Energizing an industry

The economic theory of supply and demand developed by Alfred Marshall suggests that prices increase in response to tight supplies and increasing demand. Marshall died in 1924, so he missed two of the better examples of his theory at work — Prohibition, and today's energy supply crisis. It is the latter event that drives many managers to the point where they are at least grateful the forme...
By Bob Vavra, Chief Editor May 1, 2005

The economic theory of supply and demand developed by Alfred Marshall suggests that prices increase in response to tight supplies and increasing demand. Marshall died in 1924, so he missed two of the better examples of his theory at work — Prohibition, and today’s energy supply crisis. It is the latter event that drives many managers to the point where they are at least grateful the former was repealed.

One expert we interviewed for our May cover story on energy efficiency contends we are “in a new energy world.” We tended to view energy consumption as a domestic issue, but we no longer have that luxury. The world wants what we want, and with the same intensity we want it. Demand is growing, and supply hasn’t kept up.

So if lower demand isn’t going to happen, what’s left as we seek to grow business? Making better use of our supply.

Energy powers every machine and lights every room in our manufacturing facilities. It keeps us cool, or warm. It keeps us productive. Energy consumption will also power profitability this summer, and for the summers and winters to come. It must be viewed as a manageable cost center that can influence whether a company survives or fails.

It is time to get serious about energy efficiency. PLANT ENGINEERING is leading that effort this month with a comprehensive look at how some of our best companies — large and small — have tackled the issue aggressively. They have made energy efficiency a core value, and have allowed their people to champion its proliferation throughout their organizations.

Beyond just writing about energy efficiency, however, we’re taking one more unprecedented step this month. We’re putting the tools of energy efficiency and the knowledge of successful companies in your hands.

This month, every PLANT ENGINEERING subscriber with an email address will receive links to two new reports on energy efficiency: The National Association of Manufacturers’ Energy Efficiency, Water, and Waste-Reduction Guidebook for Manufacturers and Energy Management Pathfinding, published by the Alliance to Save Energy. These links will be distributed through PlantMail! our electronic newsletter.

More than telling us what the problem is, these books offer excellent, on-the-ground ways to improve energy efficiency, with some of America’s best companies as examples. We believe these guidebooks are outstanding resources to address this problem. We appreciate the support of both agencies for this email effort — perhaps the largest of its kind ever undertaken in this industry.

The guidebooks and the case studies offer solutions, but plant leaders must take them to heart, and to their boardroom. You power machines, but you empower people. That energy source, I am happy to report, is in ample supply. The demand for a nation of empowered people, however, has never been higher.

Alfred Marshall’s theory of supply and demand covers goods and services, not the movement of human capital. In the summer of 2005, the demand for energy will tax our human and business capital like never before. How we meet this challenge will shape our present, and our future.