For many businesses, energy is the second- or third-largest expense after labour. The good news is that energy costs can be reduced—often by as much as 25%, and without heavy capital expenditures. By attending to the details, these gains can be sustained year after year.
Is there a catch? Is there a “secret sauce”? No. Any company familiar with Lean Manufacturing principles for continual improvement will recognize the energy management playbook.
A lean approach starts with focusing on eliminating waste: identifying a baseline, implementing improvements, monitoring changes, and continually seeking ways to improve.
Proactive energy management follows a similar process. It is a methodical approach for the procurement and consumption of energy. It, too, focuses on eliminating waste and reducing costs. Utility bills are a treasure trove of baseline data. Areas for improvement are identified and investigated. An action plan is developed with team input, then implemented. Energy conservation measures and procurement practices are monitored and reported. The process is then repeated.
Good energy management, like lean manufacturing, requires a certain frame of mind. Both take root when the corporate culture engages the whole organization. Both make step change possible, not just incremental change. Sustainable results are exponentially more likely to occur where there is a company-wide culture of continuous improvement.
Can organizations adopt these practices without outside help? It’s possible, but it never hurts to ask for help. Many businesses find they move farther, faster by engaging consulting firms with specialized knowledge to help them establish these processes. A third-party consultant also provides independent assessments and process validation. Companies typically recover the costs of consulting fees through rapid improvements and by avoiding painful, expensive mistakes.
So what does an organization that has embraced good energy management principles look like? Here are some indicators:
• Energy is part of the company’s strategic plan, along with a strong and positive brand promise.
• Senior leadership has accountability.
• Management processes have specific goals and metrics.
• Improvement is the job of cross-functional employee teams, not just one person or department.
• Measurable progress is made year over year.
• People want to work there.
Energy management is a good proxy for excellence in overall business management.
No longer do managers need to helplessly shrug their shoulders in the face of volatile energy markets. Instead, they can lean into the problem. The intelligent management of human creativity builds competitive advantage.
Market conditions are always changing. A company cannot plan the future based on last year’s outcomes, but it can equip itself with good management processes. Energy in all its forms needs good management, and lean principles and energy management are great tools for building resilience in difficult times. ♦♦♦
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