Investing resources in sustainable product innovation

WHY MANAGING IT MATTERS

Our success is ultimately driven by how well we solve our customers’ needs. Sustainability is a major issue both for companies and individuals as we work within the constraints of the planet’s limited natural resources. And, as part of the broader supply of materials to buildings and energy infrastructure, we must focus on how our customers use our products and how we can jointly benefit society.

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Our investment in and response to innovation opportunities differentiates us among our industry peers. Southwire is proud of the advancements we pursue each year to transform our research and experience into products and solutions on the leading edge of sustainability, safety, satisfaction and efficiency.

We stay abreast of evolving industry standards and requirements, and innovate in advance of pending changes. We also listen to and observe our customers and product end users to identify innovation opportunities. Through extensive firsthand research, Southwire takes a comprehensive approach to understanding our customers’ needs and behaviors. We closely examine the entire product life-cycle, paying special attention to the product’s design, installation methods and use. We strive to make the customer experience seamless, so we integrate our solutions as much as possible—thereby enhancing customer productivity and ensuring the highest standards of user safety.

Goals

Southwire’s Sustainability Scorecard includes goals that directly connect innovation to customer experience. One goal is to improve customer efficiency by providing innovative products that improve productivity and reduce waste, leading to cost savings and enhanced profitability.

Southwire set an aggressive new goal in 2016 with corresponding innovation targets. We will begin reporting our progress toward our new goals in our 2017 Sustainability Report.


2021 SUSTAINABILITY GOALS & TARGETS

Develop and commercialize four breakthrough solutions to customers’ sustainability challenges.
  • 10% of EBITDA (earnings before interest, taxes, depreciation and amortization) in the funnel.
  • $1 billion of incremental revenue tied to these solutions (15% of projected 2021 revenues).

Research & Development

Our strength in technology and innovation stems from our dedication to Research and Development (R&D). Southwire grounds its culture in its rich history and tradition of cultivating new ideas and creating customer solutions, and it remains an integral part of our collective fabric today. The Southwire Cofer Technology Center houses our world-class R&D team, which communicates with each business unit to learn what solutions to pursue to solve our customers’ most pressing problems. Our business groups communicate the desired solutions based on insights gained from observing and experiencing customers’ use of our products.

Innovation differentiates Southwire in the marketplace, and we include environmental considerations into our product development approach. We examine six sustainability criteria as we consider each new product effort.

After a performance evaluation by the respective division president, a Specifications Committee formally manages the approval and launch of product innovations, ensuring the product can be manufactured and its performance consistency maintained. Staffed by Manufacturing, Marketing and R&D, the team manages the long-term integrity of any product innovation as it moves from development to full-scale production.

Southwire’s innovation is a successful interweaving of the product managers’ understanding of customers’ needs and R&D’s conquering the science necessary to implement a product design that satisfies those needs.

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2016 Innovation Highlights

To best serve customers’ needs, in 2016 Southwire reorganized into business groups based on our approach to the market: Power Systems & Solutions Group (PS&S) and Construction Systems & Solutions Group (CS&S). These groups were created to build from the strengths of Southwire’s decentralized commercial business, fostering creativity and providing market-driven solutions to deliver value to our end users. At the same time, the groups created a centralized structure for our commitment to customers.

To support the success of these business groups, Southwire is investing in technologies to maintain and govern best business practices for marketing assets in supporting product management. These technologies allow us to be more efficient and make it easier for customers to do business with us. This is a scalable and sustainable method to support future growth.

Also, sustaining future growth is the company’s focus on our brand. The Southwire brand, along with individual product brands, is our promise to our customer. In 2016, a companywide branding style guide was established to be governed, managed and maintained by marketing teams across all business units. The guidelines also address all acquired brands as they fold into the Southwire branding structure.

Power Systems & Solutions Group (PS&S)

Southwire’s Power Systems & Solutions Group is composed of the Energy business unit, the Industrial business unit and the OEM business unit. The PS&S Group is dedicated to working with customers to provide innovative products, solutions and services that not only meet, but exceed our customer’s expectations, with a foundation in R&D and engineering expertise that is unparalleled in the industry. Collectively, the PS&S Group realized numerous developments in 2016:

  • We unveiled a Customer Experience Center at the Huntersville Plant in Huntersville, North Carolina. The updated lobby allows visitors to journey through our company history with a focus on medium, high and extra-high voltage products.
  • SOLONONplus™ low smoke, non-halogen cross linked polyolefin cable (LSZH XLPO) was engineered as a solution for the transit and railway markets, offering a fire resistant, low smoke product to the transportation industry.
  • We announced the launch of Super Sunlight Resistant – SSR™ PV cable, developed in response to customer needs for enhanced UV protection on photovoltaic (PV) wire slated for above ground solar installations. Extensive laboratory testing on the product has proven its longevity for color retention as well as superseding elevated tensile and elongation trials.
  • For the Factory Automation market, Southwire expanded our existing product offerings including machine tray cable, control cable and power cable.
  • We introduced two new innovative cable designs for access lift manufacturers. Our EV 40 amp and 80 amp charging cables have seen substantial growth in 2016.
  • We introduced EPDM-insulated products into the truck market, allowing for cost savings and efficiencies.
  • Lastly, we developed a circuit sized automotive aluminum wire for Japanese OEMs.
Construction Systems & Solutions Group (CS&S)

Southwire’s Construction Systems & Solutions Group is composed of the Electrical business unit and the Tools & Assembled Products business unit. These business units are composed of the following business segments: Electrical Wire and Cable for Electrical Distributors, Contractors, DIYers and Retail Outlets, and Tools & Assembled Products—which also includes Contractor Equipment. The CS&S Group is focused on creating innovative products that help end users of our products and services save time, increase efficiency and, most importantly, increase safety on the jobsite.

In 2016, we developed and launched several innovative, award-winning products:

  • The Tappan™ Fire Alarm Cable in a SIMpull® CoilPAK™ Wire Payoff earned a 2016 NECA Showstopper Award. Due to the marriage of the SIMpull® NoLube® wire jacket and innovative CoilPAK™ design, physical effort associated with material handling, pulling wire out of the package and through conduit has been reduced. The durable, fully-encased package also helps eliminate broken spools and protects the wire, which is manufactured in accordance with stringent fire safety codes and regulations.
  • The TechnicianPro™ Bluetooth CAT IV Multimeter also won the NECA Showstopper 2016 award. This 600V waterproof multimeter was designed for electricians who work in commercial settings and includes desirable features such as Bluetooth® technology, TrueRMS, Low-Z for eliminating false readings from ghost voltage, a powerful built-in worklight, fully backlit controls and displays and magnetic hanging straps.
  • The MC-PCS Duo™ Cable—a 2015 NECA Showstopper winner—won the Electrical Construction & Maintenance magazine’s Product of the Year 2016 Award. This product, specifically designed for use with energy efficient LED lighting, combines power conductors and 0-10 volt dimming control conductors into one cable, reducing labor and installation costs. MC-PCS Duo™ cable also features circuit identification printed directly on the armor, eliminating any confusion about the cable construction under the armor.

Other notable products include the SIMpull™ Reel and SIMpull™ Flange. Although the SIMpull™ Reel launched in 2015, contractors continued to adopt this innovation. Building on the success of the SIMpull™ Reel, we developed the SIMpull™ Flange in 2016 to be used with smaller wooden reels. The SIMpull™ Flange’s shaftless design safely allows one person to turn a wooden reel up to 34 inches and 2000 pounds on a flat level floor. This design is a time saving, field-installable solution that removes the need to handle heavy jack stands. Each flange rotates independently and allows free movement of loaded wooden reels. The SIMpull™ Flange is reusable in the field and can be installed on multiple reels throughout the jobsite.

The Tools & Assembled Products business unit forms an integral part of Southwire’s value-added solutions model for our customers. Building on our powerful wire and cable product and market position, the Tools & Assembled Products business unit integrates high margin adjacent products into more efficient solutions for Southwire’s customers. Innovation and quality define the core of our next generation products and solutions, which take shape based on constant customer interactions at the new Thorn Customer Solutions Center. We utilize a continuous improvement quality process to identify opportunities for product improvements and implement changes. For example, the TechnicianPRO™ Smart Multimeter includes fully backlit controls—an industry first in this category—allowing our customers to use this multimeter in near dark conditions and thereby enhancing safety on the jobsite. NECA awarded Southwire the 2016 NECA Showstopper Award for TechnicianPRO™.

SCR® designs and manufactures systems that produce copper and aluminum rod for customers around the world. Currently, SCR has more than 100 systems operating in 36 different countries. Its product offering in the aluminum market includes the Ultra-D™ degasser and Ultra-G™ grain refiner. In 2016, SCR gained traction in the aluminum degassing market with the installation of four Ultra-D™ systems at companies with varying manufacturing processes that include continuous cast rod, twin roll casting and DC casting. Further development of Ultra-G™ aluminum grain refiner continues with the installation and continuous operation of a unit at Southwire’s Kentucky Plant, which has resulted in significant savings in production cost while maintaining product quality.

Our Performance

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We share our advances through the Southwire network, newsletters, digital or industry trade press releases, our internal email, advertisements, universities and trade shows. We also share them with our industry partners, such as the National Electrical Contractors Association (NECA).

Metrics 2015 2016
Active patents 322 Over 375
Patents acquired during year 20 Over 20
Innovation Awards SIMpull Reel system.

  • Grand Prize Winner, 2015/16 MAX Awards, which honor the biggest innovations in the state of Georgia across all industries
  • Product of the Year, Electrical Construction & Maintenance magazine

MC-PCS Duo™ Cable. 2015 NECA Showstopper Award

EZ-In™ Mini-split Cable. Innovation Award at the 2015 Air-Conditioning, Heating and Refrigeration (AHR) Exposition

EZ-In™ Mini-split Cable. Ranked #2 by Contracting Business (Dec. 2015), Favorite Products of 2015

MaintenancePRO™ Data Logging Digital Multimeter. Showstopper award at 2015 NECA show for our 15190T

MC-PCS Duo™ Cable. Product of the Year 2016, Electrical Construction & Maintenance magazine.Tappan™ Fire Alarm Cable in a SIMpull® CoilPAK™Wire Payoff. 2016 NECA ShowstopperTechnicianPro™ Bluetooth CAT IV Multimeter. 2016 NECA ShowstopperACLHS Adjustable Can Light Hole Saw. Pro Tool Innovation Award, www.ProToolReviews.comCT90 Heavy Duty Cable Tie. Pro Tool Innovation Award, www.ProToolReviews.com

FTSP45-75NCT 75’ SIMpull™ Non-Conductive Fish Tape. Pro Tool Innovation Award, www.ProToolReviews.com

MPSCP 8” Linesman Multi-Tool Plier. Pro Tool Innovation Award, www.ProToolReviews.com

40150N Advanced Dual Range NCV 12-1000V & 100-1000V AC. Pro Tool Innovation Award, www.ProToolReviews.com

40150N Advanced Dual Range NCV 12-1000V & 100-1000V AC. Tools In Action Award, www.ToolsInAction.com