Creating a Holistic and Self-sustaining Energy Reduction Strategy

1. Creating a Holistic and Self-sustaining Energy Reduction Strategy Kit Oung

2. “ ... We have practical engineering options to reduce current energy demand by 73% ... ” “ ... 25% energy can be saved with relatively little or no cost plus no significantly changes in lifestyles and practices. ... ” “ ... anticipated annualbaseline 0.9% energy efficiency improvement...”

3. Market forces on a business … Lean Manufacturing Total Productive Maintenance OHSAS 18001 Raw Materials Employees Waste Value-based Management Activity Based Costing Just-in-Time Production Customer Satisfaction Root Cause Analysis ISO 50001 Value Add Sales ISO 14001 Regulatory Compliance Reliability ISO 9001 Energy Kaisen / Gemba 6 Sigma Health and Safety Competition

4. Why Energy Reduction Works Fail? The Future of Energy. A Harvard Business Review Analytical Services Report.

5. The Five Forces in Managing Energy Management System Tools & Techniques Information & Insight Organisational Engagement

6. What is a Management System? “... A Management System is an integrated set of processes and tools that a company uses to develop its strategy, translate it into operational actions, and monitor and improve the effectiveness of both. ...” Robert Kaplan, 2008 Robert Kaplan and David Norton. Mastering the Management System.

7. Management Systems Link Strategy and Results Intended Plan Deliberate Action Realised Outcome Emergent Plan Unrealised Plan

8. Stage 1 • Develop the Energy Strategy External features of ISO 50001 4.1 Scope and Boundary 4.2 Top Management Responsibility 4.3 Energy policy Energy Management Plan Continual Improvement 4.7 Management Review 4.4.2 Legal and Other Requirements 4.4.3 Energy Review 4.4.4 Energy Baseline 4.4.5 Energy Performance Indicators 4.4.6 Objectives and Targets Energy Measurement Plan 4.5.2 Competence, Training and Awareness 4.5.5 Operational Control 4.5.6 Design 4.5.7 Procurement 4.6.1 Monitoring and deviation analysis 4.6.5 Internal Audit

9. Unknown outcome for change Plan Do Check Act

10. 1: Inspiring vision that is larger than self Is there a business model and tactical plan? Is the objectives aligned with targets? Does this set of targets thoroughly describe the above? Is the number of objectives achievable within the timeframe? No objectives help to achieve these targets There are 20 objectives serving this target This objective does not serve to achieve any targets Who is responsible for each objectives? Is this plan balanced?

11. Pareto to identify distribution Results on an Executive Dashboard Metrics Corporate Orders Share Price RONA Safety Index Environmental Index Backlog RONA/ROCE Plant/Business Unit OEE Cost Effectiveness by Production Unit/Line Availability Yield Quality Cost/RAV Cost/Unit KPI’s MTBF Efficiency Equipment Work Effectiveness MTBF affects availability and cost

12. 2: Consistent & understandable terminology “... [1] Use mathematics as shorthand language, rather than as an engine of inquiry. [2] Keep to them till you have done. [3] Translate into English. [4] Then illustrate by examples that are important in real life. [5] Burn the mathematics. [6] If you can’t succeed in [4], burn [3]. This I do often. ...” Alfred Marshall Guillebaud, Marshall’s Principles of Economics, Vol. 2. p. 775

13. Quack quack Quack quack Cock-a-doo -a-doo Cock-a -doo-a-doo Quack quack Cock-a-doo -a-doo Cock-a -doo-a-doo Quack quack Quack quack Cock-a-doo -a-doo Quack quack Quack quack Cock-a-doo -a-doo Cock-a -doo-a-doo Quack quack Cock-a -doo-a-doo

14. 3: Involve whole organisation “... The notion that [management] is something that should happen way up there, far removed from the details of running an organisation on a daily basis, is one of the greatest fallacies of conventional strategic management. ...” Henry Mintzberg, 1994

15. 4: Transparent & appropriate performance measure “... 60% - 80% of performance measurement items are useless or drives the wrong behaviour. ... People tend to measure too much, building very complex models to quantify the unquantifiable, or use too many non-complementary measurement models simultaneously.” Andy Neely, 2011

16. People in an organisation relate to different things Air Dryer Steam Consumption Feed Throughput Product Specification Solvent Concentration Ambient Air Temperature Temperature in Dryer Solvent Content Thermocouple Calibration Daily Checklist Operator Input PLC Programme Engineer Input Operation Procedure Operations and Maintenance Plan User Specifications Training

17. 5: Allocate resources fairly & early Shop Floor Department Operating Plant Boardroom Develop a policy statement Set objectives and targets Regulations and legal requirements Allocate roles and responsibilities Review improvements Define specific objective and targets Define roles and responsibilities Allocate appropriate resources Integrate energy into business processes Management Reporting Prepare detailed action plans Anticipate barriers to implementation Manage resistance for change Initiate priority actions Quantify Energy Usage Carry out the process audits Distribute audit findings Develop draft action plan Measure improvements Apply corrective and sustaining actions Training to raise awareness and know how Continuous improvement

18. 6: Integrate into Daily Operation Energy Losses in Generation Energy Purchase Energy Losses in Distribution Energy Generation Energy Losses in Conversion Energy Use Energy Distribution Energy Use Waste Waste Effluent Disposal / Reuse

19. Challenge Established Assumptions • Legislations • BS 2486 Water Treatment • ACOP L8 Cooling Water • Emissions trading (ETS, CRC, etc.) • Contractual Agreements • Specifications • Industry Specific • Validation requirements • Operations and Maintenance • SOPs • Scheduling • Raw materials • Throughputs • Inspections • Financial • Gross margins • Unit pricing • Capital and debt structure • Credit rating • Insurance

20. 7: Integrate into Life Cycle Business Case Scope Definition Concept Design Feasibility Study Detailed Design Procure Fabricate, Construct Transport Install Test Commission Handover / Acceptance Operate In-Service Inspect Maintain, Repair and Replace Modify, Retrofit / Life Extension Decommission Dismantle, Demolish and Dispose Start HERE !!! Normally HERE

21. 8: Continual learning & improvement actual constraint

22. “... Achieving a goal, accomplishing a task, or resolving a problem often evoked great pleasure and sometimes elation. Even making good progress towards such goals could elicit the same reactions.” Teresa Amabile, 2011 Teresa Amabile and Steve Kramer. The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work

23. Data from ISO 50001 Marco Matteini. Why ISO 50002 and Energy Management for Industry of Developing Countries and Emerging Economies

24. Data from ISO 9001 David Levine and Mike Toffel. Quality Management and Job Quality: How ISO 9001 Affects Employees and Employers

25. Data from business Colin Price and Scott Keller. Beyond Performance: An Overview of Our Approach to Sustainable Transformational Change

26. Success in maximising and sustaining energy • Understand the 5-forces at play • leadership challenges • management system challenges • technical challenges • people challenges • Focus on being competent to tap into synergistic effects • Balance the hard science with people solutions • Active implementation brings real benefits

27. Creating a Holistic and Self-sustaining Energy Reduction Strategy Kit Oung Experienced Energy & Environment Manager Author of Energy Management in Business Email: kit.oung@gmail.com Web: uk.linkedin.com/in/kitoung