Manufacturing accounts for almost a fifth of the UK’s energy demand, according to ONS statistics from 2017. For manufacturers themselves, energy is the second-highest cost after manpower. It stands to reason, then, that whatever industry can save on its energy usage will help not just the planet but also the bottom line.
There’s a real incentive to do so, as well. Research by energy consultancy Inenco estimates that UK companies can expect to have paid an extra £7.4 billion in energy costs by 2019 if they don’t implement energy management systems. Manufacturers specifically will see their bills increase by more than half, or an average of over £950,000, from 2017 to 2019.
It’s for this reason, says John Walsh, senior strategic account manager at E.ON, that energy is becoming ever more important for manufacturers today.
“In a world where energy prices are often negotiated to the nth degree, the main focus for consumers – including industry – is how to use less of it,” he says. “In recent years, we’ve seen the energy discussion moving from the plant room to the boardroom. Ten years ago, a conversation about energy usage would have been with an engineer; today, it tends to be with CFOs and managing directors.”
A major issue facing manufacturing leaders, however, is a lack of the right skill-set to identify energy-saving initiatives. That’s the argument of Professor Steve Evans, director of research in industrial sustainability at the University of Cambridge. “What part of the average manufacturing leader’s training has told them how good their site is at using energy?” he asks. “On a walk around the factory, they will be able to spot if staff aren’t doing their jobs, or if a machine isn’t being used properly. They don’t have the same skills for energy.”
This, continues Evans, has bred a culture of ignorance in factories over the amount of control manufacturers can have over their energy consumption. “The cost of energy has always been seen as a headache, but one that’s out of our control,” he says. “We pay the bills and get frustrated at how much they have risen, but always see it as the problem of the government or the energy companies, and not as something we can influence.”
In reality, however, if manufacturers can get a grasp of their energy consumption, it can make significant savings to the bottom line – not least because, as the Inenco research indicates, energy costs are set to rise. The research also found that continuing along the same path over introducing a range of measures to manage energy consumption would cost over half a million pounds (£548,057).
“Energy price rises are all happening, of course, against a backdrop of other financial challenges – business rates are rising, the national living wage has increased, a new Apprenticeship Levy has been introduced, and workplace pensions will soon apply to all businesses,” says David Oliver, a consultant at Inenco. “With these cost rises, which look set to continue into the future, organisations will understandably be looking to mitigate the impact on their bottom line. Our research demonstrates that organisations cannot afford to stand still and carry on as before.”
Burnaston: using brains, not brawn
One site that sets itself apart when it comes to energy is Toyota Motor Manufacturing (UK) Ltd. (TMUK) in Burnaston, near Derby. One of 69 Toyota sites worldwide, and two in the UK (the other being the engine plant at Deeside in Wales), Burnaston is responsible for the global manufacture of the company’s Avensis model and European manufacturing of the Auris.
Burnaston’s other claim to fame is its fabled focus on energy. It is the first UK car plant to reach the ISO 14001 certification for environmental management and is home to a large scale solar array – consisting of 16,800 panels, which produces 4.3 million kilowatt hours of energy per year. When it was commissioned in 2011, the array was the largest of its kind in the UK.
As a company, Toyota has set itself a bold environmental target. Called Toyota Environmental Challenge 2050 (https://bit.ly/1NFZClL), it lays out a series of six ambitions for each of its plants across the globe by the year 2050. Amongst these is a drive for zero CO2 emissions – not just from vehicles, but from the manufacturing plant.
At first glance, this may seem impossible, admits John Malpas (image, below), Burnaston’s environment manager, but a concerted effort is helping the site achieve it. The secret, he says, is a site-wide focus on energy.
“Energy is on the minds of everyone on-site,” he explains. “Certainly amongst senior management, it’s one of the core focuses. When the company sets out its hoshin at the start of the year, it’s always listed as a target.”
Toyota operates a two-pronged approach to energy savings. The first of these are step changes, which require capital investment, while the second, incremental kaizens, come largely from the shopfloor and will cost the site little to no money. “A lot of these ‘smaller’ projects have made the biggest difference,” says Malpas. “We want to encourage people to think with their brains, not always with money.”
This requires a highly analytical approach, explains Gary Cowley, a senior engineer at the plant. “The size of the energy demand is directly related to the size of the investment needed to improve it,” he says. “We therefore want to be able to make everything as efficient as possible through kaizen before making any investment. If we can squeeze processes down from all directions we can get to an almost ideal situation. Then, and only then, can we look at a step change – we can be sure that we’re getting the right investment and only focusing on what we need.
One example of this way of thinking in action is Burnaston’s aspiration for a ‘“steamless plant”. Since the plant opened in 1992, a series of incremental kaizen approaches had ensured that the processes in the plant are as efficient as possible. However, the efficiency of the steam supply network couldn’t be improved to the same extent, says Cowley. “We had quite significant transmission issues,” he explains. “ By the time the steam got to a process, we could lose as much as a third of it through transmission losses. That left us with high steam costs, low efficiency and an aging pipe network.”
The solution was a radical one: eliminate the need for steam altogether. This would require time, and some lateral thinking. Staff at Burnaston benchmarked the site’s performance with other Toyota plants around the world, focusing specifically on the capabilities of the equipment. The biggest benefits came in the paint shop, continues Cowley.
“Before the change, we used steam to condition the air to make it perfect for spraying the cars. Over a three-year period we removed the need for steam in those areas and now use spray humidifiers, reducing the demand for steam before a step change to spray humidifiers.”
Burnaston’s approach is paying dividends. In 2013, the plant was producing 80,000 tonnes of CO2 per year; today that is down to 58,000 tonnes – close to the planned target for 2020. By 2025, Malpas is confident that that figure will be down to 37,000 tonnes – a drop of over half in just 12 years. At this rate, the ambitious Environment Challenge 2050 target should be well within reach.
A new way of thinking
Cambridge’s Prof. Evans says that Toyota’s approach to energy savings can teach a lot to other manufacturers, many of which will be complacent on the amount of energy they actually use. “Analyse your top two energy-intensive processes on-site,” he says. “Chances are, you’ll find the amount of energy you use on one day will vary massively to the next. This phenomena is called performance variation.
“People assume that because their processes are in control in terms of quality and time – they make a product every X seconds, and the quality is always within Y% - that the energy required to do that will be the same every time as well. In reality, it swings wildly. For instance, at night, energy consumption is higher than on day shifts. This isn’t because it’s colder and the plant needs heating, it’s because there’s no management around to check on energy behaviours.”
Even manufacturers that have made steps towards efficiency have seen their bills rise, says E.ON’s Walsh. “Traditional energy-saving measures, like turning off unused machinery, remain popular, which is great, but manufacturers are still seeing their energy bills rising thanks to the impact of government taxes and tariffs.”
It’s therefore time to get smarter, he says. “Energy shouldn’t be seen as a necessary evil. Become more energy efficient by becoming
more energy savvy. Work in partnership with your energy; don’t be scared of it.”
BOX OUT: Energy efficiency top tips
● Don’t invest for the sake of it: “Don’t go putting solar panels on the roof or a wind turbine in the car park unless you can pay for them with the money you have already saved from your
energy bill,” says Prof. Evans from Cambridge University (above). “The most important thing is to understand your energy usage and identify areas where you can make small improvements.”
● Embrace the concept of yokoten: Visit other sites, like Burnaston, which are leading the way with energy savings.
“The biggest investment is in learning,” says Evans. “That can
be from other factories, organisations or academia.” Toyota
call this yokoten – the sharing of successful kaizen ideas.
● Treat energy seriously: Energy is likely to be your site’s second-biggest cost, so should be high on the agenda of today’s manufacturing leaders. “Any successful, modern manufacturing company must be on top of their energy performance, from counting carbon right through to pound notes,” says E.ON’s John Walsh.
● Just like any other waste: Manufacturing is very good at eliminating waste and maximising efficiencies, and energy is no different. “Treated properly, there is no difference between cutting your energy consumption and the concepts of lean manufacturing,” says Evans.
● Use technology to monitor consumption: Proper metering and data collection will help you spot trends and areas for improvement. “Companies need to become smarter about energy usage in order to understand it better,” says Walsh.
“It’s important to use smart solutions that can have a direct impact on your bottom line.”
BOX OUT: Water deregulation: a missed opportunity for manufacturers?
Research by SES Business Water and YouGov has found that English SME manufacturers are not as energy-savvy as they perceive themselves to be (https://bit.ly/2smo18B). Despite 91% of the companies surveyed saying they were ‘cost-conscious’ when it comes to choosing suppliers, only 51% had changed their energy supplier in the past 12 months. When it came to water, none of the 757 companies surveyed (from a range of industries) had changed water suppliers, despite the fact that, since April 2017, businesses in England no longer have to buy their water from their regional water company. “Small business’ inactivity in switching suppliers could mean they are missing out on important benefits,” says Max Langford, SES Business Water’s commercial director. “For water, these include cost, efficiency and resource savings. It’s clear that more must be done to raise awareness of the open water market amongst SMEs.”