For Manufacturers and Warehouses, This is LEDs’ Moment

August 2, 2017 Neil Egan

Growth is good.

But with growth comes challenges, and for manufacturers and logistics companies, that can be eased by conversions to or optimizations of LED lighting systems.

That insight is among many gleaned by our own Tiago Khouri from a review of recent economic data. Take a look at both the “Manufacturing at a Glance” and “Industry vs. Sector” charts below. They reveal that the industry is being whipsawed by a good/news bad news scenario.

For instance, the “good news” of 97 consecutive months of manufacturing activity expansion and year-long monthly rises in the Purchasing Managers' Index (PMI) are being somewhat offset by significant spikes in rent, wages and utilities. According to IbisWorld’s Public Storage and Warehousing U.S. report, the average logistics operator spends 42.4 percent of revenues on wages and another 11.2 percent on rent and utilities.

These are common byproducts of expansion, which naturally drives up employment and infrastructure costs. While cost pressures are challenging, the controllable nature of employee productivity and space utilization makes these trends manageable when compared to past drivers of costs, such as the 2007 rise in oil prices. In other words, companies have a great opportunity to take advantage of expansion to invest in and optimize labor and space costs.

And that’s where LED lighting can come to the rescue.

Cost, productivity benefits

There has never been a better time to upgrade factories and warehouses to LED lighting. Not only can LED upgrades significantly reduce energy costs, but they can enhance employee engagement, productivity and safety.

Here’s a closer look at cost-saving and employee-enhancement benefits of LED conversions and upgrades:

  • Since upfront costs are often the largest barrier to efficiency upgrades, facilities managers can pursue attractive financial incentives and rebates to maximize return on investment for lighting retrofits. Utilities and governments offer a variety of options, which can translate into faster payback for your investment.
  • In fact, depending on the size and scope of the LED project, a payback that might have spanned up to a decade can now be reduced to two years. One reason is that upgrade projects could be eligible for multiples incentives. Read this Acuity Brands analysis of incentives and rebates available and how they can vastly accelerate the payback period.
  • Companies that have already upgraded to LED can take their energy savings to the next level, while minimizing maintenance and operational costs, by implementing lighting and HVAC control systems.

For instance, our XPoint™ Wireless Lighting Control System provides both energy savings and increased user configurability. This is made easy by integrating time-based, daylight-based, sensor-based and manual lighting control schemes into one solution.

  • Our LED lighting products improve light levels for line and warehouse workers with reliable, superior illumination. This helps ensure greater levels of operational efficiency, productivity and safety.
  • Further, LED lighting allows maintenance crews to focus on fixing machines, not changing lamps.  Also, control systems provide data to help reduce unplanned downtime.

Growing demand and employment are the foundation of positive economic cycles. Take advantage of a robust economy and put together a business case for implementing lighting and controls upgrades, which turn your supply-chain into a competitive advantage.

Click here to learn more about controls strategies for manufacturing facilities and warehouses.

Source: Institute for Supply Management (ISM), July 3, 2017

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