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How do you pick a firm to engage in SEM?

Created 9/29/2011 by John Sandin
Updated 2/21/2012 by Ben Fowler
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Continuing on the theme of barriers to market adoption, NEEA has seen a varied rate of adoption among the firms we connected with in our initial CEI engagement. In hindsight, we realized that the adoption of a strategic approach to managing energy as a controllable expense is a somewhat forward business practice.  This realization came after we had selected the group of food processing companies to participate in our CEI demonstration project. This certainly isn’t to say that those who did not adopt are not forward thinking. On the contrary, there are a variety of factors such as market conditions; the energy proportion of a firm’s cost of sales; and other competing business priorities that drive consideration of a strategic energy management system.

For the recently completed Superior Energy Performance (SEP) pilot, we took a different course and attempted to identify characteristics of firms that we thought would have a higher probability of adopting a management system approach before we attempted to deploy a SEM system.  Our approach was similar to the “Are you ready” questions on the energyimprovement.org site (http://energyimprovement.org/areyouready.html).

For those implementing some form of Strategic Energy Management, or those planning to tackle this, do you see this as an issue and how are you approaching it?
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Comments (5)
edward birch on 09/29/11 on 04:49 PM (Pacific Time)

Most important to have is a senior site official who is involved and has passion for the process.

Next you nees an energy champion with passion to improve operations.
Energy productivity data easily and readily available
Time needs to be allocated to drive improvement
Energy needs to be a key element of the employees annual performance review
The sponsor needs to establish consequences for not achieving progress 

Martha Grasty on 10/07/11 on 01:08 PM (Pacific Time)
You must also engage and "hook" someone in the accounting or finance area of the company as well as procurement staff.  In finance, this can be a CFO (for a small company) or someone who works for him/her. But until people who control the purse strings understand the process and consequences of decisions they make (often in a vacuum), they'll continue to deny funding for projects, staffing, and equipment that, to many of us, would be no-brainer decisions.
Kim Crossman on 11/03/11 on 02:18 PM (Pacific Time)
We are most interested in understandng the site's motivation, we are of course looking for the most motivated sites. sometimes I think of this as looking for "good pain" - competing or conflicting set of circumstances that provides enough of a rub that the key staff (as discussed above) are motivated to change (the opposite of this would be would be complacency/ or "fat and happy". An example would be a situation where energy rates are rising, while operating budgets are being sqeezed. Another and more powerful for SEM in particular is when corporate has set hard energy reductions goals (cut by 30% in 3 years) but have not provided any budget, support or ideas for how the site should get there. Sites under these types of pressures will find SEM to be an awesome and totally necessary solution
One other question we focus on during recruiting is what other competing initiatives/ priorities they have planned in the next year or two. Everyone's always busy doing their core business of course, but the "good pain" can overcome that barrier. But if they have a major expansion or production change planned, or other big management initiatives coming up, then they will not be available to dedicate the focus to SEM needed. In these situations, then, we'd encourage them to wait to take up SEM until they could really focus on it.
John Sandin on 11/07/11 on 03:33 PM (Pacific Time)
Kim, I think you point on seeing how SEM fits in terms of competing priorities is spot on.  Not only do we need executive sponsorship as Ed mentioned, and a compelling reason as Martha points out, but a firm needs to see energy efficiency as a priority.  If as you point out, they have significant competing priorities SEM is a tough sell.

I saw this first hand at a local, large industrial that is now shuttered.  The plant manager was battling environmental litigation and struggling with raw materials to name just a couple.  I don’t think a robust energy efficiency program would have saved this company, but it clearly makes the case that the system will not root without it being a priority.
Jeremy Wilbert on 03/14/12 on 09:10 AM (Pacific Time)
I would have to agree with all of the comments above.  You really need to have a variety of things in place before a good SEM system/plan is implemented.  Sponsor, Champion, Financial support, internal "change" culture, time and resources.

In addition though, something that I have seen companies lose sight of is context.  A lot of conversations I've had over the last year or two with manufacturing customers have proven that most don't know what is available or possible.  When you say Energy Management or Energy Conservation, most people immediately start thinking about light bulbs and turning off equipment.  Some of the Energy Management consulting firms I've seen offer their solutions, often focus on those areas and recommend a stand-alone energy management package to monitor and analyze the data

I say take it a step further.  Apply the energy consumption data directly to the context of their manufacturing process.  Is that machine running?  Is it scheduled to run sometime soon?  Is the cost associated with keeping that machine running less than the cost to "start it up" again?  How much did I produce?  How much energy did that production run consume?  Is that the same as previous batches?  What are my peak demand rates?  What are my most energy intensive products?  Can I schedule a more energy intensive product during a night shift, when my peak demand rates are lower?  Is electricity my only form of "energy"?  What about water, gas, compressed air, cooling/heating, etc?  All those take energy as well and add up into the overall material cost to produce.

Lots of things to consider, measure and improve.  But that can only be done by integrating with and applying the context of the manufacturing process.