Business Tour 3

Mega Power Systems

Sarah Siddiqui: President

Mega Power Systems test Switches installed on a Control Panel.

The Test Switch market is dominated by a German Manufacturer named ABB that bought the patent from Westinghouse, an American electrical equipment manufacture, over one decade ago. A small company located in Chino California came up with their own design that functioned the same way that the ABB test switch operated and entered the market only five years ago. Sarah Siddiqui is the young entrepreneur that owns and operates the business and is perfectly comfortable competing with a world class company like ABB.

Sarah walked me through her assembly and warehouse facility that housed boxes of switch mechanisms and case assemblies, plastic handles and case covers and hardware. Sarah employees between eight to twelve people throughout the year handling sales and marketing, assembly, quality assurance and logistics. The most important factor of her supply chain begins with the major components being the stamped and formed steel switch assemblies as they are outsourced and provided by partners located in China and are shipped to California where final production and Quality Assurance batch testing takes place.

Sarah explained that the most challenging aspect of working with her Chinese partner suppliers is when she has to analyze for root cause quality issues. The language barrier can make for a process of repeated phone calls and emails before issues are resolved. Making payments to suppliers can be relatively easy when invoicing where invoices are required to be paid up front for all orders. Finally the speed at which orders arrive can be an issue when she has a large project and new materials are needed right away so she can fulfill the order. She typically forecasts orders from 3 to 6 months beyond what she thinks she will need so there is a safety net for materials being on hand at any given time.

Overall the outsourcing of these key components allows her products to be a low price leader in this market and enables her to compete against the biggest players. She continues to grow her business and will likely continue to utilize her Chinese partnerships in the future. This business tour experience was insightful from a supply chain perspective in being able to see what challenges exist when coordinating efforts overseas and here in the United States. Customer demand for affordable products will certainly drive demand for lower and lower priced material for the power protection and control industry.