Leveraging Energy for Operational Excellence and Cost Management

In the contemporary industrial environment, organizations face the pressing challenge of enhancing operational efficiency while adeptly managing costs. One critical yet often overlooked area that presents significant opportunities for financial savings is energy management. Companies can substantially reduce expenses, enhance reliability, and promote long-term economic, environmental, and social sustainability by employing advanced energy monitoring and proactive management strategies. This discourse will explore essential energy management components, encompassing electricity, natural gas, and water, among others, underscoring that strategic energy management is not merely an option but an imperative for organizational success. The potential for significant cost savings and financial benefits should be a source of motivation and optimism for all organizations.

Understanding the Cost of Demand Energy Charges

A significant portion of operational expenditures is attributable to energy demand charges. These charges, which are based on the maximum energy draw recorded over a specified period, can significantly impact a company’s financial performance. Facilities that depend on high-capacity machinery, such as refrigeration systems and large motors, must thoroughly understand their electricity consumption patterns to manage these charges effectively.

For instance, one facility reported monthly demand fluctuations of 18 to 24 megawatts. Consequently, even a transient spike in energy requirements could result in a long-term increase in the facility’s demand charges, significantly impacting its financial performance.

The Role of Energy Monitoring Systems

To mitigate these challenges, an energy monitoring program was initiated to track electrical usage and associated demand costs meticulously. This system provided invaluable insights into consumption patterns and promptly identified any anomalies. With access to this data, the management transitioned from a reactive to a proactive stance, facilitating the effective mitigation of demand spikes before incurring elevated fees. This proactive approach to energy management empowers organizations to take control of their operational costs and make informed decisions.

Harvesting the Benefits

The outcomes resulting from the implementation of the energy monitoring system were noteworthy. In the initial year, the organization achieved an 8% reduction in power demand charges, resulting in considerable savings of $750,000. This significant achievement reaffirmed the organization’s commitment to energy management, demonstrating how addressing the demand side of utility expenses can yield immediate financial advantages. These success stories from other companies should inspire confidence in the effectiveness of energy management strategies.

Moreover, this energy-focused strategy extended beyond electrical consumption; similar management principles were applied to natural gas and water usage, broadening resource efficiency within the facility.

Natural Gas and Water Management

Natural gas and water are essential resources in various manufacturing processes, yet they are often underappreciated in terms of potential efficiency and cost-saving opportunities. Through meticulous oversight, effective management of these resources can yield significant financial benefits.

For example, a company operating in the sterilization and retort sector utilized 69 retorts, predominantly reliant on manual labor. Five boilers facilitated product heating, cooking, and cooling. The water used in this operation functioned as a single-pass system, disposing of all heated water down the drain.

A thorough analysis of processes and costs prompted substantial improvements during constructing a new facility. The outdated retorts were replaced with modern steam water spray retorts and automated loading and unloading systems. Furthermore, the heated water system was upgraded to a closed-loop configuration.

These enhancements led to remarkable outcomes, including a 90% reduction in labor costs and a 50% decrease in steam requirements. The overall consequence of these upgrades was considerable cost savings alongside diminished natural gas and water consumption.

Electrical Energy Management through Oversight of Daily Operations and Equipment Functionality

One of the most effective strategies for managing energy costs is the daily oversight of operational functions and equipment performance. For instance, a company employed large box dryers to eliminate moisture from a clay-based product, which consumed significant energy. During burner changes, the drying process exhibited a nominal dead time of two to three hours, leading to inconsistencies that caused various manufacturing challenges.

The company engaged an artificial intelligence model designed to predict the final moisture content of products by analyzing real-time raw material and environmental data. This comprehensive evaluation permitted the identification of variables affecting final moisture content, including raw material characteristics, environmental conditions, and burner operation. The AI model then enabled the application of a feedforward mechanism to regulate burner temperature on the dryer, significantly enhancing energy efficiency.

The results of this initiative were so impactful that the payback period was realized within a matter of days, in stark contrast to typical paybacks that can extend over months or years. Consequently, this strategic decision proved to be highly advantageous for the company, leading to the implementing the system across all box dryers, not only for this specific clay product but also other food products, given the magnitude of the savings achieved.

Energy Savings Warehouse Lighting and Compressed Air

“In response to the significant and rapid increase in energy costs at our California manufacturing facility, we have determined it necessary to explore strategies for reducing our energy expenditures at this location. As a corporate officer responsible for asset management, I was surprised to discover the potential savings achievable through a comprehensive examination of powered assets, enhanced management of operational equipment, promoting energy-conscious behavior among employees, and collaboration with our utility providers. The identified savings were substantial, prompting us to implement a program that assesses energy usage across all our facilities”

— Former Chief Facilities Officer, mid-size food manufacturer.

This initiative has yielded very positive outcomes, as illustrated by the examples provided below.

An assessment was conducted to evaluate the lighting conditions within the office, warehouse, and operational areas and identify potential energy savings and the feasibility of upgrading the lighting systems. This evaluation replaced obsolete lighting fixtures with LED alternatives throughout the facility. An analysis was undertaken in the operational and warehouse sectors to assess the benefits of implementing zone and room occupancy sensors. Furthermore, the introduction of skylights, which provided significant natural illumination, warranted the consideration of a lumen brightness sensor designed to deactivate electric lighting when adequate daylight was available.

The outcome of this initiative involved the comprehensive replacement of all existing lighting with LED fixtures. A monitoring system was established to oversee zone occupancy and lumen levels and to conduct periodic reviews, ensuring that lighting is deactivated on weekends when the facility remains unoccupied. The resultant cost savings were substantial, achieving a return on investment in less than one year.

A separate analysis scrutinized the management of compressed air within a manufacturing environment. The compressed air system consumed over 500 horsepower, contributing significantly to increasing energy costs. An investigation was initiated to examine the effective use of compressed air and the associated equipment’s overall performance.

This evaluation uncovered numerous air leaks within the operational processes. It was determined that many air compressors operated at excessive levels and were outdated, lacking the advanced technology necessary for improved energy efficiency.

Consequently, new equipment was installed, incorporating variable-speed, demand-based compressors that utilize air compression only as necessary. Additionally, a monitoring system was enacted to proactively manage compressor operations, while maintenance efforts were scheduled to address the identified compressed air leaks systematically. This restructuring resulted in a nearly 50% reduction in compressed air demand, leading to a 60% decrease in energy expenditures related to the air compressors, facilitated by implementing a compressor monitoring system and demand-based technology. The payback period for this investment was both rapid and noteworthy.

Conclusion: A Call to Action

As industry experts, we acknowledge the inherent challenges associated with the intricacies of energy management. Nevertheless, the financial repercussions of overlooking this critical domain can be considerable. By investing in energy monitoring and management systems and maintaining rigorous daily oversight of energy consumption, organizations can enhance operational efficiency while aligning with modern environmental standards. This approach will yield significant cost savings that will bolster profitability and improve competitive product offerings.

In the spirit of continuous improvement, we encourage organizations within the manufacturing sector to share their experiences and strategies. Collaborative dialogue will foster a culture focused on resource efficiency and innovation.

The pursuit of operational excellence within the manufacturing industry necessitates the active management of energy consumption. Let us collectively direct our efforts toward energy management and strive to establish an efficient and sustainable future.