Stephen Beard, from Gazprom Energy UK, explores how UK manufacturers can gain a competitive edge through effective energy management.
With energy prices on the increase, effective energy management plays an important role in almost all UK businesses – and this is the case in manufacturing businesses outfits more than most. A recent report by Siemens uncovered that 90% of UK manufacturers discuss energy management at board level, with almost 80% agreeing that managing energy is now a business-critical function.
While business continuity is considered key for this recent surge in interest, for many, the ability to gain a competitive advantage is the main driver in their energy efficiency efforts.
In this post, I’m going to run through a few of the ways that UK manufacturers can take control of the energy usage for a greater competitive edge and a higher profit margin.
Effective energy procurement
As many manufacturing professionals will well know, understanding the volatile wholesale energy market, negotiating with suppliers and choosing the best contract type can present big challenges and can be a significant drain on resources. Yet cost reduction in the purchasing process is vital to ensure competitiveness.
Depending on consumption levels, some businesses choose to appoint a dedicated member of staff to energy procurement. However, the use of energy partners or ‘brokers’ is considered a more cost-effective way of staying on top of the energy spend. A broker can talk to you about the range of contracts available from various suppliers and, more importantly, the value of each against the short and long-term forecasts for the market.
Appointing ‘energy champions’
Harnessing the energy spend by choosing the right contract is an essential starting point in making progress in energy management – but for serious energy savings, the work doesn’t stop there. The cost-saving benefit of internal monitoring and management on an on-going basis shouldn’t be underestimated. For those serious about gaining a competitive edge through reduced production costs, a company-wide behavioural shift is crucial.
It’s for this reason that some firms are starting to appoint ‘Energy Champions’, i.e. members of staff that are given roles and responsibilities designed to ‘champion’ energy-efficient behaviours amongst their colleagues. Depending on how much resource can be allocated to this, ‘Energy Champions’ might be responsible for anything from developing ideas for day-to-day awareness and improvement, to implementation of energy-saving strategy and feedback and reporting.
Providing the roles are taken seriously, ‘Energy Champions’ can be really effective for embedding the importance of energy efficient practices through the company.
Likewise, to stay effective your energy-saving programme should be subject to continuous review. A good evaluation process should include regular energy audits, during which you look at:
• Assessment of bills and meter readings: To establish peaks and troughs in consumption over several months
• Compiling a checklist: Of energy-using equipment and machinery to be inspected for efficiency. Include even the most everyday expenses like office lighting and heating, as well as cooling and ventilation, equipment, machinery and processes.
An audit should highlight any inefficient or energy-sapping activities. This could be something as simple as the office lights not being turned off out of hours, or as critical as energy draining machinery being turned off and on again rather than using energy efficient standby options, in between production runs.
As well as allowing you to identify where savings can be made, regular audits also allow recognition of successes, which can often be passed through the business as morale-boosters.
There is no quick fix when it comes to energy efficiency improvements in manufacturing and it takes time before you can see a tangible return on your efforts. However, in an energy-intensive industry, the benefits of harnessing usage and spend can be extraordinary.
Though, according to Siemens, it seems most manufacturers have really started to take hold of energy management, I’d urge production managers and procurement specialists to take an even closer look at the energy spend and consider the options. With foresight and planning, taking control of energy usage can make way for a greater competitive edge and a higher profit margin.
About Gazprom Energy
Gazprom Energy is one of the UK’s leading business energy suppliers, offering a range of competitive business gas and electricity contracts for manufacturers.