Pumps & Systems, March 2008
Changing traditional industry ways of thinking can help usher in the plant of the future.
In only a couple of years, the focus on energy efficiency has gone from blurred to steely-eyed. Green business practice is now a necessity, and organizations must find the best way to transition to this new reality. There are many opinions and approaches on "how we get there," and each one will have its own merits. A journey of a thousand miles starts with a single step, and making the right steps in the beginning will hasten the achievement of energy efficient goals.
It is always prudent to look first at the important elements in an organization and how they contribute to the desired outcomes. Certainly, change starts with leadership from upper management down to middle management and the rank-and-file. Someone in the organization has to be the champion for the cause. Making changes never comes easy; it requires focused effort over time. It can't be the program du jour; it has to be embedded in the organization's thinking and action.
Energy Efficiency Thinking
The principal activity of industry is production for the purpose of providing shareholder value. To continuously increase value, managers must seek new ways to reduce the cost of the elements required to support production. Although the cost of energy is closely managed, energy use is not and industry is still relatively energy inefficient. There are multiple reasons including that managers often feel they must sacrifice energy efficiency for production reliability, which is a core value. For most facilities, capital budgets are managed based on equipment first cost, without consideration of the long-term energy costs. Furthermore, unless an industrial facility actively manages energy use using a documented process, significant opportunities for improving energy efficiency are often overlooked.
In the past, this approach has led to temporary initiatives. As such, energy projects are lumped in with other capital projects each year. Once the short-term energy reduction goal is met, the activity is not duplicated in subsequent years. Today, energy demand reduction needs to be part of the core business strategy to be successful in achieving long-term sustainable improvements.
You can bet that the management team for an industrial plant has a full time focus and dedicated resources on fuel supply. Price is monitored continuously, and the plant fuel mix is often varied to ensure lowest overall energy cost. Conversely, only a small percentage of companies dedicate these resources and attention to energy demand reduction. A good demand reduction plan can drive a significant amount of energy cost out of the budget while providing other non-energy benefits such as reliability improvements and raw material savings. Again, first cost concerns trump life cycle cost reductions.
Senior managers need to interact and focus on energy. Review energy usage and costs data, and develop more sophisticated methods to collect future data on various aspects of the business. Use the data collected to develop an energy management plan and prioritize the important of the specific elements in the plan. The systematic collection of data can take on many forms.
One U.S. based chemical company used the six sigma quality process to collect data on its pump population in order to identify the maintenance cost associated with the top ten "bad actor" in each of four plant segments. The historical data collected on these 40 pumps covered 80 months and revealed a total of 727 work orders with an associated cost of $6,020,000-i.e., an average of 109 work orders each year with a total annual cost of $903,000, not including excess energy costs.
With this data in hand, the company drilled deeper into the numbers to better understand the root causes of these costs. The maintenance costs were broken down by area and pump model, and then the underlying reason for the failure was identified. Based on the analysis, a suggested course of action to rectify the situation was recommended.
For one of the most frequent failure modes-seal damage due to dry running-the plant put together a cross-functional team to identify the best practices through preventive and predictive maintenance techniques to improve MTBR (mean time between repairs) and reduce costs. Priorities were set and best practices were determined for replication across the plant. Training and follow-up were implemented to ensure adoption, and measurement techniques to track MRBR and costs were put into place. With these changes, significant improvement followed.
Organizations and Global Initiatives
A growing chorus of suppliers, electric utilities and non-governmental organizations are offering assistance with pump system life cycle cost reduction. For instance, Pump Systems Matter is sponsored by multiple organizations with services and technologies to help effect changes in an organization.
In addition, industrial efficiency is growing around the world. According to the Department of Energy Office of Industrial Technology, there are several global initiatives underway:
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United Nations Industrial Development Organization is promoting systems energy efficiency and energy management standards for both developed and developing nations
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International Organization for Standardization (ISO) is initiating a broad portfolio of
initiatives to promote energy efficiency -
China initiated a plan to reduce energy use 20 percent per unit of GDP over 2005 levels by 2010
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Through the Asia Pacific Partnership, the United States, Australia, Korea, Japan, China and India are promoting greater industrial energy efficiency
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Energy efficiency is now a major focus of G-8 meetings
Envinta™, a well known consulting firm, helps organizations identify the management processes required to ensure long-term results. Their One-2-Five® Energy diagnostic identifies ten key areas of importance for driving sustainable improvement, including:
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Leadership-demonstrating commitment from the senior management team
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Understanding-understanding the opportunities that exist within your operation for energy savings
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Planning-developing plans for improvement, backed up by key performance indicators to track progress
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People-making the people that utilize energy accountable for their usage, as well as investing in people (training) and resource availability
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Financial Management-reviewing capital and operating budgets in relation to energy management
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Supply Management-assessing how energy is purchased in a competitive market, as well as reviewing mechanisms employed to ensure a high level of quality and reliability
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Operations and Maintenance-ensuring energy management issues are incorporated into operating and maintenance procedures
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Plant and Equipment-establishing guidelines and evaluations of new designs and innovations to enable energy efficiency to be optimized
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Monitoring and Reporting-ensuring the right energy flows are metered and usable reports developed to track and proactively manage energy
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Achievement-assessing how the operations are performing against established targets and reviewing projects to ensure the right outcomes are achieved
Conclusion
To handle the growing focus on energy efficiency, a consistent organizational structure is required to effectively manage energy use. Knowledge resides with individuals who have been trained on energy efficiency measures-it is not institutionalized. When trained individuals leave or transfer, they take this knowledge with them. Additionally, processes change over time and process inefficiencies can reoccur.
The growing partnership between industry and government is important to accelerate energy efficiency. The government is increasingly offering tools, training, technologies and standards for all types of manufacturing plants. Facility recognition and incentives for effective industrial energy management and energy efficient technology are also under development.
Travelling on the path to the plant of the future, everyone-from alliances to facilities to individuals-needs to be in step.