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POWER OUTAGE COSTS A MILLION DOLLARS

Lithonia Lighting, located just outside of Atlanta, Georgia, is the world's largest manufacturer of light fixtures, with more than $1 billion in annual sales. One afternoon, the power transformer at its corporate headquarters exploded, leaving the entire office complex, including the corporate data center, without power. The data center's backup power system immediately took over and kept critical parts of the data center operational. However, it was insufficient to power all systems, so the system supporting sales for all of Lithonia Lighting's North American agents, dealers, and distributors had to be turned off. The transformer was quickly replaced and power was restored. However, the 3-hour shutdown of the sales system cost $1 million in potential sales lost. Unfortunately, it is not uncommon for the cost of a disruption to be hundreds or thousands of times the cost of the failed components.

QUESTION:

What would you recommend to avoid similar losses in the future?

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M91921157

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