Energy costs are the quiet budget killer, stalking your operations and eating away at your margins while you are preoccupied with manufacturing goals. Manufacturers find this not just a “it would be nice to fix it” sort of problem. The situation is “sort this out or watch your profits bleed”.
There are a few steps to consider:
Know Your Numbers
First up, how many of you actually know how much energy your business uses? I mean the specifics – what equipment is guzzling the most energy, when peak usage times are, and how costs fluctuate throughout the day.
Most manufacturers I’ve worked with start off blind here. They’re running top-tier equipment but monitoring energy usage like it’s the 1990s. If you want to get serious about cutting costs, start tracking your data.
Invest in smart meters and energy monitoring systems. These tools give you real-time insights into where your energy’s going and, crucially, where it’s being wasted.
Tackle the Obvious First
Sometimes, the biggest culprits are staring you in the face. If you have machines running 24/7 – even when there isn’t a single product being made. What’s the logic? “We might need them”, just doesn’t cut it.
Start with a walkaround. Check for equipment running unnecessarily, heating or cooling systems set to extremes, and outdated lighting that belongs in a museum. Swapping out old fluorescent lights for LEDs might sound dull, but it can cut your lighting costs by up to 75%.
Another quick win? Fix leaks in compressed air systems. You’d be amazed how much energy is wasted on tiny holes that sound like nothing but act like a black hole for your wallet.
Upgrade with Intention
Upgrading equipment isn’t about splashing cash on the latest gadgets – it’s about targeting your spending where it makes the most impact.
Take motors, for example. Did you know that motors account for nearly half of all electricity usage in manufacturing? Replacing standard motors with energy-efficient ones can save you a fortune in the long run. Sure, there’s an upfront cost, but you’ll recoup it faster than you think.
And don’t fall into the trap of thinking “newer is always better.” Sometimes, retrofitting your existing equipment with energy-efficient components is all you need. I’ve seen manufacturers save thousands by tweaking rather than replacing.
Optimise Your Production Schedule
Look at your energy usage across the day. Are you running your heaviest machinery during peak hours when energy rates are at their highest? If so, stop.
Shift energy-intensive processes to off-peak times whenever possible. Many utility companies offer lower rates at night or during weekends – why not take advantage?
One client I worked with staggered their production schedule to spread out energy usage, avoiding the dreaded peak-hour surcharges. The result? A 30% reduction in their monthly energy bill, without changing a single piece of equipment.
Don’t Forget the Maintenance
A breakdown halts production, and suddenly your team is scrambling to fix a problem that could have been prevented with regular maintenance.
Neglecting maintenance doesn’t just lead to downtime; it also makes your equipment less energy-efficient. Dust, dirt, and worn-out components force machines to work harder, consuming more power to deliver the same output.
Set up a proactive maintenance schedule. Clean filters, lubricate moving parts, and keep your equipment in tip-top shape. It’s not glamorous, but it works.
New simple, inexpensive, IoT devices can monitor your machines, checking vibrations of motors against known standards – an inefficient motor can cost more to run and may affect other parts of the machine.
Tap into Renewable Energy
“Solar panels? Wind turbines? We’re manufacturers, not environmentalists”. Well, you’re wrong. Renewable energy isn’t just for the green brigade – it’s for businesses that want to slash their bills while keeping an eye on sustainability.
One factory I advised installed solar panels on their roof – not a massive array, just enough to power their offices and a few machines. The payback period? 6 years. After that, it’s pure savings.
Engage Your Team
Your employees are part of the solution. If they understand the importance of energy efficiency, they’re more likely to adopt behaviours that reduce waste.
Don’t just stick a poster on the wall and call it a day. Get them involved. Run workshops, offer incentives for energy-saving ideas, and celebrate successes. When your team feels like they’re contributing, they’ll take ownership of the results.
Get Professional Help
Sometimes, it pays to bring in an expert. Energy consultants might sound like a luxury, but they’ve got the tools and experience to identify savings you’d never spot on your own.
One manufacturer I worked with was convinced they’d already done everything they could to cut energy costs. After a quick audit, we found inefficiencies in their cooling systems, lighting layouts, and machine settings. The result? A 20% drop in energy consumption within 12 months.
Reducing energy costs is about future-proofing your business. With energy prices rising and sustainability becoming a non-negotiable, manufacturers that ignore this issue will find themselves lagging behind.
Every little change adds up. A more efficient motor here, a staggered schedule there – it might not seem like much on its own, but together, these changes can transform your bottom line.
If you want to get into this subject more deeply and take a closer look together at your unique circumstances, contact me at noah@shepherd-partnership.com