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The Lean and Energy Toolkit

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Chapter 3: Energy Assessment Strategies

On This Page

• A. Walk Through Processes to Observe Energy Use
• B. Energy Audits and Measuring Energy Use
  • 1. Energy Audits
  • 2. Measuring Energy Use of Individual Processes
• C. Examine Energy Use with Value Stream Mapping
  • Adding Energy Analysis to Value Stream Mapping
  • Identifying Opportunities
• D. Use Six Sigma to Find and Eliminate Energy Waste and Variation
• E. Eliminate Energy Wastes in Kaizen Events

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This chapter describes strategies and techniques for understanding how energy is used at your facility and identifying opportunities to reduce energy use and costs. This chapter discusses the following strategies:

1. Walk Through Processes to Observe Energy Use
2. Energy Audits and Measuring Energy Use
3. Examine Energy Use with Value Stream Mapping
4. Use Six Sigma to Find and Eliminate Energy Waste and Variation
5. Eliminate Energy Wastes in Kaizen Events

A. Walk Through Processes to Observe Energy Use

Walking through and observing processes as they actually run at a facility can be a simple, but effective way to identify waste and find improvement opportunities. During the walk through, look for signs of unnecessary or inefficient energy use. Ask questions, such as the Questions for Understanding Energy Use below (Box 6), to learn more about potential opportunities to reduce energy use.

Walk throughs are a key step in value stream mapping and other Lean activities. Companies such as Toyota and GE frequently conduct “Energy Treasure Hunts” to find energy savings (see Box 7). An Energy Treasure Hunt is a three-day plant assessment event in which a cross-functional team of employees identifies opportunities to reduce unnecessary energy use. Project teams then implement the ideas that are likely to yield the greatest benefits through kaizen events.

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B. Energy Audits and Measuring Energy Use

While a walk through is an excellent way to identify and fix energy wastes that are readily apparent, you may be leaving energy savings on the table unless you examine energy use more closely. Two strategies for learning more include:

1. Conduct an energy audit to understand how energy is used—and possibly wasted—across your facility.
2. Measure the energy use of individual production and support processes.

1. Energy Audits

An energy audit, sometimes referred to as an energy assessment, is a study of the energy end uses and performance of a facility. Energy audits can range in complexity and level of detail, from a simple audit involving a facility walk through and review of utility bills, to a comprehensive analysis of historical energy use and energy-efficiency investment options. Energy audits allow managers to compare a plant’s energy use to industry benchmarks and identify specific energy savings opportunities.

In many locations, local utilities or non-profit manufacturing assistance organizations provide energy audit services for free or at reduced cost. There also are free tools available to help companies conduct energy audits. Appendix A describes service providers, resources, and tools for energy assessments.

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2. Measuring Energy Use of Individual Processes

You may not really know which process or process step uses the most energy—and therefore where the greatest energy savings might be— until you actually measure the energy use. During the analysis of the “current state” of a value stream or an individual process, collect data on how much energy each operation uses. Typical energy metrics include:

• Common Energy Units (Box 9)

  Energy Units / Energy Equivalent

  • 1 kilowatt-hour / 3,412 Btu
  • 1 Therm / 100,000 Btu
  • 1 cubic foot natural gas / 1,000 Btu
  • 1 horsepower / 746 Watts
  Kilowatt-hours (for electricity)
• Therms (for natural gas)
• British thermal units (Btu)
• Energy intensity (energy use per production unit)
• Energy costs (dollar amount spent on energy)

There are several techniques for measuring or estimating the energy used by production processes.

• Metering: One technique is to install meters to track the energy use of a process. For example, flow meters can be installed to track natural gas inputs to ovens used to provide process heat and electric meters can be used to monitor electricity use in a particular process area. Metering enables a facility to track energy use over short and longer time periods.
• Estimating: Another technique is to estimate energy use based on information provided by equipment manufacturers. Calculate energy use for specific equipment or process activities using equipment energy specifications (often obtained from equipment manuals or vendors) coupled with equipment operation data (e.g., number of hours the equipment is in different modes of operation). While such calculations are often not precise, they can indicate the order of magnitude of energy use.
• Energy Studies: Energy specialists can also help conduct detailed analyses of energy use and costs at both the facility level and the process level. This type of analysis can look not only at where and how much energy is used, but also opportunities to reduce energy costs through load shifting (shifting electricity use to off-peak times), changing the mix of energy sources, and other strategies.

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C. Examine Energy Use with Value Stream Mapping

One effective way to understand energy use at your facility is to integrate energy analysis into the Lean value stream mapping process. Value stream mapping is a method of creating a visual representation of the information and material flows involved in creating a product or delivering a service to a customer. Lean practitioners use value stream maps to understand where the largest sources of waste are in the value stream and to prioritize future process-improvement efforts.

Adding Energy Analysis to Value Stream Mapping

Your value stream mapping team can examine the energy use of processes in a value stream at the same time your team examines other data about the “current state,” including Lean metrics such as cycle time (C/T), changeover time (C/O), and uptime. Use the techniques described above for observing and measuring energy use to collect energy data for processes in the value stream, or consider asking internal or outside experts to assist with the energy analysis. This may involve collecting baseline data in advance of a value stream mapping event.

The key is to have both Lean and energy use data available when your value stream mapping team brainstorms and prioritizes improvement ideas for the “future state” of the value stream. This will leverage the whole systems thinking of Lean to maximize operational gains and energy savings. Figure 4 shows a value stream map from a value and energy stream mapping project.

Example Value Stream Map (Figure 4)
(click to enlarge in a new window)

Source: Packaging Plus LLC and California Manufacturing Technology Consulting

Another opportunity is to incorporate energy use data directly into current and future state value stream maps. Consider adding data on the average energy use or energy intensity of each process to the process data boxes in value stream maps, along with other regularly collected metrics. This will make it easier to spot key energy savings opportunities in the context of other improvement opportunities. Figure 5 shows an example process data box with energy use data (in kilowatt-hours per pound of output).

Combining energy use analysis and value stream mapping is a proven technique for cutting energy costs and improving productivity. For example, the California Manufacturing Technology Consulting, a Manufacturing Extension Partnership center in California, has partnered with a local utility and an energy efficiency firm, Alternative Energy Systems Consulting, Inc., to conduct “Value and Energy Stream Mapping” projects with facilities (see Box 10 for examples).

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Identifying Opportunities

Incorporating energy analysis into value stream mapping allows your team to consider energy reduction opportunities alongside other process improvement opportunities. You may find ways to reduce energy use that will also provide other production benefits, such as fewer defects from more reliable equipment. Here are a few things to consider:

• Key Questions: When you look at energy uses in the context of the entire value stream, ask two fundamental questions:
  • Is this energy end use needed?
  • Is there a way to deliver this end use more efficiently?
• Eliminating Energy End Uses: Eliminating entire energy end uses can result in substantial cost savings, improve production flow, and simplify processes. For example, when planning for a Lean and environment kaizen event, a Lasco Bathware manufacturing plant found it could eliminate a shrink-wrap heating oven. This resulted in an annual savings of $99,290 and 12.6 million cubic feet of natural gas.
• Support Processes: Support processes may consume significant amounts of energy. Even brief consideration of support processes in value stream mapping enables a Lean team to think more broadly when identifying wastes and improvement opportunities. For example, particular processes may produce air emissions that go to a pollution control device (e.g., a natural gas-fired thermal oxidizer) or effluent that is sent to a wastewater treatment plant. Other support processes include lighting, heating, and cooling.

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D. Use Six Sigma to Find and Eliminate Energy Waste and Variation

Six Sigma refers to a collection of statistical analysis and process improvement tools designed to identify and eliminate variation (or defects) in a process. Although specific training is needed before using Six Sigma, many companies have added these methods to their continuous improvement toolbox, developing an improvement approach often known as Lean Six Sigma. Six Sigma analytical tools can be particularly useful for identifying energy waste in situations where there is a lot of energy use and when process-level data are available. Statistical analysis and process control methods can help isolate the root causes of energy use fluctuations and identify factors that result in energy waste.

Lean Six Sigma helped the 3M Company reduce energy use by 27 percent (when indexed to net sales) from 2000 to 2005. 3M has set a corporate goal for further energy use reductions of 20 percent for the period from 2005 to 2010, and the company views Lean Six Sigma as critical to realizing this performance goal (4).

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E. Conduct Energy Kaizen Events

After identifying the production areas that consume large amounts of energy, your facility can further analyze and eliminate wasteful energy practices through kaizen events, or rapid process improvement events. In kaizen events, which typically last 3-5 days, a cross-functional team of employees identifies and implements process changes to reduce wastes such as idle time, inventory, and defects. Kaizen events create important windows of opportunity to consider ways to eliminate energy waste. Revisit the results of energy audits or assessments to familiarize your Lean team with information that can be used to identify energy wastes during a kaizen event. Asking key questions during a kaizen event, such as those in Box 6, can also help to ensure that energy-reduction opportunities are identified as part of Lean implementation. Consider conducting energy-focused kaizen events at your facility to:

• Understand how energy is used in a particular process
• Brainstorm opportunities to reduce energy use in that process
• Implement those ideas in a short time frame

Energy kaizen events combine a detailed energy-use assessment with immediate implementation of energy-reduction opportunities. From 1999 to 2005, Eastman Kodak used energy kaizen events to generate a total of $14 million in annual energy savings. Since then, energy kaizen events, along with other improvement efforts, have enabled Eastman Kodak to shut down one of the company’s two powerhouses in Rochester, New York. This resulted in over $20 million in additional annual savings (5). Table 4 shows examples of energy savings opportunities identified during a kaizen event.

Table 4: Example Actions Identified at a Kaizen Event (6)

Energy Waste Identified	Counter Measure	Savings Opportunity
Main supply fans (air conditioners) run 24 hours/day	Change non-critical systems run time schedule	$47,000
Fan motors are over-sized	Lower horsepower on motors	$27,000
Some exhaust fans run 24 hours/day	Change exhaust fans to 2 speed and run at slow speed during off hours	$18,000
Heat recovery unit from exhaust fans run faster than needed	Bypass tilt coils and slow down fans	$24,000
Room lights are always on and emit more light than needed	Install motion sensors to control lights and reduce number of lamps	$25,000
Water recirculation pumps are running but are not required	Shut down and remove	$20,000
Total Opportunity		$161,000

The next chapter outlines practical strategies for reducing energy use through Lean events as well as day-to-day maintenance and operations activities.

Footnotes

1. California Manufacturing Technology Consulting (CMTC). “Automotive Case Study: Mission Rubber.” www.cmtc.com/success_stories/mission_rubber_Auto.html, accessed 23 Aug. 2007.

2. CMTC. “Industrial Case Study: Packaging Plus LLC.” www.cmtc.com/success_stories/ind_ppllc.html, accessed 13 Nov. 2006.

3. CMTC. “Trojan Battery Company Case Study.” Case Study No. 05-80760.

4. See U.S. EPA, “3M: Lean Six Sigma and Sustainability” case study, www.epa.gov/lean/studies/3m.htm.

5. Discussion with James Breeze, Energy Engineer/Project Leader, Worldwide Energy Office, Eastman Kodak Company, September 2007.

6. Adapted from a presentation by Eastman Kodak Company to the Business Roundtable Climate Resolve Teleconference, April 2004.
 

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