The execution took a couple of months and it was as smooth as anything I had ever experienced,” says Lim. “We didn’t have a lot of issues and things were moving very, very smoothly. That’s something I thought FM Global engineers brought to the project. More than just the project itself, the testing and implementation went really well and interruption was kept to a minimum. That’s an immense value for us.”


Collaboration and success
In the end, the Leviton installation was a tremendous success, resulting in the site earning an HPR designation and award.


“Receiving that HPR award was one of the end goals of Dongguan,” says Ries. “However, the most important goal was to provide a safer working environment and living quarters for the employees at Leviton. That’s what they had been striving for, to go from a good facility to an excellent facility. We reserve the HPR rating for a client who truly believes in loss prevention, but obviously, Leviton achieved so much more than an award.” Cai presented the designation to Lim in 2013. “It was a small token of gratitude that we could give back to them after a long, but successful project.”


Pierce took great pride in the designation. “When you look at a project like this, it’s nice to know that we now have adequate protection, that we can provide people with some breathing room for their life safety, that we have provided them with a feeling of comfort, and that the facility and the company are much less in jeopardy than they ever were before. I’m proud to have been involved in this project.”


Baydarian concludes that the whole project couldn’t have been done without collaboration from their insurer. “We use FM Global as our loss consultants. They’re almost like our legal counsel. We didn’t make any decisions on this Dongguan project without first consulting them. That’s why we value our relationship and it really proved beneficial, especially in this case.”


“FM Global was there with us from day one,” adds Pierce. “There was input on every level from FM Global, whether it be the account engineer, or the vice president in charge of China, who in fact did come down for the final testing and implementation. So there was total involvement and commitment on the part of FM Global for the success of this project, and without their input we would not have been successful.”


For Leviton, this success has set the stage for additional sprinkler projects as they make their way down a short list of important recommendations to address. “We’re going to work very closely with FM Global on other projects that we have,” admits Raynor. “There are several under consideration or are about to begin, and FM Global will be involved with those as a partner with us.”


Leaning back in his chair, and searching for the perfect words, Lim is introspective about the way this entire project has affected the way he conducts business. “FM Global introduced a new dimension of safety for us and our team here,” he says. “The engineers and the support that came in were really important. They taught us how to do things differently in terms of safety, not just with sprinklers and fire protection and all that. They actually shared lessons they had learned with other companies, failings in other places, that convinced us we should be as tight as we could be.”


“In my mind,” Lim says with a gleaming smile, “that’s what makes for a very good partnership.”