Investing in waste reduction through lean manufacturing and through energy saving is a fantastic way to lower the costs of manufacturing and drive up profit.
Investing into energy now makes up 30-90% of maintenance budgets.
Operational Effectiveness still helps to meet business objectives, however lean manufacturing methods must be utilised to Production Effectiveness and monitoring the use of Energy.
EFF the manufacturers’ advisory organisation produced survey results that showed managing energy spend is a focus at board level for many companies, especially in the goal of increasing profitability.
This blog looks at why being more energy efficient is key to calculating production effectiveness, which is the core measure of the profitability of a business.
The volatility of energy markets.
Over 30% of the world’s energy consumption comes from the manufacturing sector.
For the government to meet its target of reducing greenhouse gas emissions in 2050 by 80% manufactures need to invest in energy saving measures.
Manufacturers are being encouraged to reduce energy by such as extent that the Government will pay manufacturers for every kilo-watt hour they reduce.
Article 8 of the European Unions Energy Efficency Directive has introduced ESOS, which is the Energy Saving Opportunity Scheme. ESOS requires that larger manufacturers have frequent energy audits, from independent sources. The goal of such as audit is to help companies identify opportunities to reduce energy waste and increase the profitability of their operation.
Falling energy production
Many manufactures in the UK are conscious of falling energy production, with an almost 11% decline in production in 2012, when compared with the previous year.
With the decline in fossil fuels happening at a rate that supersedes sustainable energy sources to replace it and with the UK being no closer to being able to utilise Nuclear Power, the demand for fossil fuels is much higher than supply.
With demand being higher than supply, the economic situation means that prices have risen. So for both financial and monetary reasons, manufactures must place energy efficiency high on their priority, in order to reduce costs and increase their profitability.
Managing Energy Consumption.
Many manufacturing companies have been quick to invest in the implementation of energy saving programs.
The instillation of brand new energy-efficient equipment, or investing in the maintenance of older machines to ensure they operate effectively and reduce energy wastage
The Manufacturer publication recently published a list of low cost methods to reduce energy waste too.
By investing in a robust TPM (Total Productive Maintenance) strategy working alongside a CMMS solution will address many of the issues highlighted by the Manufacturer publication’s report.
The Carbon Trust has stated that although best practices in energy efficiency measures have been implemented on a wide scale, too few internal systems from too few manufactures have been implemented to improve manufacturing processes.
Energy consumption tends to be at its highest for most companies during its production process. To identify where energy consumption can be reduced requires companies to measure energy flows and energy intensity.
Hugh savings in capital invested can be shown by running a manufacturing plant more efficiently.
Even a 1% improvement in Overall Equipment Effectiveness (OEE) has shown significant savings.
|Overall Equipment Effectiveness score.
||Improvement of 1%
||Saved 3 hours
|Units produced / hour
||Improvement in quality
|Cost of Labour
||Savings in running hours 292 (£)
|Cost of Energy
||Saving 1,168 (£)
|Saving per week
Due to advances in energy management technology it’s easier than ever before for manufactures to gather data and identify opportunities to improve Production Effectiveness.
In doing so manufactures can decrease their energy bills, reducing costs and making their manufacturing operations much more profitable.
As the focus on increasing profitability by reducing costs is a matter of board concern its crucial to work with experts in the field of lean manufacturing solutions.
Someone like our partners Idhammar Systems that understand monitoring energy, CMMS, OEE and have expert technology available to help manufactures reduce costs and increase profitability.
Check them out at the following link: