Manufacturers must do more to combat rising energy costs

A new report ‘The balance of power’ says that it is essential that the manufacturing industry gains a tighter control on energy consumption and expenditure. David Raistrick, the newly appointed UK manufacturing industry leader at the business advisory firm Deloitte, which published the report, said: “Energy cost inflation is not a cyclical trend requiring a temporary response. For some time now manufacturers have been experiencing inflated energy costs, and higher prices are here to stay. Structural reform is necessary, involving a step-change in thinking, process and actions with regard to energy usage.” The report sets out a number of measures UK manufacturers should undertake in order to tackle the issue, such as: Financial discipline (with energy viewed as a strategic issue - manufacturers should apply lean-thinking techniques and treat energy as a scarce resource). Energy management (producing more with less - manufacturers need to focus as much on how energy is consumed as well as on price). Sustainability (such as retrofitting existing plants and facilities to be more energy efficient - investment in high-efficiency systems should pay dividends by reducing overall bills). An integrated approach ( such as the use of recycled waste-heat and high-efficiency motors). Engaging the workforce (empowering staff to be energy efficient). Julian Denee, director in Deloitte's energy practice, said: “While new sources of energy supply, such as the revival of the UK’s nuclear programme, new LNG terminals and gas pipelines and the building of a renewable energy infrastructure, will improve the reliability of energy supplies, they are unlikely to result in cheaper energy for manufacturers in the short term. High energy prices will continue to put pressure on manufacturer margins for some time. And if UK manufacturers are to be truly competitive on a world stage, running a tight ship on energy consumption and expenditure will be imperative.” Works Management readers wanting to know more about Energy for Manufacturing should look ot for the special report on the subject in the December issue. The Deloitte report can be found at www.deloitte.co.uk/manufacturing.