Turn utility costs into cash flow
July 5, 2011
by Lime Energy
Frito-Lay reported in 2008 that it is saving $55 million per year in energy and water expenses because of its programs to conserve resources. Kraft Foods has a goal of 25% reduction in energy and 15% reduction in water use per pound of production by the end of 2011 when compared with 2005. Information and technology giant IBM is reporting a savings of $25 million per year in electricity costs across its global operations. These are real millions that are being put to work inside these companies to expand and improve operations, rather than going outside the organizations to pay for utility bills.
Eliminating waste is an important activity in food production companies. Leading companies use sophisticated production planning systems and metrics to reduce change-over waste. Millions of dollars are spent each year to reduce extraneous packaging, with impressive results. Eliminating wasteful spending on utility costs is just as lucrative, but often does not receive the attention it deserves.
Steps to achieving the millions of dollars in potential savings always start at the same place: You cannot manage what you don’t measure. A company that knows exactly how many pounds of product are thrown away during changeover is a company that has excellent systems and procedures to optimize production and reduce the amount of wasted product. A company that knows exactly how many units of energy and water — such as kilowatt-hours of electricity, million BTU of natural gas and cubic feet of water per ton of production — is a company that is starting to focus.
At the plant level, the next step is to further break down the energy and water use and identify the largest contributors. This involves submetering some of the large motors and lighting circuits to better pinpoint the energy consumption and cost. Just as changeover waste is reduced through careful planning and established procedures that are developed over time, energy and water savings are available through similar focus and analysis to reduce these inputs.
Savings that come from identifying and reducing obvious sources of waste flow straight to the bottom line. Don’t let unnecessary energy and water costs leak out of your company and into the revenues of your utility providers. They won’t miss it; put that money to work in your own organization. Read more about Sustainability