In its recent report ‘Pressure on the production line - Working capital in global manufacturing’ PwC dissects the way in which companies in the sector are managing and using working capital.
The report points to the need for businesses to invest continuously in their plant and operations in order to remain competitive and to secure long-term stability.
The report reveals that the sector’s rate of investment has seen a steady decline over the last five years and now sits at its lowest point during that period, concluding that better management of working capital is key to generating the necessary cash for investment.
As we enter the much-discussed ‘4th industrial revolution’ there is clearly pressure on manufacturing businesses to assess legacy operations and re-think legacy processes.
Historically, lighting has not been a major consideration for the sector.
But a new mindset is emerging. The sector’s leaders are embracing the new idea of light as a service, whereby the future performance of the lighting solution is ensured by the supplier, and where no capital outlay is required.
The light as a service model enables manufacturing companies to look far beyond what would otherwise be possible without such a financing model in place.
Put simply, businesses can upgrade the way in which light is used within their environment and pay for it using savings generated from day one of installation.
Tailored manufacturing light solutions for purpose
Certainly, the cost-savings and energy efficiencies delivered by today’s LED lighting systems are compelling. But undertaking to buy light as a service rather than a commodity moves the conversation way beyond simple savings.
Manufacturing covers a broad array of processes, many of which impact – or are impacted by - the operational environment. Our dealings with the sector have revealed a number of specific lighting challenges.
The pharmaceutical industry provides an obvious case in point. Many pharmaceutical products are light sensitive and will degrade under the wrong kind of light. In turn, lean manufacturing processes place the emphasis on increasing efficiency and reducing waste.
Here, high-quality LED lighting is assisting with product inspection and quality control.
Food manufacturing presents another challenging environment. We have seen examples of dispersed sausage fat eating into the plastic lighting surrounds. The same issues are present in environments dealing with ammonia or chlorine.
The light as a service model delivers immediate and ongoing access to lighting industry experts, individuals who are trained to assess the operating environment and who have the experience and depth of knowledge to suggest best-fit lighting solutions. Light can be tailored and controlled to suit a client’s specific needs.
Maintaining excellence with LED technology
The future-proofing advantages of light as a service are critical. Without such a model in place, every new technological advancement would require significant capital expenditure.
Light as a service provides buyers with the necessary consultative expertise to enable them to stay a step ahead.
Additionally, any decision-maker will surely welcome the prospect of dealing with just one supplier contact (safe in the knowledge that the system is being monitored and maintained in the background) rather than having to deal with multiple maintenance, management and sales personnel.
Such a service enables the sector to benefit from LED technology – and from future developments - without the hassle of owning and operating the lighting solution themselves.
Not only is electricity getting more expensive every year, maintenance costs are also increasing. Every day an obsolete lighting system is operating it causes unnecessary extra costs - through excessive electricity consumption, high failure rates and high maintenance charges. Doing nothing is expensive.
Time to switch on Light as a Service (LaaS)
Changing any purchasing and business model will always require careful assessment, and moving to light as a service will be a step change for many. However, taking the decision now can lead to immediate savings and can result in a model that normally pays for itself from day one.
Everything associated with lighting - from design via installation and commissioning through to regular maintenance – will be handled by the expert provider, enabling manufacturing leaders to focus on core tasks.
Once installed, transparent remote monitoring helps to achieve the agreed aims regarding illuminance and energy efficiency and – with expert guidance - to quickly identify opportunities to adapt and enhance usage patterns.
Adjusting lighting to individual specific needs and implementing new functions isn't a one-off task performed when installing the lighting, but rather continues throughout operations.
In this way, possibilities for optimisation – in the areas of quality, efficiency and functionality – are constantly monitored.
Light as a service arrangements allow future cost savings to be harnessed to pay for today’s digital technology upgrade. Such arrangements are gaining attention precisely because they enable investment without capital commitment, moving the business model from buying technology, to paying for access to that technology.
It is the combination of smart financing and smart technology that can accelerate investment in the smart manufacturing environment.