The industrial and transport sector have been the sectors that took the hardest hit of the economic downturn since 2008. The downfall in profitability has urged man executives to take a close look at their energy consumption.
The early release overview of the 2010 Annual Energy Outlook* revealed that more than one-third of delivered energy consumption in the United States occurs in the industrial sector. The same outlook also highlighted the fact that the current economic growth combined with the increased use of coal in the electric power sector will contribute to expected increases in CO2 emissions of 2.1% and 1.1% in 2010 and 2011, respectively.
Such developments put pressure on boards to take an holistic look at their consumptions rates. Aberdeen research proved that organizations with an pro active energy management program were able to improve their profitability more then comparable organizations without such programs.
Sustainable goals become each year more important to organizations. Not only from climatchange considerations but also economic based arguments. The success of energy savings programs in industrial environments is not that strange as it a major part of the total landed cost.
“Our plants in the United States were able to save nearly $5 million in energy savings last year. The interesting aspect is that this savings has been realized without any capital investments across the plants. At year-end 2007, we also made inroads toward reducing our CO2 emissions and achieved a reduction of over 16% per ton of product since the effort began in 1990. In 2008, five additional plants qualified for the top 75% for energy efficiency.”~ Solomon Baumgartner, Manager of Energy and Strategy Support, Holcim –
Create and improve the visibility of energy consumption throughout the organisation or even the supply chain is the first step towards signicant energy savings. Each process is carefully monitored and optimised in order to reduce the energy consumption. Note that specific production steps may bring only a limited savings. It is about the total supply chain efficiency that can be realized. Invest and train staff to contiously improve the energy efficiency of production. Awareness of energy consumption, for instance as part of Lean Programs, is fundamental.
“We have extensive plans and some of them are laid out in our first sustainability report. In general, we have been reporting emissions from our main US factory for years and are always trying to reduce our greenhouse gas emissions as well as to ensure the safety of the environment through the use of our products. Our products are used in animal agriculture and, when used properly, they reduce the environmental load generated by the animal livestock industry. We are a global company and make an effort to minimize transportation miles by combining loads and optimizing delivery routes.- Board-level support for the ROI is required for major capital initiatives.” – Director, Mid-sized North American Agricultural Input Provider
It proved that bringing data intelligence into the organization is a major driver to realize energy cost reductions. Create visibility is the first step in the process, but understanding and developing the right strategy to improve results is key. Focused dashboards and analytic skills at people can quickly lift up the results. There are a lot of different approaches companies are taking to manage energy and carbon efficiently across different industrial plants. But each top performer has in common the strong executive level focus on energy savings. This has enabled the top performers to reduce emissions by 12%, energy consumption by 13%, and surpass energy and operating margin goals by 17% and 12%, respectively.
Carbon and Energy Management in Manufacturing Operations August 2010. Mehul Shah, Matthew Littlefield – Aberdeen Research