Whether it is due to escalating maintenance costs, increasing system failures, wasteful energy behavior, or simply lack of visibility into system performance, 9 out of 10 manufacturers are discussing energy matters at the board level, according to Siemens. 79% of UK manufacturers describe energy efficiency as a “business critical” issue. Energy and operational efficiency, as well as sustainability, are making their way up corporate agendas throughout the world. And yet, only about half of manufacturers have energy management plans in place for the next five years. This means that nearly 50% of manufacturers lack visibility into the performance of the critical devices running their plants.
The manufacturers who are paving the way, like Dow Chemical with its operational and sustainability goals that aim to improve the lives of 1 billion and deliver $1 billion in cost savings, are likely following these five steps for improving operations and cutting energy costs.
Step 1: Get Buy In
The Campbell Soup Company was the winner in the Sustainability Leadership Category of the 11th annual Manufacturing Leadership (ML) Awards last month. Campbell’s CSR platform is built on pillars like Leadership (“responsibility starts at the top”), Performance (“we manage by measuring”) and Accountability.
Undoubtedly, the project owner, Randy Puckett, Manager of Services & Utilities, began by getting buy-in of everyone involved: from the c-suite to the shop technicians.
Getting buy-in is a critical first step that includes detailing the problem and need with statistics and their implications, then involving the team in creation a resolution that improves processes, develops corporate culture, and shows sustainable ROI.
Step 2: Set Goals
For the second year in a row, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has led sustainability in its sector, according to the Dow Jones Sustainability Indices. A pioneer in energy goals, TSMC has declared that they will “cut PFC emissions by 30%, greenhouse gas emissions by 18%, power consumption by 12%, and water consumption by 30% from 2010 levels by 2020.”
For manufacturers to improve their operations and cut their costs, they must set specific and measurable goals that are based on real data of the energy performance of systems and devices within the manufacturing process.
According to LNS research, companies with automated data collection at the production asset level enjoyed a 10% reduction of median energy intensity vs. 5% for those without.
Step 3: Monitor Devices
When one of the world’s largest building materials suppliers sought an improved means of tracking, managing and reporting live energy consumption, they implemented a Panoramic Power device-level energy management solution within one of the company’s manufacturing site. The result was operational improvements and a 20% increase of productivity, off-hour consumption savings of $10,000 per year, and ROI within one month.
When manufacturers monitor the energy consumption of devices, they ensures facility wide visibility, which enables system wide improvements, increasing the efficiency of motors and systems and optimize their maintenance schedules. This combination improves operational efficiencies and helps ensure streamlined production processes and OEE (Overall Equipment Effectiveness).
Step 4: Make Improvements
Nissan Motors CEO, Carlos Ghosn, said “By implementing Nissan Green Program 2016, our third mid-term plan, we are taking both large and small steps-and harnessing the power of new technologies – to reduce the environmental impact of our operations.”
Manufacturers would be wise to use the energy data they aggregate to find systemic issues relevant to the production process or energy-intensive production assets. For example, optimizing scheduling of systems with heavy energy consumption helps manufacturers take advantage of lower energy costs during off-peak hours. Or, by transitioning from preventative maintenance of equipment to predictive maintenance that identifies equipment failures ahead of time based on data saves costs, staff resources, and downtime.
Step 5: Empower Employees
In order to cut energy costs and improve operational efficiency, we need the commitment, motivation, support, and participation of our employees. As it relates to energy and operational efficiency, we empower employees by arming them with information, describing positive effects of their behavior, and celebrating their successes.
3M is a perfect example of empowering employees. They have implemented more than 1,900 employee-inspired projects that have realized a 22% improvement in energy efficiency and yielded $100 million in energy savings.
Can 5 steps make a difference?
Sustainable manufacturing seems like complicated proposition. However, though large manufacturers may have complex operations, the process of making them more efficient typically involves simplifying rather than complicating. By following these five steps, detailed in the e-book, manufacturers can immediately begin to improve operations and cut costs.