COMMeMOratiVe ISSue - Illuminating Engineering Society

E N E R GY A D V I S O R
Powers: As long as the significant
wage discrepancy exists between
North America and Asia, imports will
continue to sharply increase. Those
product categories that have high labor
contents will continue to be sourced in
Asia. Some of those categories, such
as manufacturing of decorative products,
have now completely ceased to
exist in North America.
At the same time, factors other than
direct manufacturing labor costs will
remain an obstacle to offshore manufacturing.
Freight costs will continue
to increase as a result of energy cost
increases. Additionally, non-stocking
projects and jobs with tight and fluctuating
schedules will also remain
unattractive to offshore imports.
More recently, initiatives such as
LEED, where emphasis is on broader
environmental and sustainability
issues, will also be a factor. Through
LEED, emphasis on shipping from
locations within a narrow geographical
distance will persuade end-users
to look upon other issues than just
the initial low acquisition cost.
Our company continues to produce
a significant percentage of our
products in our North American factories.
We have been able to remain
competitive, despite the significantly
higher wage structure, through
automation and substantial process
improvements.
Feldman: Where a product is produced
will always be dictated around
total competitiveness: quality, service
and cost. Currently many products
and components are produced
outside the country into which they
are sold based upon the expertise
required for that specific product.
‘We are investing enough in R&D. If you
look worldwide at the luminaire, ballast,
lamp and controls manufacturers as a
whole, the R&D investment is in the
hundreds of millions of dollars’-Morgan
Conversely, many products will continue
to be produced close to the point
of sale because of shipping, handling
and service issues. New technologies
or processes will be based where the
best center of expertise resides.
Producing and selling product in
countries other than U.S. has a benefit
in that it exposes opportunities in
technology and process that may not
exist or be embraced in our current
facilities or markets.
Petras: Successful companies will
continue to look for global sources
of products and services that provide
the most cost-effective solutions,
assuming that quality, timeliness
and other service- and performance-related
attributes are not
compromised. However, as we look
at “game-changing” lighting innovations,
it is also entirely possible
that the tuning of products for customer
needs may require integrated
domestic efforts for the particular
market being served.
Morgan: Outsourcing will continue
to increase. Products manufactured
outside the U.S. have found
favor with customers for a variety of
reasons. Until that is no longer true,
there will be offshore outsourcing.
Do the energy codes offer opportunities
for luminaire manufacturers to
provide products and services of higher
value that will gain a greater share
of the total cost of construction
Morgan: Not in and of themselves.
The only thing that will allow lighting
to obtain a larger share of the
construction dollars is for the total
lighting community to do a better
job of educating building owners
and occupants about the value and
the benefits of effective lighting.
Feldman: The energy codes, if
enforced, open up opportunities for
manufacturers to provide higher
value products that have a lower
overall cost of ownership. Lighting
cost will continue to be a growing
concern as we have more issues
around overall energy usage. Many
efforts have been made to educate
people about the inherent savings in
energy-efficient products but, until
there is enforcement, the industry
structure allows too much emphasis
on initial purchase price as opposed
to total cost of ownership.
ASHRAE 90.1-2004, LEED version
2.2, Title 24 and the International
Dark-Sky Associations Model
Lighting Ordinance all include further
reductions in energy allowances
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