Cushioning cost pressure with energy management

With around 20 international production sites, the company is one of the largest dairy groups in the world. The products are exported to over 70 countries and undergo extensive processing, for example for homogenization or to ensure shelf life over longer periods of time. This requires complex, large-scale and energy-intensive machines and production facilities in which the raw materials and end products are heated and cooled.

Under these conditions, there is no alternative to producing food at high capacity – if volumes fall, the cost pressure from operating, cleaning and maintaining the systems increases. In addition, energy efficiency measures no longer help once volumes have been lost. The dairy group already had this scenario in mind and took various measures to counteract it.

Exemplary energy management as a starting point

Several plants had already identified energy efficiency as an option for reducing costs but were not yet exploiting the full potential of this approach. One production site in Europe was now to act as a “lighthouse project”. It was to show how the most effective starting points for energy consumption savings could be identified throughout the plant. Suitable measures were also identified and evaluated for possible implementation. This approach is therefore suitable as a “best practice” for other sites.

A living culture of improvement

The group management selected the plant with his two production lines as a “lighthouse”, because its top management had already been actively pursuing energy-efficient management as an important task for years. This not only resulted in solutions at a high level in some cases. The site also continuously addressed opportunities for improvement: in an “energy circle”, managers from several organizational areas regularly defined and monitored the plant's energy targets (KPIs), decided on measures and followed up on their implementation.

As the relevant expertise developed over time, the plant already achieved good results at the start of the collaboration with ROI-EFESO. The team at the plant not only dealt with classic issues such as waste heat recovery and reduced the overall energy requirement by around 20 %. The site also took advantage of negative electricity prices through load management. In addition, the workforce was made aware of the topic of energy efficiency through regular training sessions. So, the employees were motivated and empowered to actively participate.

A critical view from the outside

The “energy circle” wanted to continue this already exemplary initial situation with further successes. Together with the plant management, it decided to reflect on the existing knowledge and the status achieved with the independent, critical view of an industry-experienced management consultancy. It was also necessary to identify further measures as cost-cutting options and to prepare these as a decision paper for the company management as follows:

• Specification: what amount will a measure save over what period of time? How are the amortization period and CapEx quantified?

• Prioritization: which measure is particularly effective based on which investments and results?

This is where ROI-EFESO came into play as an industry-experienced partner in solving operational challenges. The ROI-EFESO consultants contributed their expertise from the implementation of cost reduction and sustainability programs to the joint project team with those responsible for the dairy site.

Regardless of the plant and industry-specific starting conditions, these approaches are recommended in energy management assessments:

Go from the “big picture” to the details – not the other way around!

In this case, the assessment started in an ideal situation. The team at the plant had already acquired a great deal of expertise and was highly motivated to pursue opportunities for improvement. However, there was a risk of getting lost in implementation details or not correctly assessing the actual benefits or profitability of measures and technologies.

When discussing options for reducing energy or costs, a “big picture” overview of the collected measures should first be drawn up and roughly divided into a few blocks according to their estimated effectiveness (e.g., savings potential > 50%, < 50%, 5-10%). This simplifies the sorting and prioritization of measures and avoids a time-consuming discussion of detailed questions about ultimately unimportant “levers” in the subsequent steps.

Evaluate the measures according to the Pareto principle!

The Pareto principle is also a useful guideline for prioritizing measures in energy management: How can 80% of the targeted savings be achieved with 20% of the total expenditure? Which measures require a high implementation / cost effort, but produce comparatively unimportant results? This simple subdivision helps to quickly find the most effective levers.

In this case, the amortization period was also used as a selection criterion – all measures that would have taken more than three years to implement were eliminated. However, this does not automatically make the measure unsuitable. In the case of further technological development, it may be worth reassessing its suitability after one or two years.