A fully automatic and robotized production

Challenge

Problems with quality assurance in Valtavalo’s production in China meant that the warranty replacement rate on the LED-tubes were high. Logistics and cultural differences were also a challenge.

Solutions

In 2012, Valtavalo returned its production from China to Finland. Since then, Valtavalo’s LED tubes have been produced on a fully automatic and robotised production and testing line in Kajaani, Finland.

Costs

Valtavalo has invested more than 2 million Euros in automating their production lines, including industrial robots and automated testing.

Result

Turnover has increased 20-50 pct. yearly and is expected to increase in the coming years.

Introduction

Valtavalo Oy is a developer, manufacturer and supplier of LED lighting solutions with headquarters and administration in Oulu, and production and logistics facilities in Kajaani, Finland. Valtavalo is the only manufacturer of LED tubes in the Nordics.

Valtavalo was founded in 2008 by the Laatikainen brothers together with current CTO Tuukka Prykäri. At that point, LED technology was not well-known in Europe, which meant that Valtavalo met credibility problems. According to CEO and founder, Markku Laatikainen Valtavalo has since then worked hard on product development in order to increase product quality and to handle product safety issues to meet European safety standards. This has led to several certifications of Valtavalo’s LED tubes including ISO standards. Valtavalo has gradually gained more customers as the market for LED lighting solutions in Finland and European markets has matured. Valtavalo’s customer base mainly consists of large public and private organisations. Valtavalo has sales offices in Sweden, Germany and Netherlands and more than 10 distributors in Europe.

The breakthrough - moving production back to Finland

When Valtavalo was founded in 2008, they initially had their LED tubes manufactured in China. In 2010 however, Valtavalo decided to produce their LED tubes in Finland because of several challenges. This included problems with quality assurance in their production in China, which had a negative influence on the warranty replacement rate of the LED-tubes. Other problems included the long shipping time from China to Finland as well as the different holiday seasons. This meant that production was not effective all year round (as an example Chinese New Year is in January and February). These problems made it impossible to meet requirements from big customers.

To reduce the warranty replacement rate of the LED-tubes and to make it possible to produce LED tubes in Finland, Valtavalo hired the Finnish company EID Tech to design and establish a fully automated LED tube production facility.

“We have successfully implemented a fully automated production line. Both production and testing have been automated.”

- Markku Laatikainen
CEO and founder, Valtavalo Oy

The fully automated LED tube production facility assembles, measures, tests and packages the LED tubes. It consists of four industrial robot arms. Each robot arm does multiple tasks and can be reprogrammed to do other tasks if needed. In the first phases of Valtavalo’s fully automated production and testing line, the LED tubes are assembled. This includes automatic attachment of an LED PCB (printed circuit board) to an aluminium body, installation of a LED driver, connecting the LED driver to the LED PCB and installation of a PC cover. When assembled, each LED tube’s profile is measured, marked and ‘aged’ before going through the automated standardized test procedures where each individual LED tube undergoes complete product testing. This phase tests light and electricity properties. The LED tubes that do not live up to a number of standards when tested are automatically put to the side by a robot. When the LED tubes are being tested, data concerning each individual LED tube is stored in a database, making it possible for the employees at Valtavalo to figure out what has to be fixed on the LED tubes that do not work sufficiently and compare them to Valtavalo’s standards. Lastly, the LED tubes are automatically packed in carton trays.

“Production of the product [LED tubes] has been automated, which has resulted in an extremely high quality of the product. The testing of tubes is also automated. Each LED-tube is measured and data is stored in a database that customers, when granted, can access by entering a serial number or scanning the QR-code on the tube with their mobile phone.”

- Markku Laatikainen
CEO and founder, Valtavalo Oy

Besides their employees, customers can also gain access to Valtavalo’s database. This provides customers with the possibility to see the test results of that specific tube and check if light output and energy consumption compares to the promised values.

Automation: Increased product quality and the making of a new business model

According to CEO, Markku Laatikainen, continuous product development of Valtavalo’s LED tubes to meet European safety standards and demands from customers, coupled with automated production and testing, have increased the quality of Valtavalo’s LED tubes.

 

How ‘Light as a Service works’

With LaaS (Light as a Service) customers can buy 5-year service from Valtavalo that they pay for on a monthly basis. The service includes an inspection of the customer’s existing lighting solution and an analysis of how it can be improved, installation of Valtavalo’s LED tubes and maintenance. Two times during the 5-year period, Valtavalo will visit the company to check if everything is in order. According to Valtavalo, what the customers pay for LaaS is less than what they are saving by using Valtavalo’s LED tubes due to their high energy-efficiency. Even though LaaS is a 5-year service, Valtavalo products have a 7-year warranty so if anything goes wrong after the 5th year, the warranty will cover that. As Valtavalo’s LED tubes have almost no need for maintenance and a low replacement rate, Valtavalo does not need to budget maintenance fees, meaning low costs for Valtavalo and their customers.

The results: Increasing turnover and preparing for the future

As a small company, it may be difficult to finance investments. In the case of Valtavalo, investment in the fully automated LED tube production facility was made possible, in part, due to investment support from the Finnish government institution ELY which supports and helps businesses in Finland. With support from ELY, Valtavalo succeeded to finance investments, and overall, investing in automation has been vital to Valtavalo.

“The whole existence of our company lies on automation. Automation is the most crucial thing in our company. Because of automation, we are able to make these tubes in Finland.”

- Markku Laatikainen
CEO and founder, Valtavalo Oy

As a result, Valtavalo’s sales has grown approximately 20-50 pct. a year and is expected to grow at the same rate in the coming years. Due to increased demand for Valtavalo’s lightings solutions, Valtavalo is multiplying its production capacity by acquiring a second, more efficient and fully automated LED tube manufacturing line. The new line will become operational in the second half of 2016 and will be delivered again by EID Tech.

“When we were in China, there were 150 employees doing assembly tasks, now we only have 1 employee. Automation has meant zero advantages in having production in China.”

- Markku Laatikainen
CEO and founder, Valtavalo Oy

Another result from moving production to Finland is that the total number of employees has been reduced compared to before insourcing production to Finland. Today however, the number of employees in Finland has increased. Secondly, Valtavalo’s employees are highly skilled as many of their employees have three different degrees within manufacturing. When Valtavalo’s production was in China, they had a manufacturing partner who supplied the labour and were low skilled.

Learning from experience, CEO and founder Markku Laatikainen recommends that other small companies in Scandinavia think twice before outsourcing production. Automation makes it possible to produce locally as it reduces production costs, products do not spend weeks being shipped, and being 'Made in Finland' adds value to the product.