am project report

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03PUBLICATION DATE: Q1 2009

REF NUMBER: XXXXXXX

Project Report 2008

ALTERNATIVE METHODOLOGIES SPECIAL WORKING GROUP

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Executive Summary

As part of the Energy Agreements Programme, the Alternative Methodologies Special Working Group wasestablished to examine the possibility of combining tools and techniques from Continuous Improvementmethodologies such as Lean, Six Sigma and TQM with the already established analysis tools used in EnergyManagement. It was expected that combining the toolsets from the different disciplines might lead toimproved tools and techniques that would benefit organisations in their efforts to obtain and maintain IS393Certification.

As the IS393 Standard gains international recognition, and as progressive companies are turning theirattention to Energy Management, many companies are attempting to integrate IS393 into their existingContinuous Improvement Culture. There is an opportun ity to assist such companies with ad vice on integratingIS393 into their existing culture and to enhance the analysis tools already in their arsenal for application toenergy manag ement.

Likewise, there is a population of Energy Experts who have tried and tested techniques for managing utilities,but who would welcome the introduction of proven Quality/Operations techniques to their toolsets forimproved effectiveness.

To this end, the Alternative Methodologies Special Working Group, incorporating nine member companies andsome Energy, Lean and Six Sigma experts, embarked on a series of initiatives as follows:

Prepare a guidance document for implementation of IS393 in companies with an existing Lean or SixSigma culture.

Blend tools and workflows traditionally used in Energy, Quality and Operations Management to formmore effective versions.

Prepare a diagnosis tool that will examine the effectiveness and efficiency of a current IS393 EnergyManagement System.

Complete a series of Demonstration Projects to showcase a number of the proposed AlternativeMethodologies and in particular, the blended tools.

The current cycle of activities is primarily research-based and focused on gaining an understanding of thevarious toolsets available and how they might work together. The work, and in particular the projects and casestudies, has clearly demonstrated inextricable links between Energy, Quality and Operations and that animprovement initiated in one area has definite effects on the others.

It is expected that future cycles of the Alternative Methodologies Special Working Group will consolidate thiswork through further development and a broader implementation of the tools and work-processes, all thewhile improving them on the basis of learning and experience.


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TABLE OF CONTENTS

SECTION 1 - INTRODUCTION

1 INTRODUCTION 4

1.1 Background: the role of special working groups 4

2 THE ALTERNATIVE METHODOLOGIES GROUP 5

2.1 Initial approach of the working group 6

2.2 SWG two different perspectives 6

3 RANGE OF PERSPECTIVES AND FOCUS 7

3.1 Energy management 7

3.2 Lean thinking 7

3.3 Six Sigma 8

3.4 Different perspectives 9

3.5 Different approaches to improvement 10

3.6 Different focuses 10

3.7 Combining all of the above 11

4 THREE OBJECTIVES: REPRESENTING THE LIFECYCLE OF THE ENERGYMANAGEMENT EFFORT.

12

4.1 Integrating IS393 in a company with a Lean or Six Sigma culture. 12

4.2 Blending Lean, Six Sigma and energy tools and workflows to improveenergy management.

13

5IMPROVING THE EFFECTIVENESS OF THE IS393 ENERGY MANAGEMENTSYSTEM.

14

5. 1 Other expected outcomes 15

SECTION 2 - INTEGRATION OF IS393 INTO A COMPANY WITH A LEAN/SIX SIGMA

CULTURE

16

1 INTRODUCTION 17

2 IS 393 SECTION 4.2 ENERGY POLICY 19

2.1 Management commitment to the energy policy 20

3 IS 393 SECTION 4.3 PLANNING 21

3.1 Defining and communicating roles and responsibilities 22

3.2 Core energy management team with improvement agenda 23

3.3 Ranking significant energy users and establishing KPIs 24

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3.4 Maintaining the Register of Opportunities 25

4 IS 393 SECTION 4.4 IMPLEMENTATION AND OPERATION 28

4.1 Standardising operations 294.2 Operator-specific training 30

4.3 Training and education 31

4.4 Promotion and awareness 32

4.5 Incentives and awards 33

5 IS 393 SECTION 4.5 CHECKING AND CORRECTIVE ACTION / MONITOR ANDMEASURE

34

5.1 Generating, analyzing and monitoring performance data 35

5.2 Selection and Implementation of Improvement Activities 37

6 IS 393 SECTION 4.6 MANAGEMENT REVIEW 40

6.1 Management Diagnosis of Energy Objectives and Targets 42

7 CONCLUSION

SECTION 3 - BLENDING LEAN, SIX SIGMA AND ENERGY TOOLS / WORKFLOWS FOR

IMPROVED ENERGY MANAGEMENT

43

1 INTRODUCTION 44

2 WORKFLOW FOR ENERGY MANAGEMENT, LEAN AND SIX-SIGMAMETHODOLOGIES

45

2.1 Workflow for energy management 45

2.2 Workflow for Lean 45

2.3 Workflow for Six Sigma 46

3 APPLYING ENHANCED TOOLS TO ENERGY PROGRAMME 48

3.1 Tools that energy programmes can adopt from Lean 48

3.2 Tools that energy programmes can adopt from Six Sigma 51

3.3 Tools that energy programmes can adopt from Lean-Sigma 54

3.4 Tools that Lean/6-/Lean-Sigma can adopt from energy management 56

4 BLENDED WORKFLOWS INTEGRATING METHODOLOGIES 624.1 Energy management incorporating LEAN and Six Sigma expertise 62

5 BLEND OF METHODOLOGIES NEW TOOLS 66

5.1 VSMe Value Stream Mapping embedding Energy 66

5.2 Waste/MUDAe 68

6 CONCLUSIONS 71

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SECTION 4 - IMPROVING THE EFFECTIVENESS OF YOUR IS393 ENERGYMANAGEMENT SYSTEM.

72

IMPROVING THE EFFECTIVENESS OF YOUR IS393 ENERGY MANAGEMENTSYSTEM

73

SECTION ONE: GUIDANCE ON INTERPRETING ASSESSMENT QUESTIONS EXECUTIVE LEVEL

75

SECTION TWO: GUIDANCE ONINTERPRETING ASSESSMENT QUESTIONS ORGANISATIONAL LEVEL

77

CONCLUSION 80

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SECTION 5 - CONCLUSION 85

SECTION 6 - GLOSSARY 86


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1 Introduction

EIGHT companies are taking part in the Sustainable Energy Ireland Special Working Group (SWG) onAlternative Methodologies. As part of the Energy Agreements Programme, the SWG was established todemonstrate the viability and strategic benefits of integrating improvement methodologies,traditionally used in quality and operations management, into the energy management function.

The strategic benefits of this approach are:

It will encourage a more multi-department response to the energy-management programme. The energy-management function will benefit from the best resources available, in the form

of diagnosis tools and personnel experience across technical services, engineering supportfunctions and production operations.

It will allow access to processes otherwise difficult for the energy-management function toinfluence.

It will give energy projects equal stan ding when competing for approval to commence andrequired capital expenditure.

It will complement the objectives of the IS393 En ergy Man agement System (EnMS) to ensure amulti-fun ctional response.

The SWG will also aim to develop an en hanced toolbox with improved traditional Lean tools andtechniques to take account of learning from energy manag ement and vice versa. The ultimate aim isto enhance the tools for successful application in energy-efficiency project applications.

The member companies are sharing and d eveloping these tools in order to agree best practice anddetermine the best methodology for future improvement activities.

The methodologies include Lean Enterprise, Six Sigma, Lean-Sigma & Total Quality Manag ement(TQM), as well as the multitude of derivative tools that make up each of these approaches. The toolshave long been u sed in quality management and have proven successful in d riving improvements.However, it is recognised that they are under-used as enablers of significant energy-saving projectsand have potential for development in Ireland.

The member companies come from both sides of the spectrum: compan ies withenergy managementfalling within the Facilities/Technical Services Department and responsible for the efficient and cost-effective operation of utilities and, secondly, organisations where the Lean/Sigma Manager isresponsible for cost management and seeks to apply the tools successfully throughout the operationto ensure energy saving .

1.1 Background: the role of special working groupsSEIs industry programmes offer a range of support services to the industry and wider business sectorsof the Irish economy. The emphasis is on supporting companies to address their energy use rationallyso that they improve their competitiveness an d redu ce their environmental impact.

The Energy Agreements Programme, launched in May 2006, is aimed at the largest energy u sersthat want to take a strong, strategic and systematic approach to energy management.

Firms agree to implement the IS393 EnMS and to pursue an aggressive programme of energy-efficiency action and investment. In return, SEI offers relationship support, advice, networking an dsome financial supports.

The SWGs focus on a particular area of technology or a special interest for IS393 implementation or a

strategic direction of SEI.


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2 The Alternative Methodologies group

The Special Working Group on Alternative Methodologies was set up in Sep tember 2008. Its plannedduration was six months.

Its objective is to determine the viability of using alternative approaches for energy management andto demonstrate successes. The members range across different sectors to ensure a varied approachand a good mix of experience in the use of tools.

Participants of the SWG include representatives from Energy Ag reements Programme membercompanies wishing to investigate the use of alternative methodologies and to apply them to energymanag ement. Many of these companies are certified to IS393 and all are seeking to apply the mosteffective management techniques available. There was a strong openness to learning evident in thisgroup.

SEI, as project owner, provided d irection and sponsorship of tasks and projects to develop the initiativeand case-study material, and to disseminate good practice.

A panel of consultants was assigned by SEI to:

Advise and mentor participants in applying such tools Collaborate in investigating their application in energy management

Complete elements of the demonstration projects with clients Document the learning for inclusion in the SWG report

Central to the work of the group is collaboration with recognised industry leaders in Lean/Six Sigmaand organ isations currently supporting the use and deployment of these tools in Ireland . This,combined with energy-management exp erts, provided a fertile environment for cross-pollination ofideas, methods and cultures.

The planned activities of the Alternative Methodologies SWG are to include:

Case studies/demonstration projects in the ap plication of tools, as per the interest of theparticipants

Value Stream Mapping exercises for Lean Energy projects Training and man aging Kaizen events Using Statistical Process Control (SPC) and Total Quality Management (TQM) techniques to

improve energy performance Overall Equ ipment Effectiveness (OEE) project to improve energy performance

Project selection techniques Selection of Energy Performance Indicators (EPIs) for maximum impact Desktop research on topics of particular interest to the working group, and development of

new tools, app lying Lean and Six Sigma thinking to energy, an d documenting these toolsfor sharing with the SWG and with SEIs broader audience.

Production of an SWG group report incorporating Blended Tools and case studies

Group members are:

Abbott Ireland , Cootehill, Co Cavan Allergan Pharmaceuticals Ireland, Westport, Co Mayo Astellas Ireland Co Ltd, Killorglin, Co Kerry Boston Scientific Ireland Ltd, Galway Connacht Gold Ltd, Shannonside Plant, Ballaghadreen, Co Galway Intel Ireland Ltd, Leixlip, Co Kildare Pfizer Ireland Pharmaceuticals Little Island, Co Cork Roadstone Provinces Ltd, Bunratty, Co Clare


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Consultants/advisors assigned by SEI to the SWG were:

Ethos Ltd Lean Business Systems Improve Ltd PM Group RPS Viegand & Maag e (VMAS)

2.1 Initial approach of the working groupIn preliminary discussions, the p articipant companies indicated what tools they used for operationsand quality improvements. In many cases, a different set of tools was being applied to energyefficiency. There was a recognition throughout the group that successful application of thealternativemethodologies to energy manag ement would result in improved control and performance, leading tocost savings, reduced en ergy waste and reduced CO2 emissions.

The group members were keen to share their skills; to build on both their own exp erience and theshared knowledge of the g roup, and to learn about relevant measurements and improvements fromthe best in the field.

They were also keen to share best practice with other compan ies, including through the publicationby the SWG/SEI of a set of guidelines.

Lean, Six Sigma and energy consultants were engaged to work with the group. Each companyshared insights into the type and potential of alternative tools and outlined examples of work alreadybeing conducted in the field, including of some Irish and international success stories.

From this in itial meeting, a series of case studies was initiated and follow-on discussion spawnedresearch projects on three objectives to develop new techn iques and enhanced improvement tools.

2.2 SWG two different perspectivesThe launch meeting for the Alternative Methodologies SWG revealed that, while sharing an interest inimproving energy man agement, there were two distinctive groups (summarised below).

Each group had its own tools and techniques, as well as perspectives on how energy should bemanag ed. There was an early recognition that combining the thinking on each side of the roomwould yield a richer toolset.

Energy Managers

This group was technicallyexpert in utilities andprovision of all energyservices.

Interested in learning aboutimprovement techniques inrelation to specific problemson-site.

Lean Pract itioners/

Six Sigma Black Belts

This group was expert inimprovement tools andtechniques.

Interested in what tomeasure to maximise theimprovement effort and whattools to app ly.


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3 Range of perspectives and focus

3.1 Energy management

The Energy Manageris primarily focused on operating u tility systems in the most efficient way possible.They will have a thorough understanding of user requirements and schedu les and try to ensu re thatsteam generation, refrigeration, purified water, water treatment, compressed air, lighting, etc areavailable according to their customers needs. Preventive maintenance effortsare strictly sched uledaround the plants production requirements. Capital expen diture is generally justified by return oninvestment (ROI).

Normally working in the facilities or technical services department, the Energy Manager will generallyundertake improvement projects that are centred in their own department. Characterised bytheregular monitoring of consumption patterns, the Energy Manager will maximise efficiencies within thefacilities function and may act as an internal advisor on improvementprojects such as Awareness

Training and Energy Improvement initiatives, IS393 implementation an d maintenance.

Improvements are often made on the basis of maximising the efficiency of systems through

preventive maintenance and justifying upgrades on the basis of plant capacity; replacement of old orinefficient systems an d, in more recent times, recovery of waste energy.

Specialists in this area will be familiar with techniques such as Sankey Diagrams, Co-efficient ofPerformance (COP/COSP), Best Available Technology (BAT) and Energy Service Analysis the OnionDiagram principle.

While the Energy Manager uses many of the methodologies described below, in the utilities area, theytend to use them in a less structured manner. This can be a disadvan tage as senior manag ers likestructure and IS393, by its nature, requires structure and fits best within a continuous-improvementenvironment.

The alternative methodologies might ensu re that the Energy Man ager secures support andcommitment outside of their own department boundaries. There might also be an opportunity tostrengthen goal-setting on energy projects, while at the same time improving communication andinfluence within the organisation.

3.2 Lean thinkingThe Lean five-step thoug ht process was proposed by James Womack and Dan Jones in their1996bookLean Thinking to guide managers through a Lean transformation. The steps are:

1. Specify value from the standpoint of the end customer2. Identify all the steps in the value stream3. Make the value-creating steps flow toward the customer4. Let customers pull value from the next upstream activity5. Pursue perfection

Lean is based on the Toyota Production System (TPS), the production system developed by ToyotaMotor Corporation to provide bestquality, lowest cost and shortest lead time through eliminatingwaste. TPS is comprised of two pillars: just-in-time production andjidoka. It is maintained and improvedthrough iterations of standardised work and Kaizen, following the scientific method of the plan-do-

check-act cycle. Jidoka, or mistake proofing, has its origins in programming machines to stop when aproblem arises, to avoid defective products. This means that a single operator may be put in charge ofnumerous machines, resulting in a significant improvement in productivity.


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In Lean, waste is termed muda. Lean addresses waste under seven headings:

1. Lean Transport Most forms of transportation are waste (muda) and as such should beminimised or eliminated. Th is includes the u se of forklifts, conveyors, pallets and trucks.

2. Inventory Excessive inventories are considered as waste as they do not add value to theprocess. Excess inventory requires storage space, transportation, adds to product lead times,creates potential for obsolescence an d ties up cash.

3. Motion Unnecessary employee movements. Every workstation or cell should be designed withergonomics in mind so as to prevent excessive walking, heavy lifting, awkward bending,overreaching or repeated unnecessary motions.

4. Waiting Waiting for the next processing steps or material to arrive. There can be many causesfor waiting including poorly organised workflows, unbalan ced production lines, an d excessive set-up times.

5. Over-processing Unnecessary processing steps in manufacturing or service are waste (muda)and should be eliminated. Examples include having to remove burrs, reshaping a piece due topoor dies, making extra copies of documents or performing an inspection step(as inspection isnon-value-adding).

6. Over-production Overproduction ahead of demand. Parts need to be available at a certain

location, at a certain time, according to customer schedu les (Just in Time). Product should b emanufactured only at the rate it is consu med. This is called the Takt time (from the German wordTaktzeitor cycle time).

7. Defects Production of scrap or defective parts is one of the primary forms of waste. Where goodsor services are n ot to specification, at b est they will have to be remade; at the worst, they escapeinspection and reach the customer.

The Lean organisation empowers its employees to participate in continuous-improvement projects,whereby the operator becomes the expert and sponsorship is forthcoming fromsenior managementvia the operations manager. Continuous improvement becomes a way of think ing an d is part of thecore strategy of the business. Commun ication is achieved through regular meetings and visualdisplay boards. Analysis tools are used and commonly understood, and recognition is forthcoming forimprovements d elivered.

Improvement tools such as Kaizen and Kaikaku are commonly used, while Value Stream Mapping is

used for analysis and goal-setting.

3.3 Six SigmaSix Sigma (6) is a business management strategy, initially implemented by Motorola, which todayenjoys widespread application in many sectors of industry. It seeks to identify and remove the causesof defects and errors in manufacturing and business processes. It uses a set of quality-managementmethods, including statistical methods, and creates a special infrastructure of people withinanorganisation (Black Belts, Green Belts, etc) who are experts in these methods.

Each Six Sigma project follows a defined sequence of steps (DMAIC) and has quantified financialtargets (cost reduction or profit increase).

The basic method consists of five steps:

1. Define high-level project goals and the current process

2. Measure key aspects of the current process and collect relevantdata

3. Analyse the data to verify cause-and-effect relationships; determine what the relationships are,and attempt to ensure that all factors have been considered

4. Improve or optimise the process based on data analysis using techniques such as design ofexperiments DoE);

5. Control to ensure that any deviations from target are corrected before they result in defects. Setup pilot run s to establish process capability, move on to production, set up control mechanismsand continuously monitor the process.


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Six Sigma organises business improvement functions by identifying several key roles for its successfulimplementation: Executive Leadership, Ch ampions, Master Black Belts, Black Belts, Green Belts.

In the Six Sigma organisation, the Black Belt is seen as the expert. Projects are sponsored by themanag ing director through the quality organ isation. Goal-setting is based on specific objectives and isdriven by thorough and detailed analysis. Improvements are targeted and significant (step function)in nature and are effected through statistical analysis and control of significant operational variables.Communication is deliberate and organ ised. Recognition is provided through publication andthedissemination of success stories.

3.4 Different perspectivesAlthough the Energy Manager, the Lean Practitioner and the Six Sigma Black Belt are all looking at thesame process, their emphasis differs, as outlined in Figu re 3.1. This was particularly evident in theSWG.

Figure 3.1 : Energy, Lean and Six Sigma perspectives


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3.5 Different approaches to improvementDifferent views of the improvement cycle are also evident, as shown in Figure 3.2 and described below.

Figure 3.2: Different approaches to improvement

Energy Manager

Recognise the need

Justify the investment

Install and operate

Provide data to justify

Lean Practit ioner/Team

Calculate theoretical saving

Install and operate

Verify the improvement

Standardise

Six Sigma Black Belt Statistical analysis

Proposal with projections

Install and operate

Statistical verification

Standardise

3.6 Different focuses

Energy, Lean and Six Sigma Managers have different influences acting upon them, as outlined inFigure 3.3:

Figure 3.3 : Energy, Lean and Six Sigma focus

The Energy Man ager is driven between the requirements of balancing the cost of the energy serviceand en suring security of energy supply.

The Lean Practitioner/Lean improvement team is always looking at the process from the point of viewof what the customer is willing to pay for and consistently removing waste or muda, in attempting toachieve an improved future state.

The Six Sigma Black Belt is striving for tighter statistical control of the variable(s) considered to be criticalto the qu ality of produce or service.


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3.7 Combining all the aboveCombining these three approaches, together with their workflows and tools/techniques,produces amuch richer blended workflow and toolset to help with energy improvement and management.

The closer the integration between the approaches, thebetter integrated the tools and workflows will be.

Later sections will describe the integration of the V alueStream Map (VSM) with an energy perspective to form theVSMe, and the Seven Wastes with an energy perspective

to form theMUDAe.

A case study was completed to trial the V SMe tool. Thefindings were more insightful that what might have beendiscovered using the individual tools in isolation. (SeeAppendices.)


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4 Three objectives: representing the lifecycle of the energy

management effort

It was evident in the early work of the Alternative Methodologies SWG that different d isciplines in anorganisation had different emphases on energy.

The primary interest of each is:

Energy Manager: the efficiency of utility systems Lean Practitioner: identifying and eliminating waste Six Sigma Black Belt: controlling process variability Quality/Compliance Specialists: ensuring that the system is in control

In addition to this, each discipline has its own set of processes and activities and they tend to operatein well-established workflows. Tremendous opportunity exists if the measurements, tools andworkflows of these different approaches are shared to form a blended approach toenergyimprovement.

In the following chapters, the major phases that a Lean or Six Sigma company might encounter in thelifecycle of IS393 will be examined, as follows:

4.1 Integrating IS393 in a company with Lean or Six Sigma cultureThe combination of the specific toolsets, measurements and detailed technical knowledge in theenergy world, combined with the structured goal-setting, project management and follow-throughfrom the Lean/Six Sigma world combine to provide a recipe for improved application of theIS393standard.

This section is focused on implementing IS393 in acompany with a Lean or Six Sigma culture and examineshow to leverage opportunities when developing theEnMS, un der the following headings:

Energy policy Planning Implementation and operation Checking and corrective action/Monitor and Measure Management review

A key strategic outcome is for companies that practise Lean an d/or Six Sigma to develop acomplementary IS393 system that exploits existing capabilities,giving energy-efficiency projects equalstatus for receiving resources and investment.

If successful, IS393 becomes integrated within the Six Sigma/Lean culture, and environment andenergy-management responsibility will be jointly shared by all departments and, in particular, thehigh -impact project functions. This will help to forge a team environment, involving the quality andcompliance organisations, which will in turn help to remove barriers to process chan ge. In addition tothis, IS393 and energy performance may obtain higher visibility among senior corporate management.

An equal audience is the Six Sigma/Lean organisation where the primary focus is on improvement in:

Productivity Elimination of waste Quality improvement Cost reduction Profitability

Depen ding on the company, energy-efficiency projects may meet compete with the topics mentionedabove, h owever they may be in competition with other, more traditional projects andmight thereforebe overlooked.

Integration of IS393 in acompany with a Lean or Six

Sigma culture

~ Implementatio n of systems andorganisational focus


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In this model, energy man agement will have equivalent standing with other improvement activitiesand is more likely to be approved for funding and resource allocation.

4.2 Blending Lean, Six Sigma and energy tools and workflows to

improve energy management

Using a combination of the tools and methods used by the Energy Manager, the Lean Practitioner andthe Six Sigma Black Belt, a blended toolset will yield g reater improvements.

Energy Manager: Energy service analysis (Onion diagram) Sankey diagrams Pinch technology; Co-efficient of performance (COP/COSP) BAT/Technology solutionsLean Thinking Defining value Identifying value stream

eliminating waste Flow Pull Perfection (continuous improvement)Six Sigma Statistical control; Reduced product and process variability; Improvement projects define, measu re,

analyse, improve, control (DMAIC)

There is also a difference in approach between the disciplines described above an d each has its ownworkflow, each of which will be examined in a later section.. The major benefit from this study is an

und erstanding of what Lean/Six Sigma can give to energy manag ement and vice versa.Combining the toolsets and workflows described above will yield a richer an d more effective set ofBlended Tools and Workflows, leading to a more effective EnMS, with the ab ility to better diagnose andmonitor processes, effect improvement, gain influence and backing within an organisation, andengaging a wider group of stakeholders.

Six Sigma/Lean tools might be u sed in facilities/technical services/utilities for process improvements,while energy management tools may be used by Six Sigma/Lean functions for energy-related projectopportunities. They can also be used for the Review of Energy Aspects and operational control.

In all this, there is an opportunity to adapt tools that have traditionally been used in one discipline andintroduce them to other disciplines, and to highlight opportunities for more effective diag nosis ofenergy conversion in order to effect improvements. Some such examples in Value Stream Mapping(VSMe) and Waste Management (MUDAe) are described in later sections.

Successful blending of tools and workflows willassist with project selection, improve access to resourcesand enable the ap plication of the best techniques for analysis & diagnosis of process-related projects.

It will allow access to manu facturing areas or processes that might have been outside the scope oftechnical services under traditional settings, and will help address operator influence in the process. Akey issue that should be considered is the minimisation of energy-service need and the selection andcontrol of process to deliver this need.

How energy management cannow function in the integrated

or blended workflow

Application focus

Blended Workflow & Tools howto make it work in practice


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5 Improving the effectiveness of the IS393 EnMS

A diagnosis tool has been developed that will helpidentify opportunities in the current systems toimprove the effectiveness and efficiency of the EnMS.

There are two elements to this effort:

Examine the effectiveness of the EnMS

Evaluate the efficiency of the day-to-dayoperation of the IS393 system and identifyopportunities for improvement

The IS393 EnMS requires a systematic approach to demonstrate the continual review andimprovement of all facets of energy performance. To this end, a Diagnosis Tool is being piloted to assistin the examination of the performance of the system and to provide a benchmark to demonstrate

continu ous improvement.This tool is expected to appeal to Energy , Lean and Six Sigma practitioners alike since it provides ahigh-level indicator of performance and, in addition, highlights areas requiring further improvement.

The Diagnosis Tool focuses in particular on:

Overall system performance

Planning

Implementation and operation

Checking and corrective action

Management review

The Diagnosis Tool, currently in version, is introduced in this report in order to solicit feedback on its

effectiven ess. It is expected th at a follow-on project will be required to test it formally in a series ofdemonstration projects, collect user feedback and to update an d release.

Preliminary trials in two companies indicate that the Diagnosis Tool was found to be useful in setting abenchmark and in highlighting areas for further improvement.

How the EnMS can be improved

Diagnosis-focused

Value-add-focused


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5.1 Other expected outcomesIn addition to the objectives described in Section 4 above, a series of initiatives were und ertaken todemonstrate the applicability of the alternative methodologies to improvements in energy

management.

A brief description of each follows (the case studies are included in the Appendices):

A food-processing plant uses overall equipment effectiveness (OEE) to discover inefficienciesin the process. Corrections resulted in significant energy saving s.

The statistical process control (SPC) tool reduces defective product and the energy investedinit by 76%, through statistical analysis of semi-processed material and improved control ofup-stream processes.

A Kaizen project encourages worker participation and introducesa new process using existingequipment. Approximately 50,000 in energy savings are realised du ring a two-dayimprovement drive. Further improvements identified during the event are beingimplemented.

Energy Value Stream Map (VSMe) combines the traditional Value Stream Map as used in aLean enterprise with analysis of energy use at each stage of the process to highlightimprovement opportunities for a qu arrying application and to introduce a new tool toenergy managers.

These case stud ies summarise a series of more detailed confiden tial client reports outlining the entireimprovement process from investigation to analysis of data, identification of causes and correctiveaction.


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Integration of IS393 into a companywith a Lean/Six Sigma Culture


02


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1 Introduction

THE ong oing drive to reduce costs through continu ous improvement is an essen tial part of mostcompanies operations. To date this has mainly focused on the production element of each operation.However, using the skills and knowledge that exist within an organisation to address energy usagecan result in significant improvements in efficiency and considerable cost savings, as well as reducinga companies overall carbon footprint.

Energy usage can also be viewed as a benchmark of the overall efficiency of an organisation andidentifying and eliminating energy waste can result in parallel improvements in the efficiency of the

operation.

In companies with experience in theuse of Lean manufacturing and/or SixSigma, the potential is even greater asthese tools have been demonstrated tobe very suitable for application toprojects aimed at reducing energyusage.

The IS393 Energy ManagementStandard is recommended bySustainable Energy Ireland (SEI) as ameans of managing energy usagethrough a robust energy -management strategy. The roadmapshown highlights the key stepsinvolved in implementing thestandard.

In this document we will look at specificareas where companies can use the

Lean or Six Sigma culture, tools and methods to assist them with IS393 implementation and thus havea greater probability of engagement across all support functions and achieve significantimprovements in energy efficiency. These areas are shown in the table below:

IS393 Section 4.2 En ergy PolicyManagement commitment to theenergy policy

Defining and communicating rolesand responsibilities

Core energy management teamswith improvement agenda

Ranking significant energy usersand establishing KPIs

IS393 Section 4.3 Planning

Maintaining the Register ofOpportunities

Standardising operations

Operator-specific training

Promotion and awareness

Training and education

IS393 Section 4.4 Implementation and Op eration

Incentives and awards

Generating, an alysing andmonitoring performance dataIS393 Section 4.5 Checking and Corrective Action/ Monitor

and Measure Selecting and implementingimprovement activity

IS393 Section 4.6 Management Review Management Diagnosis of EnergyObjectives and Targets


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In developing this document the authors have assumed that:

The company h as an existing continuous-improvement approach in place, centred on the

use of Lean Manufacturing, Six Sigma or a combination of the two The company is willing to allocate key Lean/Six Sigma personnel to its energy-efficiency

programme Management of the company are committed to improving their energy efficiency and wish to

use the best available methods to achieve their goals

Many of the recommendations will relate specifically to the Lean manufacturing or Six Sigmaenvironment. Where recommendations are common to Lean and Six Sigma, the text will be black; forLean environments it is navy-blue, and for Six Sigma it is purple.

The document lists a number of distinct headings that need to be addressed when implementingIS393. For each heading, we have identified the related characteristics that should already exist within

a company practising Lean/Six Sigma. We have then listed a number ofsuggestions to show howexisting resources can be leveraged to help with implementing IS393.


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2IS393Section4.2

EnergyPolicy

TheEnergyPolicydefinesw

hatanorganisationisaimingtoachievethroughtheEnergyProgrammeanditestablishesenergymanagementasac

orepriorityofan

organisation.


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3IS393Section4.3

Planning

TheplanningstageofIS393

implementationrequirestheorganisat

iontobaselineitsenergyusageforam

inimumo

fthreeyears,toidentifythem

ainenergyusersin

afacility,toidentifyopportu

nitiesforimprovementandtoallocate

resourcestotheimprovementeffort.

ForanorganisationwithLean/SixSigmaknowledge,t

hereareman

yareaswheretheuseoftoolsnormally

focusedonproductivityimprovement

canbeleveraged

toaddressenergyefficiency

forexample,t

heuseofprocessmaps

tohelpidentifythemainenergyusers

andthekeyparametersofasystemtha

taffectitsoverall

energyefficiency.


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22

3.1

Definingandcommunicatingrolesandresponsib

ilities

Inmanycompanies,theene

rgy-managementfunctionwillfallundertheremitofafacilityormaintenance

managerwhowillgenerallytakerespo

nsibilityfor

monitoringenergyusagean

dfordrivingimprovementsinenergyefficiencythroughpreventivemaintena

nceprogrammesormoreefficientequipment.

InaLean/SixSigmaorganisation,t

hereisanopportunitytobroadenresponsibilitysothatawiderrangeofstaffcanplayaroleinimprovingenerg

yefficiency.T

his

mightinvolveincludingene

rgyefficiencyinthejobdescriptionsof

BlackandGreenBeltsandensuringtha

tfacilitypersonnelreceivebasictrainin

ginLean

manufacturingorSixSigma

improvementmethodologies.

Leanmanufacturing

SixSigma

Heading

Charac

teristics

Suggestions

Heading

Characteristics

Suggestions

Expandjobdesc

riptionof

teamm

emberstoinclude

requirementsto

improve

energyefficiencyaspartof

theirroutinetasks

Keystaffmemberscertified

asSix

SigmaBlackBeltsand

GreenBelts.Focusedrolein

theorganisation,primarily

centredondrivingongoing

improvements

Provideadditionaltraining

toSixSigmaS

taffon

energy-efficiency

improvement

methods

RoleDefinition

Jobdes

criptionsexistforall

personnel.Roleofeach

person

inidentifying

improvementsintheir

workspaceisclearly

defined

Improvementsinenergy

efficiencytaken

into

accountaspartofannual

personnelreviewsystem

RoleDefinition

Alltechnicalpersonnelto

receivebasictraininginSix

Sigmatoolsandmethods

Keyenergystafftrainedas

GreenBeltsan

d/orBlack

Belts`

Providespecific

trainingin

energyefficiency

improvementto

allstaff

Role

Communication

Trainingplanforallstaff

thatensuresthattheyare

fullyeq

uippedwiththe

toolsan

dknowledgeto

meetth

edemandsoftheir

role

Monitoreffectivenessof

trainingandidentify

additionaloppo

rtunitiesif

required

Role

Communication

Well-definedjob

descr

iptionsandtraining

plans

inplaceforallstaff.

Allstaffawareoftheir

respo

nsibilitiesand

focus

edonachieving

specificgoalsonanannual

basis

Incorporateenergy-

efficiencyimp

rovementsin

annualtargetsforkey

individuals.In

dividual

targetsshould

bealigned

withoverallcompany

strategy


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23

3.2

Coreenergymana

gementteamw

ithimprovementagenda

Theenergyteami

nvolvesre

presentativesfromd

ifferentfunctionsintheorganisationwhocometogether

toleadtheEnergyManagementProgramme.

When

establishinganenergyteam

,lookformemberswhoareenthusiasticaboutenergyefficiencyandcanhelp

selltheideaacrosstheorganisation.

Theteams

houldincludepe

oplefroma

varietyofdisciplinesanddepartmentsandbeledbyaseniorindividualwhoiscommittedtotheEnergyM

anagement

Programme.

Lea

nmanufacturing/SixSigma

Heading

Ch

aracteristics

Su

ggestions

Te

amm

embersshouldhaveagenuineinterestinenergyefficiency

TeamM

embership

Cross-functionalteamw

ith

me

mbersfroma

llareasincluding

op

erations,maintenance,quality,

financeandlogistics

IncludeLean/SixSigmaspecialistsonthe

teama

swellastechnicalrepresentativeswith

sp

ecialistknowledgeinenergymanagem

ent

Se

niormanagerwiththeauthoritytomak

etherequireddecisionsonissuesthat

affectenergy

efficiency

TeamL

eadership

Seniorpersonincompanywhocan

tak

eownershipofandresponsibility

for

theEnergyManagement

Pro

gramme

Te

aml

eadercanplayakeyroleinensurin

gthatLean/SixSigmaresourcesarewe

llintegrated

in

theEnergyManagementProgramme

Leadingtheongoingdriveto

ide

ntifyopportunitiesforuseof

Lean/SixSigmamethodologiesin

energymanagement

Fa

cilitatingbrainstormingsessions,dataa

nalysis,etc

Wo

rkingwithvalue-streamt

eam

me

mberstohelpthemi

ntheireffort

toimproveenergyefficiency

Co

achingandmentoringteamsandtrainingthemi

nimprovementtools

TeamR

ole

Mo

nitoringoverallenergyintensity

andleadinginvestigationsinto

deviationsfromt

henorm

Us

eofcontrolcharts,statisticalanalysisto

helpidentifysignificantvariations


26/91

24

3.3

Rankingsignifican

tenergyusersandestablishingKPIs

Understandingenergyusag

eandthefactorsthatdriveitisanessentialelementofanEnergyManagemen

tProgramme.CompanieswithLeanandSixSigma

resourcesareuniquelypositionedtoleveragetheskillsoftheirstaffinidentifyingthekeyenergyaspectso

faprocessandinensuringthatthecor

rectmetricsare

putinplacetoenableenerg

yusagetobemonitored,controlledan

dimproved.

Considerationshouldalsob

egiventousingenergyasanindicator

oftheoverallefficiencyofanoperation

,sincevariationsinenergyusageareof

tenclearindicators

ofchangesinoverallproces

sefficiency.

Le

anmanufacturing/SixSigma

Heading

Characteristics

Suggestions

Identifyallsystemsthatuseenergyacrossthefac

ilityand

determine

theirenergyusagethroughmeteringorcalculations

basedonsupplierinformation

Incorporateallsystemsthataffecttheproduction

processinthe

calculation(HVACsystems,aircompressors,l

ightingandchillers

aswellas

equipmentuseddirectlyintheproductionprocess)

Rankingsignificantenergy

users

Systematicmethodusedtoidentifyandrankall

significantenergyusers

UseofSan

keydiagrams,ProcessMapping,Pareto

Charts,Energy

Balance,T

ableofEnergy-UsingEquipment,withrelatedload

data

Le


Heading

Characteristics

Suggestions

EstablishingKPIs

KPIsalignedtostrategicgoalstoenablemanagement

tomonitorprogressagainstk

eycriteria

DevelopK

PIbasedonenergyintensityasamean

stotrack

overallim

provementsinenergyefficiency


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25

3.4

MaintainingtheRegisterofOpportunities

TheRegisterofOpportunitiesisacriticaldocumentusedtoidentify

andprioritisetheimprovementopportunitiesinanorganisation.Overallresponsibilityfor

maintainingtheregistersho

uldresidewiththeenergyteam,w

hon

eedtoensurethatitiskeptuptodate

andreflectsthecurrentsituation.

Leanmanufacturing

SixSigma

Heading

Character

istics

Suggestions

Heading

Characteristics

Suggestions

Incorporateenergycom

ponent

intoVSM.V

SMtolookatentire

reworkspace(i.e.H

VAC,

compressedair),notlim

itedto

processspecificsteps(see

examplebelow)

Identific

ationofprocesses

withhig

hvariationand

defects

rate

Focusonequipm

entand

processeswithh

ighoverall

energyusageas

thesearelikely

toprovidesignificant

improvementop

portunities

Useofcurrent&future

state&value-stream

mapsasa

basisfor

identifying

potential

improvem

ent

opportunities

VSMtoincorporateenti

re

workspace.Includeall

equipmentthataffectsthe

processsuchasHVACsystems,

aircompressorsandchillers

Projects

likelytorequire

compleximprovement

tools

UseofDOE,statisticalanalysis,

tooptimiseequipmentand

processperform

anceagainst

energyusage

Involveallstaffmembersin

waste-walks,brainstorm

ing

sessions,benchmarking

,

suggestionschemeand

audits

aimedspecificallyatide

ntifying

examplesofwasteenergy

Projects

shouldbesuitable

forexec

utionthroughthe

useofD

MAICmethodology

Ensurethatano

pportunity

cannotbeaddre

ssedbyamore

straightforwardimprovement

methodsuchas

Kaizenevent

Opportunity

Identification

Ongoingd

riveto

identifyan

deliminate

wastefrom

allaspects

oftheope

ration

Gaugeperformanceaga

inst

peers/competitors/siste

r

divisionsandidentifybest

practicesusedtoimprove

energyefficiency

Opportunity

Identification

Projects

shouldbe

manage

ableina3to6-

monthperiod,w

iththe

potentialforsignificant

overallbenefittothe

Focusonlargee

nergyusers

whereaSixSigm

aprojectcan

resultinameasu

rable

improvementin

energy

efficiencyandsignificantcost


28/91

26

Gaugeperformanceaga

inst

peers/competitors/siste

r

divisionsandidentifybest

practicesusedtoimprove

energyefficiency

Reviewproductionproc

essesto

identifyequipmentidle

timeor

non-standardmachinesettings

thatcouldbecausingexcessive

energyconsumption

organisation

benefit

Projectsprioritis

edbasedon

time,cost,resou

rces,risk,

potentialbenefit,customer

needs,energyefficiency

Allimprov

ement

opportunitieslistedin

registeran

d

prioritised

,basedon

savingspo

tential

Eachvalue-streamt

eam

to

maintaintheirownRegisterof

Opportunitiesthatis

incorporatedintheoverall

register

Comple

xproject

prioritis

ationprocesswith

stringen

tapprovalcriteria

inplace

Mayneedtoweightenergy

criteriatoaccountforchanges

inenergysupply

cost

Opportunity

Prioritisation

Newideas

testedprior

toplant-w

ide

implemen

tation

UseLeanLab/PilotLine

with

highlytrainedstafftote

stand

pilotnewideasandmethods

Opportunity

Prioritisation

Projectapprovalinvolves

sign-off

bymemberof

seniorm

anagement

Todemonstrate

commitmentto

IS393,companie

sshouldensure

thatatleastone

projectwithan

energyfocusisimplemented

everyyear


29/91

27

VSMeincorporatingEnergyLine


30/91

28

4IS393Section4.4

ImplementationandOpe

ration

ImplementationandOperationcoverstherunningoftheprogrammesthatwillactuallyresultin

improvementsinenergyefficiency.T

hisinvolvesensuringthat:

Keystaffmembersaretrainedintherequiredskill-sets

Energyefficiencyis

promotedacrosstheorganisationtora

iseawarenessabouttheEnergyManag

ementProgramme

Anincentivesschem

eisusedtorewardthosewhohavemadeasignificantcontributiontotheenergyefficiencyoftheorganisation

FoodProduc

eruseda

short3dayK

aizen

Eventtoreview

all

aspectsofth

e

operationof

their

refrigeration

system.

TheKaizenteami

dentified

improvementsthatresultedin

improvedpro

ductivityandreduced

energyintensityperunitofproduct

produced


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29

4.1

Standardisingope

rations

InaLeanmanufacturingdeployment,thedevelopmentofstandard

isedmethodsforallaspectsofprocess

operationcanplayasignificantroleinincorporatingbest

practiceintoanoperationandprovideabaselineforallfutureimprovements.

Thestandardworkpracticesneedtobesupportedbyacompanys

documentationandprocedures.Fromanenergy-managementperspective,practicesthatcan

affectthestandardoperatio

nofasystem,suchaspreventivemaint

enanceprogrammes,shouldbedocum

entedandparticularaspectsthataffectenergyefficiency

shouldbehighlightedintherelatedprocedures.Theseprocedures

shouldbebackedupbytrainingrecord

s.

Leanmanufacturing/SixSigma

Heading

Characteristics

Suggestions

Allsystemo

pera

torsuseastandardbest-practicemetho

dologytocoverall

areasofoperatio

nandmaintenance

Implementationofdocumentedm

ethodsthatcoverall

criticalelementsofasystemsoperation,backedupbya

rigoroustrainingsystema

ndcertificationprocessfor

eachindividualrequiredtoperformt

herelatedtasks

Criticalsettingso

roperationsthatcanpotentiallyaffect

energyefficiency

shouldbehighlightedinthestandardoperatingproced

ures

Immediateinvestigationsheldtod

eterminerootcause

ofissueshighlightedbyfailuretoperforma

taskusing

thedocumentedstandardpractice

UseofAndonsystemt

hattriggersimmediatecorrective

actionprocessinthe

eventofadeviat

ionfromt

hedocumentedstandard

WorkStandardisation

Processesdesignedtominimiseth

epotentialfor

deviationsfromt

hedocumentedstandard

Extensiveuseof

mistake-proofing(Poke-Yoke)techniqu

estolimitthe

potentialofpeopleandequipmenttodeviatefromt

heagreedstandard


32/91

30

4.2

Operator-specifictraining

KeytoasuccessfulLeanmanufacturingprogrammeisensuringthe

involvementofallstaffmembersinordertobenefitfromt

heircollectiveeffort.Thesameholds

trueforanEnergyManagem

entProgramme.Providingtraininginenergyawarenessandefficiencytoallstaffmembersisagreatwaytoreinforce

thismessage.

InaLean/SixSigmaorganisation,energyshouldbeviewedasakey

rawmaterialthatcanbewastedifnotusedefficiently.Operationalstaffcanplayanimportant

roleinhighlightingenergylossessuchascompressed-airleaksore

quipmentleftonwhennotinuseforex

tendedperiods.

Leanmanufacturing

SixSigma

Heading

Characte

ristics

Suggestions

Heading

Characteristics

Suggest

ions

Trainedin

Leantoolsand

methods

Developtheskillsofoperationalstaff

toincludeidentifyin

gopportunitiesto

improveenergyefficiency

Trainedin

improvement

methods

Processmapping,standardisation,

energymeasurement,gain

understandingofhowtheiractions

canpositivelyornegativelyaffect

energyefficiency

Operator

Training

Useofon-the-jobtraining

dealingw

ithrealproblems

andimprovement

opportun

ities

UseA3tooltodeve

lopopportunities

anddemonstrateeffectiveness

OperatorTraining

Operatorsreceivebasic

traininginimprovementtools

andmethods

Useofco

ntrolchartsand

identificationofout-of-controldata,

problemi

dentification,error

proofing

Andonboardstodisplaydatarelating

toenergyefficiency

atplaceofwork

Involvem

entinSixSigmaproject

teamsor

Kaizenevents

Visualfactory

Useofmetricsthatcanbeinfluenced

andcontrolledbytherelevantteam

members

Operatorsinvolvedin

improvementefforts

Develop

systemf

orexecutingnon-

SixSigmaprojectsthatcanbe

appliedb

yallstaff

Useoftrendcharts&controlchartsto

monitorenergyusa

geinworkplace

Operator

Awareness

Defectidentification

Useoftaggingsystemt

ohighlight

potentialpointsofenergywaste

Operator

Support

Roleofsu

pervisor/teaml

ead

iscritical

Teaml

eaderneedstoreceivesupport

andcoachingtoensurebuy-intothe

programme

Operator

Involvement

Projectselection

Provideforumf

oroperatorsto

highlightissuesandsuggest

projects


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31

4.3

Trainingandeducation

ImplementationofIS393requiresthecompanytogenerateatrainingplanwherekeystaffmembersinvolvedinenergy-relatedtasksaretrainedinenergy-efficient

practices.InaLean/SixSigm

acompany,considerationshouldbegiventoprovidingadditionaltrainingtobothLean/SixSigmapersonnelonener

gyefficiencyand

energymanagementandto

energymanagementpersonnelonLea

n/SixSigma.

Thiswillensurethatthesetwodistinctgroupsofpeoplewhotraditionallywould

nothaveworkedtogethera

renowfamiliarwitheachothersrequir

ementsandcanstarttoseethebenefit

sthatworkingtogethercanrealise.

Le

anManufacturing/SixSigma

Heading

Characteristics

Suggestions

Providetraining

inenergymanagement,energyefficien

cy

Lean/SixSigmapersonnelwithadvancedtrainingin

continuousimprovementtoolssuchasKaizen,D

OE,

SPC,5

S,andotherLeanandSixSigmatools

Providetraining

inenergy-relatedimprovementtoolssuchasSankey

diagrams,Onion

diagrams,processmaps,energywaste

sandenergy

value-streamma

ps

Provideintroduc

torytrainingonLean/SixSigmatoolsandmethodsto

utilityengineeringstaff

Ensureallstaffaretrainedinenergy-efficiencymethodo

logies

Technical/Utilitypersonnelwithspecialistknowledge

inenergymanagement

ConsidertrainingutilityengineerstoGreen/BlackBeltle

vel

Providetraining

toallstaffonenergyefficiencyandene

rgyawareness.

Expandwasteca

tegoriestoincludeenergylossasaformo

fwaste

TrainingandAwareness

Value-streamt

eamm

emberstraine

dinbasic

improvement,wasteidentificationandelimination

methods

Provideadvance

denergyefficiencytrainingforteamle

adsand

technicalperson

neltoenablethemt

ofacilitateteamef

fortsin

improvingenerg

yefficiency


34/91

32

4.4

Promotionandaw

areness

Energyawarenessisabouth

arnessingthepoweroftheindividualt

oreduceenergywasteintheworkplace.T

hisstepinvolvesmakingpeopleawareofenergyissues

andenergy-savingpractices

intheirday-to-dayactivities,inordertoachieveasustainedimprovementine

nergyperformanceintheorganisation

.

InaLean/SixSigmaenvironment,thereshouldbeanemphasisonusingthecollectiveenergyofteamsandteamm

emberstoachieverapidimprovementinenergy

efficiency.

Le


Heading

Characteristics

Suggestions

Promotionofsu

ccessfulKaizeneventsthatimprovede

nergyefficiency

Useofcompany

intranettopromoteenergyawarenessandtoshare

goodideasand

practicesthatimprovedenergyefficien

cy

EnergyDaywhe

nteamspresenttheirsuccessstoriesto

management

Bottom-upapproachtopromotionandawareness

withvalue-streamt

eamm

embers

empoweredto

highlightenergywaste,andforum

sprovidedfor

teamstodemonstratetheirsuccessinreducingwaste

acrossthevaluestream

Competitionto

identifybestenergy-savingideasamon

gteams

Useofposters/p

resentationstoensurethatallstaffare

awareof

successfullycom

pletedprojectsandfutureplansforco

ntinued

improvements

PromotionandAwareness

PromotionofsuccessfulSixSigma

projectsthat

resultedinsignificantprocessimp

rovements

Involvestafffroma

llfunctionsinprojectteamsbothfo

rtheirinput

andasameans

topromoteenergyefficiencyamongth

eirpeergroup


35/91

33

4.5

Incentivesandawards

Onepracticethatshouldbe

implementedtoensureanongoingco

mmitmenttoenergy-efficiencyimprovementthroughouttheorganisationisa

nincentivesand

awardscheme.

Ifacompanyhasanexistingincentiveandawardsschemeaspartofitscontinuous-improvementprogramme,t

hiscaneasilybee

xpandedtocover

theEnergyManagementProgramme.I

fsuchaschemeisnotinplace,considerationshouldbegiventoas

ystemt

hatrewardsteamsandindividu

alswhomakea

significantcontributiontoe

nergyefficiencyintheorganisation. L

eanmanufacturing/SixSigma

Heading

Characteristics

Suggestions

Useofin-compa

nyrecognitionsystemstohighlightpo

sitive

contributionsm

adebyteamsorindividualstotheEnergy

ManagementPr

ogramme

IncentivesandAwards

Rewardsgiventostaffmembersa

ndprojectteams

whomakeasignificantcontributiontoenergy

efficiency

Useofvouchersystemt

orewardteamm

embersonsuc

cessful

implementation

ofsignificantenergy-efficiencyimprov

ements


36/91

34

5IS393Section4.5

CheckingandCorrectiveAction/MonitorandMeas

ure

Monitoringandmeasuringenergyusagerequiresthedevelopmentofrobustmeasurementsystems.This

allowstheusertotrackboththeoverallenergyusage

acrossanoperationandthe

usageofspecificareasthatareknowntobemajorconsumersofenergy.

Systemsshouldalsobeimplementedthatenablethedetectionofsignificantvariationsinenergyusagean

dlonger-termt

rendsthatindicateany

improvementin

theusageofenergy.T

hisda

tashouldbeusedtohelpthecompany

todeterminetheprojectsandimprove

mentactivitiesthatwillprovidethegre

atestbenefit.


37/91

35

5.1

Generating,analysingandmonitoringperformancedata

Anyenergy-managementsy

stemi

sonlyasgoodasthedataitisba

sedon.Generating,analysingandmon

itoringthecorrectdatacanplayasignificantrolein

ensuringthesuccessoftheEnergyManagementProgramme.Companiesthathavepeoplewithexperienc

einstatisticsandparticularlySixSigma

shouldusethese

skillsetsinmonitoringandcontrollingtheirenergyusage.

Leanmanufacturing

SixSigma

Heading

Characteristics

Suggestions

Heading

Chara

cteristics

Suggestion

s

Keyenergyusersinv

alue

streami

dentifiedand

meteredforenergyu

sage

DataGeneration

System

sinplacetocollect

datafromp

rocesscontrol

param

etersthataffectthe

qualityofthefinalproduct

Identifyprocesssettingsor

parametersthatcanaffectthe

energyefficiencyofan

operation

Data

Generation

Keyperformance

parametersidentified

andmonitoringsystems

inplace

Considerationgiven

to

equipmentthataffectsvalue

streams

uchascomp

ressed

air,H

VAC,c

hillers,etc

Processsettingsmonitored

using

SPCtechniquesto

detectspecialcausevariation

inthe

process

UseSPCtom

onitorparameters

andintegratewithcorrective

actionsystemt

oensurethatall

out-of-speceventsarefully

addressed

Keyperformancedatais

displayed

inthework

area

UseofAndonboardsinteam

meetingareatodisp

lay

energymetrics

Data

Monitoring

and

Analysing

Regularte

amm

eetings

usedtom

onitorand

analysedataas

appropria

te

Data-reviewsessionsusedas

anopportunitytoup

datethe

registerofopportunities

DataMonitoring

andAnalysing

Ongoingefforttoreduce

comm

oncausevariationin

keypr

ocessparameters

throughuseofDMAICproject

strategy

Focusprojectsonprocessor

equipmentthatexhibithigh

variationinenergyusageas

thesecanalsoindicatevariation

inproductq

uality


38/91

36

SPCChart


39/91

37

5.2

Selectingandimplementingimprovementactivities

Ultimately,anyenergy-managementprogrammewilldependonth

esuccessfulcompletionofimproveme

ntprojects.

Existingmethodsforselect

ingand

implementingprojectscaneasilybeexpandedtodealwithenergy

management.ThesemethodscanincludethestandardSixSigmaDMAICmet

hodologyand

Kaizeneventsbasedonthe

PDCAcycle(shownbelow).

Energyefficiencyshouldalsobepartofoverallprojectselectioncriteria.T

hiswillhelptoensurethatenerg

yefficiencyistakenintoaccountwhen

implementingnew

projectsthatarenotenergy

-specific,suchastheselectionandinstallationofnewequipment.

Leanmanufacturing

SixSigma

Heading

Characteristics

Suggestions

Heading

C

haracteristics

Suggestio

ns

P

rojectsfocusonreducing

v

ariationacrossthe

p

roductionprocess

Considerlo

okingat

equipmentorprocesses

withhighenergy-usage

variationasthiscanalso

indicatesignificant

variationsinprocessquality

andefficiency

Includeenergyefficiencyas

acriterion

inselectionofall

projects

Project

Selection

Improvement

opportu

nitiesidentified

through

useofLeantools

suchas

CurrentandFuture

StateMaps,Auditsand

Waste-W

alks

Includeenergyasaparameterin

value-streamm

apasameansto

identifyenergyw

aste.Include

energyasafacto

rwhen

performingwaste-walks.Hold

energy-specifica

uditsandaudit

outsidenormalw

orkinghours

ProjectSelection

U

seofprojectselection

m

atrixtoprioritise

p

rojects

Setrequire

mentforatleast

oneenergy-specificproject

eachyear

Emphas

isoncontinuous

improvementthrough

numero

ussmallprojects

Useofenergy-focusedKaizen

eventstorunimprovement

efforts

Improvementprojects

e

xecutedusingSixSigma

D

MAICstrategy

Regularproject-review

sessionsto

ensureprojects

areontrac

k

Project

Implementation

Allteam

members

involvedinimprovement

effort.T

eaml

eaderswith

specialisttrainingin

leading

improvement

projects

Useoftechnicalengineering

stafforLeanfacil

itatorstohelp

withprojectexec

ution.Consider

useofexternalco

nsultantsas

partofKaizentea

mstohelp

identifytechnicalissuesthatcan

affectenergyeffi

ciency

Project

Implementation

C

ross-functionalproject

t

eamswith

r

epresentativesfroma

ll

a

ffecteddepartmentsled

b

ycertifiedBlackorGreen

B

eltSixSigmapractitioner

Includefin

ance,production

andfacility

personnelon

projecttea

ms


40/91

38

Sankeydiagram


41/91

39

PDCAcycle


42/91

40

6IS393section4.6

Managementreview

TheIS393managementreviewshouldbeusedtosettheobjectivesforthecomingyear,toidentifytheres

ourcestobeallocatedtoenergymanagementand

identifytheactivitiestobec

arriedoutoverthecomingyear.

Thereviewshoulddiagnose

energyperformanceandtheEnergyM

anagementSystemi

tselfforeffectiveness.


43/91

41

6.1

Managementdiag

nosisofenergyobjectivesand

targets

Oncetargetshavebeenestablishedandaprogrammeinitiated,ma

nagementmustplayaroleinmonitoringtheeffectivenessoftheprogramme

toensurethatall

objectivesandtargetswillb

ereached.

Themanagementapproach

tothisfunctioncanvarydependingon

howthecompanyhaschosentorollouttheprogramme.InLeancompanies,

managementwill

haveamoreextensiveroleinsupportingandadvisingteamsandm

onitoringoverallprogress.IncompanieswithasignificantuseofSixSigmaprojects,t

he

managementrolewillfocus

onprojectselectionandthemonitorin

gofprojectprogress.

Leanmanufacturing

SixSigma

Heading

Characte

ristics

Suggestions

Heading

Cha

racteristics

Suggestions

Energy

Objectives

Systemin

placeforsetting

objectivesforthe

organisation.Annual

objectivesshouldbe

relatedto

alonger-term(

3-

5)yearstrategy

Energy-efficiencyo

bjectivesin

placeforoverallsit

e.O

bjectives

shouldbecascadeddownto

individualvalue-streamt

eams

Energy

Objectives

Ove

rallannualtargetsset

forallkeyparametersthat

affe

cttheoverall

performanceofthe

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7 Conclusion

The IS393 standard provides a roadmap that, if followed will enable an organ isation to realisesignificant savings in energy costs.

A critical element of the programme is the use of continuous-improvement tools that enable theorganisation to identify and implement a programme that will result in improvements in energyusage. Traditionally the responsibility for this has rested with staffwho have direct control of theenergy supply to the organisation, such as utility engineering. This has resulted in a focus onimprovements on the su pply side through negotiation of cheaper rates or by improving equipment-maintenan ce procedures with the end user left out of the overall programme.

Companies with experience in Lean manufacturing and Six Sigma have an opportunity to approachenergy efficiency from a different viewpoint. Involving the end user and Lean and Six Sigmapractitioners alongside the energy-supply specialists will enable the organisation to focus on howenergy is used and to identify areas where significant waste of energy occurs.

Standard tools used in driving process improvements such as DMAIC, SPC and Kaizens can also beapplied to energy-efficiency improvements. An organisation that empowers its staff to identify andeliminate waste can use these same skills as a means to drive improvements in energy usage. Bytapping the collective skills of its people, breakthrough improvements can be achieved. This meansreduced energy costs, more efficient processes and a more profitable an d competitive organisation.


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PUBLICATION DATE: Q1 20 09

REF NUMBER: XXXXXXX

Blending Lean, Six Sigma and EnergyTools for Improved Energy Management


03


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1 Introduction

GREAT effort is put into increasing production capacity and reducing costs in Irish industries. Optimisingproduction facilities plays a vital role in maintaining competitiveness in todays markets. Whether the capacityis measured in flow, pieces, quality or availability and the costs are considered as time, raw material or energy,the result remains the same a fit plant operation.

Several approaches may be used. Lean and Six Sigma are continuous-improvement approaches used todrive improvement in cycle times and product quality respectively. Both ultimately drive up shareholdervalue.

The Energy Manager has a brief to reduce costs and impact on the environmentby increasing energyefficiency and controlling energy usage. The most robustenergy-efficiency strategy uses an EnergyManagement System to provide a framework to continuously improve and standardise efforts. A criticalrequirement is a multifunctional approach that deals with all influences on the energy requirement.

There are synergies to be gained from blending all three approaches, which ultimately respond to the samechallenge of continuous improvement, operational excellence and reduction of overhead.

Implementing the Energy Management System (EnMS) in an organisation in a way that attaches

requirements of the EnMS Standard to attributes or characteristics of a Lean or Six Sigma culture is the firststep. This lays the framework for a multifunctional approach. It shares responsibility outside the EnergyManagers department and thus widens the scope of project managers and membership and thus theareas that are to be focused upon

Each improvement methodology hosts its own workflow and set of tools to apply. The energy-managementactivity in a Lean or Six Sigma environment should adapt a blend so that it applies the most effectiveworkflow and tools that involve all stakeholders, works on the right projects at the right time, and commandsthe required support to ultimately generate the best results.

Strengths are merged to generate synergies in which the overall goals achieved exceedthe sum of threeindividual results.

In this section we discuss the tools commonly used by the different disciplines and how some of these toolsand approaches can be incorporated in the blended workflow.


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2 Workflow for Energy Management, Lean and Six Sigma

Methodologies

2.1 Workflow for energy management

A review of energy aspects often follows the steps illustrated inFigure 1.

Figure 2.1: Common project flow for energy audits

The Energy Manager or appointed consultant initially establishes an overview of the total energyconsumption at the enterprise by department/plant/equipment/area and of individual consumers in orderthat significant energy users (SEUs) may be identified. The SEU could take the form of a utility plant, aprocess, a building or even a specific process parameter influencing energy consumption. This analysis maytake the form of flow sheets, energy consumption data, pie charts and balance sheets.

The projects are most often initiated by the staff responsible for utility systems, e.g. boiler systems,refrigeration plants and compressors, (where the energy is billed). In this context, decision-making in theFacilities/Technical Services department is determined by budget constraints and must compete forresources and funding with other projects from Operations, Engineering, Quality, Logistics, etc.

The analysis phase requires identification of key performance indicators (KPIs) for monitoring energyefficiency, and uses the tools outlined in Section 3 of this chapter. However, when it comes to justifyinginvestment in new plant or equipment, KPIs are often forgotten. The analysis phase also looks at energyefficiency and examines where investment could be made to harness waste energy, for example, with theuse of economisers on boilers.

A cost analysis, identifying savings opportunities, either by improved capacity or efficiency or through theuse of new technology, will lead to the issue of a proposal. The decision will often be made on the basis of

return on investment (ROI), sometimes running to hundreds of thousands ofeuro. If approved, the project ishanded over to the facilities manager for installation, commissioning, setting operational controls andoperating the unit.

The KPIs described above should be continued in order to demonstrate the savings resulting from thechange.

2.2 Workflow for Lean

The workflow for conducting Lean projects follows a common format for most situations.

Figure 2.2: Lean project flow

A value stream map (VSM) is a map of the processes needed to deliver the value that the customer requires.The Current State Map reflects the state of things as they actually are at the time of the analysis. TheIdealState Map reflects things as you would wish them to be in a more efficient, more effective operation. TheFuture State Map reflects the point to which the current initiative is expected to bring the organisation.

Once the current and future-state maps have been prepared, the improvement team, which generallyspeaking is all or some subset of the operations team, is commissioned and tasked with the improvement. Itis not unusual to undertake several Kaizen events per year to continuously improve a significant process.


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In contrast to many energy projects, Lean projects are initiated in the operations area of the plant. Operatorsare deeply involved in the process, often using Kaizen events.

The term project flow is somewhat misleading, as Lean is a continuous process often referred to as a way ofthinking.

2.3 Workflow for Six Sigma

As with Lean, the flow for Six Sigma is very structured and the tools are well defined.

Figure 2.3: Six Sigma project flow

Six Sigma is led by the supporting functions of an organisation such as Quality Assurance, ProductionPlanning or Process Engineering. A project team is gathered to solve a specific problem and a large emphasisis placed on the reporting and follow-up phases.

These might include:

Process mapping;

Detail statisticalal analysis;

Process control;

Golden batch entitlements;

Analytical techniques to control variability in process;

High Impact project with high expected return in cost savings.

The Six Sigma process follows a define-measure-analyse-implement-measure process. During the process, ituses robust engineering and statistical analysis tools to diagnose and develop a thorough understanding ofprocess variability of critical parameters. Through the process, negative influences on performance arereduced and controlled.

A company using Six Sigma invests heavily in organisation and training. Assignments to Six Sigma projectsare either full-time (Master Black Belt, Black Belts) or part-time (Green Belt).

There are missed opportunities if energy management is treated separately from mainstream businessimprovement activities.

Lean and Six Sigma projects have a strong management focus. This is not always the case for energyconsumption.

Lean and Six Sigma projects almost never consider energy costsas the primary objective partlybecause they are focused on finding any operational or high-impact cost saving and also because thepeople carrying these projects are not aware of the opportunities.

Lean is strong in setting and achieving targets whereas itis very uncommon in the energy world. Lean is strong in involving operators through standard operating procedures (SOPs) where energy

people most often have difficulties addressing operator influence. Focus on process and core production activities is strong in Lean and Six Sigma whereas energy

management tends to focus on the utility area (with limited saving opportunities).

As described, the three approaches are led by different parts of an organisation, as illustrated below.


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Figure 2.4: Typical organisation entrance

It is clear that an approach that combines all three disciplines will yield a far better result. Blending the threeapproaches should lead to broader involvement in the organisation for obtaining energy savings, and often

synergy effects arise.


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3 Applying Enhanced Tools to Energy Programme

3.1 Tools that energy programmes can adopt from Lean

3.1.1 Value-stream mapping that embeds energy

A tool commonly used for analysis in Lean is thevalue-stream map (VSM). Adding energy usage line andenergy intensity detail to the traditional VSM would highlight areas for improvement to the Lean and SixSigma specialists.

Figure 3.1: VSM embedding energy (theoretical)


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This enhanced version of the traditional VSM would be useful to help understand the influence on energyusage of the material transformation process in operations. Additionally, if energy usage for non-value-adding steps were included, it would help in highlighting target areas for energy reductionnot addingdirect value.

This introduces a new tool that is described later (see Section 5) VSMe, or Value Stream Mappingembedding Energy.

A case study of VSMe application is tested as part of this project and included in the Appendix.

3.1.2 Addressing operator influence

Operator activity can influence energy usage greatly.

In many facilities start/stop times, temperature and pressure levels and duration of cleaning andsterilisation processes are manually controlled by operators.

Operators run the plant despite all thedocumentation and controls in place. They decide whether thestandard operating procedures (SOPs) are followed or not.

Typically, the people who run the process are well informed of where energy-saving is achievable andknow the equipment well (small defects, bottlenecks, etc).

Despite these facts, involving operators in energy optimisation projects is rather uncommon. In Lean, on theother hand, participation by operators is seen as essential to success. It is therefore strongly recommended toinvolve operators in energy-saving projects for energy mapping, and identifying and analysing projects.

Example: Operator involvement

A Danish food company producing cheese powders has been deeply involved in energy optimisation ofitsproduction facility by using traditional energy engineering. Projects on heat-recovery systems and utilityoptimisation have been carried out successfully,but the company is beginning to run out of ideas forimprovement.

The energy usage is mapped in relation to the production process and it becomes evident that the mostimportant factor is avoiding wastes, as defined in Lean terms. The expression is the right product, on time,right-first-time. This implies that production planning, process optimisation and avoiding wastes are keygoals, and energy has been incorporated as a part of Lean thinking.

At operational level, no productivity or energy-improvement investments are approved without employeeinvolvement. This has contributed greatly to higher awarenessamong and commitment from theemployees, as their input is often is of great value. Recognising theirfingerprints on projects clearly providesmotivation for further involvement.

Energy issues are always included in regular Lean meetings with operators and staff to help ensurecontinuous improvement and continuous awareness of potential energy savings in daily work. In this way,energy optimisation pervades the mind of the entire organisation.

3.1.3 The Kaizen culture influence on energy

In the Lean world, Kaizen events are used for bringing in the opinions of the entire organisation. Thisencourages further commitment and the identification, planning and implementation of new ideas.Operators, planners, quality-assurance staff, maintenance personnel, energy management, technologyexperts and other internal stakeholders should participate in Kaizen events in order to review all aspects of

the improvements.

This being the case, energy-saving projects can be reviewed from other perspectives, and spin-offopportunities, such as quality, production capacity and maintenance improvements, are possible.

Example: Chiller optimisation through Kaizen event

An Irish food-processing plant experienced lack of capacity in chilling product as a bottleneck andconsequently any downtime in chiller system had a serious impact. To identify the problem, the followingdata was collected:

Temperature of product entering the chilling area

Temperature of product exiting the chilling area


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Product dwell time in the chilling area

Product density in the chilling area

Equipment settings

Chiller layout

Analysing this data provided a list of problems. Most were solved during or shortly after the actual Kaizenevent. Team members included the environmental manager, maintenance technician, plant supervisor,refrigeration consultant, QC and production supervisor. The outcome was a significant cost saving, higherproduction throughput and increased awareness of and commitment to energy savings.

3.1.4 Overall equipment effectiveness (OEE)

The Lean term OEE compares to its theoretical efficiency the total effectiveness of a piece or combination ofequipment when the equipment is fully used, at full performance and delivering 100% quality. It is commonto benchmark OEE of 85 % and above as world-class.

Table 3.1: World-class OEE

Factor World-class

Availability rate 90 %

Performance rate 95 %

Quality rate 99.9 %

Overall Equipment Efficiency 85 %

In the process industry, experience shows that a strict measure of OEE causes some difficulty. Lack ofavailability, performance and quality is not always directly caused by the equipment itself but by upstreamequipment bottlenecks or failures. A number of individually defined OEE formulas exist in the processingindustry, but OEE is still applicable for evaluating process improvements internally.

By using OEE in energy reviews, the true operation of a plant may be analysed and energy-saving

opportunities may be identified for: Idle time

Poor equipment performance

Variance in operation patterns

Reprocessing or discarding defective product

Example: OEE used for energy saving

Connacht Gold decided to investigate the overall equipment efficiency (OEE) of pasteurisers, separators andevaporators in its Shannonside dairy process plant. Huge potentials were discovered in increasing theavailability of the equipment, as substantial variation in start-up procedures and cleaning routines wasdiscovered. It was also found that a simple pipe restriction caused poor performance ratio.

Potentially high energy saving exists in increasing the OEE at Connacht Gold toworld-class. (A full case studyis included in the Appendix.)

3.1.5 Takt time

Takt time is the maximum time allowed to produce a product in order to meet demand. It is derived from theGerman word Taktzeit(cycle time). Takt time sets the pace for industrial manufacturing lines. An exampleis inautomotive manufacturing when cars are assembled on a line, and moved to the next station after a certaintime the Takt time. Therefore, the time needed to complete work on every station has to be less than orequal to the Takt time in order to complete all tasks before the product moves to the next assembly station.Strictly speaking, the Takt time is determined by the rate at which the customer requires product.


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Reviewing and minimising Takt time in

am project report

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