An energy boost

Posted on 8 Aug 2013

Roberto Priolo, editor of TM’s sister publication Lean Management Journal, discusses how a lean implementation naturally supports a company’s effort to reduce energy-related wastage.

What does ‘efficiency’ mean? In general terms, the concept can be defined as the ratio between an input and an output. When we say a factory is 80% efficient, for example, what we are really saying (and what we should, perhaps, state more clearly) is that it is 20% wasteful.

Lean folks are used to tackling inefficiency in its every form, but for others who might be less familiar with the methodology’s principles and tools the discovery of just how much waste lies in our operations can be an eye-opening, if startling, discovery.

One of the best examples of inefficiency is our power grid. Power generation and distribution in the UK see wastage levels of up to 60% – this staggering figure puts the entire energy efficiency debate onto a different level.

We spend our days discussing what the best sources of energy are, and debating on whether we should build more nuclear plants or put ourselves in the environmentally-friendly hands of wind farms and solar panels, but what we should figure out first is the best way to ensure that the power we already produce actually ends up being used.

In our houses and businesses energy leaks through draughty windows, electricity-hungry and inefficient appliances and machinery, or poorly-insulated walls.

Investing in better wiring, piping and insulation to improve power distribution can be very costly (and, as a matter of fact, 100% efficiency in power generation is actually impossible to achieve due to the laws of physics), but the “sit and wait” approach is not an option for UK businesses.

Heavy energy users, like steel makers, already know how painfully high a company’s energy bill can be, and know all too well how such costs are not sustainable.

Lean strives to improve processes and reduce waste in its every form, which is why it goes hand in hand with environmental principles. Making for a more efficient supply chain or improving a process by reducing the number of steps necessary to achieve the same output will not only streamline your operations and make your staff happier, but will also reduce your energy costs and environmental impact.

As it is often the case in many a lean implementation, conspicuous amounts of cash can be saved even before lean becomes part of the organisational culture (although good luck sustaining results if this doesn’t happen), by merely implementing a few basic tools, from 5S to value stream mapping.

This is the same with energy. Small upfront investments and simple actions can lead to big savings.

Applying lean principles and tools to power consumption is the best way for a company to reduce its energy costs and maximise its electricity usage.

Take a value stream map, for example. This is used to identify bottlenecks and faulty steps in a system, but it can just as easily be used to improve visibility over what parts of the process see the largest loss of energy.

Similarly, introducing energy concepts to kaizen events can lead to a better understanding of what problems we are trying to face and, if we do things properly, to a solution to these problems.

Some do it by means of expanding the focus of the 6th S within 6S (which stands for safety) to include the effects of energy that a better-organised workplace can have, while others do it by introducing other acronyms to an already long list, another way to add energy wastage to the issues lean aims to solve.

Whatever we decide to call it or however we decide to tackle it, making energy efficiency a big part of our lean implementation makes sense.

There is a good chance that those organisations that have recently started a lean journey will have already achieved some kind of energy-related improvement (like I said above, these results tend to happen whether we actually seek them or not), but a bigger focus on energy by lean practitioners will ensure that lean provides a more varied and all-encompassing range of benefits to our businesses.

To remain competitive, manufacturers have already started to generate their own energy, look for cheaper suppliers and find ways to cut energy usage.

As energy prices continue to increase, the trend for manufacturers to look for alternative ways to source energy and to minimise power waste will also gather pace. After the summer, The Manufacturer will produce a series of reports on energy. Stick around.