3 Reasons Lighting Manufacturers Should Think Lean
Lighting fixture producers the world over have much to look forward to. Predictions from Transparency Market Research indicate a near 7 percent compound annual growth rate through 2021, when global revenues will reach an estimated $215.29 billion.
However, the same cannot be said for bulb manufacturers, who came out of the Great Recession hurting and continue to see sharp declines. Although IBISWorld economists estimate a slight leveling through 2021 when compared to 2011-2016 figures, where bulb makers saw an 8.7 annualized contraction, it doesn’t take a business analyst to understand the direction of this industry is declining. And the truth is, this dip could eventually impact the fixture market in many ways.
What drivers have turned the dimmer switch down on the lighting industry? Could lean manufacturing practices help businesses operating in this sector find their way in the coming economic darkness?
1. Energy efficiency: ‘Sustainable’ for whom?
Be it for financial or ecological reasons, everyone from homeowners to business owners have begun switching to solid-state lighting like LEDs and OLEDs. According to the U.S. Department of Energy, SSL technology today could potentially reduce lighting electricity consumption by 75 percent, a big deal for those with burdensome energy bills, but not ideal for the lighting industry.
Apart from their electrical efficiency, SSL bulbs also last longer than conventional filament bulbs by a long shot. LEDs, for instance, outlast incandescents 25 times over, so says the DOE. Lighting has, in essence, innovated itself out of a lucrative consumer cycle. People may pay considerably more for a single light bulb than they did a decade ago, but not 25 times more. Lean practices like quality assurance inspections and process standardization will be a boon to these industries as they attempt to reclaim their former glory with a more reliable, simpler-made product.
2. Obsolescence new engine for lighting consumers
As creators of SSL products continue to integrate smarter, interoperable technology into their goods, a dead bulb will no longer drive consumers to buy – technological advancement will. That goes for fixtures, too.
Steve Arriola, director of operations at Hubbell Lighting in Greenville, S.C., showed Architectural Lighting Magazine luminaire manufacturing and assembly have taken on the appearance of any other electronics plant. This major shift impacts everything from equipment on the lines to the training required to work on the floor, not to mention the accelerated integration rate of embedded components required to meet customer demands.
Therefore, leaning out operations today while the industry rests on the cusp of a revolution will allow lighting manufacturers to hire and retain top talent, train workers on new technology, and capitalize on innovation rather than succumb to it. Furthermore, lighting manufacturers pushing to vertically integrate will need to rein in waste and optimize processes as much as possible to achieve the kinds of production cost savings and lead time cuts necessary to claim pole position in their market.
3. Trending now: Over-sized lighting fixtures
Large, modern chandeliers and pendant fixtures have come into favor with both residential and commercial lighting investors. So, as luminaire producers combine the traditional elegance of colossal installations with connected, data-driven mechanisms for a new age of consumers, they are met with attractive value propositions.
Yet as with all products that can be sold at a higher price point, manufacturers will need to back up their cost increases with value adds for the buyer – greater quality assurance, maintenance packages, responsibly sourced materials, etc. – any of which could tip a business into the red if lean manufacturing practices aren’t already in place and functioning smoothly.
Who knows what tomorrow might bring for the lighting industry. Uncertainty is the only certainty. Adopting a culture of lean manufacturing, however, ensures these businesses will stay responsive to changing customer expectations and technological integration.