Production Energy Optimization Profile
Industrial Energy Management: We can’t necessarily see energy being wasted, but it can be identified and tracked on the road to lower costs in manufacturing and process industries.
What are the most important factors that impact energy costs in a production facility? Some of these conditions are permanent, while others change from day to day based, for example, on the production schedule or how hot or cold it is outside. Are costs high due to record productivity or excessive due to such things as downtime or steam leaks? Given the many factors involved, looking at a facility’s overall energy cost by itself doesn’t tell you much. Even then, many companies cannot say how – given their energy-intensive operations and processes – the energy is used and if the cost is truly justified.
The concepts of “sustainability” and “energy efficiency” already are part of the lexicon for manufacturing and process industries. Yet at many companies, energy is still treated as an overhead cost, even though things like quality – quantified in scrap, rework, and similar work – are well recognized as variable costs to be tracked and managed.
Operators cannot “see” energy being wasted when a kiln is kept heated for hours without product moving through it. Manufacturers need tools to monitor energy use to identify poorly run processes. One good first step in this direction is to define a production energy optimization (PEO) solution as an enterprise management system empowering existing teams to reduce energy waste through continuous improvement, as well as capture the variable cost of energy per product produced.
Defining an energy solution
While vendors and users are developing, assembling and implementing solutions for industrial energy management, the reality is that getting companies to invest in and getting users to buy into these solutions is only possible if they deliver actionable information and empower work teams.
A production energy optimization system should include the following capabilities:
- Reads real-time energy consumption for water, air, gas, electric and steam (WAGES) and process information such as product ID/SKU, equipment, rate, operator/team and machine state
- Provides an energy-per-product base-line
- Recognizes energy over-consumption events (NVAW)
- Alerts managers of energy events and other items needing attention
- Interfaces with the ERP or activity-based costing model to pass energy costs per product
- Creates virtual sub-metering by reading actual system meters, splitting costs among the relevant process areas based on configured business rules and in conjunction with real-time equipment monitoring
On the one hand, PEO includes web dashboards of metrics, goals and real-time performance indicators of a business-level optimization system, scalable from single production lines to multi-plant scenarios. On the other hand, a PEO solution will include the analytic tools help managers understand causal relationships and identify procedure-change opportunities.
PEO is an operations-management decision-support system focused on energy and its undesired by-product CO2. Implementing the right solution requires an understanding of energy usage in relation to industrial processes, aimed at attaining maximum return to the business. The system drives knowledge-based decisions.
PEO project management
The PEO project begins with defining its scope. The work starts with a person, or team, responsible for facility energy management or accounting. Any goods producer will want to have a team of people providing input and oversight to a PEO project. In addition, the team needs an executive-level sponsor. This sponsor will serve as champion, solve problems, and resolve conflicts.
Not all team members will have active roles, but, in addition to the sustainability manager, the team should include representatives from the following groups or departments:
- Operations management – uses the energy and the PEO system
- Facilities or maintenance – owns most of the metering systems. Integration from PEO to the maintenance system could initiate service request in the event of abnormal energy consumption
- Engineering – process automation owners
- Information technology – supports system, databases and network connections
- Accounting – needs the energy consumption per grade for activity-based costing
Once the team participants are in clear view, the next step is likely a discovery services study (DSS). This study may have different names such as pre-engineering study, scope development or project definition study. The important thing is that the team will either produce – or hire a company to produce – a formal document that includes the following:
- Long-term system solution definition based on the company’s strategic goals
- Proposed system architecture, including definition of metering (including virtual meters), system integrations, and user interfaces
- Data to be collected: key performance indicators (KPIs), display information, alerts, notifications, and reports
- Estimated costs, implementation schedule, return on investment projection and risk evaluation
The overall project includes three major elements: sub-metering installation; computers and networking; and software configuration and roll-out. Sub-metering is the only step that may require downtime and outages.
- Sub-metering of WAGES – The DSS should have defined all of the metering necessary; if virtual meters can be used in the application; and if the PEO will read WAGES data directly from the meters, from a process historian, or from the energy management system (EMS). PEO is concerned with monitoring energy usage. Power quality, power factor, disturbances, and other tools are typically associated with energy management systems. Often both are needed and custom dashboards can display metrics from both systems.
- IT: Computers, databases, and communications – A clear, written understanding of responsibility for loading software, communications, troubleshooting and security is very important. Security, IP Addresses, domain authentication, user accounts, network configuration, firewalls, COM problems and communication drivers can all delay work. What’s worse, these nuisance delays can kill team morale and lead to a poor initial user experience.
- The PEO software solution – The DSS should have answered most of the questions about what is to be implemented. Schedule a time for implementation engineers and the system owners to meet. A general discussion of the project and long-term goals helps everyone to better understand the needs and fosters good working relationships. The configuration should have specific milestone delivery dates that drive early configuration. Inspect the work at milestone dates. The configuration engineers should understand procedures for getting technical assistance from technical support personnel and escalating problems above technical support. Perform a factory acceptance test (FAT) on the system. Keep a punch-list of incomplete items. Perform a site acceptance test (SAT) on the system.
Integrating PEO with existing systems
Integration with other systems can be minimal, interfacing only with plant controllers and energy meters, or it can be quite complex: including with enterprise, asset, or energy management systems; information portals and dashboards; and other possibilities. The number of interfaces will likely increase over time as more functionality is added. Integration accomplishes the following:
- ERP - to pass product and SKU information and energy consumed per unit, per SKU to update the activity-based costing model.
- Automation – to get process operations data, such as rates, flows, machine state, etc.
- Metering/EMS – to get the energy data
- Maintenance system – Send completed maintenance work request based on energy over consumption business rules
- People systems - Operators acknowledge energy over-consumption events and provide classification
End adverse energy events
A Production energy optimization system is a manufacturing operations management tool that reads the real-time energy consumption in each process area along with the production information (product SKU, machine state, rate, shift, etc.). It is configured by means of business rules to give the existing operational excellence team the ability to eliminate adverse energy events and give companies the ability to execute activity-based costing for better scheduling, accounting, and profitability.
- Kevin Totherow is the Schneider Electric business development manager for the Ampla manufacturing execution system and production energy optimization solutions. Totherow has held a variety of executive and operations management positions with major MES and automation vendors and has been an automation engineer.
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.