For the past several years, Plant Engineering has conducted annual energy management studies in an effort to identify high level findings which are impacting manufacturing industries. They conducted this research at the end of Q1 and published their findings mid Q2 2015. Typically in years past I’ve been more timely in my review of this research but I have been engaged in a number of exciting implementations this year and thus I am a bit late. However, I still find the results extremely relevant and worthy of sharing to get some “end of the year” thoughts flowing.
In Plant Engineering 2015 Energy Management Study, they identified six primary takeaways I want to draw your attention towards. My hope is to obtain your interest and solicit your feedback through the comments section as I feel each of these takeaways are real and provide substantial opportunity across Industry. So, here are the takeaways with a couple of my thoughts interjected (shown in blue):
- Energy audits: Forty-eight percent of facilities conduct regular energy audits. Of those facilities, 62% perform them annually, 7% twice a year, and 16% quarterly. Aside from audits, 76%of plants monitor energy usage regularly—up 12% from 2014. How does this even make sense? We all know the adage “You can’t manage what you don’t measure”. While this doesn’t indicate that only 48% are capturing relevant data to measure their energy footprint, it does tell me that only 48% of the respondents are following a key step in continuous improvement. Audits are instrumental in ensuring we are meeting not only expectations and goals but that our programs are structured to obtain increasing value and incorporate any improvement ideas or industry best practices. Annual audits are a must in my book as they demonstrate what’s going well and what needs more attention.
- Challenges: Top challenges to energy management programs continue to be acquiring resources from corporate or management (34%), calculating return on investment (27%), and educating workers on the goals and objectives (26%). This is a big ticket item and I am convinced that it remains a challenge to nearly every initiative, project, or program that is ever implemented. As Energy Engineers or Energy Managers, we must do a better job of showing the value of such programs and obtaining the C-Suite buy-in and support. While not easy, it can be done! While I don’t speak specifically about C-Suite support in a previous post, it starts here. I’ll be sure to add some additional thoughts and suggestions for the C-Suite support in a future post.
- Energy reduction: On average, manufacturing facilities are trying to reduce their energy usage by 9.1%. Thirty-seven percent of respondents are convinced that they’re goals are achievable, while 53% are less confident but still optimistic. Ouch, only 37% of the respondents are convinced their goals are achievable! This indicates to me that they have missed one of the first steps in structuring a program for success. Shared vision with a Project Charter that aligns current state with future state. It’s a key step in the ISO 50001 Standard and I walk through a similar process that we use which can be found in a series of previous posts starting here.
- Implementation: Thirty-eight percent of respondents reported success with implementing an energy management program within their facilities, while 19% are just starting to employ such a program. Not a surprise given the previous three findings. If we lack corporate or management support and we are confident in our targets/goals, and we don’t have plans to audit our program, success is hard to achieve.
- Local utilities: Two-thirds of facilities work with their local utility companies to develop energy strategies, 81% of which reported a cooperative partnership. Three in 10 manufacturing plants have a peak load sharing program with their utilities, and 96% said it has been an overall success—nearly half of which experienced no problems along the way. This is outstanding and a great stride forward. Kudos to the local utilities for offering the programs and support. While it is simply crazy not to take advantage of these programs, my plead for plant managers is that they see the internal benefits, long term equipment reliability, and increased operational throughput by doing the right things without waiting for local utilities to offer programs to offset the initial investment. Listen, I understand the logic and thinking as there is only so much operational funding to go around. But the bottom line is we need to do what is right and eliminate the items that are not adding value or are simply a bottomless pit. In doing so, we will free up funding to engage in these efforts and when we combine it with rebate programs we will be able to become a profit center rather than a cost center.
- Alternative energy: Of the 52% of facilities that use alternative energy sources, 43% use co-generation, 36% use solar, 31% use wind, and 21% use nuclear. Alternative energy continues to trend positively upward and with the more recent research and advances this trend will continue to climb.
Over the past several years there has been a huge increase in interest and movement around the concept and idea of Smart Manufacturing. Smart Manufacturing is an umbrella which includes multiple consortium efforts to modernize industrial practices with more open connectivity in the entire value chain between smarter equipment, facilities, products, and processes. The Smart Manufacturing Leadership Coalition (SMLC) describes this movement best by stating that “smart manufacturing marries information, technology and human ingenuity to bring about a rapid revolution in the development and application of manufacturing intelligence to every aspect of business.” I completely agree and believe that this idea is fundamentally changing how products are invented, manufactured, shipped and sold. It is improving worker safety and protecting the environment by making zero-emissions, zero-incident manufacturing possible.
Smart Manufacturing, which includes items such as Industrie 4.0, Smart Factory, Digital Manufacturing, IoT and Industrial IoT, will help keep jobs in this country by keeping manufacturers competitive in the global marketplace despite the substantially higher cost of doing business.
Why is this important and how does it relate to Energy Management? Real time management of energy consumption exemplifies the potential benefits, but we continue to face barriers to the implementation of Smart Manufacturing technology. In many industries, energy is frequently the second largest operating cost. However, many companies lack cost effective measurement systems and modeling tools and/or performance and management tools to optimize energy use in individual production operations, much less in real-time across multiple operations, facilities, or an entire supply chain.
As a result, business plans and day-to-day management decisions are being implemented with incomplete knowledge of the relationship between product output, energy usage, and the environmental impact. Case in point, approximately 30% of the energy delivered to U.S. manufacturing sites is lost as wasted heat.
So, where do we go from here? What’s next? Generally speaking, a cost effective infrastructure to integrate real-time manufacturing intelligence and active management above and across the control systems of an entire production operation should be our goal as it represents a huge opportunity.
I have a bunch more to share including some of the projects I’ve been engaged on over the past year along with some exciting advances ARG continues to develop and make available to the marketplace. I’m looking forward to many more posts in 2016 and your feedback as to what intrigues and interests you in regards to the future of Energy Management.