Proactively taking charge of manufacturing energy costs

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Manufacturing News, Source : The Manufacturer US
Published : 26 Oct 2006 21:54

Mary Beth Holly, a TechSolve Project Manager, has issued her take on what businesses can learn from an Ohio non-profit that's helping businesses save money and natural resources.

With wildly volatile energy prices, overseas competition, and escalating raw material costs, manufacturers are seeking new and innovative ways to reduce or keep more predictable production expenses. Typically energy costs make up five to 20 percent of a manufacturer's operating costs, and it is one expense that can continues to hold significant opportunities for cost savings. According to an Ohio Manufacturers' Association member survey, more than a quarter of the participating manufacturers responded that they could experience reductions in production and/or employment due to energy costs and supply shortages.

The International Profit Association reports that rising energy and fuel costs is the number one issue affecting small businesses, and that energy in previous years did not even make this list. The priority of energy is now driving many companies to act to reduce these costs. The 2005 Interland Business Barometer actually named energy costs and supply shortages as a top threat to business.

Sure, making equipment modifications and installing new, more energy-efficient equipment is one method to reducing energy costs. However, capital expenditures may not be feasible, especially for small manufacturers or ones that are already experiencing financial difficulties. Another energy reduction method that is gaining interest is the no-cost energy management techniques. The U.S. Department of Energy estimates that, on average, industry can reduce energy consumption by 20 percent, and approximately 30 percent of those savings can be achieved without capital investment using simple procedural and behavior changes. An energy management system addresses those behavioral and procedural changes in a systematic fashion to provide continuous energy improvement.

Energy management goes beyond providing the short term gains of improving equipment efficiency, and seeks to change the way energy is viewed by the end users. Because energy waste is not visible or tangible like scrap, it is often overlooked or discounted as a part of doing business. The obvious realizations about energy are the increasing energy bills and the desire of the manufacturing sector to do something about it. Taking a proactive energy management approach allows the manufacturer to make these best management practices a part of their business culture to be able to sustain energy savings.

Management System Philosophy

Similar to ISO 14001, an energy management system provides a series of checks and balances to ensure that the efforts initially implemented are not neglected, and that energy management knowledge is not lost through employee turnover or lack of documentation. Envinta is a set of energy management principles originally developed by Energetics of Australia. Energetics used the ISO principles of Plan-Do-Check-Act to provide a framework for developing an energy management system to sustain energy savings. If the organization is unable to fulfill or implement this type of activity, hire a professional consultant, like TechSolve.

The basic philosophies of both management systems are primarily the same. Both management systems are assigned accountabilities, resources, procedures, a policy, and most importantly, top management commitment. Without top management commitment, any management system will fail due to the lack of resources, time, and a champion to ensure that the momentum continues. Unlike ISO 14001, energy management is self-policing, requiring that the energy manager and top management act as the gatekeeper to motivate, promote, and enhance the energy management system.

Plan

Planning for near-term and future efforts under the energy management system is necessary provide system direction. The first element of an effective energy management program is leadership, which includes top management commitment, an energy policy, and an appointed energy manager. This is the most critical stage in developing the energy management system. Top management needs to support this system, provide the necessary resources including labor, financial resources, and endorse the system to ensure that it can be effectively implemented and maintained. Without this commitment, the system may be established, but the long term benefits of sustaining the best energy management practices will not be realized. Assigning a single individual to oversee the energy management system and assigning accountability through personal incentives and goals will help to drive the management system and ensure its continuity.

Understanding the process parameters and energy consumption allows an organization to identify energy saving activities. This is accomplished through a baseline facility-wide technical audit that identifies projects with quick payback savings. By quickly demonstrating that the energy savings are possible through improved management techniques, the more likely employees will readily adopt the new energy management system. The key is to sustain energy savings by continuously seeking additional opportunities and developing a strategic plan to coordinate future energy projects. Planning also incorporates the setting of targets and goals, tracking the progress towards those goals, and communicating the progress towards these goals to management. Levels of authority and responsibility are established to ensure progress towards these goals and that the necessary resources are allocated to implement and sustain the energy management system.

Implementing energy saving activities and procedures involves the entire facility at some degree of involvement. In my work with manufacturers, I am finding that many companies lack the basic energy awareness that is needed to promote energy conservation facility-wide. Making all employees aware of the company's desire to save energy and how they can participate in that effort, even minor changes such as turning off lights and computers when not needed, is a good start and simple to accomplish.

Reminders such as posters, energy awards incentives, and time set aside in meetings for energy discussions help to reinforce those concepts. Developing an energy committee or using an existing committee to drive energy idea exchange, will increase employee buy-in if the committee represents all areas and levels of the plant, especially including maintenance and operation employees, which have the most control over equipment operating efficiency. In addition to basic awareness training, certain facility workers will need more in-depth training to enhance their current job skills and develop new skills sets. Two of the primary candidates for job training are operators and maintenance. Operators should be trained to efficiently operate the equipment at maximum energy efficiency, and be able to identify and have authority to shut down equipment as needed to conserve energy. Likewise, maintenance will need to be trained to identify and address energy-saving opportunities and be able to adjust and maintain the equipment to achieve maximum energy efficiency.

Having sufficient resources both internal to the company and through assistance from contractors and consultants are important to address energy waste in a timely fashion, and to provide the necessary level of expertise to identify and implement both standard and innovative energy saving measures. The skills set of internal personnel once established and documented will help determine the resources needed by external sources to address energy issues. A listing of approved contractors and services is a helpful tool to have available in emergency situations and to rectify energy waste in a timely fashion.

Planned major energy-related projects will be more easily implemented by having a professional review project design to ensure energy efficiency is incorporated into the initial design. Defining the energy efficiency criteria for major equipment will aid in the replacement and retrofit of this equipment for use by maintenance. New technologies and energy-saving techniques are solicited from staff during energy brainstorming sessions and committee meetings. The industry norm for energy efficiency is known for the major equipment through trade associations, equipment vendors and consultants, and publications.

Check

Having a means to measure the energy performance of equipment and processes allows for the ability to determine both optimal and out-of-specification conditions in terms of energy efficiency. This task is accomplished through establishing set points or levels for both of these conditions and providing instructions to operations and maintenance on how to address when the limits have been exceeded. Information on the incidents which caused the out-of-limit conditions is reported to the energy manager to take action to prevent future incidents.

Act

Establishing targets and goals to reduce energy and to conduct energy-related activities such as awareness and training, provides a driver for improvement. Top management establishes these targets and goals with technical staff to provide a measure to gauge progress. Evaluation of the status of meeting targets and goals, progress towards energy projects, and changes needed to improve the energy management system are discussed in management meetings to determine changes needed in the system and resources needed to be allocated for improvement.

Energy management systems formalize the behavioral and procedural modifications that help to sustain energy savings. Companies that have implemented these systems have the procedures and practices outlined to: research and solicit new energy saving ideas; plan for future energy saving measures; review project outcomes against planned outcomes; have established responsibilities and accountabilities for energy; and documents to sustain the system despite changes in personnel.

Companies that have implemented ISO 14001 experience the benefits of having the structure to prevent errors and to sustain waste reduction and other environmental improvement projects. An energy management system provides the same level of structure to progress energy improvement practices.

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