Start small, dream big – the future of energy efficiency for UK manufacturers

Posted on 9 Mar 2022 by The Manufacturer

The UK’s manufacturing sector is revered around the world, with businesses including Unilever, GSK and Jaguar Land Rover all making products which are lauded globally.

It’s not just what, but how these manufacturers produce which makes them innovative. Indeed, according to MAKE UK, the manufacturers association, the sector actually outperforms pretty much all other sectors when it comes to innovation activity in recent years, with electrical and optical manufacturing leading the pace (Make UK).

Some of this innovation has been geared towards becoming greener and more sustainable. The sector utilises 17% of the UK’s total energy demand, and holds a target of achieving a 100% reduction in carbon dioxide emissions by 2050 (on 1990 levels).

There’s also the Clean Growth Grand Challenge Fund, which supports the transformation of UK manufacturing by pioneering the development and integration of new and existing Industrial Digital Technologies (IDTs), including Artificial Intelligence (AI) and virtual reality.

The challenge aims to ‘deliver a resilient, flexible, more productive and environmentally sustainable UK manufacturing sector. It will also develop new technologies that can be exploited commercially across the manufacturing industry, worldwide’.

In this piece, I will explore the various steps UK manufacturers should take if they want to make their processes more sustainable, in particular around energy usage.

A solid foundation

The track record of innovation is there. The will is there. And, for some manufacturers, the funding is there, too. Together we’ve got the ingredients to make the UK’s manufacturing sector the most efficient in the world – and we need to, quickly.

The current energy crisis is hitting businesses hard – they don’t benefit from cap protection like individual consumers and households do, so are particularly susceptible to increases in costs. What’s more, manufacturers overseas aren’t experiencing the same energy price shocks, meaning UK manufacturers are becoming less competitive and could miss on business opportunities out to rivals abroad due to factors beyond their control.

We estimate that approximately a third of UK manufacturers do not set energy efficiency targets nor have any means of measuring improvements.

We need to act now to make manufacturing processes more transparent, efficient and sustainable.

The main issue UK manufacturers are likely to face? They often don’t know what they don’t know.

The attitudinal shift

Before making any technological or organisation changes, it’s important to make an attitudinal shift – in particular around what energy actually is within the production process. For many, energy constitutes a lump, fixed cost, however this needn’t be the case.

In a manufacturing facility, the manufacturing processes and HVAC system are often the largest consumers of energy. However, currently, focus for manufacturing managers is output and productivity based, with energy costs generally unaccounted for and considered an indirect cost of facility management. The Carbon Trust states that in the warehousing and logistics industry, it is lighting that uses most of the energy (typically around 65 percent).

With this in mind, manufacturers should start to see their energy usage as a cost which can be cut, and cut in a way which doesn’t affect the quality of produce.

Getting granular with assets

Many manufacturers don’t have an asset-level understanding of energy consumption – this means they might have a view of total energy usage for a facility, but won’t know how much of this is lighting, heating or production equipment usage.

But by understanding energy consumption at a more granular level, it’s possible to identify inefficiencies and make changes – almost instantly.

For example, we introduced the Hark platform to a top UK supermarket chain. By segmenting energy usage across its various facilities, we were able to easily identify opportunities for big reductions in unnecessary lighting. By having access to high granularity data and remote control, we were able to effectively manage lighting through real-time scheduling and alerting, resulting in energy savings equal to 100 homes’ yearly electricity use.

We know that manufacturers keep a very close eye on operating costs – a food manufacturer such as Unilever for example, will have a very detailed view of where they get their ingredients from and how much they cost. The same can be the case for energy usage, and ultimately, by understanding it at a more detailed level, facility managers will be able to reduce the cost per unit by taking a more tailored approach to consumption.

Peak shaving is another area to look at

As well as developing an asset-level understanding of energy consumption, manufacturers should consider ‘peak shaving’. Essentially, manufacturing companies are frequently subjected to peak-load-dependent energy prices/tariffs, so facilities are faced with high costs for the peak consumption utilised, rather than their total consumption.

The reduction of this energy peak, known as peak shaving, has proven to reduce electricity bills by 10-30%.

This was a particular challenge one of our Manufacturing clients came to us to resolve. Working with Hark we helped to reduce the performance variance of a production line in a manufacturing facility, helping to highlight the potential to reduce energy costs by 10%, saving over 60,000 kgC02e. By highlighting energy spikes we were able to uncover system inefficiencies in order to optimise shift changeovers and reduce costs.

Having the right organisational structure is important

Making organisational changes is important in driving efficiencies, and an approach we’ve seen leading manufacturers begin to adopt.

The introduction of sustainability-focused C-suite hires, such as Chief Sustainability Officers for example, can help set the tone and enact change from the top.

But manufacturers need to ensure they go deeper, and build sustainability KPIs into pretty much every aspect of the production process – if the entire production line is invested in identifying and solving inefficiencies, it makes it easier to introduce new processes such as training to switch assets on and off as is required.

While these organisational shifts are important, they are secondary to technological changes when it comes to improving efficiency – it is estimated that managerial and process changes help increase energy efficiency by 10-20%, compared to 50% for technological or digital changes (McKinsey).

Utilising technology is the quickest and most cost-effective way of improving efficiency

The Hark platform is an example of how cutting-edge technology can work alongside legacy manufacturing assets to identify and solve inefficiencies.

Our cloud-based sensor platform, powered by Intel Gold, allows production facility managers to get an asset-level understanding of energy usage, meaning they can spot inefficiencies and trial different things to reduce energy consumption without impacting the quality of the product.

Intel’s technology – which sits within commonly used pieces of Hark’s hardware – plays a key role in helping us identify and build the right integrations for our customers’ requirements.

A key part of our approach is compatibility with everything from vast, complicated production operations spanning numerous sites, to one-off, niche facilities.

This has seen us work with clients (leaders in their respective fields) spanning energy production, retail, manufacturing and more. All incredibly different in their own right, they are united in their desire to maximise the assets they have.

Many manufacturers can be impeded from making technological changes due to perceived high costs of implementing change. Yes – if you think you need to replace an entire production line to become more efficient, then the investment may not be worth the resulting efficiencies.

But this is seldom the case – from our experience, pretty much every manufacturer in the UK could save on their energy usage, they just need to get better at measuring their energy use.

Start small (but think big)

Faced with monitoring huge, complicated manufacturing facilities can be daunting – for facility managers and procurement specialists alike – but it doesn’t need to be.

The most important thing is getting started – this may mean focussing on a single element of one aspect of the production process, at one facility.

By testing, learning and adapting, it’s possible to identify inefficiencies in one area before rolling out changes throughout the entire production line. A segmented and evolving approach to manufacturing energy efficiency is the smartest way to make improvements without sacrificing on the quality of produce.

Thankfully, the UK’s track record of manufacturing innovation and ingenuity means it is starting in a strong position.

The task now? Move quickly to ensure manufacturers overseas don’t capitalise on the energy crisis.

About the author

Jordan Appleson, HarkWith an extensive background in industrial software architecture and cloud technology development Jordan Appleson founded Hark in June 2016 alongside colleagues Andrew Hathaway and Julian Kay. Hark is an award-winning Energy Analytics and Industrial Internet of Things (IoT) company based in Leeds, helping businesses to perform better.

With the world, and businesses in particular, being held accountable for climate change, carbon emissions and sustainability – Jordan’s mission with Hark is a simple one: helping businesses to run more efficiently. Hark does this by connecting a businesses’ energy-producing assets – such as refrigeration units in supermarkets, lighting, heating, and computer systems – and allowing firms to optimise their energy usage in real-time with smart technology.