Lean and Energy Management
Lean manufacturing principles have been practiced in the US for decades and for most manufacturing companies, energy management programs are consistent with Lean initiatives. In fact, many energy efficiency improvements can result from lean manufacturing programs without actually focusing on energy savings. Examples include:
- Process improvement projects can deliver a more consistent manufacturing flow and thus reduce the amount of time machines run (reducing overall energy use) at less than full capacity and potentially reduce total run time of the equipment.
- Inventory reductions will reduce required floor space and thus may reduce lighting and HVAC requirements.
The question is why do the energy management improvements achieved by many companies seem to happen as a byproduct of lean manufacturing initiatives instead of applying lean practices directly to energy management.
European companies have taken a more proactive approach to lean energy initiatives than most of their US counterparts and you can argue that the cost of energy (much higher in Europe) is the main reason for this. Most studies show that energy management programs can save 10-20% on energy costs, so I would argue that if a company is a heavy energy user, in the millions of dollars annually, it’s worth focusing on energy management regardless of the per unit cost.
I believe North American companies are beginning to focus on lean energy management initiatives for several reasons:
- Energy management is now about more than just cost savings, although energy costs continue to disproportionately rise and erode bottom lines. Today most companies have sustainability departments which are eager to implement meaningful initiatives. Energy management can be just what they are looking for based on the ability to reduce consumption, cost and thus CO2 emissions.
- The second reason is improved technology and integration options. A true Energy Management Information System should be developed on a platform that allows integration to plant floor systems and meters as well as integration to ERP and various point solutions to provide the ability to fully manage energy as a raw material.
In the EPA’s (Environmental Protection Agency) “ The Lean and Energy Toolkit”, the case is made for looking at energy management in terms of Lean thusly: “By thinking explicitly about unnecessary energy use as another “deadly waste’ Lean implementers can significantly reduce costs and enhance competitiveness, while also achieving environmental performance goals”.
If manufacturing companies want to gain control over their energy consumption and cost they would do well to look toward implementing Lean initiatives specifically targeting energy.