DOOD’S KEYNOTE ADDRESS:
SCHNEIDER ELECTRIC ROAD SHOW
SCHNEIDER ELECTRIC ROAD SHOW
PRESENTATION 2006
Parklane Hotel, Cebu City
November 9 & 10, 2006
November 9 & 10, 2006
INTRODUCTION
Invoking ‘PLANT EFFICIENCY’ as Schneider Electric’s theme in this Road Show is very much timely in these times of resurging uncertainties in energy costs as variable inputs to production economy. As we speak today, manufacturing plants in the Philippines are unsure of what tomorrow will bring to the state of oil prices even as business itself has again been sailing into another uncharted economic limbo. After all, [COST + PROFIT] = [SELLING PRICE]; that’s business all about.
In physics; Efficiency means, Output/Input. In engineering, Efficiency = Output/(Output + Losses). We had been taught that efficiency is always less than 100%. And that Output is always less than the Input. In order to gain Maximum Efficiency, Output must be at its possible maximum while losses at its possible minimum. Simple, yet how do we interpret that in the Shop Floor? The center-stage therefore in analyzing efficiency is: losses! To the layman on the shop floor, the better word is “waste”.
Interpreting wastages or losses in real-life plant environment could be cumbersome. It takes not only technical & managerial expertise but also business sense in integrating a labyrinthine maze of nitty-gritties into an orchestrated energy management program. It is not switching off lights or air-conditioning systems during lunch breaks that counts but Energy Management extends beyond mediocre imagination.
TODAY’S COMPETITIVENESS
In general terms, Management experts say that the ingredients of today’s competitiveness are: quality, efficiency and productivity. To help attain this goal, several old inefficient plants in the 90's were replaced with high technology lines giving way to modern techniques and processes in manufacturing. On top of this, organizations were restructured to meet new synergistic requirements. Several companies in the country sought for ISO certification - showing to the world that these companies are at par with world class standards. The mood in the 1990’s therefore was modernization to meet global competition. But modernization is in fact going back to basics, again to: quality, efficiency and productivity. That is still valid even up to today…
The phrase ‘energy management’ means different things to different people.
Quality Buffs say, “AIM QUALITY” … and Efficiency as well as Productivity follows…
Productivity Enthusiasts say, “FOCUS ON PRODUCTIVITY” … and Efficiency as well as Quality follows…
Efficiency Practitioners declare, “EFFICIENCY IS EVERYTHING” … Productivity & Quality are built-in.
Whatever it is, it is the same banana. Simply because there must be a “War On Waste”. In our lingo, we say, WOW! And WOW has always been beautiful. Let us therefore dwell in WOW!
THE NEED FOR ENERGY MANAGEMENT
To me, there are three reasons why we need Energy Management.
1) Manufacturing Economics: The company, (meaning, your company and everyone else’s) has to survive. Energy Costs have now been an expensive raw material and closing shops would mean unemployment debacle of large proportions.
2) National Good: Energy management is good for the national economy as the balance of payments becomes more favorable and the peso stronger. Energy management makes us less vulnerable to leaps in energy prices, or curtailments due to political unrest or natural disasters elsewhere.
Although the Philippines has oil, forget about it. We need to realize that until the country strikes a new liquid black gold mine, Philippine indigenous oil is forgettable. The Philippines is consuming an average of 338,000 bbl/day, with net oil imports of 312,000 bbl/day (92.3%). This dependence on imported oil makes the Philippine economy vulnerable to sudden spikes in world oil prices. Although exploration underneath the Malampaya gas field revealed an estimated 85 million barrels of oil, this could probably supply the country for a period of nine (9) years at present production level of 25,000 bbl/day (7.7% of the country’s needs). If Malampaya field supplies the country 100% of its oil requirements of 338,000 bbl/day, Philippine oil deposits would only last for (hold your breath) 8 months.
In comparison, the USA consumes 24.5 million barrels of oil per day in 2004. The Malampaya oil deposit of 85 million barrels will last for only for THREE DAYS in the USA.
3) Energy management is kind to our environment as it eases some of the strain on our natural resources and may leave a better world for future generations.
WHAT IS ENERGY MANAGEMENT?
To the energy managers, energy management is: “the judicious and effective use of energy to maximize profits (minimize costs) and enhance competitive positions”.
According to Mr. Barney L. Capehart, PhD, CEM, in his book “Guide to Energy Management”, the primary objective of energy management is to maximize profits or minimize costs. Some desirable sub-objectives of energy management programs include:
1. Improving energy efficiency and reducing energy use, thereby reducing costs,
2. Developing and maintaining effective monitoring, reporting, and management strategies for wise energy usage,
3. Finding new and better ways to increase returns from energy investments through available controls system & automation,
4. Developing interest in and dedication to the energy management program from all employees. Cultivating good communications on energy matters,
5. Reducing the impacts of curtailments, brownouts, or any interruption in energy supplies.
-------------------------------------------------------------------
What therefore is the relevance of Energy Management to this Roadshow? Let me talk first about “Plant Efficiency”…
PLANT EFFICIENCY
Plant Efficiency is related to production throughput. To a Plant Manager, the cue would always be: ‘Cost Vs. Production’. Low Production Cost is good. Similarly, High Production Output is good. Which is which?
The best is when you have the highest production at the lowest cost, because the two measurements must be integrated into a ratio. The lowest ratio of Cost per unit Product is always seen as the penultimate measure. That is one element of the so-called “throughput”!
Production of course is dependent on the capacity of the plant. But even if production wanted to achieve the same output as the capacity, seldom is it possible because of loss factors such as quality rejects, idling, speed adjustments, line adjustments, technical troubles, waiting times, etc., are influencing production throughputs.
In any industrial plant or commercial complex, energy must be seen as a raw material to production. Nevertheless, Energy Management must not be understood as doing without energy but is in fact, making the most out of it. Often misunderstood, energy management is actually a ‘War on Waste’ (WOW). Its basic strategy is to eliminate unnecessary losses while paying for wastages are mortal sins. Energy Management means that monthly power bills are as normal as eating three square meals per day but paying for unnecessary extras is a waste that every business abhors. Yet in most plants, energy management as a discipline is often “said than done”; because it is always not seriously taken into action.
Energy Management therefore must focus on the following:
a) Managing the Load, because mismanaged load could mean millions of pesos,
b) Managing Power Losses, because unmanaged extra losses mean big bucks.
If your plant doesn’t manage the load or is not concerned on losses, then that plant has never understood energy management. All energy conservation pronouncements by management are just plain rhetoric. Many Plant Managers are usually non-cognizant to the fact on how to tap the seemingly non-existent gold mine in his plant’s backyard!
---------------------------------------------------
The objective of today’s Road Show is to reinforce the managers and engineers in the modern tools to achieve the highest efficiency in plant facilities. Surprisingly, the subjects in today’s Road Show jibe with Mr. Capehart’s goals in energy management. Non-scripted, the following areas are featured as today’s highlights, namely:
a) Power Monitoring,
b) Selective Automation,
c) Energy Efficient Devices & Controls.
But let me add two more things,
d) Effective Maintenance, and
e) Efficiency-Driven Workforce.
All of these are part of WOW. Allow me discuss each …
1) POWER MONITORING
Remember the dictum: “You can’t control if you don’t measure”. We need meters to measure. And there are six good reasons why we should meter a plant. A management, who wants to manage energy but doesn’t want to install measuring means, is an oratorical management who is not serious in energy management. Unless energy usage is measured, it is next to impossible to know where to direct efficiency efforts.
A metering system provides that vital ingredient to a successful energy management program. There are six (6) reasons why we should meter the plant.
• CHARGE OUT ENERGY TO INDIVIDUAL DEPARTMENTS
This is the most basic reason to meter. Experience in this country has shown that a 5–10% reduction in consumption can be achieved after meters are installed just by letting the users know that they are monitored. Up to 10% more reduction can occur when the users start to manage the use of their energy. Ultimately, up to a 25% to 30% reduction will be achieved when metering is tied directly to the process through a Programmable Logic Controller (PLC) or Distributed Control System (DCS), in a closed loop automated process control arrangement.
ACCOUNTABILITY FOR ENERGY USED
Once metered, establish energy budgets for the various departments. Each month the total energy bill is proportioned to each department. This data is used to compare costs against the department's budget and thus develop a variance-peso value.
Trending of energy consumption per unit of production or per service performed is the basis for initial analysis and resulting corrective actions. Accountable for every kw-h consumed, each department shall be made to explain the variances of the use of energy.
Management and creative personnel are always critical components of an energy management program. Tough, specific, and measurable goals need to be developed. Once the goals are established, management should carefully monitor the results, but the energy management staff should be allowed to perform its functions.
Staff and management need to realize that:
1) energy costs, not consumption, are to be controlled
2) energy should be a direct cost—not an overhead item, and
3) all energy consumers need be metered and monitored closely.
• EFFICIENCY OF UTILITY EQUIPMENT & SYSTEMS
The objective of an energy reporting system is to measure energy consumption and compare it either to company goals or to some standard of energy consumption. Ideally, this should be done for each operation or production cost center in the plant, but most facilities simply do not have the required metering devices. Many plants only meter energy usage at one place—where the various sources enter the plant. Most plants are attempting to remedy this, however, by installing additional metering devices when the opportunity arises. Systems that should be metered include steam, compressed air, and chilled & hot water.
There are established world standards in machine or system performance. For instance, how is your refrigeration system performance compared with world standards? In a Bottling Plant for instance, how much kw-hour does your plant consume per case or per liter of product as compared to established world standards? Is your air-conditioning kw-hours per unit area more than industry standards? It is prudent for plant management to benchmark its performance to the established best practices. This way, management will know if you are performing well or not.
• PROVIDE INFORMATION FOR AUDITS OF ENERGY PROJECTS
With funding becoming increasingly difficult to obtain, audits of cost reduction energy management projects have been required more frequently. But energy audits will be blind without meters.
• IDENTIFY PERFORMANCE PROBLEM AREAS & PROVIDE FEEDBACK TO MANAGERS
The collection of energy-consumption data in support of energy management is seen as a viable tool, greatly aiding in the identification of equipment performance problems. As a side issue, performance problems associated with the people operating the equipment are also identified, allowing managers to take any necessary corrective action.
Cost center orientation is important, as are comparison to some standard or base and calculations of variances.
• IDENTIFY POTENTIAL ADDITIONAL ENERGY SAVINGS
According to IEEE publications, “… with the long-term goal of management being one of continual improvement, metering and trending systems provide data on which to base resource allocation decisions. With regard to audits of the electrical power system, metering results can be used to compile an energy profile that will reveal areas where conservation projects are most beneficial. Monitoring and reporting energy consumption allows for close control while minimizing expenses. It also provides historical energy consumption data to aid in projecting future loads and developing standards for the next year. Such data are essential to financial forecasts and operating budgets. Through proper monitoring, recording, and analysis, the use of meters can lead to corrective actions that produce the desired result of reducing energy per unit of production or per service performed”.
2) SELECTIVE AUTOMATION
Technology advancements could have been kind to the electrical engineering profession. The electrical engineering we knew of 20 or 30 years ago is no longer the same engineering today. With the entry of power & control electronics highlighted with industrial automation, electrical engineering has raised its dignity significantly. With the new wonders in electrical engineering unfolding, in a high-tech brewery scenario for example, the electrical cost component of a project is now elevated from a forgettable 9% of the past to some 15% today. For a P 2.0 billion brewery, it is not surprising to have an electrical budget of some P 300 million.
The acceptance of new technologies in industries today made the increase of the value of electrical engineering. To keep pace with global pursuit to manufacturing quality and efficiency, more plants in the country are upgrading or modernizing their facilities. Small candy factories for instance are now equipped with variable frequency drives. Tableware factories have now graduated from ancient manufacturing techniques to PLC orchestrated automation. The departure from the traditional TW or THW wires in conduits to industrial multi-core cables (not ‘Cord’, please) in cable trays, the shift to soft starters in lieu of the traditional magnetic contactors and the employment of DIN rail mounting molded case circuit breakers from age-old fuses; are just few examples but significant changes in the industrial plant landscape. Common electrical equipment as transformers, generators, power circuit breakers, protection and control devices had undergone series of evolution compared to counterparts in other engineering disciplines.
For the manufacturing plants, there’s no other way to increase production quality & efficiency throughput but to employ instrumentation that makes automation possible. The trend now is to manage production through a centralized control centre where all operational variables can be supervised through computer screens or mimic boards. There is no escape to new technology and electrical engineering is supposed to be the beneficiary.
The name of the game in manufacturing today is therefore automation & robotization. Why? Simply because in the global business arena, it is a must! John H. Zenger, a known American management expert in his book "Leading Teams" wrote, "In the 1960's, North America stood at the summit of world economic power. In those days, the order of the day for every manufacturing manager can be summarized by a sign that hung over his desk and that is:
GOOD. FAST. CHEAP.
PICK ANY TWO..!
It means that:
"If you want quality and you want it fast, it'll cost you big bucks"
"If you want it fast and cheap, no problem, but it won't be good enough to last through the winter"
"If you want good quality at a good cheap price, that's fine too, but don't hold your breath for delivery. It'll probably take forever."
Then, comes the customer’s cue to nod in wide-eyed agreement:
"You always have to trade off one to get the other two."
Today in the third millennium, a manufacturing company has to give out all the THREE, in order to survive fierce competition. In a customer-driven business environment, automation therefore becomes the answer to the need of efficiency & speed. Robotization where applicable, is the key to achieve large volume and uniform quality throughput especially in industries where human factor is too hazardous. That in a nutshell, is why so many companies are putting themselves through so many agonizing internal changes, including the parting away of old traditional management styles. For until a manufacturing plant becomes "good, fast and cheap", it's an easy prey for any competitor that figures out how to deliver on all three.
3) ENERGY EFFICIENT DEVICES & CONTROLS
INSTRUMENTATION & CONTROLS..? Bulk of power consumption in a plant comes from conveyors running without materials conveyed, machines running even if there are no materials being fed, circulating pumps running even if not needed, air-conditioning in full-blast even if no people around, lights on with no one is using the light, and a host of others. Make an audit and you might discover that 25% to 30% of your power bills are consumed unproductively.
In modern plants, instrumentation & electronics control systems employing sensors are now common scenarios to watch over these problems. They came in the form of automated and intelligent buildings or plants. Machines & comfort equipment are shutdown automatically if sensors can not detect any reason why these machines should run. Pumps are slowing down when volume demand dwindles. Conveyors slowing down when full or gain speed when not loaded or shut down at all. Compressors loading and unloading automatically depending on demand and the list is endless.
4) EFFECTIVE MAINTENANCE
In the past, responsibilities of maintenance are to concentrate only in making machines and equipment run in service to the production department. Today, maintenance is already included in the ownership of the quality and quantity of the products produced, because after all, it is maintenance’s job to make the process capability of the plant fit to produce such products.
Maintenance is a critical part of a facility’s operation. Effectively maintained equipment and processes are necessary to keep the facility functioning at its optimum capability. Unfortunately, maintenance programs are often the first victims of any cost-cutting effort. Generally, proactively preventive or scheduled maintenance is cut back or eliminated. Then the maintenance effort is directed more toward “repair and replacement” than toward keeping the equipment running most efficiently. When this “run-to-failure mode" of maintenance happens, you are in the state of poor maintenance.
Maintenance should now be an integral part of any energy management program. Maintenance keeps equipment from failing, helps keep energy costs within reason, helps prevent excess capital expenditures, responsible to the quality and quantity of the products produced, and is frequently necessary for safety.
Again, automation & robotization bring the equipment or machines to the center-stage. When we say equipment or process machines, it means maintenance because maintenance now plays a much bigger role in production. Along with the shift in philosophies in maintenance, new concepts in modern management had been developed in Europe and anywhere else in the globe, among them are as follows:
In the past, quality and quantity of production were to a large extent decided by the skills of men and their capacity to work fast. All through a long period of time, from generation to generation, maintenance had been thought of as a service department - not a condition to production.
Times had changed. The quality and quantity of production now do not depend on man but on machines. With the increasing degree of automation and robotization in most manufacturing plants today, it is now appropriate to recall Mr. John Moubray a British expert on Reliability Centered Maintenance (RCM) when he said, "that product quality & quantity now depends on equipment". At the other side of the globe, Mr. Seiichi Nakajima, a Japanese guru on Total Productive Maintenance (TPM) preached: "that productivity, cost, inventory, safety, health and production output - as well as quality - now all depend on equipment”.
In the scene of plant maintenance, the concept that maintenance is nothing but a service unit has now been changed to the concept that “maintenance is a function of production, and conversely, production is a function of maintenance”.
5) EMPLOYEE PARTICIPATION
Investing capital for “self-intelligence” & automation will pay off handsomely by eliminating big time losses. However, no amount of automation shall relieve the responsibilities of the attendant. There is still that so-called “human interface”. An energy management program can be successful only if it arouses and maintains the participative interest of the employees. Employees who participate and who feel themselves partners in the planning and implementation of the program will be more inclined to share pride in the results.
The use of company newsletters, bulletin boards, or posters for pictorializing energy conservation objectives and accomplishments will help impress employees with the importance of such matters. Employee participation can be increased by communicating examples of energy conservation ideas being implemented, photographs of persons who submitted the ideas and information on the savings realized.
Five critical factors in organizing an effective energy management program are as follows:
a) Top Management Commitment: This is a formally communicated, financially supported dedication to reducing energy consumption while maintaining or improving the functioning of a facility. This commitment shall be active and visibly communicated to all levels of the organization in terms of words and actions by top management.
b) People Commitment: People at all levels of the organization should be involved in the program. Ideas should be encouraged with rewards for significant contributions to the energy management program. People should be shown why their help is needed, and a team approach should evolve. Note that a most successfully planned program can be devastated by a single person trying to subvert the program.
c) Communication Channel: The purpose of this channel is to report to the organization the results of your efforts, to recognize high achievers, and to identify reward recipients. Use the channel to advertise the program and to encourage cooperation.
d) Organizational Changes: This is to give ample authority and commensurate responsibility for the conservation effort and develop an energy management program.
e) Monitor & Control the Program: An organizational plan, using the above criteria, should then be developed for both implementing and monitoring specific energy management programs.
6) CONCLUSION
In the next hours of the day, Schneider Electric will give you details on how to help achieve the objectives of Plant Efficiency.
In the modern times, we electrical engineers must remember that:
In the past,
[COST + PROFIT] = SELLING PRICE
Today,
[SELLING PRICE] – [COST] = PROFIT
DOODS A. AMORA, PEE
November, 2006
Invoking ‘PLANT EFFICIENCY’ as Schneider Electric’s theme in this Road Show is very much timely in these times of resurging uncertainties in energy costs as variable inputs to production economy. As we speak today, manufacturing plants in the Philippines are unsure of what tomorrow will bring to the state of oil prices even as business itself has again been sailing into another uncharted economic limbo. After all, [COST + PROFIT] = [SELLING PRICE]; that’s business all about.
In physics; Efficiency means, Output/Input. In engineering, Efficiency = Output/(Output + Losses). We had been taught that efficiency is always less than 100%. And that Output is always less than the Input. In order to gain Maximum Efficiency, Output must be at its possible maximum while losses at its possible minimum. Simple, yet how do we interpret that in the Shop Floor? The center-stage therefore in analyzing efficiency is: losses! To the layman on the shop floor, the better word is “waste”.
Interpreting wastages or losses in real-life plant environment could be cumbersome. It takes not only technical & managerial expertise but also business sense in integrating a labyrinthine maze of nitty-gritties into an orchestrated energy management program. It is not switching off lights or air-conditioning systems during lunch breaks that counts but Energy Management extends beyond mediocre imagination.
TODAY’S COMPETITIVENESS
In general terms, Management experts say that the ingredients of today’s competitiveness are: quality, efficiency and productivity. To help attain this goal, several old inefficient plants in the 90's were replaced with high technology lines giving way to modern techniques and processes in manufacturing. On top of this, organizations were restructured to meet new synergistic requirements. Several companies in the country sought for ISO certification - showing to the world that these companies are at par with world class standards. The mood in the 1990’s therefore was modernization to meet global competition. But modernization is in fact going back to basics, again to: quality, efficiency and productivity. That is still valid even up to today…
The phrase ‘energy management’ means different things to different people.
Quality Buffs say, “AIM QUALITY” … and Efficiency as well as Productivity follows…
Productivity Enthusiasts say, “FOCUS ON PRODUCTIVITY” … and Efficiency as well as Quality follows…
Efficiency Practitioners declare, “EFFICIENCY IS EVERYTHING” … Productivity & Quality are built-in.
Whatever it is, it is the same banana. Simply because there must be a “War On Waste”. In our lingo, we say, WOW! And WOW has always been beautiful. Let us therefore dwell in WOW!
THE NEED FOR ENERGY MANAGEMENT
To me, there are three reasons why we need Energy Management.
1) Manufacturing Economics: The company, (meaning, your company and everyone else’s) has to survive. Energy Costs have now been an expensive raw material and closing shops would mean unemployment debacle of large proportions.
2) National Good: Energy management is good for the national economy as the balance of payments becomes more favorable and the peso stronger. Energy management makes us less vulnerable to leaps in energy prices, or curtailments due to political unrest or natural disasters elsewhere.
Although the Philippines has oil, forget about it. We need to realize that until the country strikes a new liquid black gold mine, Philippine indigenous oil is forgettable. The Philippines is consuming an average of 338,000 bbl/day, with net oil imports of 312,000 bbl/day (92.3%). This dependence on imported oil makes the Philippine economy vulnerable to sudden spikes in world oil prices. Although exploration underneath the Malampaya gas field revealed an estimated 85 million barrels of oil, this could probably supply the country for a period of nine (9) years at present production level of 25,000 bbl/day (7.7% of the country’s needs). If Malampaya field supplies the country 100% of its oil requirements of 338,000 bbl/day, Philippine oil deposits would only last for (hold your breath) 8 months.
In comparison, the USA consumes 24.5 million barrels of oil per day in 2004. The Malampaya oil deposit of 85 million barrels will last for only for THREE DAYS in the USA.
3) Energy management is kind to our environment as it eases some of the strain on our natural resources and may leave a better world for future generations.
WHAT IS ENERGY MANAGEMENT?
To the energy managers, energy management is: “the judicious and effective use of energy to maximize profits (minimize costs) and enhance competitive positions”.
According to Mr. Barney L. Capehart, PhD, CEM, in his book “Guide to Energy Management”, the primary objective of energy management is to maximize profits or minimize costs. Some desirable sub-objectives of energy management programs include:
1. Improving energy efficiency and reducing energy use, thereby reducing costs,
2. Developing and maintaining effective monitoring, reporting, and management strategies for wise energy usage,
3. Finding new and better ways to increase returns from energy investments through available controls system & automation,
4. Developing interest in and dedication to the energy management program from all employees. Cultivating good communications on energy matters,
5. Reducing the impacts of curtailments, brownouts, or any interruption in energy supplies.
-------------------------------------------------------------------
What therefore is the relevance of Energy Management to this Roadshow? Let me talk first about “Plant Efficiency”…
PLANT EFFICIENCY
Plant Efficiency is related to production throughput. To a Plant Manager, the cue would always be: ‘Cost Vs. Production’. Low Production Cost is good. Similarly, High Production Output is good. Which is which?
The best is when you have the highest production at the lowest cost, because the two measurements must be integrated into a ratio. The lowest ratio of Cost per unit Product is always seen as the penultimate measure. That is one element of the so-called “throughput”!
Production of course is dependent on the capacity of the plant. But even if production wanted to achieve the same output as the capacity, seldom is it possible because of loss factors such as quality rejects, idling, speed adjustments, line adjustments, technical troubles, waiting times, etc., are influencing production throughputs.
In any industrial plant or commercial complex, energy must be seen as a raw material to production. Nevertheless, Energy Management must not be understood as doing without energy but is in fact, making the most out of it. Often misunderstood, energy management is actually a ‘War on Waste’ (WOW). Its basic strategy is to eliminate unnecessary losses while paying for wastages are mortal sins. Energy Management means that monthly power bills are as normal as eating three square meals per day but paying for unnecessary extras is a waste that every business abhors. Yet in most plants, energy management as a discipline is often “said than done”; because it is always not seriously taken into action.
Energy Management therefore must focus on the following:
a) Managing the Load, because mismanaged load could mean millions of pesos,
b) Managing Power Losses, because unmanaged extra losses mean big bucks.
If your plant doesn’t manage the load or is not concerned on losses, then that plant has never understood energy management. All energy conservation pronouncements by management are just plain rhetoric. Many Plant Managers are usually non-cognizant to the fact on how to tap the seemingly non-existent gold mine in his plant’s backyard!
---------------------------------------------------
The objective of today’s Road Show is to reinforce the managers and engineers in the modern tools to achieve the highest efficiency in plant facilities. Surprisingly, the subjects in today’s Road Show jibe with Mr. Capehart’s goals in energy management. Non-scripted, the following areas are featured as today’s highlights, namely:
a) Power Monitoring,
b) Selective Automation,
c) Energy Efficient Devices & Controls.
But let me add two more things,
d) Effective Maintenance, and
e) Efficiency-Driven Workforce.
All of these are part of WOW. Allow me discuss each …
1) POWER MONITORING
Remember the dictum: “You can’t control if you don’t measure”. We need meters to measure. And there are six good reasons why we should meter a plant. A management, who wants to manage energy but doesn’t want to install measuring means, is an oratorical management who is not serious in energy management. Unless energy usage is measured, it is next to impossible to know where to direct efficiency efforts.
A metering system provides that vital ingredient to a successful energy management program. There are six (6) reasons why we should meter the plant.
• CHARGE OUT ENERGY TO INDIVIDUAL DEPARTMENTS
This is the most basic reason to meter. Experience in this country has shown that a 5–10% reduction in consumption can be achieved after meters are installed just by letting the users know that they are monitored. Up to 10% more reduction can occur when the users start to manage the use of their energy. Ultimately, up to a 25% to 30% reduction will be achieved when metering is tied directly to the process through a Programmable Logic Controller (PLC) or Distributed Control System (DCS), in a closed loop automated process control arrangement.
ACCOUNTABILITY FOR ENERGY USED
Once metered, establish energy budgets for the various departments. Each month the total energy bill is proportioned to each department. This data is used to compare costs against the department's budget and thus develop a variance-peso value.
Trending of energy consumption per unit of production or per service performed is the basis for initial analysis and resulting corrective actions. Accountable for every kw-h consumed, each department shall be made to explain the variances of the use of energy.
Management and creative personnel are always critical components of an energy management program. Tough, specific, and measurable goals need to be developed. Once the goals are established, management should carefully monitor the results, but the energy management staff should be allowed to perform its functions.
Staff and management need to realize that:
1) energy costs, not consumption, are to be controlled
2) energy should be a direct cost—not an overhead item, and
3) all energy consumers need be metered and monitored closely.
• EFFICIENCY OF UTILITY EQUIPMENT & SYSTEMS
The objective of an energy reporting system is to measure energy consumption and compare it either to company goals or to some standard of energy consumption. Ideally, this should be done for each operation or production cost center in the plant, but most facilities simply do not have the required metering devices. Many plants only meter energy usage at one place—where the various sources enter the plant. Most plants are attempting to remedy this, however, by installing additional metering devices when the opportunity arises. Systems that should be metered include steam, compressed air, and chilled & hot water.
There are established world standards in machine or system performance. For instance, how is your refrigeration system performance compared with world standards? In a Bottling Plant for instance, how much kw-hour does your plant consume per case or per liter of product as compared to established world standards? Is your air-conditioning kw-hours per unit area more than industry standards? It is prudent for plant management to benchmark its performance to the established best practices. This way, management will know if you are performing well or not.
• PROVIDE INFORMATION FOR AUDITS OF ENERGY PROJECTS
With funding becoming increasingly difficult to obtain, audits of cost reduction energy management projects have been required more frequently. But energy audits will be blind without meters.
• IDENTIFY PERFORMANCE PROBLEM AREAS & PROVIDE FEEDBACK TO MANAGERS
The collection of energy-consumption data in support of energy management is seen as a viable tool, greatly aiding in the identification of equipment performance problems. As a side issue, performance problems associated with the people operating the equipment are also identified, allowing managers to take any necessary corrective action.
Cost center orientation is important, as are comparison to some standard or base and calculations of variances.
• IDENTIFY POTENTIAL ADDITIONAL ENERGY SAVINGS
According to IEEE publications, “… with the long-term goal of management being one of continual improvement, metering and trending systems provide data on which to base resource allocation decisions. With regard to audits of the electrical power system, metering results can be used to compile an energy profile that will reveal areas where conservation projects are most beneficial. Monitoring and reporting energy consumption allows for close control while minimizing expenses. It also provides historical energy consumption data to aid in projecting future loads and developing standards for the next year. Such data are essential to financial forecasts and operating budgets. Through proper monitoring, recording, and analysis, the use of meters can lead to corrective actions that produce the desired result of reducing energy per unit of production or per service performed”.
2) SELECTIVE AUTOMATION
Technology advancements could have been kind to the electrical engineering profession. The electrical engineering we knew of 20 or 30 years ago is no longer the same engineering today. With the entry of power & control electronics highlighted with industrial automation, electrical engineering has raised its dignity significantly. With the new wonders in electrical engineering unfolding, in a high-tech brewery scenario for example, the electrical cost component of a project is now elevated from a forgettable 9% of the past to some 15% today. For a P 2.0 billion brewery, it is not surprising to have an electrical budget of some P 300 million.
The acceptance of new technologies in industries today made the increase of the value of electrical engineering. To keep pace with global pursuit to manufacturing quality and efficiency, more plants in the country are upgrading or modernizing their facilities. Small candy factories for instance are now equipped with variable frequency drives. Tableware factories have now graduated from ancient manufacturing techniques to PLC orchestrated automation. The departure from the traditional TW or THW wires in conduits to industrial multi-core cables (not ‘Cord’, please) in cable trays, the shift to soft starters in lieu of the traditional magnetic contactors and the employment of DIN rail mounting molded case circuit breakers from age-old fuses; are just few examples but significant changes in the industrial plant landscape. Common electrical equipment as transformers, generators, power circuit breakers, protection and control devices had undergone series of evolution compared to counterparts in other engineering disciplines.
For the manufacturing plants, there’s no other way to increase production quality & efficiency throughput but to employ instrumentation that makes automation possible. The trend now is to manage production through a centralized control centre where all operational variables can be supervised through computer screens or mimic boards. There is no escape to new technology and electrical engineering is supposed to be the beneficiary.
The name of the game in manufacturing today is therefore automation & robotization. Why? Simply because in the global business arena, it is a must! John H. Zenger, a known American management expert in his book "Leading Teams" wrote, "In the 1960's, North America stood at the summit of world economic power. In those days, the order of the day for every manufacturing manager can be summarized by a sign that hung over his desk and that is:
GOOD. FAST. CHEAP.
PICK ANY TWO..!
It means that:
"If you want quality and you want it fast, it'll cost you big bucks"
"If you want it fast and cheap, no problem, but it won't be good enough to last through the winter"
"If you want good quality at a good cheap price, that's fine too, but don't hold your breath for delivery. It'll probably take forever."
Then, comes the customer’s cue to nod in wide-eyed agreement:
"You always have to trade off one to get the other two."
Today in the third millennium, a manufacturing company has to give out all the THREE, in order to survive fierce competition. In a customer-driven business environment, automation therefore becomes the answer to the need of efficiency & speed. Robotization where applicable, is the key to achieve large volume and uniform quality throughput especially in industries where human factor is too hazardous. That in a nutshell, is why so many companies are putting themselves through so many agonizing internal changes, including the parting away of old traditional management styles. For until a manufacturing plant becomes "good, fast and cheap", it's an easy prey for any competitor that figures out how to deliver on all three.
3) ENERGY EFFICIENT DEVICES & CONTROLS
INSTRUMENTATION & CONTROLS..? Bulk of power consumption in a plant comes from conveyors running without materials conveyed, machines running even if there are no materials being fed, circulating pumps running even if not needed, air-conditioning in full-blast even if no people around, lights on with no one is using the light, and a host of others. Make an audit and you might discover that 25% to 30% of your power bills are consumed unproductively.
In modern plants, instrumentation & electronics control systems employing sensors are now common scenarios to watch over these problems. They came in the form of automated and intelligent buildings or plants. Machines & comfort equipment are shutdown automatically if sensors can not detect any reason why these machines should run. Pumps are slowing down when volume demand dwindles. Conveyors slowing down when full or gain speed when not loaded or shut down at all. Compressors loading and unloading automatically depending on demand and the list is endless.
4) EFFECTIVE MAINTENANCE
In the past, responsibilities of maintenance are to concentrate only in making machines and equipment run in service to the production department. Today, maintenance is already included in the ownership of the quality and quantity of the products produced, because after all, it is maintenance’s job to make the process capability of the plant fit to produce such products.
Maintenance is a critical part of a facility’s operation. Effectively maintained equipment and processes are necessary to keep the facility functioning at its optimum capability. Unfortunately, maintenance programs are often the first victims of any cost-cutting effort. Generally, proactively preventive or scheduled maintenance is cut back or eliminated. Then the maintenance effort is directed more toward “repair and replacement” than toward keeping the equipment running most efficiently. When this “run-to-failure mode" of maintenance happens, you are in the state of poor maintenance.
Maintenance should now be an integral part of any energy management program. Maintenance keeps equipment from failing, helps keep energy costs within reason, helps prevent excess capital expenditures, responsible to the quality and quantity of the products produced, and is frequently necessary for safety.
Again, automation & robotization bring the equipment or machines to the center-stage. When we say equipment or process machines, it means maintenance because maintenance now plays a much bigger role in production. Along with the shift in philosophies in maintenance, new concepts in modern management had been developed in Europe and anywhere else in the globe, among them are as follows:
In the past, quality and quantity of production were to a large extent decided by the skills of men and their capacity to work fast. All through a long period of time, from generation to generation, maintenance had been thought of as a service department - not a condition to production.
Times had changed. The quality and quantity of production now do not depend on man but on machines. With the increasing degree of automation and robotization in most manufacturing plants today, it is now appropriate to recall Mr. John Moubray a British expert on Reliability Centered Maintenance (RCM) when he said, "that product quality & quantity now depends on equipment". At the other side of the globe, Mr. Seiichi Nakajima, a Japanese guru on Total Productive Maintenance (TPM) preached: "that productivity, cost, inventory, safety, health and production output - as well as quality - now all depend on equipment”.
In the scene of plant maintenance, the concept that maintenance is nothing but a service unit has now been changed to the concept that “maintenance is a function of production, and conversely, production is a function of maintenance”.
5) EMPLOYEE PARTICIPATION
Investing capital for “self-intelligence” & automation will pay off handsomely by eliminating big time losses. However, no amount of automation shall relieve the responsibilities of the attendant. There is still that so-called “human interface”. An energy management program can be successful only if it arouses and maintains the participative interest of the employees. Employees who participate and who feel themselves partners in the planning and implementation of the program will be more inclined to share pride in the results.
The use of company newsletters, bulletin boards, or posters for pictorializing energy conservation objectives and accomplishments will help impress employees with the importance of such matters. Employee participation can be increased by communicating examples of energy conservation ideas being implemented, photographs of persons who submitted the ideas and information on the savings realized.
Five critical factors in organizing an effective energy management program are as follows:
a) Top Management Commitment: This is a formally communicated, financially supported dedication to reducing energy consumption while maintaining or improving the functioning of a facility. This commitment shall be active and visibly communicated to all levels of the organization in terms of words and actions by top management.
b) People Commitment: People at all levels of the organization should be involved in the program. Ideas should be encouraged with rewards for significant contributions to the energy management program. People should be shown why their help is needed, and a team approach should evolve. Note that a most successfully planned program can be devastated by a single person trying to subvert the program.
c) Communication Channel: The purpose of this channel is to report to the organization the results of your efforts, to recognize high achievers, and to identify reward recipients. Use the channel to advertise the program and to encourage cooperation.
d) Organizational Changes: This is to give ample authority and commensurate responsibility for the conservation effort and develop an energy management program.
e) Monitor & Control the Program: An organizational plan, using the above criteria, should then be developed for both implementing and monitoring specific energy management programs.
6) CONCLUSION
In the next hours of the day, Schneider Electric will give you details on how to help achieve the objectives of Plant Efficiency.
In the modern times, we electrical engineers must remember that:
In the past,
[COST + PROFIT] = SELLING PRICE
Today,
[SELLING PRICE] – [COST] = PROFIT
DOODS A. AMORA, PEE
November, 2006
