One of the best parts of the Profile series is the ability to connect with family businesses. It’s further refreshing to see the next generation pick up the torch and run with a well-founded business. Such is the case with NEP Electronics, and I was recently treated to an interview with Jim Brander, Director of Business Development, Dante Federighi, Director of Operations, Denise Chiuccariello, Director of Sales & Marketing, as well as Sydney Fanelli and Nick DiGirolamo of the digital marketing team.
NEP was founded as a component distributor in 1977 by Bill Federighi and Tom Lotus. The two were close friends and sales managers in the industry. With their contacts and knowledge of the industry, they were able to become fully franchised with over 20 lines in the electronics distribution realm in their first year. In 1979, the company was asked to support a value-add opportunity for some switch assemblies. Bill and Tom explained to the customer that they were a component distributor business, but the customer pressed on. Fueled by the notion that “Customer is King”, they overcame their initial reluctance and built the assemblies. Though that assembly is now history, NEP’s value-add business now represents over 70% of their total revenue annually.
The coin-op industry provided the launchpad for NEP’s growth in the early days. As the hub of that industry was Chicago, their assemblies were soon found in most arcade games, pinball machines, and video lottery terminals produced in the region. All the big names were customers and many still are. NEP began with switch assemblies and then moved into various lead sets and cable assemblies. The company now has capabilities in virtually every type of wire harness and cable assembly. “We build quite simple wire sets and cable assemblies through very complex harnesses. From building coax assemblies to huge battery lug cables, and on up to full turnkey box-build and electromechanical assemblies, we manufacture and cover the gamut in-house. We are always trying to offer best in class support during the design and reverse engineering phases ” Jim detailed.
The company has grown from three employees in the early days to 225 employees currently. “When Covid hit and the world was freaking out, we kept our production facility going strong and supported many new customers that needed immediate assistance. Our accelerated growth has continued ever since, and we are not looking back. We are expecting to double our sales again in the next five years. One of the things we realized is that you can’t support the customers and grow if you wait until you are at a breaking point. Accordingly, we’ve been putting more and more infrastructure and personnel in place, planning for, and knowing we need to support that future growth.” Jim explained.
As NEP grew, their business expanded into diverse markets. “We have medical device customers around the country and internationally. We build industrial control cables for a large number of OEMS in all different markets and have a very big footprint in the food service industry. We provide the harnesses that go into many different appliances in quick service restaurants around the globe.” NEP is also heavily engaged in the power distribution and renewable energy sector and is also currently developing assemblies with several EV customers. They are starting to serve the mil-aero sector directly, as well as building ITAR-compliant assemblies as a tier 2 supplier for the military.
NEP is very proud of their HQ facilities in Wood Dale, Illinois, which is near O’Hare Airport. The administrative departments, warehousing, and the electromechanical builds are done in one building while all the cable assemblies and harnesses are manufactured in the building directly next door. Jim touched on the efficiency of their setup and equipment noting: “We operate with all the latest and newest technologies in manufacturing. We have full-speed robotics to cut, strip, tin, and print on wires. We’ve got processing equipment to cut through everything from 30 gage on up to 250 MCM cable.” Jim also stressed that the company strives to be as efficient as possible as they know they are competing with lower labor cost regions.
In addition to the Wood Dale facility, NEP also has distribution and service centers in Franklin, Wisconsin, and Las Vegas, Nevada to service customers at a higher level regionally. They also have manufacturing partners in China, Vietnam, Taiwan, and India. They work with specific factories based on the product type, the requirement, or the opportunity that best fits. As Jim revealed, these partnerships are very symbolic. “Just to give you an idea of how that works, the specific relationship in India is through one of our direct distribution connector manufacturing partners; we are using one of their factories supporting direct business of finished assemblies” he explained.
We spent a lot of time discussing quality and NEP stressed the importance of it, noting that they are both ISO 9001 and UL certified. Their quality system is very robust; they 100% electrically test every cable assembly built, testing for continuity and opens/shorts as standard practice. Depending on the type of assembly and customer requirements, NEP will include burn-in testing, sweep testing, loss testing, hi-pot testing, dielectric testing, and any other applicable tests required by the customer. They manufacture to the IPC/WHMA-A-620 standard and have five certified in-house trainers as well as a trainer for the IPC-J STD for soldering.
One of NEP’s manufacturing partners is ISO 13485 and NEP is also on the path to obtaining that certification directly, as well as evaluating UL 508A certification for panel builds. “Every assembly we build undergoes a rigorous first article process before we go into full-scale production,” Jim described. “During that process, we work out any kinks, evaluate the design for manufacturability and repeatability, and complete the first article samples. Two golden samples are produced on production equipment; one is kept at NEP, and one is provided to the customer for evaluation and approval.
Once the customer approves the sample and releases the assembly for production, NEP’s golden sample is then used to build and validate a custom test fixture. During production, that sample then travels with the work order, throughout the entire process, serving as a visual aid for the production team”. This all serves to make their first pass yield rate of over 99%. “At every single operation, we make sure we’re dialed in. Every time we set up a terminal and wire combination, whether a reel of terminals or wire ran out, another crimp height and the UL pull test is performed.” He noted these destructed samples, along with the test data, are then supplied to the customers with their finished product.
Although he highlighted efficiency and quality, Jim noted that NEP really hangs their hat on exemplary customer service and technical support to bolster its global competitiveness. They have manufacturing engineers, design engineers, and quality engineers supporting their production, estimating, and field application teams. He further noted that a lack of industry mentoring at the OEM level presents challenges with many of the designs they see. “We strive to be the folks that can sit down with that engineer and, if required, help educate them. We will ask what type of form factor they are coming out of or need, where the breakouts need to be, how much power they need, etc. From there, we can conceptualize the design and offer solutions from several interconnect manufacturers. Our sales staff and field engineers are educated so that when they are sitting with a customer or taking a call, they’re not wasting their time; they are providing value.”
Because of their unique relationship as a distributor, NEP can guide OEMs in components that are dual footprinted and readily available, offering competitively priced components with multiple sources. “Our unique value proposition is that we started, and still maintain our status, as a distributor,” Denise explained. “We have direct distribution relationships with key connector manufacturers in the supply chain. As franchised partners, we stay on top of innovative technologies and foster the relationships with the factories directly. Molex, Panduit, and JST, for instance, host their headquarters in our backyard. Accordingly, we have established deep partnerships, over the years that transcend the typical manufacturer-distributor relationship.”
For over 44 years, the company has worked in tandem with connector manufacturers aiding in the design of new connectors for the industry. Mr. Federighi has developed several connectors for the gaming realm that have become the standard in the industry today. In addition to working with their principles in the development of new products for themselves, and their unique customer needs, NEP also works on new product/tooling development for the connector manufacturers directly. They have supported the development of new connector systems with several manufacturers by running some of their prototypes as they qualify new products. Denise concluded, “Further, NEP builds assemblies for several connector OEMs directly; our partners trust in what we do!”
Since the very beginning, NEP has cultivated a “family” atmosphere throughout of the company. “It really is a family business gone global, and everybody looks to Bill and Tom as father figures. Now the second generation has taken over the leadership roles and EVERYBODY in the company is excited to be part of the family. That’s what makes it so unique and, when our customers get to know us, they become family” Jim described.
“I think if you see our facility, you will agree that it’s amazing; we always try to provide the highest level of customer satisfaction as well. As we speak, I have someone driving an assembly to St. Louis for me because a customer is in need and the need became critical this morning; we are going to take care of the customer!” Dante rounded out the discussion saying “We are constantly improving our production capabilities, and capacity and looking to automate as much as possible by reinvesting in new equipment. The goal is always the same: to focus on the customer and their needs.”
If you’d like to see NEP’s line card, or learn more about their manufacturing capabilities, you can visit their website at nepelectronics.com. For any new business inquiries or support, feel free to contact Jim at [email protected].
