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Lean & Energy Toolkit: Chapter 4

Energy and Greenhouse Gas Assessment Strategies

Observe Energy Use on the Shop Floor

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 New Toolopportunities. 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 7), to learn more about potential opportunities to reduce energy use. These are just some of the potential energy opportunities; see Appendix A for additional assessment tools and resources.

Questions for Understanding Energy Use (Box 7)

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 8). 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.

Energy Treasure Hunts at General Electric (Box 8)

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Energy Audits and Measuring Energy Use

While a walk-through is an excellent way to identify and fix energy wastes that are clearly visible, you may still want to examine energy use more closely. Two strategies for learning more include:

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

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Energy Audits

Key TermAn 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 saving opportunities. Table 4 below provides examples of the top ten reduction recommendations based on data collected by the U.S. Department of Energy’s Industrial Technologies Program. 

Top Ten Energy Reduction Recommendations (Table 2)In many locations, local utilities or non-profit manufacturing assistance organizations provide energy audit services for free or at reduced cost. There are also free tools available to help companies conduct energy audits. Appendix A describes service providers, resources, and tools for energy assessments. 

Energy Savings (Box 9)

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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:

  • 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)

Common Energy Units (Box 10) 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, install a flow meter to track natural gas inputs to ovens that provide process heat, or install electric meters in a particular process area to monitor electricity use. 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 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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To Consider
  • How much energy does your facility use?
  • Which value streams and processes contribute the most to your facility’s total energy use?
  • What are the costs associated with this energy use?
  • Where are the best places to look for energy savings? 

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Greenhouse Gas Inventories

In addition to energy use, your organization may also want to look at your overall impact on global climate change. Corporate greenhouse gas inventories help your company identify where emission reduction opportunities exist. A greenhouse gas inventory is simply an accounting of the amount of greenhouse gas emissions emitted to or removed from the atmosphere over a given period of time. Corporate greenhouse gas inventories focus specifically on the emissions of a company. 

Key PointIt is important to note that depending on the quantity of your greenhouse gas emissions you may be required to report your emissions to EPA. In October of 2009, EPA passed a rule requiring the mandatory reporting of greenhouse gases from large emissions sources in the United States. In general, the reporting threshold is 25,000 metric tons or more of carbon dioxide equivalent per year. Most small business will fall below this threshold, and therefore not be required to report.

Key TermGreenhouse gases are released into the atmosphere and trap heat, slowly warming the earth. Carbon dioxide is the most talked about greenhouse gas, but it is not the only one. The principal greenhouse gases that enter the atmosphere because of human activities are: 

  • Carbon Dioxide (CO2): Carbon dioxide enters the atmosphere through the burning of fossil fuels (oil, natural gas, and coal), solid waste, trees and wood products, and also as a result of other chemical reactions (e.g., manufacture of cement). Carbon dioxide is also removed from the atmosphere (or “sequestered”) when it is absorbed by plants as part of the biological carbon cycle. 
  • Methane (CH4): Methane is emitted during the production and transport of coal, natural gas, and oil. Methane emissions also result from livestock and other agricultural practices and by the decay of organic waste in municipal solid waste landfills.
  • Nitrous Oxide (N2O): Nitrous oxide is emitted during agricultural and industrial activities, as well as during combustion of fossil fuels and solid waste.
  • Fluorinated Gases: Hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride are synthetic, powerful greenhouse gases that are emitted from a variety of industrial processes. Fluorinated gases are sometimes used as substitutes for ozone-depleting substances (i.e., CFCs, HCFCs, and halons). These gases are typically emitted in smaller quantities, but because they are potent greenhouse gases, they are sometimes referred to as High Global Warming Potential gases (High GWP gases).

New ToolCorporate greenhouse gas inventories help your company calculate the emissions your organization is responsible for and provide you an idea of potential areas for improvement.  

Typically, when you reduce your energy use, you are also reducing your greenhouse gas emissions, but there are additional improvements that can be made to further reduce your company’s global warming impact such as switching to fuel that emits fewer greenhouse gas emissions. Lean activities can be targeted at processes with high greenhouse gas emissions, or greenhouse gas emissions can simply be calculated in addition to energy efficiency reductions. This is just one more metric that could be calculated as part of a Lean and Energy event. 

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Examine Energy Use with Value Stream Mapping 

Key TermOne 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. 

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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 previously 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 3: Example Value Stream Map shows a value stream map from a value and energy stream mapping project.

Example Results from Value and Energy Stream Mapping Projects (Box 11)

Example Value Stream Map (Figure 3)Another opportunity is to incorporate energy use data directly into current and future state value stream maps. Consider adding data on the average New Toolenergy 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 with energy savings opportunities in the context of other improvement opportunities. Figure 4 shows an example process data box with energy use data (in kilowatt-hours per pound of output). 

Example Process Data Box with Energy Use Data (Figure 4)Key PointCombining energy use analysis and value stream mapping is a proven technique for cutting energy costs and improving productivity. For example, California Manufacturing Technology Consulting, a Manufacturing Extension Partnership center in California, 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 11 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. When you look at energy use in the context of the entire value stream, ask two fundamental questions:

  • Is this energy end use needed? 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.1
  • Is there a way to deliver this end use more efficiently in support processes? Support processes may consume significant amounts of energy. Even Key Pointbrief 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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Use Six Sigma to Find and Eliminate Energy Waste and Variation

Key TermSix 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 substantial 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 reduced worldwide energy use by 46 percent (when indexed to net sales) from 2000 to 2010. 3M set a corporate goal for further energy use reductions of 25 percent for the period from 2005 to 2015, and the company views Lean Six Sigma as critical to realizing this performance goal1.

Six Sigma and Energy Savings at Baxter International (Box 12)

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To Consider
  • Has your facility conducted an energy assessment (such as an energy treasure hunt, a facility walk-through to identify energy wastes, or a formal energy audit and utility bill analysis) recently? 
  • Do you know what processes and areas of your facilities have the most greenhouse gas emissions? What ideas do you have for reducing those emissions? 
  • Has your facility used value stream mapping, kaizen events, and/or Six Sigma to identify energy wastes and reduce energy use? 
  • Are there any energy-intensive processes that could be targeted in your organization using Lean Six Sigma methods? 
  • What practical steps will you take to identify and address energy waste during upcoming Lean events at your facility?

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1 3M Corporation. Sustainability at 3M. 

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