2. Energy Management 1.Commitment2.Training3.ContinuousImprovement4.Communication Figure 2.1 – Energy Management diagram ENERGY SAVINGS A strategic approach to energy management can result in significant energy savings for all types of businesses, including food processors. The management model, diagrammed in Figure 1.1, requires commitment (1) from leadership, training (2), continuous improvement (3) through strategic goals and action plans, and communication (4). This model draws on ideas from several existing programs, including the “Energy Star”1 program developed jointly by the U.S. Department of Energy and the Environmental Protection Agency. The Energy Star Program has recently increased its participation in the industrial sector and has over 450 industrial participants including Anheuser-Busch, Ben and Jerry’s, Cargill, McCain Foods, Sargento Foods, and Weaver Potato Chip Company. DOES EM CONFLICT WITH LEAN, TOTAL QUALITY, SIX SIGMA, ISO, ETC.? Companies that are using management principles like Lean, Total Quality (TQ), Six Sigma, ISO 9000, and Theory of Constraints to achieve world-class performance may wonder whether an Energy Management (EM) program will work with their current initiatives. The answer, in all cases, is a resounding “yes.” EM will complement any initiative, regardless of a company’s place in the process. Whether a company’s just beginning TQ or well into ISO 9000, it will still benefit from a strategic energy management program. Consider Lean. At least five of the seven forms of waste (and, arguably, all seven) usually involve energy waste. Overproduction obviously wastes energy, as do unnecessary transportation, inappropriate processing, and the production of defective 1 For more specific information on the Energy Star for Industry, refer to http://www.energystar.gov/index.cfm?c=business.bus_index. 7products. Waiting can also be a huge waste of energy if the process that is waiting for work-in-process to arrive is a continuous, high consumer of energy such as an oven or a dryer. Clearly, efforts to manage energy are consistent with reducing waste. Similarly, there are parallels between EM and TQ. Both start with a commitment from the top, are data driven, and involve a cultural change for all of the employees in the organization. TQ provides many tools to make an EM program more effective. Six Sigma is also data driven and focuses on improving quality of all processes. Similar to TQ, the tools of Six Sigma can and should be used to enhance the quality of an effective EM program. ISO 9000 and ISO 14000 are also widely used in the food processing industry. These two standards will work with EM to simultaneously build high quality into the EM program and to improve the program as it develops over time. Theory of Constraints is based on the concept that improving a few capacity constraint resources in a production system will have the greatest impact on the bottom line. In energy intensive industries like food processing, it is often the case that energy-intensive equipment, such as ovens or spiral freezers, are bottlenecks. When such equipment is truly a physical constraint, reducing energy consumption per unit by increasing the flow rate at that piece of equipment will significantly improve bottom line performance. In summary, an effective EM program will complement current management efforts and will help improve company performance. 8MAKE THE COMMITMENT 1a.Talk the Talk1b.Assess Performance1c.EstablishStandards1d.Walk the Talk1. Commitment Figure 2.2 – Commitment diagram Dr. W. Edwards Deming, an Iowa native whom many consider to be the founder of the Total Quality (TQ or TQM) movement, refused to work with an organization unless its top leaders were involved in the improvement process. Commitment starts at the top, he believed. So it is with Energy Management—an effective EM program starts with the support and participation of the company’s leaders. So, what constitutes real participation? Talk the Talk (1a in Figure 2.2) Company leaders must be strong advocates for an EM program. In addition to supporting a corporate energy policy, they should do the following: • make EM part of the corporate strategic plan • tie EM to corporate financial goals • tie EM to corporate environmental goals Assess Performance (1b in Figure 2.2) An old maxim says, “If you don’t measure it, you can’t manage it.” The “it” in this case is energy performance. Once Energy Management is truly on the corporate radar screen, an initial measurement and assessment of energy performance is necessary. It should include the following: • understanding energy cost structure • understanding current energy usage and trends 9Understanding the Energy Cost Structure Utility companies generally determine the energy cost structure. Most utilities have multiple rate plans, which can complicate attempts to understand them. Customer service representatives work with businesses to ensure that the most favorable plan has been assigned. An onsite visit from the energy provider is one way to facilitate a discussion on energy needs and cost structures. Chapter 3 of this publication contains detailed information about the various types of charges and cost structures that may be encountered. Understanding Current Usage and Trends Understanding current energy usage and trends goes hand-in-hand with understanding energy cost structures. Usage dictates the choice of rate plan, and the rate plan greatly influences cost savings strategies. As much as feasible, energy usage should be tracked by both: • end use • fuel type End Use An important step in EM is determining the exact sources of energy consumption. The Centre for the Analysis and Dissemination of Demonstrated Energy Technologies (CADDET) recommends establishing Energy Accountable Centers (EAC)2 to facilitate this step of the process. These are production areas that are neither too small nor too large, in which energy consumption can be measured and reported independently. (It may be necessary to install meters.) For example, it may be revealing to monitor the energy consumption of a separate building, a central boiler house, or a specific production line. Many of the details of the end-use patterns can be defined by a technical assessment or energy audit. There are many sources for these audits including private consultants, utility companies, and some government-funded organizations. For