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01
Executive Summary
As part of the Energy Agreements Programme, the Alternative Methodologies Special Working Group was established to examine the possibility of combining tools and techniques from Continuous Improvement methodologies such as Lean, Six Sigma and TQM with the already established analysis tools used in Energy Management. It was expected that combining the toolsets from the different disciplines might lead to improved tools and techniques that would benefit organisations in their efforts to obtain and maintain IS393 Certification. As the IS393 Standard gains international recognition, and as progressive companies are turning their attention to Energy Management, many companies are attempting to integrate IS393 into their existing Continuous Improvement Culture. There is an opportunity to assist such companies with advice on integrating IS393 into their existing culture and to enhance the analysis tools already in their arsenal for application to energy management. Likewise, there is a population of Energy Experts who have tried and tested techniques for managing utilities, but who would welcome the introduction of proven Quality/Operations techniques to their toolsets for improved effectiveness. To this end, the Alternative Methodologies Special Working Group, incorporating nine member companies and some Energy, Lean and Six Sigma experts, embarked on a series of initiatives as follows: Prepare a guidance document for implementation of IS393 in companies with an existing Lean or Six Sigma culture. Blend tools and workflows traditionally used in Energy, Quality and Operations Management to form more effective versions. Prepare a diagnosis tool that will examine the effectiveness and efficiency of a current IS393 Energy Management System. Complete a series of Demonstration Projects to showcase a number of the proposed Alternative Methodologies and in particular, the blended tools.
The current cycle of activities is primarily research-based and focused on gaining an understanding of the various toolsets available and how they might work together. The work, and in particular the projects and case studies, has clearly demonstrated inextricable links between Energy, Quality and Operations and that an improvement initiated in one area has definite effects on the others. It is expected that future cycles of the Alternative Methodologies Special Working Group will consolidate this work through further development and a broader implementation of the tools and work-processes, all the while improving them on the basis of learning and experience.
TABLE OF CONTENTS
SECTION 1 - INTRODUCTION 1 INTRODUCTION 1.1 Background: the role of special working groups 2 THE ALTERNATIVE METHODOLOGIES GROUP 2.1 Initial approach of the working group 2.2 SWG two different perspectives 3 RANGE OF PERSPECTIVES AND FOCUS 3.1 Energy management 3.2 Lean thinking 3.3 Six Sigma 3.4 Different perspectives 3.5 Different approaches to improvement 3.6 Different focuses 3.7 Combining all of the above 4 THREE OBJECTIVES: REPRESENTING THE LIFECYCLE OF THE ENERGY MANAGEMENT EFFORT. 4.1 Integrating IS393 in a company with a Lean or Six Sigma culture. 4.2 Blending Lean, Six Sigma and energy tools and workflows to improve energy management. 5IMPROVING THE EFFECTIVENESS OF THE IS393 ENERGY MANAGEMENT SYSTEM. 5. 1 Other expected outcomes SECTION 2 - INTEGRATION OF IS393 INTO A COMPANY WITH A LEAN/SIX SIGMA CULTURE 1 INTRODUCTION 2 IS 393 SECTION 4.2 ENERGY POLICY 2.1 Management commitment to the energy policy 3 IS 393 SECTION 4.3 PLANNING 3.1 Defining and communicating roles and responsibilities 3.2 Core energy management team with improvement agenda 3.3 Ranking significant energy users and establishing KPIs !
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4 4 5 6 6 7 7 7 8 9 10 10 11 12 12 13 14 15 16 17 19 20 21 22 23 24
3.4 Maintaining the Register of Opportunities 4 IS 393 SECTION 4.4 IMPLEMENTATION AND OPERATION 4.1 Standardising operations 4.2 Operator-specific training 4.3 Training and education 4.4 Promotion and awareness 4.5 Incentives and awards 5 IS 393 SECTION 4.5 CHECKING AND CORRECTIVE ACTION / MONITOR AND MEASURE 5.1 Generating, analyzing and monitoring performance data 5.2 Selection and Implementation of Improvement Activities 6 IS 393 SECTION 4.6 MANAGEMENT REVIEW 6.1 Management Diagnosis of Energy Objectives and Targets 7 CONCLUSION SECTION 3 - BLENDING LEAN, SIX SIGMA AND ENERGY TOOLS / WORKFLOWS FOR IMPROVED ENERGY MANAGEMENT 1 INTRODUCTION 2 WORKFLOW FOR ENERGYMANAGEMENT, LEAN AND SIX-SIGMA METHODOLOGIES 2.1 Workflow for energy management 2.2 Workflow for Lean 2.3 Workflow for Six Sigma 3 APPLYING ENHANCED TOOLS TO ENERGY PROGRAMME 3.1 Tools that energy programmes can adopt from Lean 3.2 Tools that energy programmes can adopt from Six Sigma 3.3 Tools that energy programmes can adopt from Lean-Sigma 3.4 Tools that Lean/6-/Lean-Sigma can adopt from energy management 4 BLENDED WORKFLOWS INTEGRATING METHODOLOGIES 4.1 Energy management incorporating LEAN and Six Sigma expertise 5 BLEND OF METHODOLOGIES NEW TOOLS 5.1 VSMe Value Stream Mapping embedding Energy 5.2 Waste/MUDAe 6 CONCLUSIONS !
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25 28 29 30 31 32 33 34 35 37 40 42 43 44 45 45 45 46 48 48 51 54 56 62 62 66 66 68 71
SECTION 4 - IMPROVING THE EFFECTIVENESS OF YOUR IS393 ENERGY MANAGEMENT SYSTEM. IMPROVING THE EFFECTIVENESSOF YOUR IS393 ENERGY MANAGEMENT SYSTEM SECTION ONE: GUIDANCEON INTERPRETING ASSESSMENT QUESTIONS EXECUTIVE LEVEL SECTION TWO: GUIDANCEON INTERPRETING ASSESSMENT QUESTIONS ORGANISATIONAL LEVEL
72 73 75 77 80
CONCLUSION
! SECTION 5 - CONCLUSION
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SECTION 6 - GLOSSARY
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1 Introduction
EIGHT companies are taking part in the Sustainable Energy Ireland Special Working Group (SWG) on Alternative Methodologies. As part of the Energy Agreements Programme, the SWG was established to demonstrate the viability and strategic benefits of integrating improvement methodologies, traditionally used in quality and operations management, into the energy management function. The strategic benefits of this approach are: It will encourage a more multi-department response to the energy-management programme. The energy-management function will benefit from the best resources available, in the form of diagnosis tools and personnel experience across technical services, engineering support functions and production operations. It will allow access to processes otherwise difficult for the energy-management function to influence. It will give energy projects equal standing when competing for approval to commence and required capital expenditure. It will complement the objectives of the IS393 Energy Management System (EnMS) to ensure a multi-functional response. The SWG will also aim to develop an enhanced toolbox with improved traditional Lean tools and techniques to take account of learning from energy management and vice versa. The ultimate aim is to enhance the tools for successful application in energy-efficiency project applications. The member companies are sharing and developing these tools in order to agree best practice and determine the best methodology for future improvement activities. The methodologies include Lean Enterprise, Six Sigma, Lean-Sigma & Total Quality Management (TQM), as well as the multitude of derivative tools that make up each of these approaches. The tools have long been used in quality management and have proven successful in driving improvements. However, it is recognised that they are under-used as enablers of significant energy-saving projects and have potential for development in Ireland. The member companies come from both sides of the spectrum: companies withenergy management falling within the Facilities/Technical Services Department and responsible for the efficient and cost effective operation of utilities and, secondly, organisations where the Lean/Sigma Manager is responsible for cost management and seeks to apply the tools successfully throughout the operation to ensure energy saving.
1.1
SEIs industry programmes offer a range of support services to the industry and wider business sectors of the Irish economy. The emphasis is on supporting companies to address their energy use rationally so that they improve their competitiveness and reduce their environmental impact. The Energy Agreements Programme, launched in May 2006, is aimed at the largest energy users that want to take a strong, strategic and systematic approach to energy management. Firms agree to implement the IS393 EnMS and to pursue an aggressive programme of energyefficiency action and investment. In return, SEI offers relationship support, advice , networking and some financial supports. The SWGs focus on a particular area of technology or a special interest for IS393 implementation or a strategic direction of SEI.
Consultants/advisors assigned by SEI to the SWG were: Ethos Ltd Lean Business Systems Improve Ltd PM Group RPS Viegand & Maage (VMAS)
2.1
In preliminary discussions, the participant companies indicated what tools they used for operations and quality improvements. In many cases, a different set of tools was being applied to energy efficiency. There was a recognition throughout the group that successful application of thealternative methodologies to energy management would result in improved control and performance, leading to cost savings, reduced energy waste and reduced CO2 emissions. The group members were keen to share their skills; to build on both their own experience and the shared knowledge of the group, and to learn about relevant measurements and improvements from the best in the field. They were also keen to share best practice with other companies, including through the publication by the SWG/SEI of a set of guidelines. Lean, Six Sigma and energy consultants were engaged to work with the group. Each company shared insights into the type and potential of alternative tools and outlined examples of work already being conducted in the field, including of some Irish and international success stories. From this initial meeting, a series of case studies was initiated and follow-on discussion spawned research projects on three objectives to develop new techniques and enhanced improvement tools.
2.2
The launch meeting for the Alternative Methodologies SWG revealed that, while sharing an interest in improving energy management, there were two distinctive groups (summarised below). Energy Managers This group was technically expert in utilities and provision of all energy services. Interested in learning about improvement techniques in relation to specific problems on-site. Lean Practitioners/ Six Sigma Black Belts This group was expert in improvement tools and techniques. Interested in what to measure to maximise the improvement effort and what tools to apply.
Each group had its own tools and techniques, as well as perspectives on how energy should be managed. There was an early recognition that combining the thinking on each side of the room would yield a richer toolset.
The Energy Manager is primarily focused on operating utility systems in the most efficient way possible. They will have a thorough understanding of user requirements and schedules and try to ensure that steam generation, refrigeration, purified water, water treatment, compressed air, lighting , etc are available according to their customers needs. Preventive maintenance efforts are strictly scheduled around the plants production requirements. Capitalexpenditure is generally justified by return on investment (ROI). Normally working in the facilities or technical services department, the Energy Manager will generally undertake improvement projects that are centred in their own department. Characterised bythe regular monitoring of consumption patterns, the Energy Manager will maximise efficiencies within the facilities function and may act as an internal advisor on improvementprojects such as Awareness Training and Energy Improvement initiatives, IS393 implementation and maintenance. Improvements are often made on the basis of maximising the efficiency of systems through preventive maintenance and justifying upgrades on the basis of plant capacity; replacement of old or inefficient systems and, in more recent times, recovery of waste energy. Specialists in this area will be familiar with techniques such as Sankey Diagrams, Co -efficient of Performance (COP/COSP), Best Available Technology (BAT) and Energy Service Analysis the Onion Diagram principle. While the Energy Manager uses many of the methodologies described below, in the utilities area, they tend to use them in a less structured manner. This can be a disadvantage as senior managers like structure and IS393, by its nature, requires structure and fits best within a continuous-improvement environment. The alternative methodologies might ensure that the Energy Manager secures support and commitment outside of their own department boundaries. There might also be an opportunity to strengthen goal-setting on energy projects, while at the same time improving communication and influence within the organisation.
3.2
Lean thinking
The Lean five-step thought process was proposed by James Womack and Dan Jones in their1996 book Lean Thinking to guide managers through a Lean transformation. The steps are: 1. Specify value from the standpoint of the end customer 2. Identify all the steps in the value stream 3. Make the value-creating steps flow toward the customer 4. Let customers pull value from the next upstream activity 5. Pursue perfection Lean is based on the Toyota Production System (TPS), the production system developed by Toyota Motor Corporation to provide bestquality, lowest cost and shortest lead time through eliminati ng waste. TPS is comprised of two pillars: just-in-time production and jidoka. It is maintained and improved through iterations of standardised work and Kaizen, following the scientific method of the plan-docheck-act cycle. Jidoka, or mistake proofing, has its origins in programming machines to stop when a problem arises, to avoid defective products. This means that a single operat or may be put in charge of numerous machines, resulting in a significant improvement in productivity.
In Lean, waste is termed muda. Lean addresses waste under seven headings: 1. Lean Transport Most forms of transportation are waste (muda) and as such should be minimised or eliminated. This includes the use of forklifts, conveyors, pallets and trucks . 2. Inventory Excessive inventories are considered as waste as they do not add value to the process. Excess inventory requires storage space, transportation, adds to product lead times, creates potential for obsolescence and ties up cash. 3. Motion Unnecessary employee movements. Every workstation or cell should be designed with ergonomics in mind so as to prevent excessive walking, heavy lifting, awkward bending, overreaching or repeated unnecessary motions. 4. Waiting Waiting for the next processing steps or material to arrive. There can be many causes for waiting including poorly organised workflows, unbalanced production lines, and excessive set up times. 5. Over-processing Unnecessary processing steps in manufacturing or service are waste (muda) and should be eliminated. Examples include having to remove burrs, reshaping a piece due to poor dies, making extra copies of documents or performing an inspection step(as inspection is non-value-adding). 6. Over-production Overproduction ahead of demand. Parts need to be available at a certain location, at a certain time, according to customer schedules (Just in Time). Product should be manufactured only at the rate it is consumed. This is called the Takt time (from the German word Taktzeit or cycle time). 7. Defects Production of scrap or defective parts is one of the primary forms of waste. Where goods or services are not to specification, at best they will have to be r emade; at the worst, they escape inspection and reach the customer. The Lean organisation empowers its employees to participate in continuous -improvement projects, whereby the operator becomes the expert and sponsorship is forthcoming fromsenior management via the operations manager. Continuous improvement becomes a way of thinking and is part of the core strategy of the business. Communication is achieved through regular meetings and visual display boards. Analysis tools are used and commonly understo od, and recognition is forthcoming for improvements delivered. Improvement tools such as Kaizen and Kaikaku are commonly used, while Value Stream Mapping is used for analysis and goal-setting.
3.3
Six Sigma
Six Sigma (6) is a business management strategy, initially implemented by Motorola, which today enjoys widespread application in many sectors of industry. It seeks to identify and remove the causes of defects and errors in manufacturing and business processes. It uses a set of quality-management methods, including statistical methods, and creates a special infrastructure of people withinan organisation (Black Belts, Green Belts, etc) who are experts in these methods. Each Six Sigma project follows a defined sequence of steps (DMAIC) and has quantified financial targets (cost reduction or profit increase). The basic method consists of five steps: 1. Define high-level project goals and the current process 2. Measure key aspects of the current process and collect relevantdata 3. Analyse the data to verify cause-and-effect relationships; determine what the relationships are, and attempt to ensure that all factors have been considered 4. Improve or optimise the process based on data analysis using techniques such as design of experiments DoE); 5. Control to ensure that any deviations from target are corrected before they result in defects. Set up pilot runs to establish process capability, move on to production, set up control mechanisms and continuously monitor the process.
Six Sigma organises business improvement functions by identifying several key roles for its successful implementation: Executive Leadership, Champions, Master Black Belts, Black Belts, Green Belts. In the Six Sigma organisation, the Black Belt is seen as the expert. Projects are sponsored by the managing director through the quality organisation. Goal-setting is based on specific objectives and is driven by thorough and detailed analysis. Improvements are targeted and significant (step function) in nature and are effected through statistical analysis and control of significant operational variables. Communication is deliberate and organised. Recognition is provided through publication andthe dissemination of success stories.
3.4
Different perspectives
Although the Energy Manager, the Lean Practitioner and the Six Sigma Black Belt are all looking at the same process, their emphasis differs, as outlined in Figure 3.1. This was particularly evident in the SWG. Figure 3.1: Energy, Lean and Six Sigma perspectives
3.5
Different views of the improvement cycle are also evident, as shown in Figure 3.2 and described below. Figure 3.2: Different approaches to improvement Energy Manager Recognise the need Justify the investment Install and operate Provide data to justify Lean Practitioner/Team Calculate theoretical saving Install and operate Verify the improvement Standardise Six Sigma Black Belt Statistical analysis Proposal with projections Install and operate Statistical verification Standardise
3.6
Different focuses
Energy, Lean and Six Sigma Managers have different influences acting upon them, as outlined in Figure 3.3: Figure 3.3: Energy, Lean and Six Sigma focus
The Energy Manager is driven between the requirements of balancing the cost of the energy service and ensuring security of energy supply. The Lean Practitioner/Lean improvement team is always looking at the process from the point of view of what the customer is willing to pay for and consistently removing waste or muda, in attempting to achieve an improved future state. The Six Sigma Black Belt is striving for tighter statistical control of the variable(s) considered to be critical to the quality of produce or service.
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3.7
Combining these three approaches, together with their workflows and tools/techniques,produces a much richer blended workflow and toolset to help with energy improvement and management. The closer the integration between the approaches, the better integrated the tools and workflows will be. Later sections will describe the integration of the Value Stream Map (VSM) with an energy perspective to form the VSMe, and the Seven Wastes with an energy perspective to form the MUDAe. A case study was completed to trial the VSMe tool. The findings were more insightful that what might have been discovered using the individual tools in isolation. (See Appendices.)
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4.1
The combination of the specific toolsets, measurements and detailed technical knowledge in the energy world, combined with the structured goal-setting, project management and follow-through from the Lean/Six Sigma world combine to provide a recipe for improved application of theIS393 standard. This section is focused on implementing IS393 in a Integration of IS393 in a company with a Lean or Six Sigma culture and examines company with a Lean or Six how to leverage opportunities when developing the Sigma culture EnMS, under the following headings: Energy policy Planning ~ Implementation of systems and Implementation and operation organisational focus Checking and corrective action/Monitor and Measure Management review
A key strategic outcome is for companies that practise Lean and/or Six Sigma to develop a complementary IS393 system that exploits existing capabilities,giving energy-efficiency projects equal status for receiving resources and investment. If successful, IS393 becomes integrated within the Six Sigma/Lean culture, and environment and energy-management responsibility will be jointly shared by all departments and, in particular, the high-impact project functions. This will help to forge a team environment, involving the quality and compliance organisations, which will in turn help to remove barriers to process change. In addition to this, IS393 and energy performance may obtain higher visibility among senior corporate management. An equal audience is the Six Sigma/Lean organisation where the primary focus is on improvement in: Productivity Elimination of waste Quality improvement Cost reduction Profitability Depending on the company, energy-efficiency projects may meet compete with the topics mentioned above, however they may be in competition with other, more traditional projects andmight therefore be overlooked.
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In this model, energy management will have equivalent standing with other improvement activities and is more likely to be approved for funding and resource allocation.
4.2
Blending Lean, Six Sigma and energy tools and workflows to improve energy management
Using a combination of the tools and methods used by the Energy Manager, the Lean Practitioner and the Six Sigma Black Belt, a blended toolset willyield greater improvements. Energy Manager: Energy service analysis (Onion diagram) Sankey diagrams Pinch technology; Co-efficient of performance (COP/COSP) BAT/Technology solutions Lean Thinking Defining value Identifying value stream eliminating waste Flow Pull Perfection (continuous improvement) Six Sigma Statistical control; Reduced product and process variability; Improvement projects define, measure, analyse, improve, control (DMAIC)
How energy management can now function in the integrated or blended workflow Application focus Blended Workflow & Tools how to make it work in practice
There is also a difference in approach between the disciplines described above and each has its own workflow, each of which will be examined in a later section.. The major benefit from this study is an understanding of what Lean/Six Sigma can give to energy management and vice versa. Combining the toolsets and workflows described above will yield a richer and more effective set of Blended Tools and Workflows, leading to a more effective EnMS, with the ability to better diagnose and monitor processes, effect improvement, gain influence and backing within an organisation, and engaging a wider group of stakeholders. Six Sigma/Lean tools might be used in facilities/technical services/utilities for process improvements, while energy management tools may be used by Six Sigma/Lean functions for energy-related project opportunities. They can also be used for the Review of Energy Aspects and operational control. In all this, there is an opportunity to adapt tools that have traditionally been used in one discipline and introduce them to other disciplines, and to highlight opportunities for more effective diagnosis of energy conversion in order to effect improvements. Some such examples in Value Stream Mapping (VSMe) and Waste Management (MUDAe) are described in later sections. Successful blending of tools and workflows willassist with project selection, improve access to resources and enable the application of the best techniques for analysis & diagnosis of process -related projects. It will allow access to manufacturing areas or processes that might have been outside the sc ope of technical services under traditional settings, and will help address operator influence in the process. A key issue that should be considered is the minimisation of energy-service need and the selection and control of process to deliver this need.
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The IS393 EnMS requires a systematic approach to demonstrate the continual review and improvement of all facets of energy performance. To this end, a Diagnosis Tool is being piloted to assist in the examination of the performance of the system and to provide a benchmark to demonstrate continuous improvement. This tool is expected to appeal to Energy, Lean and Six Sigma practitioners alike since it provides a high-level indicator of performance and, in addition, highlights areas requiring further improvement. The Diagnosis Tool focuses in particular on: Overall system performance Planning Implementation and operation Checking and corrective action Management review The Diagnosis Tool, currently in version, is introduced in this report in order to solicit feedback on its effectiveness. It is expected that a follow-on project will be required to test it formally in a series of demonstration projects, collect user feedback and to update and release. Preliminary trials in two companies indicate that the Diagnosis Tool was found to be useful in setting a benchmark and in highlighting areas for further improvement.
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5.1
In addition to the objectives described in Section 4 above, a series of initiatives were undertaken to demonstrate the applicability of the alternative methodologies to improvements in energy management. A brief description of each follows (the case studies are included in the Appendices): A food-processing plant uses overall equipment effectiveness (OEE) to discover inefficiencies in the process. Corrections resulted in significant energy savings. The statistical process control (SPC) tool reduces defective product and the energy invested in it by 76%, through statistical analysis of semi-processed material and improved control of up-stream processes. A Kaizen project encourages worker participation and introducesa new process using existing equipment. Approximately 50,000 in energy savings are realised during a two-day improvement drive. Further improvements identified during the event are being implemented. Energy Value Stream Map (VSMe) combines the traditional Value Stream Map as used in a Lean enterprise with analysis of energy use at each stage of the process to highlight improvement opportunities for a quarrying application and to introduce a new tool to energy managers.
These case studies summarise a series of more detailed confidential client reports outlining the entire improvement process from investigation to analysis of data, identification of causes and corrective action.
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02
1 Introduction
THE ongoing drive to reduce costs through continuous improvement is an essential part of most companies operations. To date this has mainly focused on the production element of each operation. However, using the skills and knowledge that exist within an organisation to address energy usage can result in significant improvements in efficiency and considerable cost savings, as well as reducing a companies overall carbon footprint. Energy usage can also be viewed as a benchmark of the overall efficiency of an organisation and identifying and eliminating energy waste can result in parallel improvements in the efficiency of the operation. In companies with experience in the use of Lean manufacturing and/or Six Sigma, the potential is even greater as these tools have been demonstrated to be very suitable for application to projects aimed at reducing energy usage. The IS393 Energy Management Standard is recommended by Sustainable Energy Ireland (SEI) as a means of managing energy usage through a robust energy management strategy. The roadmap shown highlights the key steps involved in implementing the standard. In this document we will look at specific areas where companies can use the Lean or Six Sigma culture, tools and methods to assist themwith IS393 implementation and thus have a greater probability of engagement across all support functions and achieve significant improvements in energy efficiency. These areas are shown in the table below:
Management commitment to the energy policy Defining and communicating roles and responsibilities Core energy management teams with improvement agenda Ranking significant energy users and establishing KPIs Maintaining the Register of Opportunities Standardising operations Operator-specific training Promotion and awareness Training and education Incentives and awards Generating, analysing and monitoring performance data Selecting and implementing improvement activity Management Diagnosis of Energy Objectives and Targets
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IS393 Section 4.5 Checking and Corrective Action/ Monitor and Measure IS393 Section 4.6 Management Review
In developing this document the authors have assumed that: The company has an existing continuous-improvement approach in place, centred on the use of Lean Manufacturing, Six Sigma or a combination of the two The company is willing to allocate key Lean/Six Sigma personnel to its energy-efficiency programme Management of the company are committed to improving their energy efficiency and wish to use the best available methods to achieve their goals Many of the recommendations will relate specifically to the Lean manufacturing or Six Sigma environment. Where recommendations are common to Lean and Six Sigma, the text will be black; for Lean environments it is navy-blue, and for Six Sigma it is purple. The document lists a number of distinct headings that need to be addressed when implementing IS393. For each heading, we have identified the related characteristics that should already exist within a company practising Lean/Six Sigma. We have then listed a number ofsuggestions to show how existing resources can be leveraged to help with implementing IS393.
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The Energy Policy defines what an organisation is aiming to achieve through the Energy Programme and it establishes energy management as a core priority of an organisation.
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To ensure its success, management need to demonstrate commitment to the Energy Programme through their actions, both in participating in the process and in ensuring that staff members have the time and resources to successfully implement the programme. In an environment where personnel with Lean/Six Sigma experience are required to support ongoing improvement efforts, management needs to ensure that these key staff are given the time and training to enable them to make a real impact on energy efficiency.
Lean Manufacturing/Six Sigma
Heading
Characteristics Improvement practitioners with specialist training in Lean Manufacturing and Six Sigma tools and methods
Allocate Resources
Adequate personnel trained in improvement methodologies who can take a lead role in improvement projects
Capital programme in place for equipment upgrades, capacity expansion, purchase of new equipment
People given the time and resources to work on specific improvement projects as part of their regular working activities
Facilitate Improvement
Sis Sigma Black Belt/Green Belt practitioners with exclusive focus on process improvement
Team members participating in improvement projects receive support and mentoring from senior managers
Suggestions Use Six Sigma-trained personnel to lead projects with a focus on energy management Train technical staff with knowledge of energy management as lean practitioners or Six Sigma Practitioners (Green Belt) Identify cases where older systems can be replaced with more energy-efficient equipment System in place to allow people to work on improvement projects without affecting operation of the facility Ensure sufficient resources are available to undertake all necessary improvement projects. Look at adding extra resources to focus on energy-related activities Use A3 coaching tool to help mentor team leaders Leverage internal Six Sigma resources to provide a basic level of training for all staff involved in the Energy Programme
Provide Training
Mission statement that emphasises the importance of continuous improvement in energy efficiency through the use of best practice Management are centrally involved in promoting and supporting improvement methods through their words and actions on a daily basis across the site
Management play a key role in supporting and mentoring project teams and team leaders
Provide training on energy efficiency and energy management to Energy Team members and Six Sigma practitioners Refer to SEI website for information on mission statements Manager involvement in Kaizen events, wastewalks audits, etc Use A3 coaching tool to help mentor team leaders
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The planning stage of IS393 implementation requires the organisation to baseline its energy usage for a minimum of three years, to identify the main energy users in a facility, to identify opportunities for improvement and to allocate resources to the improvement effort.
For an organisation with Lean/Six Sigma knowledge, there are many areas where the use of tools normally focused on productivity improvement can be leveraged to address energy efficiency for example, the use of process maps to help identify the main energy users and the key parameters of a system that affect its overall energy efficiency.
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In many companies, the energy-management function will fall under the remit of a facility or maintenance manager who will generally take responsibility for monitoring energy usage and for driving improvements in energy efficiency through preventive maintenance programmes or more efficient equipment.
In a Lean/Six Sigma organisation, there is an opportunity to broaden responsibility so that a wider range of staff can play a role in improving energy efficiency. This might involve including energy efficiency in the job descriptions of Black and Green Belts and ensuring that facility personnel receive basic training in Lean manufacturing or Six Sigma improvement methodologies.
Six Sigma Suggestions Provide additional training to Six Sigma Staff on energy-efficiency improvement methods Key energy staff trained as Green Belts and/or Black Belts`
Heading
Characteristics
Role Definition Improvements in energy efficiency taken into account as part of annual personnel review system Provide specific training in energy efficiency improvement to all staff Monitor effectiveness of training and identify additional opportunities if required Role Communication
Job descriptions exist for all personnel. Role of each person in identifying improvements in their workspace is clearly defined Role Definition
Expand job description of team members to include requirements to improve energy efficiency as part of their routine tasks
Key staff members certified as Six Sigma Black Belts and Green Belts. Focused role in the organisation, primarily centred on driving ongoing improvements All technical personnel to receive basic training in Six Sigma tools and methods
Role Communication
Training plan for all staff that ensures that they are fully equipped with the tools and knowledge to meet the demands of their role
Well-defined job descriptions and training plans in place for all staff. All staff aware of their responsibilities and focused on achieving specific goals on an annual basis
Incorporate energyefficiency improvements in annual targets for key individuals. Individual targets should be aligned with overall company strategy
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The energy team involves representatives from different functions in the organisation who come together to lead the Energy Management Programme. When establishing an energy team, look for members who are enthusiastic about energy efficiency and can help sell the idea across the organisation.
The team should include people from a variety of disciplines and departments and be led by a senior individual who is committed to the Energy Management Programme.
Lean manufacturing/Six Sigma Suggestions Team members should have a genuine interest in energy efficiency Include Lean/Six Sigma specialists on the team as well as technical representatives with specialist knowledge in energy management Senior manager with the authority to make the required decisions on issues that affect energy efficiency Team leader can play a key role in ensuring that Lean/Six Sigma resources are well integrated in the Energy Management Programme
Heading
Characteristics
Team Membership
Cross-functional team with members from all areas including operations, maintenance, quality, finance and logistics
Team Leadership
Senior person in company who can take ownership of and responsibility for the Energy Management Programme
Leading the ongoing drive to identify opportunities for use of Lean/Six Sigma methodologies in energy management
Team Role
Working with value-stream team members to help them in their effort to improve energy efficiency
Monitoring overall energy intensity and leading investigations into deviations from the norm
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Understanding energy usage and the factors that drive it is an essential element of an Energy Management Programme. Companies with Lean and Six Sigma resources are uniquely positioned to leverage the skills of their staff in identifying the key energy aspects of a process and in ensuring that the correct metrics are put in place to enable energy usage to be monitored, controlled and improved.
Consideration should also be given to using energy as an indicator of the overall efficiency of an operation, since variations in energy usage are often clear indicators of changes in overall process efficiency.
Lean manufacturing/Six Sigma Characteristics Suggestions Identify all systems that use energy across the facility and determine their energy usage through metering or calculations based on supplier information
Heading
Ranking significant energy users Systematic method used to identify and rank all significant energy users
Incorporate all systems that affect the production process in the calculation (HVAC systems, air compressors, lighting and chillers as well as equipment used directly in the production process) Use of Sankey diagrams, Process Mapping, Pareto Charts, Energy Balance, Table of Energy-Using Equipment, with related load data
Heading
Establishing KPIs
KPIs aligned to strategic goals to enable management to monitor progress against key criteria
Develop KPI based on energy intensity as a means to track overall improvements in energy efficiency
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The Register of Opportunities is a critical document used to identify and prioritise the improvement opportunities in an organisation. Overall responsibility for maintaining the register should reside with the energy team, who need to ensure that it is kept up to date and reflects the current situation. Lean manufacturing Heading Characteristics Six Sigma Suggestions
Heading
Characteristics
Opportunity Identification
Use of current & future state & value-stream maps as a basis for identifying potential improvement opportunities
Opportunity Identification
Focus on equipment and processes with high overall energy usage as these are likely to provide significant improvement opportunities
Suggestions Incorporate energy component into VSM. VSM to look at entire rework space (i.e. HVAC, compressed air), not limited to process specific steps (see example below) VSM to incorporate entire workspace. Include all equipment that affects the process such as HVAC systems, air compressors and chillers Projects likely to require complex improvement tools
Use of DOE, statistical analysis, to optimise equipment and process performance against energy usage
Ongoing drive to identify and eliminate waste from all aspects of the operation Gauge performance against peers/competitors/sister divisions and identify best practices used to improve energy efficiency
Involve all staff members in waste-walks, brainstorming sessions, benchmarking, suggestion scheme and audits aimed specifically at identifying examples of waste energy
Projects should be suitable for execution through the use of DMAIC methodology Projects should be manageable in a 3 to 6month period, with the potential for significant overall benefit to the
Ensure that an opportunity cannot be addressed by a more straightforward improvement method such as Kaizen event Focus on large energy users where a Six Sigma project can result in a measurable improvement in energy efficiency and significant cost
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Gauge performance against peers/competitors/sister divisions and identify best practices used to improve energy efficiency Review production processes to identify equipment idle time or non-standard machine settings that could be causing excessive energy consumption organisation benefit Each value-stream team to maintain their own Register of Opportunities that is incorporated in the overall register Opportunity Prioritisation Project approval involves sign-off by member of senior management Complex project prioritisation process with stringent approval criteria in place
Opportunity Prioritisation Use Lean Lab/Pilot Line with highly trained staff to test and pilot new ideas and methods
All improvement opportunities listed in register and prioritised, based on savings potential
Projects prioritised based on time, cost, resources, risk, potential benefit, customer needs, energy efficiency May need to weight energy criteria to account for changes in energy supply cost To demonstrate commitment to IS393, companies should ensure that at least one project with an energy focus is implemented every year
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Implementation and Operation covers the running of the programmes that will actually result in improvements in energy efficiency. This involves ensuring that:
Key staff members are trained in the required skill-sets Energy efficiency is promoted across the organisation to raise awareness about the Energy Management Programme An incentives scheme is used to reward those who have made a significant contribution to the energy efficiency of the organisation
Food Producer used a short 3 day Kaizen Event to review all aspects of the operation of their refrigeration system. The Kaizen team identified improvements that resulted in improved productivity and reduced energy intensity per unit of product produced
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In a Lean manufacturing deployment, the development of standardised methods for all aspects of process operation can play a significant role in incorporating best practice into an operation and provide a baseline for all future improvements.
The standard work practices need to be supported by a companys documentation and procedures. From an energy-management perspective, practices that can affect the standard operation of a system, such as preventive maintenance programmes, should be documented and particular aspects that affect energy efficiency should be highlighted in the related procedures. These procedures should be backed up by training records.
Heading
Implementation of documented methods that cover all All system operators use a standard best-practice methodology to cover all critical elements of a systems operation, backed up by a areas of operation and maintenance rigorous training system and certification process for each individual required to perform the related tasks Critical settings or operations that can potentially affect energy efficiency should be highlighted in the standard operating procedures Immediate investigations held to determine root cause Use of Andon system that triggers immediate corrective action process in the of issues highlighted by failure to perform a task using event of a deviation from the documented standard the documented standard practice
Work Standardisation
Processes designed to minimise the potential for deviations from the documented standard
Extensive use of mistake-proofing (Poke-Yoke) techniques to limit the potential of people and equipment to deviate from the agreed standard
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Key to a successful Lean manufacturing programme is ensuring the involvement of all staff members in order to benefit from their collective effort. The same holds true for an Energy Management Programme. Providing training in energy awareness and efficiency to all staff members is a great way to reinforce this message.
In a Lean/Six Sigma organisation, energy should be viewed as a key raw material that can be wasted if not used efficiently. Operational staff can play an important role in highlighting energy losses such as compressed-air leaks or equipment left on when not in use for extended periods.
Lean manufacturing
Heading Characteristics
Six Sigma
Suggestions
Heading
Characteristics
Suggestions Develop the skills of operational staff to include identifying opportunities to improve energy efficiency Process mapping, standardisation, energy measurement, gain understanding of how their actions can positively or negatively affect energy efficiency Use A3 tool to develop opportunities and demonstrate effectiveness
Use of control charts and identification of out-of-control data, problem identification, error proofing
Use of on-the-job training dealing with real problems and improvement opportunities
Visual factory
Operator Awareness
Involvement in Six Sigma project teams or Kaizen events Develop system for executing nonSix Sigma projects that can be applied by all staff Operator Involvement Project selection Provide forum for operators to highlight issues and suggest projects
Defect identification
Andon boards to display data relating to energy efficiency at place of work Use of metrics that can be influenced and controlled by the relevant team members Use of trend charts & control charts to monitor energy usage in workplace
Operator Support
Use of tagging system to highlight potential points of energy waste Team leader needs to receive support and coaching to ensure buy-in to the programme
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Implementation of IS393 requires the company to generate a training plan where key staff members involved in energy-related tasks are trained in energy-efficient practices. In a Lean/Six Sigma company, consideration should be given to providing additional training to both Lean/Six Sigma personnel on energy efficiency and energy management and to energy management personnel on Lean/Six Sigma. This will ensure that these two distinct groups of people who traditionally would not have worked together are now familiar with each others requirements and can start to see the benefits that working together can realise.
Lean Manufacturing/Six Sigma Characteristics Lean/Six Sigma personnel with advanced training in continuous improvement tools such as Kaizen, DOE, SPC, 5S, and other Lean and Six Sigma tools Suggestions Provide training in energy management, energy efficiency Provide training in energy-related improvement tools such as Sankey diagrams, Onion diagrams, process maps, energy wastes and energy value-stream maps Provide introductory training on Lean/Six Sigma tools and methods to utility engineering staff Technical/Utility personnel with specialist knowledge in energy management Ensure all staff are trained in energy-efficiency methodologies
Heading
Consider training utility engineers to Green/Black Belt level Provide training to all staff on energy efficiency and energy awareness. Expand waste categories to include energy loss as a form of waste Provide advanced energy efficiency training for team leads and technical personnel to enable them to facilitate team efforts in improving energy efficiency
Value-stream team members trained in basic improvement, waste identification and elimination methods
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Energy awareness is about harnessing the power of the individual to reduce energy waste in the workplace. This step involves making people aware of energy issues and energy-saving practices in their day-to-day activities, in order to achieve a sustained improvement in energy performance in the organisation.
In a Lean/Six Sigma environment, there should be an emphasis on using the collective energy of teams and team members to achieve rapid improvement in energy efficiency.
Lean manufacturing/Six Sigma Characteristics Suggestions Promotion of successful Kaizen events that improved energy efficiency Use of company intranet to promote energy awareness and to share good ideas and practices that improved energy efficiency Energy Day when teams present their success stories to management Competition to identify best energy-saving ideas among teams
Heading
Bottom-up approach to promotion and awareness with value-stream team members empowered to highlight energy waste, and forums provided for teams to demonstrate their success in reducing waste across the value stream
Promotion of successful Six Sigma projects that resulted in significant process improvements
Use of posters/presentations to ensure that all staff are aware of successfully completed projects and future plans for continued improvements Involve staff from all functions in project teams both for their input and as a means to promote energy efficiency among their peer group
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One practice that should be implemented to ensure an ongoing commitment to energy-efficiency improvement throughout the organisation is an incentives and award scheme. If a company has an existing incentive and awards scheme as part of its continuous-improvement programme, this can easily be expanded to cover the Energy Management Programme. If such a scheme is not in place, consideration should be given to a system that rewards teams and individuals who make a significant contribution to energy efficiency in the organisation.
Lean manufacturing/Six Sigma Characteristics Suggestions Use of in-company recognition systems to highlight positive contributions made by teams or individuals to the Energy Management Programme Rewards given to staff members and project teams who make a significant contribution to energy efficiency Use of voucher system to reward team members on successful implementation of significant energy-efficiency improvements
Heading
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5 IS393 Section 4.5 Checking and Corrective Action / Monitor and Measure
Monitoring and measuring energy usage requires the development of robust measurement systems. This allows the user to track both the overall energy usage across an operation and the usage of specific areas that are known to be major consumers of energy.
Systems should also be implemented that enable the detection of significant variations in energy usage and longer-term trends that indicate any improvement in the usage of energy. This data should be used to help the company to determine the projects and improvement activities that will provide the greatest benefit.
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Any energy-management system is only as good as the data it is based on. Generating, analysing and monitoring the correct data can play a significant role in ensuring the success of the Energy Management Programme. Companies that have people with experience in statistics and particularly Six Sigma should use these skill sets in monitoring and controlling their energy usage.
Lean manufacturing Suggestions Key energy users in value stream identified and metered for energy usage Data Generation Consideration given to equipment that affects value stream such as compressed air, HVAC, chillers, etc Use of Andon boards in team meeting area to display energy metrics Data-review sessions used as an opportunity to update the register of opportunities Data Monitoring and Analysing Heading Characteristics Systems in place to collect data from process control parameters that affect the quality of the final product Process settings monitored using SPC techniques to detect special cause variation in the process
Six Sigma
Heading
Characteristics
Data Generation
Suggestions Identify process settings or parameters that can affect the energy efficiency of an operation Use SPC to monitor parameters and integrate with corrective action system to ensure that all out-of-spec events are fully addressed Ongoing effort to reduce common cause variation in key process parameters through use of DMAIC project strategy Focus projects on process or equipment that exhibit high variation in energy usage as these can also indicate variation in product quality
Key performance data is displayed in the work area Regular team meetings used to monitor and analyse data as appropriate
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SPC Chart
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Ultimately, any energy-management programme will depend on the successful completion of improvement projects. Existing methods for selecting and implementing projects can easily be expanded to deal with energy management. These methods can include the standard Six Sigma DMAIC methodology and Kaizen events based on the PDCA cycle (shown below).
Energy efficiency should also be part of overall project selection criteria. This will help to ensure that energy efficiency is taken into account when implementing new projects that are not energy-specific, such as the selection and installation of new equipment. Lean manufacturing Suggestions Heading Characteristics Six Sigma
Heading
Characteristics
Projects focus on reducing variation across the production process Project Selection Use of project selection matrix to prioritise projects Improvement projects executed using Six Sigma DMAIC strategy Project Implementation Cross-functional project teams with representatives from all affected departments led by certified Black or Green Belt Six Sigma practitioner
Project Selection
Improvement opportunities identified through use of Lean tools such as Current and Future State Maps, Audits and Waste-Walks
Include energy as a parameter in value-stream map as a means to identify energy waste. Include energy as a factor when performing waste-walks. Hold energy-specific audits and audit outside normal working hours
Suggestions Consider looking at equipment or processes with high energy-usage variation as this can also indicate significant variations in process quality and efficiency Include energy efficiency as a criterion in selection of all projects Set requirement for at least one energy-specific project each year Regular project-review sessions to ensure projects are on track Include finance, production and facility personnel on project teams
Project Implementation
All team members involved in improvement effort. Team leaders with specialist training in leading improvement projects
Use of energy-focused Kaizen events to run improvement efforts Use of technical engineering staff or Lean facilitators to help with project execution. Consider use of external consultants as part of Kaizen teams to help identify technical issues that can affect energy efficiency
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Sankey diagram
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PDCA cycle
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The IS393 management review should be used to set the objectives for the coming year, to identify the resources to be allocated to energy management and identify the activities to be carried out over the coming year.
The review should diagnose energy performance and the Energy Management System itself for effectiveness.
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Once targets have been established and a programme initiated, management must play a role in monitoring the effectiveness of the programme to ensure that all objectives and targets will be reached.
The management approach to this function can vary depending on how the company has chosen to roll out the programme. In Lean companies, management will have a more extensive role in supporting and advising teams and monitoring overall progress. In companies with a significant use of Six Sigma projects, the management role will focus on project selection and the monitoring of project progress. Lean manufacturing Suggestions Heading Characteristics Six Sigma
Heading
Energy Objectives
Characteristics System in place for setting objectives for the organisation. Annual objectives should be related to a longer-term (35) year strategy Energy-efficiency objectives in place for overall site. Objectives should be cascaded down to individual value-stream teams Energy Objectives
Overall annual targets set for all key parameters that affect the overall performance of the company Regular reviews of project progress against objectives
Progress Monitoring
Hold monthly performance reviews at workplace with team members. Include energyefficiency objectives in review and ensure that team have plans in place to meet objectives
Progress Monitoring
Suggestions Use SMART (specific, measurable, achievable, relevant and time-based) when setting energy objectives. Include energy intensity as a key performance parameter Monthly/bi-monthly progress reviews with regular project sessions used to track project performance Reviews also held to determine if overall improvement strategy will be sufficient to reach overall objective Used to determine if additional projects are required to reach overall objective
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7 Conclusion
The IS393 standard provides a roadmap that, if followed will enable an organisation to reali se significant savings in energy costs. A critical element of the programme is the use of continuous -improvement tools that enable the organisation to identify and implement a programme that will result in improvements in energy usage. Traditionally the responsibility for this has rested with staffwho have direct control of the energy supply to the organisation, such as utility engineering. This has resulted in a focus on improvements on the supply side through negotiation of cheaper rates or by improving equipment maintenance procedures with the end user left out of the overall programme. Companies with experience in Lean manufacturing and Six Sigma have an opportunity to approach energy efficiency from a different viewpoint. Involving the end user and Lean and Six Sigma practitioners alongside the energy-supply specialists will enable the organisation to focus on how energy is used and to identify areas where significant waste of energy occurs. Standard tools used in driving process improvements such as DMAIC, SPC and Kaizens can also be applied to energy-efficiency improvements. An organisation that empowers its staff to identify a nd eliminate waste can use these same skills as a means to drive improvements in energy usage. By tapping the collective skills of its people, breakthrough improvements can be achieved. This means reduced energy costs, more efficient processes and a more profitable and competitive organisation.
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Blending Lean, Six Sigma and Energy Tools for Improved Energy Management
03
1 Introduction
GREAT effort is put into increasing production capacity and reducing costs in Irish industries . Optimising production facilities plays a vital role in maintaining competitiveness in todays markets. Whether the capacity is measured in flow, pieces, quality or availability and the costs are considered as time, raw material or energy , the result remains the same a fit plant operation. Several approaches may be used. Lean and Six Sigma are continuous-improvement approaches used to drive improvement in cycle times and product quality respectively. Both ultimately drive up shareholder value. The Energy Manager has a brief to reduce costs and impact on the environmentby increasing energy efficiency and controlling energy usage. The most robustenergy-efficiency strategy uses an Energy Management System to provide a framework to continuously improve and standardise efforts. A critical requirement is a multifunctional approach that deals with all influences on the energy requirement. There are synergies to be gained from blending all three approaches, which ultimately respond to the same challenge of continuous improvement, operational excellence and reduction of overhead. Implementing the Energy Management System (EnMS) in an organisation in a w ay that attaches requirements of the EnMS Standard to attributes or characteristics of a Lean or Six Sigma culture is the first step. This lays the framework for a multifunctional approach. It shares responsibility outside the Energy Managers department and thus widens the scope of project managers and membership and thus the areas that are to be focused upon Each improvement methodology hosts its own workflow and set of tools to apply. The energy -management activity in a Lean or Six Sigma environment should adapt a blend so that it applies the most effective workflow and tools that involve all stakeholders, works on the right projects at the right time, and commands the required support to ultimately generate the best results.
Strengths are merged to generate synergies in which the overall goals achieved exceed the sum of three individual results. In this section we discuss the tools commonly used by the different disciplines and how some of these tools and approaches can be incorporated in the blended workflow. 44
The Energy Manager or appointed consultant initially establishes an overview of the total energy consumption at the enterprise by department/plant/equipment/area and of individual consumers in order that significant energy users (SEUs) may be identified. The SEU could take the form of a utility plant, a process, a building or even a specific process parameter influencing energy consumption. This analysis may take the form of flow sheets, energy consumption data, pie charts and balance sheets . The projects are most often initiated by the staff responsible for utility systems, e.g. boiler systems, refrigeration plants and compressors,(where the energy is billed). In this context, decision-making in the Facilities/Technical Services department is determined by budget constraints and must compete for resources and funding with other projects from Operations, Engineering, Quality, Logistics , etc. The analysis phase requires identification of key performance indicators (KPIs) for monitoring ener gy efficiency, and uses the tools outlined in Section 3 of this chapter . However, when it comes to justifying investment in new plant or equipment, KPIs are often forgotten. The analysis phase also looks at energy efficiency and examines where investment c ould be made to harness waste energy, for example, with the use of economisers on boilers. A cost analysis, identifying savings opportunities, either by improved capacity or efficiency or through the use of new technology, will lead to the issue of a proposal. The decision will often be made on the basis of return on investment (ROI), sometimes running to hundreds of thousands ofeuro. If approved, the project is handed over to the facilities manager for installation, commissioning, setting operational c ontrols and operating the unit. The KPIs described above should be continued in order to demonstrate the savings resulting from the change.
A value stream map (VSM) is a map of the processes needed to deliver the value that the customer requires. The Current State Map reflects the state of things as they actually are at the time of the analysis. TheIdeal State Map reflects things as you would wish them to be in a more efficient, more effective operation. The Future State Map reflects the point to which the current initiative is expected to bring the organisation. Once the current and future-state maps have been prepared, the improvement team, which generally speaking is all or some subset of the operations team, is commissioned and tasked with the improvement. It is not unusual to undertake several Kaizen events per year to continuously improve a significant pro cess.
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In contrast to many energy projects, Lean projects are initiated in the operations area of the plant. Operators are deeply involved in the process, often using Kaizen events. The term project flow is somewhat misleading, as Lean is a continuous process often referred to as a way of thinking.
Six Sigma is led by the supporting functions of an organisation such as Quality Assurance, Production Planning or Process Engineering. A project team is gathered to solve a specific problem and a large emphasis is placed on the reporting and follow-up phases. These might include: Process mapping; Detail statisticalal analysis; Process control; Golden batch entitlements; Analytical techniques to control variability in process; High Impact project with high expected return in cost savings. The Six Sigma process follows a define-measure-analyse-implement-measure process. During the process, it uses robust engineering and statistical analysis tools to diagnose and develop a thorough understanding of process variability of critical parameters. Through the process, negative influences on performance are reduced and controlled. A company using Six Sigma invests heavily in organisation and training. Assignments to Six Sigma projects are either full-time (Master Black Belt, Black Belts) or part -time (Green Belt). There are missed opportunities if energy management is treated separately from mainstream business improvement activities. Lean and Six Sigma projects have a strong management focus. This is not always the case for energy consumption. Lean and Six Sigma projects almost never consider energy costsas the primary objective partly because they are focused on finding any operational or high-impact cost saving and also because the people carrying these projects are not aware of the opportunities . Lean is strong in setting and achieving targets whereas itis very uncommon in the energy world. Lean is strong in involving operators through standard operating procedures (SOPs) where energy people most often have difficulties addressing operator influence . Focus on process and core production activities is strong in Lean and Six Sigma whereas energy management tends to focus on the utility area (with limited saving opportunities) . As described, the three approaches are led by different parts of an organisation , as illustrated below.
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It is clear that an approach that combines all three disciplines will yield a far better result. Blending the three approaches should lead to broader involvement in the organisation for obtaining energy savings , and often synergy effects arise.
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This enhanced version of the traditionalVSM would be useful to help understand the influence on energy usage of the material transformation process in operations. Additionally, if energy usage for non-valueadding steps were included, it would help in highlighting target areas for energy reductionnot adding direct value. This introduces a new tool that is described later (see Section 5) VSMe, or Value Stream Mapping embedding Energy. A case study of VSMe application is tested as part of this project and included in the Appendix. 3.1.2 Addressing operator influence Operator activity can influence energy usage greatly. In many facilities start/stop times, temperature and pressure levels and duration of cleaning and sterilisation processes are manually controlled by operators . Operators run the plant despite all the documentation and controls in place. They decide whether the standard operating procedures (SOPs) are followed or not . Typically, the people who run the process are well informed of where energy -saving is achievable and know the equipment well (small defects, bottlenecks, etc). Despite these facts, involving operators in energy optimisation projects is rather uncommon. In Lean, on the other hand, participation by operators is seen as essential to success. It is therefore strongly recommended to involve operators in energy-saving projects for energy mapping, and identifying and analysing projects. Example: Operator involvement A Danish food company producing cheese powders has been deeply involved in energy optimisation ofits production facility by using traditional energy engineering. Projects on heat -recovery systems and utility optimisation have been carried out successfully,but the company is beginning to run out of ideas for improvement. The energy usage is mapped in relation to the production process and it becomes evident that the most important factor is avoiding wastes, as defined in Lean terms. The expression is the right product, on time, right-first-time. This implies that production planning, process optimisation and avoiding wastes are key goals, and energy has been incorporated as a part of Lean thinking. At operational level, no productivity or energy-improvement investments are approved without employee involvement. This has contributed greatly to higher awarenessamong and commitment from the employees, as their input is often is of great value. Recognising theirfingerprints on projects clearly provides motivation for further involvement. Energy issues are always included in regular Lean meetings with operators and staff to help ensure continuous improvement and continuous awareness of potential energy savings in daily work . In this way, energy optimisation pervades the mind of the entire organisation. 3.1.3 The Kaizen culture influence on energy In the Lean world, Kaizen events are used for bringing in the opinions of the entire organisation. This encourages further commitment and the identification, planning and implementation of new ideas. Operators, planners, quality-assurance staff, maintenance personnel, energy management, technology experts and other internal stakeholders should participate in Kaizen events in order to review all aspects of the improvements. This being the case, energy-saving projects can be reviewed from otherperspectives, and spin-off opportunities, such as quality, production capacity and maintenance improvements, are possible. Example: Chiller optimisation through Kaizen event An Irish food-processing plant experienced lack of capacity in chilling product as a bottleneck and consequently any downtime in chiller system had a serious impact. To identify the problem, the following data was collected: Temperature of product entering the chilling area Temperature of product exiting the chilling area
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Product dwell time in the chilling area Product density in the chilling area Equipment settings Chiller layout Analysing this data provided a list of problems. Most were solved during or shortly after the actual Kaizen event. Team members included the environmental manager, maintenance technician, plant supervisor, refrigeration consultant, QC and production supervisor. The outcome was a significant cost saving, higher production throughput and increased awareness of and commitment to energy savings. 3.1.4 Overall equipment effectiveness (OEE) The Lean term OEE compares to its theoretical efficiency the total effectiveness of a piece or combination of equipment when the equipment is fully used, at full performance and delivering 100% quality. It is common to benchmark OEE of 85 % and above as world-class. Table 3.1: World-class OEE Factor Availability rate Performance rate Quality rate Overall Equipment Efficiency World-class 90 % 95 % 99.9 % 85 %
In the process industry, experience shows that a strict measure of OEE causes some difficulty. Lack of availability, performance and quality is not always directly caused by the equipment itself but by upstream equipment bottlenecks or failures. A number of individually defined OEE formulas exist in the processing industry, but OEE is still applicable for evaluating process improvements internally. By using OEE in energy reviews, the true operation of a plant may be analysed and energy -saving opportunities may be identified for: Idle time Poor equipment performance Variance in operation patterns Reprocessing or discarding defective product
Example: OEE used for energy saving Connacht Gold decided to investigate the overall equipment efficiency (OEE) of pasteurisers, separators and evaporators in its Shannonside dairy process plant. Huge potentials were discovered in increasing the availability of the equipment, as substantial variation in start -up procedures and cleaning routines was discovered. It was alsofound that a simple pipe restriction caused poor performance ratio. Potentially high energy saving exists in increasing the OEE at Connacht Gold toworld-class. (A full case study is included in the Appendix.) 3.1.5 Takt time Takt time is the maximum time allowed to produce a product in order to meet demand. It is derived from the German word Taktzeit (cycle time). Takt time sets the pace for industrial manufacturing lines. An exampleis in automotive manufacturing when cars are assembled on a line, and moved to the next station after a certain time the Takt time. Therefore, the time needed to complete work on every station has to be less than or equal to the Takt time in order to complete all tasks before the product moves to the next assembly station. Strictly speaking, the Takt time is determined by the rate at which the customer requi res product. 50
Reviewing and minimising Takt time influences the operation hours and, thus, often the energy requirement either totally or per product produced.
3.2 Tools that energy programmes can adopt from Six Sigma
3.2.1 Reduction in variation Variation is the difference between actual performance and the ideal performance that is uniquely defined by stakeholders, including direct customers, internal customers, suppliers, society and shareholders. According to the law of variation, Everything varies. We cant predict the behaviour or characteristics of any one thing. Predictions only become possible for groups of things where patterns can be observed. If outcomes from systems can be predicted, then they can be anticipated and managed. In 1924, Dr Walter Shewhart of Bell Telephone Laboratories identified two causes of variation: Common cause, or noise, variation is inherent in a process over time. It affects every outcome of the process and everyone working in the process. Managing common-cause variation thus requires improvements to the process. Special cause, or signal, variation arises because of unusual circumstances and is not an inherent part of a process. Managing this kind of variation involves locating and removing the unusual or special c ause. Shewhart further distinguished two types of mistakes that are possible in managing variation: treating a common cause as special and treating a special cause as common. Later, W Edwards Deming estimated that lack of understanding of variation resulted in 95% of management actions leading to no improvement. Referred to as tampering, action taken to compensate for variation within the control limits of a stable system increases, rather than decreases, variation. Reduction in variation is the pursuit of the ideal, but stakeholders always experience some variation from the perfect situations they envision. This, however, also makes improvement and progress possible. Reducing the variation that stakeholders experience is the key to quality and continuousimprovement. Reduction in variation leading to increased energy performance can be experiencedif: The process variation is minimised (stabilisedneed for energy supply) The utility system variation is minimised (stabiliseddelivery of energy supply) Stabilising the energy supply can lead to energy savings, e.g. by fewer start/stop procedures, time savings or decreased fluctuations in temperature and pressure levels. Also, converting from on/off regulations to frequency converters can be seen as a reduction in variation. 3.2.2 Statistical process control Statistical process control (SPC) is an effective method of monitoring a process through the use of control charts. Control charts enable the use of objective criteria for distinguishing background variat ion from events of significance based on statistical techniques. Much of the power of SPC lies in the ability to monitor both process cent re and the variation about that centre. By collecting data from samples at various pointsin the process, variations in the process that may affect the quality of the end product or service can be detected and corrected, thus reducing waste as well as the likelihood that problems will be passed on to the customer. With its emphasis on early detection and prevention of problems, SPC has a distinct advantage over quality methods, such as inspection, that apply resources to detecting and correcting problems in the end product or service. In addition to reducing waste, SPC can lead to a reduction in the time required to prod uce the product or service from end to end. This is partially due to a diminished likelihood that the final product will have to be reworked, but it may also result from using SPC data to identify bottlenecks, wait times, and other sources of delays in the process. Process cycle time reductions coupled with improvements in yield have made SPC a valuable tool for both cost reduction and customer satisfaction and it often leads to energy savings.
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Example: Total quality management (TQM) and SPC In a road-surface chip and tar plant in Ireland, TQM and SPC were used to address energy-saving opportunities by decreasing the reject rate. Investigation of sources of energy waste led to a review of the rejected product, which had been part-processed, thus expending energy and time. A reduction in the amount of product scrapped led to an improvement in quality and a consequent reduction in the energy required per tonne of product shipped. Figure 3.2: Energy consumed per tonne of production: before and after
The project team consisting of operators, the plant manager, quality technicians and SixSigma experts were able to identify the root causes and significantly reduce the reject rate, leading to energy savings and reduction in CO2 emissions. (This case study is detailed in the Appendix.) 3.2.3 FMEA A failure modes and effects analysis (FMEA) is a procedure foranalysing potential failure modes in a system, classified by severity or the effect of failures on the system. It is widely used in manufactur ing industries in various phases of the product lifecycle and is now increasingly finding use in the service industry. Failure modes are any errors or defects in a process, design, or item, especially those that affect the customer, and can be potential or actual. Effects analysis refers to studying the consequences of those failures. In FMEA, failures are prioritised according to how serious their consequences are, how frequently they occur and how easily they can be detected. FMEA also documents currentknowledge and actions about the risks of failures for use in continuous improvement. FMEA is used during the design stage withthe aim of avoiding future failures. Later it is used for process control, before and during ongoing operation of the process. Ideally, it begins during the earliest conceptual stages of design and continues throughout the life of the product or service. The purpose of the FMEA is to take actions to eliminate or reduce failures, starting with the highest -priority ones. It may be used to evaluate risk-management priorities for mitigating known threat vulnerabilities.It helps select remedial actions that reducethe cumulative impacts of lifecycle consequences (risks) from a systems failure (fault). It is used in many formal quality sy stems such as QS-9000 and ISO/TS 16949 Example: Energy and FMEA A pigment manufacturer included an energy expert in the FMEA analysis of a spray drying production line , also involving a Six Sigma Black Belt, operational project engineer (energy engineer) , operators, maintenance, production-line manager, process-control manager and financial controller. The improvement team identified a nine-point FMEA listthat contributed to major improvement of the spray dryer. The solutions resulted in replacement ofthe feeder unit, upstream process optimisation, capacity improvements of specific parts, operator training and improved maintenance procedures.
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The impact on energy usage was calculated and validated by experiments throughout the project. The results are a significant capacity increase together with a reduction in specific gas consumption. Figure 3.3: Spray drier project impact on capacity and energy (indexed numbers)
An important lesson from the project was that the involvement of an energy enginee r for evaluating gas consumption was critical to its success.
3.2.4 Professionalisation of quality One of the key innovations of Six Sigma is the professionalising of quality -management functions. Prior to Six Sigma, quality management in practice was largely relegated to the production floor and to statisticians in a separate quality department. Six Sigma borrows martial -arts ranking terminology to define a hierarchy (and career path) that cuts across all business functions, and a promotion path straight into the executive suite. Six Sigma identifies several key roles for its successful implementation. 1. Executive leadership includes the CEO and other members of top management. They are responsible for setting up a vision for Six Sigma implementation. The y also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. 2. Champions are responsible for Six Sigma implementation across the organi sation in an integrated manner. 3. Master Black Belts, identified by champions, act as in-house coaches on Six Sigma. They devote 100% of their time to Six Sigma. 4. Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. 5. Green Belts take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts. Energy management may benefit from identifying similar key roles. A clear definition of key roles involving executive leadership would also help anchor Energy Programme activities in the management group. 3.2.5 Project structure using DMAIC Six Sigma seeks to identify and systematically remove the causes of defects and errors in any process , from the manufacturing floor to more general types of business processes, that can ultimately lower customer satisfaction. Originally developed by Motorola, Six Sigma has two key methods called DMAIC and DMADV, bothinspired by W Edwards Demings plan-do-check-act cycle. DMAIC consists of the following steps: 1. Define the process improvement goals required 53
2. 3. 4. 5.
Measure key aspects of current processes Analyse the data gathered in order to verify all relevant cause -and-effect relationships Improve or optimise the process through Lean techniques Control the process to ensure that deviations are consistently reduced over time
DMADV, also known as DFSS (Design for Six Sigma), consists of the following steps: 1. Define the design goals 2. Measure and identify CTQs (characteristics that are critical to quality ), capabilities and risks 3. Analyse to develop and design alternatives resulting in the selection of the best design 4. Design details, optimise the design, and plan for design verification 5. Verify the design though pilot runs before introducing to your producti on process
Evaluating all types of energy savings Utility systems Processes optimisation Operator training Standard operational procedures Benchmarking of process energy efficiency on the corporate level Benchmarking of different technologies applied for same process step
Example: Energy KPIs In an Irish food-ingredients company, the energy team used a traditionalapproach for locating meters to monitor their power consumption. Significant investment was made in metering multiple locations over the site, but the team expressed frustration that the overall KPI (total site consumption) fluctuated by as much as +/-50 % from day to day due to varying ambient conditions, changes in production patterns , etc. It was agreed to adopt a COP approach for significant energy users (evaporator lines, dryers, refrigeration plants and cooling towers) in order to controltheir efficiency. Figure 3.4: Setting energy KPIs
The energy approach (COP) found that processes were operated with water (instead of product) for periods and that cleaning in process (CIP) periods varied widely over the week. This represented two significant energy losses not recognised and addressed by either theenergy or Six Sigma team. 3.3.3 Standard operational procedures (SOP) In many factories, most processes are clearly outlined in SOPs that specify the plant operation, e.g. , operator instructions, control strategy, quality requirements and maintenance activities. SOPs are rarely taken into consideration in energy reviews butthis is a strong point in the Lean/Six Sigma-culture. The energy engineer should include SOP reviews, as savings can be identif ied in: Operator instructions Excessive process time or flow specified Unnecessary cleaning activities Control strategy
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Fixed setpoints instead of bandwidth Temperatures and flows exceeding needs Variations according to seasonal changes Quality requirements Higher than is required for additives or even product itself Storage facility temperatures and humidity Production facility temperatures and humidity Maintenance Lack of maintenance, leading to poor efficiency COP surveillance as watchdog for maintenanceneeds
Often, muda (waste) through over-processing can be identified by reviewing SOPs. Example: Adjusting quality requirements An Irish pharmaceutical plant uses nitrogen in its production facility and demands a 99.9995% grade of pure nitrogen, which requires a very high energy requirement in the pressure swing absorption (PSA) plant for producing the nitrogen. Reducing nitrogen quality marginally to 99.95% is acceptable, according to validation procedures. This reduces the energy consumption for the plant by more than 30%. 3.3.4 Analyse core production processes Many energy reviews tend to find their successes in optimisation of utility systems , and worthwhile projects are identified in boilers, HVAC or refrigeration systems. However, large energy -saving potentials are often revealed by questioning how core processes are operated. Lean/Six Sigma has a much stronger focus here and energy specialists could benefit from that. This requires the energy engineer to focus on core production processes and inve stigate: Are heating/cooling temperatures adequate for the process? Have speed, flow and frequency been optimised? Is the right technology being used? The approach is to evaluate the energy service; often huge energy-saving potentials are identified in adjusting the delivered energy to what is required by the process no more, no less. Example: Demand-side management In an Irish pharmaceutical plant, various energy-saving projects were identified in the utility systems and control strategy. However, the project with the largest potential resulted from a discussion on the need for sterilisation of tanks. The investigation revealed that specific holding tanks were sterilised twice a day although equipment and tanks downstream were sterilised less, posing larger risk for product contamination. By reviewing the requirement and analysing the process as a whole, it was possible to change routines so that the weekly number of holding-tank sterilisations was reduced by 80%.
3.4 Tools that Lean/Six Sigma can adopt from energy management
3.4.1 Process energy balance A preliminary review of a site might use a process energy balance to determine the main users of energy as part of the preparation of an energy aspects register.Specialists normally analyse energyusage in the utility systems through pie charts, energy maps and Sankey diagrams. A process energy balance provides useful information on areas with potential for energy -saving initiatives. It can aid in the development of other tools such as KPIs and e nergy-related value stream mapping. 56
The Lean/Six Sigma approach is based on mapping the process. Mapping the energyrequirementin various process steps helps identify where the energy supplied adds value to the product and how efficiently this is done. Example: Process energy consumption In a review of energy-saving opportunities in an Irish food-ingredients company, energy experts and Lean experts found two energy-usage issues with the operation of drying process equipment : a cleaning procedures variation between operators/shifts, and, in standby mode, the equipment was operated with water instead of being turned off. In both cases, the process equipment was consuming excessive energy which would not have been discovered if the team had not addressed the process itself. 3.4.2 Energy service analysis (Onion diagram) The experienced energy engineer willbegin an audit in the core of a process by asking How does the energy supply generate value?. This is very similar to VSM in Lean terms. If cleaning of equipment is not needed more than once a week, obviously if it is performed on a daily basis 6/7ths of the energy used may be saved no matter how efficiently the system is constructed and operated. Optimising such matters in process industries can also lead to huge energy savings under this category. The Onion diagram depicts how energy savings are categorised. Figure 3.5: Onion diagram showing typical types of energy waste
When all energy wastes as shown in the Onion diagram are considered, most industrial processes willbe found to have extremely low efficiency in energy usage. It is often found that just 5-10% of the supplied energy ends up as energy service which indicates massive saving potential. Example: Healthcare company In a healthcare company, autoclaves are used to sterilise products delivered to hospitals for surgery (batch sterilisation process). The items are delivered in plastic bags filled with sterile water . These bags are sterilised on trays in large vessels (as illustrated below). To avert explosion of the bags when heated above boiling pressure (120C), the vessels are supplied with compressed air at a pressure higher thantwo bars. Figure 3.6: Autoclave for sterilisation of products for surgery 57
The questions that the Onion diagram poses are: Energy service: Is it necessary to sterilise products (that are also sterilised at the hospital)? Is it necessary to use sterile water for the bags (that aresterilised)? Process: Is thermal sterilisation the most efficient proces s? Can x-rays, chemical sterilisation or other processes be applied? Plant design: Is it necessary to apply steamsterilisations use hot water with recovery? Can a continuous process (tunnel) recovering heat be applied? Is 8 bar compressed-air necessary as compared to 2-bar vesselpressure? Control: Can standard batch-time (50 min) be shortened by applying accurate control? Can compressed-air compressors be operated with VSD? Maintenance: Can leaks in the compressed-air system and steam piping be minimised? 3.4.3 Data collection Most energy audits carry out mapping activities similar tothose used by Lean and Six Sigma specialists: Principal diagrams for production flows Collection of data on production flows and raw material supplies including energy Calculation of mass balances and energy balances Pie-charts are commonly used by energy consultants to identify the areas in which most energy is used. This leads to a decision on how energy costs should be allocated to different areas and end -users in the facility. There are lessons to be learned here, since Lean/Six Sigma companies often operate with a number of cost centres, activity-based-costing (ABC), etc. If energy cost is not allocated to a particular department, that department will not be motivated to improve its energy efficiency or reduce its energy cost. To successfully allocate energy costs, it is important to involve the energy specialist sothat energy costs are not just something allocated to the boiler station and the refrigeration plant, butare considered a variable cost for each workshop, department or significant process/machine. 58
If such an allocation of energy costs islacking, energy efficiency will not be considered in the operation of the core processes. This is a missed opportunity. Example: Energy in cost centres In the Irish operation of a multinational corporation, this case study addresses the use of cost centres and how to distribute energy costs across a site. Cost -centre control is essential in all modern enterprises. The cost-centre approach faces difficulties when it comes to distribution of energy costs. Most enterprises tend to establish the boiler station and refrigeration plant as individual cost centres, a retrograde step when compared with the traditional approach of the energy manager. The flip side of this problem is that the individual cost centres in the production area show a low energy requirement (since costs have been allocated to utilities) and that energy scores low on the balance sheet, and thus on the project list. To give energy efficiency activities the right priority and to make sure that costs are allocated correctly, the accountants setting up the cost-centre approach will need input from energy experts to distribute costs correctly through appropriate metering of utilities. 3.4.4 Measurement of energy consumption Measuring is widely used, particularly in Six Sigma. Measuring and calculating energy consumption requires some background knowledge. The following should always be considered: Metering of delivered energy to the process does not always equal energy supplied by the utility Variation in load over time Seasonal changes in climate Correct placement of metering is important e.g. for flow meters Meter accuracy Energy experts must be used to consider these parameters so that energy measurements give valid data. 3.4.5 Sankey diagrams Sankey diagrams provide an overview of the energy flow in a plant, process or equipment and are sometimes used to demonstrate national energy consumption maps. Inthe Sankey diagrams, all energy losses, usage and recoveries are displayed visually. This assists identifying energy-saving opportunities. Figure 3.7: A Sankey diagram
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Sankey diagrams can also reflect other consumption, such as materials (raw material s and product) or air/water flows. These can then be used for estimating the energy costs related to each flow, e.g. for defective products or for rework. Example: Mapping of clean-water usage The energy consultant in an Irish pharmaceutical company addr essed total energy costs for producing clean steam, purified water and CIPwater during a site visit. The costs were not known and it appeared that many changes had been made over several years. When an energy balance was prepared for the water system , identifying all major flows, it transpired that 75% of the purified water produced was recycled and re -processed because reverse-osmosis capacity was not adjusted to the actual usage of water by the production. Operational costs for producing water were ther efore much higher than expected. A Six Sigma project was initiated to optimise the system. 3.4.6 Pinch technology (process integration) Virtually all energy supplied to a facility (fuels and electricity) ends up as waste heat mostly as diffused lowtemperature heat of no value, but to a certain extent as waste streams which may be useful for heating of buildings, process water, etc. A systematic analysis of opportunities to re-use waste energy is a site-wide activity involving major producers of waste heat (boilers, compressed-air plant, refrigeration plants, etc) and possible end-users where primary heat supply (steam, hot water, etc) might be substituted by waste heat. A classical example is use of waste heat for building heating, for example in industrial sectors where large HVAC units are operated and large airflows are heated to temperatures around 20 -30oC. Such evaluations can be quite complex and the use of Pinchtechnology (process integration) can be crucial in order to gain an overview of opportunities and how to prioritise these. Example: Energy Efficient Design A new pharmaceutical production facility in Ireland plans centralised utility systems, which make it attractive to use heat recovery for production of low-pressure hot water (LPHW), which can be used for heating in the facilities, e.g. in HVAC systems. Collecting waste heat from, for example, chillers and air compressors can recover energy that otherwise would end up in cooling towers and be related to additional costs. Energy recovered for LPHW will substitute energy usage that otherwise would originate in expensive utilities like electricity or steam. Consequently, heat recovery will reduce costs for discharging waste heat in cooling towers and reduce consumption of steam and electr icity. The system for collecting waste heat addressed in the facility is based on low -temperature heating water (LTHW) and is expected to achieve substantial savings every year during the lifetime of the facility. The expected payback is expected to be less than two years. 3.4.7 Metrics/COP The use of metrics is crucial to monitor progress of the L ean/Six Sigma process. As there will be overlaps in the areas where the Lean/Six Sigma specialists will focus and those where the energy specialists will focus,it makes sense for these disciplines to develop metrics together. Energy specialists often use the COPprinciple to develop KPIs. This principle originates in the refrigeration sector but generally defines the ratio between energy ending up in the productand energy supplied from the utility systems. COP is, in effect , the ratio between the energy service and the energy bill. Consider, for example: A cooling plant: COP is the ratio between delivered cooling and electricity supplied to compressors, pumps and fans A drying process: COP is the ratio between evaporated water from product and heat supplied to the drying process by the steam system
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Correct measurement is of great importance to ensure that the true energy service and consumptions are found. As a rule of thumb, the meters should be placed as close to the energy service as possible. Figure 3.8: Co-efficient of performance (COP)
3.4.8 Best available technology (BAT) A central requirement in the EU IPPC (Integrated pollution prevention and control) directive is that industrial enterprises evaluate BAT in energy efficiency when planning major investment projectsand new facilities. Best means most effective in ensuring minimum environmental impact Available means physically and financially available and feasible for the actual application Technology refers to the construction, operation, maintenance , etc Improvements in the industry have yielded comprehensive energy-efficient technologies for a wide range of industrial processes and machines. BAT can be interpreted as state-of-the-art and be used for benchmarking systems against what is theoretically achievable.
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The optimum use of the tools will depend on the type of company, experience of the staff, characteristics of savings opportunities, etc. However, best practice suggests using the tools in the following phases: Planning of energy review Energy mapping and identification of significant energy users Analysis and identification of saving opportunities Target-setting
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The following sections explore issues that should be considered. 4.1.1 Planning of energy review During the initial planning of the energy review, a diagnosis should be considered when organising the work and selecting key staff to carry out the work. Such an initial diagnosis of energy efficiency in the facility should be carried out carefully and with a broad approach in order to mobilise the right members of the organisation andensure the right approach to how energy efficiency can be improved, for example: If OEE (overall equipment effectiveness) is low, energy losses fromthe idle load of equipment might be the most significant energy loss and a focus on improvement of OEE as the most feasible way to improv e energy efficiency (specific energy consumption) might be considered. If operators have high influence on the operation of significant energy users, it may be necessaryto engage the operations management to influence operator behaviour and habits. If a large proportion of energy requirementdepends on process parameters and procedures underthe responsibility of, for example, the QA department, their involvement and cooperation is required to effect savings. Production planning influences energy usage associated with changeovers, sequencing of products, idle load, storage, etc, and therefore planners should be involved in key energy projects.
4.1.2 Mapping of data and identification of significant energy users As discussed earlier, increasing the focus on processes and energy services often reveals new ways to obtain energy savings. Examples of these are: Mapping energy usage by different process steps and/or product t ypes rather than by utility systems. The use of pie-charts in the energy balance is still valid, but consideration of value-adding versus nonvalue-adding energy supplies is promoted by use of the Lean tool VSM KPIs reflecting the energy usage per batch, mass of product per hour of operation and others can be useful in identifying significant energy users. If these do not exist, the y should be considered as additional KPIs, bearing in mind the caution on setting KPIs(in a previous section) At the end of the energy-mapping process, goal-setting can act as a motivating factor as the following steps in the workflow are completed. For specific pieces of equipment or processes , the energy metrics can be given in kWh/unit or kWh/kg or the equivalent of product as metrics. The use of such energy metrics is a good aid for the L ean consultant. Additionally, if the project involves significant energy users, consideration should be given to including an energy expert in the analysis. In cases where multiple process es or entire process flows are involved, energy experts should always be invited to the project. The experienced energy consultant can identify wastes and focus areas at a glance. 4.1.3 Analysis and identification of saving opportunities Energy savings are often identified by addressing operating times andthe load on utility systems, whereas a more structured approach and the use of process-oriented tools might provide new opportunities. Lean and Six Sigma experts should be integrated in the project teamto conduct the analysis, e.g.: SOP How is the plant supposed to be operated and is this optimised? OEE How well is the plant operated as a whole? Cause & Effect, FMEA and others systematic approaches to root-cause analysis, risk management Kaizen the involvement of operators Just-in-time production planning effects on energy savings
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Lean and Six Sigma experts are used to working with broader assessments of opportunities involving all benefits (capacity, raw materials, quality, etc). By including these aspects in energy-saving projects, more opportunities will be found. While measuring is widely used, particularly in Six Sigma projects, measuring and calculating energy consumption requires some background knowledge. The following should always be considered: Metering of delivered energy to the process does not always equal energy supplied by utility Variation in load over time Seasonal changes in climate Correct placement is important e.g. for flow meters Meter accuracy Energy experts automatically consider these parameters. When they are included, the improvement team can draw on their experience to perform energy measurements that give valid and insightful data. 4.1.4 Target-setting In the energy world, target-setting is somewhat informal. In setting out on a project, the objective is to improve from the current situation,but with the exception of ROI consideration measurable goals are seldom set. The culture of Lean and Six Sigma introduces the concept of SMART(ER) goals , which should be: Specific: clear, unambiguous, straightforward, understandable Measurable: can be related to quantified or qualitative performance measures Achievable: Objective should be realistic and within known resources Relevant: Linked to operational/service plan Time-bound: Building in target date & review dates (Extending Capabilities): Stretching team performance (Recognition) : Acknowledgement of team achievement, reflection, learning Add to this the concept of the ideal state or the future state from L ean, and there is a measure of success for the energy improvement team to achieve. There are also process metrics measures of how well the project is managed and result metrics measures of the deliverables of the project. Six Sigmaproject charters are particularly good at forcing a team to determine the improvement that will be delivered. 4.1.5 Securing management approval The energy manager often works in a technical services or facilities department and may report to thedirector of such a function. Requests for investment in new or improved equipment or controls will often compete with all other projects from production, quality, etc. Many such competing requests will have been proposed through Lean Kaizen events or Six Sigma Black Beltprojects, sponsored by executive management. Management of the energy project through such a structure will increase management ownership of the initiative and greatly improve the prospect of having the investment approved. It would be wise to integrate such a methodology into the project to take advantage of the management influence that it brings to bear, or at least to use some of the techniques of Lean/Six Sigma to maximise the prospect of management approval. 4.1.6 Follow-up Very often, the follow-up step is omitted in energy-saving projects, either because targets were not set and there is no clear measure of success (before/after comparison) or because it is assumed thatthe project has nothing further to gain. However, important concepts from Six Sigma could be beneficial: Integration with production metrics 64
Secure ownership of projects Future efficiency monitoring to decide when to review again or as a watchdog for maintenance actions Useful tools for presentation to management Standardisation of gains into the standard procedure OEE measurements and KPI surveillance should be used to continue monitoring the results relating to energy aspects after the project closure. This will help ensure that gains are maintained and improved procedures adhered to.
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Table 5.1: Lean and Energy Related Questions to help Analyse the VSMe Analysing the VSMe
Lean Thinking questions 1. What is the percentage Value Add? 2. What are the significant non-value-add activities? 3. Where is the process flow interrupted by the build-up of inventory? 4. What bottlenecks exist in the Value Stream? 5. Is there any Monument (large complex piece of plant) in the process flow? 6. Does all the value-adding process operate to Takt Time (the rate of customer demand)? 7. What processes have significant defect rates? 8. How is production scheduled? Are the processes scheduled separately? Energy-related questions 1. What is the percentage Value-Add Energy? 2. Which are the significant non-value-add energy users? 3. What is the energy loss associated with inventory? 4. What are the high energy-using processes? 5. What are the energy wastes in these processes? 6. What is the co-efficient of performance (COP) of the high energy-using plant? 7. What energy is associated with defects and rework? 8. How would changes in production schedule, Takt Time or batch quantities influence energy use or process energy intensity?
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5 .1 .1 S VMe
benef its
Several benefits accrue from using the VSMe that are effective inhighlighting opportunities to improve a companys energy performance and to reduce costs. 1. The VSMe provides an additional diagnosis tool to examine how energy is usedin a process and how it is coupled to the production operation. In doing so, the VSMe wi ll complement the Review of Energy Aspects requirement of IS393 for the process. 2. It indicates the % of value-adding energy to total process energy, a key measure for ideal and future state maps and possible energy EPI. 3. It provides clarity of energy associated with work in progress (WIP) between processes and waste , energy associated with supporting processes (not shown in example above)and rejected material from the process. This aligns with Lean thinking in determining what energy the customer recognisesas valueadd and is willing to pay for and what energy is non-value-add and therefore seen as waste. 4. The VSMe indicates the effect of having disconnected processes with varying production demand triggers. This is highlighted by inventory build-ups, where energy has already been invested. Once again, if the customer does not see this as value-add, they will not be prepared to pay for it. 5. It highlights the scale of difference in energy intensity between the most energy -intensive processes, demonstrating its potential for use in identifying SEUs in the process. a x Emp l e:S VMe ap l i p ed to l a Bck top pl ant
An Irish Blacktop production operation worked with SEI Lean and energy specialists to generate a VSMe ofits operation from quarry to dispatch. Three key areas were highlighted with significant energy-saving opportunities: SEUs were clearly evident from the energy line at the base of the VSMe. The analysis clearly indicates the potential saving that would result from any energy improvements in these proces ses. A large inventory of raw material had been accumulated, at a considerable energy cost. Attention is drawn toward balancing raw materials for the process with customer demand/ Takt time, with resulting energy savings. A significant amount of material was rejected and is awaiting rework. The rejected material has already had energy invested in it, and the rework process to make it fit for customer use requires significant additional energy. The complete case study is included in the Appendix.
5.2 W aste/ MU e A D
One of the very powerful concepts introduced by Lean is the pursuit of waste elimination. Lean allocates waste into seven categories (shown in figure below): i F gu re 5 .2 : Mu a d as seen y b A N E L
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While traditional industrial engineering has concentrated on the value-adding centres in a facility, Lean teaches us to focus on the non-value-adding time in between and to look for waste under the above headings. A new approach is to look for the seven energy wastes at the same time. In considering the application of muda to energy, some issues are indicated in the following diagram: Figure 5.3: MUDAe as related to the Energydiagram
Condition of Equipment
Defective Controls /Over Processing /Power Leakage / Efficiency Drops /Operator Influence (Error /Non Compliance) /Breakdowns /Production Planning / Electricity Demand Scheduling. Set-point Losses /Idle Load /Inaccurate Measurement /Part Load Operation (Compressors)
In-efficient Equipment /Compressor Losses /Idle Load / Boiler Losses /Leakages /Equipment Oversized /Over Pressure /Missing Heat Recovery
Too much time / Heating un-necessary items /Over Processing /Equipment Oversized /Recipe
5.2.1 MUDAe the seven wastes of energy A central activity in all projects concerning optimisation of production and energy efficiency is minimisation of waste, or muda. Energy wastes are also tightly connected to themuda definitions. Table 5.2: Muda and energy waste aspects (MUDAe) Muda (definition) Rework Example of energy waste aspects (MUDAe) Energy used in producing defective product is wasted energy
Overproduction
Producing products that exceed the quality required by the customer often affects the energy requirement, e.g. due to longer processing times or more advanced processing requirements Overproduction can also lead to acquiring oversized equipment that increases the energy consumption Energy related to both handling and storage of exce ssive finished goods also causes waste
Conveyance/transport
Energy used directly for transporting equipment such as conveyors, forklifts, sometimes even trucks
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Waiting
Maintaining adequate temperature and humidity in intermediate storage facilities Energy related to storage of excessive raw materials or finished goods Idle load for equipment Energy used for circulation of media at high flow rates during periods where demand is low
Inventory
Motion
Overprocessing
Supplying excessive level of flow, temperature, pressure, speed or time Using a process/machine with low energy efficiency as compared to the delivered energy service Generation of waste heat not used in production or building facilities
Energy wastes are also tightly connected to theMuda definitions. We have thus compiled a list of the types of energy waste that can be observed in a typical process. Energy waste or MUDAe can be detected more easily in energy audits, as Muda is in Lean. It is therefore a useful tool to engage those who are not educated in energy matters but influence energy use.
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6.0 Conclusion
In this report, we have examined the tools and workflows used by Lean, Six Sigma andenergy managers and aim to optimise improvement efforts through combining them to generate more powerful, blended tools and workflows. The examples demonstrate that the enhanced tools and workflows can lead to a more effective approach and can highlight issues that would not be recognised byany discipline using only its traditional toolset. This work represents pilot activity in tools and workflows . It is expected that the techniques described will be further improved through demonstration projects.
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Section one deals with questions and assessments that ideally would be addressed in a management review of the EnMS. It discusses the questions that an organisation should ask of itself when conducting a high-level review of EnMS performance, and facilitates the development of metrics for assessing system effectiveness. Commitment to the success of the system and the policy on facilitati n g the evolution of the EnMS are addressed, for executive review. Activity two is broken down into four sections of the system: Planning Implementation and Operation Checking and Corrective Action Management Review Each of the four sections assesses the performance of the organisation against the optimum system. The questionnaire addresses the most important points that make up each section and attempts to draw conclusions about the best practices for each. The assessment will output performance metrics for review in line with the users current EnMS. The questionnaire is intended for use as an indicative tool. It neither prescribes correct practice nor provides a means of auditing the EnMS for the organisation using it. Its purpose is to allow the userto identify the areas in their EnMS which are under-performing, not only in terms of the requirements of the standard, but in terms of ensuring a system that can be easily managed and is as effective as possible. The possible responses to the assessment questions are indicative of best practice across industry. However, each system is based on the nature and scale of the organisation in question. Thus the best-practice answer for one organisation may not be appropriate or practical for another and might require modification by the user. Each of the questions posed is further discussed in the following section and guidance on their interpretation is provided.
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Section One: Guidance on interpreting assessment questions Executive Level System Effectiveness Assessment
1 Did the organisation achieve its target energy reduction last year? Achieving less than 25% of the target reduction during the review period indicates an EnMS that is not operated effectively. The system is not receiving the required attention for energy savings to be realised. Achieving and exceeding the target reductions is a sign of an effective, well -run system that will provide opportunities for continuous improvement. 2 Was the energy reduction target ambitious enough? Setting ambitious targets will challenge the EnMS to perform to the higher end of its abilities. The system will be operated more successfully and the benefits will be greater. 3 Is the management system appropriate and achieving the goals outlined in the policy? The success of the EnMS hinges on management of the system in allocating resources, reviewing performance and promoting continuous improvement. It is the responsibility of management to ensure that all objectives set out in the policy are addressed and thatgoals are achieved. A poor management system will hinder the growth of an environment centred on continuous improvement, and ultimately the improvement of the organisations energy efficiency. 4 What percentage of supervisors/managers demonstrates commitment to the site energy policy in the day-to-day management of the facility (across all functional areas)? Less than 50% indicates low commitment to the success of the system at an executive level. Without demonstrated support and active involvement in the system by key personnel across the organisation, the system will struggle to perform effectively. With full managerial involvement, the system will ensure that the goals and objectives laid out in the policy will be achieved and the full benefits realised. 5 Are all appropriate personnel competent in the efficient management of energy in the organisation? Training and guidance should be provided to all personnel pertinent to the operation of the system, in line with Clause 4.4.2 Awareness, training and competence . All requirements under this clause should be identified and steps taken to ensure that personnel receive training in the operation and management of the system, as appropriate. This ensures that, from operations personnel through to senior management, they have the competence to make correct judgements on energy management. 6 What quantified potential improvement in energy reduction is outlined in the opportunities register? The energy opportunities register is the reservoir of potential energy-saving ideas in the organisation. The quantified savings in this register indicate the potential for savings that have not been realised as yet. A high percentage of unimplemented savings in the register should prompt additional resources to be allocated to energy management. This will ensure that the full benefit of the system and energy savings can be implemented at the earliest opportunity. 7 Are additional resources required to implement the opportunities identified? The Energy Management Programme and Opportunities Register address the issue of allocating resources to all opportunities identified, regardless of priority or requirements. The standard requires that the issue of resource allocation be addressed at the management review. This question augments the previous question where significant opportunity for improvement exists in an opportunities register. 8 Is the internal audit process effective? A successful internal audit system will address all aspects of the EnMS and provide output on each component, and its success relative to the requirements of the standard. The internal audit process should be a structured and documented approach to identifying all aspects of the system and allocating the appropriate time and resources to ensuring that they c onform to the standard, and where not, that appropriate remedial action is taken.
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The internal audit process can be resource-intensive; thus the improvements achieved as a result of this resource allocation should be evaluated on an ongoing basis. This should be carried out to ensure that the organisation gains the greatest potential opportunity for improvement as a result.
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Section Two: Guidance on interpreting assessment questions Organisational Level Section 4.3: Planning
1 What percentage of site energy usage is accounted for by the identified significant energy users? The greater the percentage of energy use attributed to significant energy users, the greater the level of EPI monitoring that can be achieved. The more knowledge that is held on a system, the more scope that exists for formulating accurate and effective solutions for improving energy efficiency. 2 What percentage of site energy usage is not accounted for in the energy aspects review (others or miscellaneous)? The smaller the percentage of unknown energy users on site, the greater the knowledge of site energy usage. This proportion of site energy use may account for a number of wasteful users, which, if identified, could be subjected to remedial action and flagged for energy-saving opportunities. Minimising the unknowns minimises the possibility of energy inefficiencies going unchecked. 3 How many opportunities for improvement are documented in the opportunities register (register of opportunities, energy portal, Excel file, etc)? All opportunities should be documented, regardless of impact, feasibility or priority. This provides a basis for ensuring individual progress and evaluating performance. This step demonstrates success and underpins a case for future investment and resource allocation. Projects deemed as unacceptable in terms of current company ROI should be retained in the register, for review in the future. 4 How many special investigations (energy audit surveys, energy balances) were carried out last year? The greater the number of special investigations, the more proactive the organisation is with respect to identified energy-saving opportunities. Special investigations allow probing into unknown areas of energy consumption. New projects and opportunities will be identifie d and system knowledge will be augmented. 5 What percentage of site energy-consumption reduction is identified as a target in the energy-management programme? A target of 4% or more will challenge the EnMS and allow its potential to be realised. More opportunities will be identified, performance parameters will be controlled more tightly, and demonstration of a successful system will gain support from staff and management. 6 Do the energy-management programme objectives include the following categories of improvement to the site energy management? All three categories contain factors that contribute to energy efficiency. Effective energy management requires that all three be managed in parallel to ensure improvement of the EnMS. Objectives should be appraised in terms of all three categories, to ensure maximum benefits. For example, a large number of technical initiatives will not survive without the required framework to carry them (organisational) and the proper training to deliver them (people). Failing to consider all categories when developing an initiative leads to a shortfall in the support required for success of that initiative. While some may succeed, others may be hindered by a lack of sufficient resources. 7 How have significant energy aspects been identified? Considering data from all sources allows a clearer picture of the energy user and drivers of energy consumption to be drawn. Section 4.3.1 (b) of the IS393 Technical Guide should be consulted for a list of suggested top down and bottom up techniques for identifying significant energy users. 8 Is the Energy Management System standalone or integrated in the existing site management systems? A standalone system demands more administrative work and generation of separate standard operating procedures (SOPs). Integrating the EnMS with existing site management systems minimises the initial workload, system operational considerations and maintenance costs. The EnMS should be integrated where possible.
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9 How many energy-related standard operating procedures were drafted to comply with the requirements of IS393? The number of energy-related SOPs should be limited to the minimum number of effective documents. A large number creates a larger workload and may dilute the aim of generating energy related SOPs. Where possible, existing procedures should be modified or expanded to include the requirements of the energy system, as opposed to generating new procedures. 10 How many people have responsibilities assigned to them in the energy-management programme? A single member of staff assigned to the EnMS cannot effectively manage the system. It requires a number of people to form a multi-faceted team which draws on a range of skills for managing the system. This includes representatives from various departments across the organisation.
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Conclusion
The assessment questionnaire is based on the performance of the organisation in each of the sections contained in the IS393 standard. The results provided in Management System Performance should be analysed as they point to performance in each key area of the system. The results of this assessment should furnish the user with a set of data giving an overview of the performance of their system. The user should refer back to the questions on which they scored poorly and use these questions to identify the areas of their system that require improvement. Once identified, the standard requirements can be consulted and the area in question can be investigated to determine the most beneficial plan of action. This step may be a case of reviewing reasons for non-conformances being open for extended periods, or a large-scale improvement based on restructuring the allocation of responsibilities within the EnMS. The results of the assessments made in Section two should be incorporated in the interpretation of the Section one results, in such a way that they may help to reveal shortf alls at an executive level. That is, the results of the organisational assessment may provide indications of underperformance of the system; these indications may be incorporated in the executive assessment and reveal reasons for underperformance in one area, at both organisational (day-to-day running) and executive (management) levels. This assessment tool should be applied to provide an ad hoc review of the EnMS in an organisation, while also lending itself to the process of continuous improvement. Figure 2: EnMS Continuous Improvement
The figure above illustrates the concept of the continuous improvement that the two activities are intended to achieve. Activity two is likened to the analogy that the continuous -improvement process is occurring in the car. The energy-management system is improving the performance of the car by the following means: Correct tyre pressure Removal of roof rack Training of driver in an economical-driving course, etc
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The purpose of Activity one is to have a high-level view of the management system, to ensure that no obstacles are hindering system performance. In the analogy above, Activity one is carried out by senior management who are remote from the day-to-day operation of the management system (in the car) and can see that a trailer of Muda or waste is hindering the overall performance of the system. With senior management help, this waste can be removed and overall system performance be greatly enhanced.
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Conclusion
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SECTION 6 - CONCLUSION
As part of the Energy Agreements Programme, the Alternative Methodologies Special Working Group was established to promote cooperation between Energy Management and Lean/Six Sigma organisations and to investigate the benefits of sharing tools and approaches to improvement. Energy management is most often the responsibility assigned to a technical services function. The natural logic is that the energy requirements within industrial facilities are utilities that are servicing the operations. The purpose of the industry is to transform materials within approved environmental conditions and using approved and standardised processes. As a result the traditional approach is to apply engineering or technology solutions to plant utilities. This approach has proven effective and will continually find new technology solutions. The Energy Management Systems IS393 requires a more integrated assessment of all functions and influencers of energy usage. It therefore requires determining the opportunities that exist by diagnosis of process and self-imposed operations requirements, thus reducing the energy service need. Improvement Methodologies applied for cost reduction and waste minimisation are predominantly Lean Manufacturing/Lean Enterprise and Six Sigma. Historically other methodologies were used such as Total Quality Management (TQM). Many of the newer methodologies today still incorporate tools included in TQM, e.g. process control, pareto analysis, root cause analysis. Companies that are using such tools must invest heavily to develop such tools and embed them in the organisation. These tools underpin all heavy investment projects. It seems logical that energy projects could also benefit from the application of these methodologies for a few reasons, namely: Cross-functional responsibility, therefore widening the net for energy project scope Diagnoses the influence of the operation on the energy requirement Senior management support and traceability Enable equal competition with other capital projects for site or division Access to heavy engineering support function with in-depth training in tools and techniques Benefits of increased collaboration on projects that challenge the norm It was decided to break the objectives of this Special Working Group into three main objectives: 1. Implement IS393 in a company with Lean or Six Sigma in place 2. Understand the new blending workflow using the best of traditional energy management and/or Lean and Six Sigma methodologies 3. Improve the effectiveness of the Energy Management System Guidelines were put in place for integration of an IS393 certified Energy Management System within the improvement culture of a Lean or Six Sigma company. It was expected that benefits would accrue from sharing improvement methodologies traditionally used in each discipline and blending them to form improved tools and workflows. Preliminary results from case studies indicate that the combination of tools yields more detailed analysis than using traditional tools alone. A diagnosis tool is proposed for evaluating the efficiency and effectiveness of an existing IS393 programme. This has been well received by two companies in which it was piloted and it served to highlight several areas for improvement. The work of the Alternative Methodologies Special Working Group was exploratory in nature and the work completed represents a Pilot Study of some new ideas. It is expected that future cycles of the Alternative Methodologies SWG will progress the work through a broader Implementation, Replication on a greater scale and Standardisation of the practices. At each stage in the process, feedback will be taken from users and the processes will be improved. It has become patently clear as a result of the work of the group that the work of the Energy Function, the Operations Department and the Quality Department are inextricably linked and that combining Engineering and Operations tools with those of the Energy Specialist yields a richer toolset with greater potential for energy improvement.
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Energy Intensity : EnMS EPI FMEA HVAC IS393 ISO JIT Kaizen Kaizen Event : : : : : : : : :
KPI
MUDA MUDAe OEE PDCA PSA Pinch ROI Sankey SEU SIP SOP SPC SWG TAKT TPM TPS TQM VSD VSM VSMe Waste Walk
: : : : : : : : : : : : : : : : : : : : :
Japanese Term for Waste Japanese Term for Waste with focus on Energy Waste Overall Equipment Effectiveness Demings Plan, Do, Check, Act Improvement Cycle Pressure Swing Absorption (Nitrogen Plant) Process Integration Return on Investment Diagram providing overview of energy flow in plant, process or equipment. Significant Energy User Sterilisation in Place Standard Operating Procedure Statistical Process Control Special Working Group The Rate of Customer Demand Total Productive Maintenance Toyota Production System Total Quality Management Variable Speed Drive Value Stream Map Value Stream Map with Energy analysis included Facility walk down aimed at identifying waste in all its forms within a process
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