Lighting retrofit economics Business Plan 6 pages

Energy Management

Wal-Mart is the largest retailer within the United States and has also enhanced its position within the international market place through the opening and operation of stores across various countries, such as Canada, Brazil and Argentina (Corporate Website of the Wal-Mart Stores, 2012). The success of Wal-Mart is due to their development and implementation of a business model based on the creation of scale economies and the adherent advantages.

The retailer purchases bulk products and resells them. Its primary strategy is that of cutting costs to the minimum possible in order to provide customers with the lowest possible price. This strategy has paid off and has earned Wal-Mart billion dollar profits in a crushing economy.

Wal-Mart operates large size facilities which consume high levels of energy, and as the stores expand and come to serve more and more customer, the energy needs of the facilities increase. In such a setting then, it is currently proposed for the company to develop and implement a lightning retrofit project.

The scope of this lightning retrofit project is that of allowing Wal-Mart to use electricity in a more efficient manner, by gaining more results and decreasing its costs; this strategy is as such integrant to the company’s overall business model. The first step of this project then is represented by the description of the lightning retrofit proposition, followed by the detailing of the project management considerations. In other words, it is not only sufficient to design the lightning retrofit, but is also necessary to manage it throughout the entire duration of the project. At this level, usage would be made of the Project Management Body of Knowledge (PMBOK).

2. The lightning retrofit proposition

At a general level, the retrofitting effort is understood as the activity developed by men with the scope of improving an already existent system. The important characteristic of retrofitting is that the system already exists and little emphasis is placed on the creation of new systems. Nevertheless, to improve it, new components are generally integrated.

In the specific case of lighting retrofitting, the emphasis falls on improving the lightning system with the specific scope of generating cost efficiencies. In other words, lightning retrofitting sets out to help the Wal-Mart to reduce its costs with electricity, while maintaining, or even improving, the quality of electricity provision and lightning.

At this specific level, it is important to note that the lightning retrofitting would initially raise additional costs and investments, and the actual cost savings would be observed within the long-term. Nevertheless, by fully capitalizing on the lightning retrofitting project, Wal-Mart would eventually become able to reduce costs with lightning, or even generate a return on its initial investment.

“A lighting retrofit is the practice of replacing components in the system with counterparts that make it use energy more efficiently. A lighting upgrade is any strategy that reduces the system’s energy use. Energy savings are realized over time that can be significant enough to not only pay for the new equipment, but produce a return on the investment” (Light Research).

Within the specific case of Wal-Mart, the proposition is represented by a retrofitting of their lightning system characterized by the following:

The maintenance of the already existent canals in the walls, floors and other structures. These are already sufficient to serve the lightning needs of the Wal-Mart facilities and there is no need to create new infrastructures.

The elimination of the old wires and their replacement with newer and more resistant wires. This process generates little cost savings for the company in terms of energy consumption, yet its benefit is that the new electrical wire system would have a higher quality, would support higher levels of usage and would be more resistant. Shortcuts and other electricity related problems would as such be better avoided and this trait generates substantial cost savings with reduced needs for repairing, as well as reduced need to close down the store and decrease sales as a result.

The replacement of all the lightning devices, namely bulbs, neons and so on with more energy efficient lightning solutions, such as solar powered LED lights or CFLs (compact fluorescent lamps).

As it has been mentioned above, the upgrading of the lighting system and its transformation into a more energy efficient and greener system is likely to generate a series of direct cost savings, such as lower levels of electricity consumption or reduced costs with repairs. Aside from these however, the lightning retrofitting would also generate some notable indirect savings for the Wal-Mart Stores.

For once, it is noted that the government of the United States provides tax deductions for the economic agents who engage in initiatives of becoming more environmentally responsible and sustainable (Energy Retrofitters). At this level, the retailer could file for tax cuts and would register savings on its tax budgets as well. Then, it is already known that the customers and the public become more and more demanding towards the economic agents and they raise new pressures. By going green, Wal-Mart would come to better serve the changing needs and pretensions of the customers; as these become better satisfied, they grow more content with the retailer and they could also become more loyal and frequent customers, to eventually support the company in increasing its sales and profitability levels.

Overall, the lighting retrofit effort at Wal-Mart would materialize in the creation of five distinctive sets of benefits, as follows:

The creation of energy savings

The improvement in the quality of the lightning in the Wal-Mart facilities

The reduction in the maintenance and labor costs

The reduction of the pollution generated by the institution, and last

The implementation of green power systems (The United States Department of Energy, 2001).

3. The project management plan

The project management body of knowledge (PMBOK) is used as a standard within the electrical industry and it has been approved by the American National Standards Institute. Its scope is that of providing standards in the practice of project management, and, according to the guide, there are five processes, which are characterized by three elements and nine knowledge areas (Anbari, 2005). These will be described below, and applied to the case of Wal-Mart.

The five processes created by PMBOK refer to the initiating of the project, planning it, executing it, monitoring and controlling it and closing it. The elements characterizing the processes are:

The inputs, in the case of Wal-Mart, these being the already existent electronic infrastructure and the financial resources allocated to the retrofitting process

The tools and techniques employed, which, in the case of Wal-Mart’s lightning retrofitting include the new wires and the new light sources

Last, the outputs, or the resulting elements of the process, which, in the case of Wal-Mart, represents the new improved lightning system.

At the level of the knowledge areas, these refer to the domains of knowledge in which the participants in the project have to be experienced. They include the adequate management of the following aspects of the project: (1) integration, (2) scope, (3) time, (4) costs, (5) quality, (6) human resources, (7) communications, (8) risk and last (9) procurement. In the case of Wal-Mart, it would be necessary to ensure adequate communications between the parties involved in the retrofitting project; to integrate the measures within the overall business model; to motivate and gain the support of the staff members and so on.

Returning to the project processes, these are applied to Wal-Mart as follows:

The initiation of the project would revolve around the analysis of the current lighting system and the identification of potential improvements, as well as their feasibility.

The planning of the project would include the identification of the alternatives to lightning retrofitting, their analysis and the selection of the best solution, in accordance with the company and project specifications. At this level, the implementation process would be designed.

The execution of the lightning retrofitting project based on the previous specifications through the actual implementation of the stages previously designed.

The monitoring and controlling of the lightning retrofitting project in a continuous manner, throughout the entire implementation process, as well as at its completion. At this level, emphasis would be placed on the ability of the completed project to attain the initially foreseen goals.

Last, the closing of the project through the assurance that the lightning retrofitting is completed and able to generate the initially stated objectives.

4. Conclusions

Wal-Mart is the epitome of corporate success and it has attained this triumph through the creation of scale economies and the adjacent advantages. Still, to fuel its large size operations and facilities, the company encounters a series of important costs and challenges. One example in this sense is represented by the company’s need to light its entire facilities. At this level, the current project has proposed the retrofitting of Wal-Mart’s lighting system through the replacement of the wires and the light elements with newer, more resistant and greener ones. This measure would materialize in a series of direct and indirect advantages, bet reflected by the following: decreased costs, improved lighting quality, decreased pollution and more efficient and environmentally responsible business model.

The adequate management of the lightning retrofitting project is a complex endeavor, which is also ongoing throughout the entire duration of the project. The management is then best addressed through the lenses on the PMBOK standards. At this level, emphasis is placed on five specific processes, namely project initiation, project planning, project execution, monitoring and controlling, and last, project closing.


Anbari, F.T., 2005, Q and A for the PMBOK guide, 3rd edition, Project Management Institute

2001, Lightning retrofit woorbook, The United States Department of Energy, last accessed on September 14, 2012

Lighting guide: Lighting retrofit economics, Light Research, last accessed on September 14, 2012

Energy Retrofitters, / last accessed on September 14, 2012

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