Lighting Equipment Manufacture
Buy This Industry Report
Get more in-depth industry information with a First Research industry report containing business challenges, trends, executive insight, call prep questions, and so much more!
Industry Overview
The US lighting equipment manufacturing industry includes about 1,100 companies with combined annual revenue of about $12 billion. Major companies include Acuity Brands, Hubbell, and Philips Lighting. Divisions of large integrated companies such as General Electric also manufacture lighting equipment. The industry is concentrated: the largest 50 companies account for about 70 percent of revenue.
Competitive Landscape
Demand depends primarily on residential, industrial, and commercial construction activity. Large companies have advantages in purchasing power, manufacturing volume, and distribution efficiencies. Small companies compete by offering specialized products and superior customer service in regional markets. Annual revenue per employee is about $200,000.
Products, Operations & Technology
Major product categories are lighting fixtures (about 80 percent of revenue) and lamp bulbs and parts (about 20 percent). Lighting fixtures consist of metal, glass, and plastic products in various decorative styles. Lamp bulbs consist primarily of incandescent, fluorescent, and three types of high intensity discharge (HID) lamps: metal halide, sodium, and mercury vapor.
Residential fixtures may be highly decorative while industrial, commercial, and institutional applications tend to be more basic. Portable fixtures, such as table and floor lamps, are used primarily in residential applications. Incandescent bulbs are the primary choice for residential applications, while longer-lasting, more expensive, fluorescent and HID bulbs dominate industrial, commercial, and institutional applications.
Raw materials for lamp bulbs include glass, tungsten, copper, and inert gases such as argon and nitrogen. Lighting fixture manufacturers use steel, aluminum, copper, brass, and plastics as components of finished products.
Incandescent lamp bulbs are the highest unit volume form of lighting due to their low cost to manufacture and install. The incandescent bulb has three basic components: the filament, bulb, and base. The filament is drawn by pulling tungsten mixed with a binder material through a die into a fine wire form, which is then annealed to soften the wire and welded to lead-in wires. Glass bulbs are produced by moving a continuous ribbon of glass past air nozzles that blow the glass through holes in the conveyor belt into molds, creating the glass casings. After the glass casings are cooled and cut, they're coated with silica to reduce glare from the uncovered filament. Manufacturing the base also uses molds to provide the screw shape that fits the socket of a light fixture. Automated machines fit the three pieces together, and then they're sealed, tested, and packaged for shipment.
Fluorescent and HID bulbs, while manufactured similarly, require a ballast to start and regulate the flow of current so that the bulb operates at maximum efficiency. Advantages of these bulbs include greater energy efficiency, better lighting disbursement, less heat generation, and longer life.
Lighting fixtures are manufactured using a series of steps that may include cutting, bending, machining, spinning, anodizing, polishing, and painting, depending on the materials used and final design configurations.
Larger companies have their own distribution centers. Smaller companies use third party distribution centers or ship direct from the factory. Transportation is by common carrier or company-owned vehicles.
Manufacturing processes are highly automated. Lamp bulb production may be accomplished at speeds as high as 50,000 per hour. Computer-controlled metal-working machinery combines precision and manufacturing speed for fixture components. Most orders are made to stock and enterprise resource planning (ERP) systems aid in production planning, inventory management, and order fulfillment.
