In the United States, the industrial sector is responsible for 33% of all energy use. Within the industrial sector, manufacturing consumes 70% of that energy. The massive energy requirements of today’s factories mean that there is considerable pressure on manufacturers to better manage their energy consumption in terms of both cost reduction and environmental responsibility.
While there has been considerable advancement in raw materials management to reduce waste for those same reasons, manufacturers aren’t putting the same effort into energy management. However, there are clear benefits for any manufacturer that finds the right solution to handle energy management on their factory floor.
Why Energy Management Matters for Manufacturers
The first incentive for manufacturers to develop more effective energy management is the cost. Within the manufacturing industry, raw materials are the largest cost component. While it varies depending on the specific type of manufacturing, raw materials typically represent well over half of the total costs. After this, labor and energy are the largest cost components.
Depending on the region and other specifics of individual factories, energy can equal or even exceed the cost of labor. This means that there is a massive potential for cost savings if better energy management can lead to reduced energy use. The cost benefits are further enhanced by the pricing schemes for industrial electricity that are used in most regions.
A manufacturing facility’s electricity costs will be based both on consumption and demand. This means that there will be a cost for both the total energy use in kWh and the peak demand measured during individual periods of time throughout the day, typically of 15 minutes each, in kW.
What this comes down to is that a factory floor that has spikes of energy demand above its average rate of consumption will have higher energy costs, even if overall consumption has not increased. This highlights the need not just for energy reduction but better energy management as well.
The other primary reason to develop a more effective energy management strategy is environmental responsibility and its consequent effects on your company. With so many resources being consumed, any improvement in energy, material, or waste management in manufacturing can have a significant positive impact on the environment.
Partners, investors, and the public all judge manufacturers based on their commitment to environmental responsibility. Manufacturers who ignore this impact and fail to implement more responsible strategies can see a reduction in future opportunities and a loss of valued customers.
It is now clearer than ever that manufacturers can’t afford to overlook energy management. Luckily, there are effective methods and strategies available for them to do so.
Developing an Effective Energy Consumption Strategy With KPIs
When it comes to manufacturing, energy management is not simply the reduction of energy use. Rather, effective energy management is the practice of monitoring, analyzing, reacting to, and planning in accordance with energy requirements. As previously mentioned, a manufacturer must focus on both consumption and demand if they are to successfully reduce their overall energy costs.
Like with any other goal within a production environment, the development of an energy management solution requires the effective use of key performance indicators (KPIs). These KPIs provide an objective way to monitor, analyze, and evaluate energy consumption, letting a manufacturer set targets and measure their progress.
While manufacturers will already have their overall consumption and peak demand available as KPIs, these don’t provide the level of insight needed to develop an effective strategy. Instead, the factory floor needs more granular KPIs that can be used to truly understand where energy management is falling short.
In most cases, the most appropriate KPI is a productivity index that connects production and energy consumption. This is the energy consumption per unit weight of material either produced or consumed, whichever is more appropriate to the individual process. This can be measured as kWh/kg or converted to any combination of BTU, tons, or pounds as needed. The productivity index can also be defined on a per-unit basis if that provides a clearer picture than a per-weight basis.
Either way, the productivity index tells the manufacturer how much energy is being consumed compared to actual production. It gives a clearer picture than overall energy consumption, which can rise or fall depending on what capacity the factory is currently working at.
If energy consumption is up because the factory had less downtime than the previous month, that isn’t an electricity management problem. However, if the kWh/kg is up, it’s a clear indicator that energy is being wasted without any benefit to production.
Once the appropriate KPIs are defined to monitor and evaluate energy consumption, there’s still the matter of implementing that monitoring and valuation, along with enacting an effective energy management strategy. To do so, a manufacturer needs the right tools.
Putting Your Energy Management Strategy Into Action With Matics
With real-time operational intelligence (RtOI) from Matics, manufacturers have the tools they need to better manage their energy consumption. The comprehensive solution enables your organization to monitor energy consumption KPIs and react quickly to any deviations with alerts.
The Matics solution aggregates data from all machines on the factory floor and from your existing systems to give you the clearest and most accurate overview of real-time energy consumption. This overview has the detail needed to manage electricity consumption at any level, with insight into energy use by specific shifts, machines, products, and more. You’ll be able to clearly identify where energy is being used efficiently and where it isn’t.
Matics also lets you leverage this information to implement a more effective energy consumption strategy. You’ll be able to schedule more energy-intensive products and processes during off-peak rate hours to reduce costs, along with leveling consumption to avoid increased demand costs.
Automated alerts from the Matics solution will let your production team react more quickly to changes in energy consumption. When your process begins to consume energy in excess of your set KPIs, the system will automatically send alerts to the correct individuals to take decisive action quickly. This will lead to less energy being wasted, both reducing costs and improving environmental responsibility.
The built-in communication features enable production teams to resolve changes in electricity as quickly as possible. Technicians can be rapidly called to action to service individual machines and will have all of the necessary context provided through the system immediately. Through both real-time monitoring and streamlined reaction time, Matics reduces the duration of excess energy consumption events to a minimum.
RtOI from Matics is by no means limited to energy consumption. These same benefits are applied to other aspects of production, including raw material use and waste. Matics lets you implement more effective management for all of your manufacturing environment’s resources, including both energy and raw materials, monitoring KPIs, and providing the alerts and information needed to keep your factory floor running smoother than ever before.
You can contact Matics today for a demo of the many features of our RtOI solution and what it can do for your factory floor’s energy consumption management.