Case History: Factory Boosts Productivity

Case History: Factory Boosts Productivity 2017-01-07T18:32:04+00:00
Topics A-O
Topics P-Z

Case Histories: Industrial/Warehouse Lighting

Factory Boosts Productivity

Metal Industries, Inc. (Elizabeth, PA) gained its reputation from manufacturing metal-framed windows and patio doors, among other products. Its 100,000-square-foot facility relied on outdated fluorescent fixtures that produced far less light than appropriate for the tasks being performed. The company installed 70 high-pressure sodium (HPS) fixtures to supplement what already existed. The new high-benefit lighting system cost just over $8,000 and operation and maintenance (O&M) costs rose from $7,254 per year to $27,114 per year. After 18 months’ experience with the new system:

Productivity in all areas increased by at least 5 percent and, in some, by far more than that, worth $1.5 million annually. The reject rate was reduced by 25 percent, from 4 percent to 3 percent. As a result of fewer rejects, Metal Industries saved on labor, energy, and materials. Overall savings were set at $200,000 annually.

Accidents, which were rare before, became almost nonexistent. As a result, the company began saving an additional $3,000 per year.

As a consequence of fewer accidents, the company’s insurance premiums were reduced , saving another $3,000 annually.

Absenteeism dropped due principally to fewer accidents, saving the company an additional $225,000 annually.

The net benefit achieved as a consequence of better lighting amounted to $1,911,140 per year ($1,931,000 less $ 19,860 in additional O&M costs). Given the size of the investment ($8,050), simple payback was achieved in an amazing 37 hours, creating a simple return on investment (SROI) of 23,741 percent per year.