Achieving Process Excellence 

Using Less Energy 

The Lean and Energy Toolkit 

www.epa.gov/lean 
Toolkit Format and Icons 

The toolkit uses icons in the page margins to help you find and 

follow important information in each chapter. 

Key Point Identifies an important point to remember 


Key Term Defines an important term or concept 

New Tool Presents a technique or resource that helps 

capture, communicate, or apply new knowledge 

How-to Steps Describes sequenced actions to 

implement a tool 

Chapters also include one or more “To Consider” text boxes 

that contain questions to help you explore how the information 

relates to your organization. 
 

Lean and Energy Toolkit
 

Acknowledgments
 

The U.S. Environmental Protection Agency (EPA) is grateful for the invaluable assistance of the organizations and individuals who helped develop this toolkit and shared experiences, tools, and techniques for integrating Lean manufacturing and energy management efforts. 

EPA’s Lean and energy partners include Baxter International, California Manufacturing Technology 

Consulting (CMTC), Eastman Kodak Corporation, Eaton Corporation, General Electric (GE), HNI 

Corporation, the National Institute of Standards and Technology (NIST) Manufacturing Extension 

Partnership (MEP), and the U.S. Department of Energy. The EPA’s National Center for Environmental 

Innovation and the Office of Pollution Prevention and Toxics participated in the development of 

this toolkit. 

In addition to these organizational partners, this toolkit has benefited from the collective expertise 

and ideas of many individuals. In particular, EPA would like to thank the following individuals for 

their thoughtful contributions: 

Susan Boone, Lean Six Sigma Trainer, GE Infrastructure 

James Breeze, Energy Engineer/Project Leader, Worldwide Energy Office, 

Eastman Kodak Company 

Jenni Cawein, Corporate Environmental Health and Safety (EHS) Engineering Manager, Baxter 

International 

Gerald Church, Director of Energy Services, CMTC 

Rob Currie, Director, Corporate EHS Engineering, Baxter International 

Gretchen Hancock, Project Manager, GE Corporate Environmental Programs 

Ernie Kulik, Corporate EHS, Eaton Corporation 

Scott Lesnet, Member EHS Manager, HNI Corporation 

Kirk Prather, Operations Manager Energy Services, CMTC 

Douglas W. Prihar, Management Assistance Partnership Project Director, 

Nevada System of Higher Education 

Randy Shultz, Facilities and EHS Manager, Eaton Truck, Shenandoah, Iowa 

Scott Summers, Director and Vice President, EHS, Film Products Group, 

Eastman Kodak Company 

Carroll Thomas, Partnership Catalyst, NIST MEP 

Joe Wolfsberger, Vice President of Corporate EHS, Eaton Corporation 

This toolkit was prepared for the U.S. Environmental Protection Agency by Ross & Associates 

Environmental Consulting, Ltd. (http://www.ross-assoc.com) in association with Industrial 

Economics, Inc. (EPA Contract # EP-W-04-023). 

 

Lean and Energy Toolkit
 

Table of Contents
 

Executive Summary ...............................................................................................................................i
 

Preface ...................................................................................................................................................iii
 

Purpose of This Toolkit ....................................................................................................................iii
 

Key Questions Addressed by This Toolkit ........................................................................................iii
 

Chapter 1 Introduction ......................................................................................................................1
 

Benefits of Coordinating Lean and Energy Management ...............................................................1
 

Strategic Lean and Energy Management .........................................................................................5
 

Chapter 2 Overview of Energy Use and Lean ....................................................................................9
 

Energy Sources and End Uses ..........................................................................................................9
 

Understand the Costs of Energy Use ..............................................................................................12
 

Energy Efficiency Benefits of Lean Implementation .....................................................................13
 

Chapter 3 Energy Assessment Strategies .........................................................................................15
 

A. Walk Through Processes to Observe Energy Use .......................................................................15
 

B. Energy Audits and Measuring Energy Use .................................................................................16
 

C. Examine Energy Use with Value Stream Mapping ....................................................................18
 

D. Use Six Sigma to Find and Eliminate Energy Waste and Variation ..........................................22
 

E. Conduct Energy Kaizen Events...................................................................................................22
 

Chapter 4 Energy Reduction Tools and Strategies ..........................................................................25
 

A. Use Total Productive Maintenance to Reduce Equipment Energy Waste .................................25
 

B. Replace Over-Sized and Inefficient Equipment with Right-Sized Equipment..........................28
 

C. Design Plant Layout to Improve Flow and Reduce Energy Use ................................................29
 

D. Encourage Energy Efficiency with Standard Work, Visual Controls, and Mistake-Proofing ...30
 

Chapter 5 Conclusion.......................................................................................................................33
 

Lean Windows of Opportunity for Energy Savings ........................................................................33
 

Going Even Further with Clean Energy .........................................................................................34
 

The Lean and Energy Journey........................................................................................................34
 

Appendices ...........................................................................................................................................37
 

Appendix A Energy Assessment Service Providers, Resources, and Tools .....................................37
 

Appendix B Sector-Focused Energy Reduction Resources .............................................................41
 

Appendix C Energy Conversion Resources and Rules of Thumb for 


Estimating Energy Cost Savings ..............................................................................................43
 
Lean and Energy Toolkit
 

Boxes
 

Benefits of Coordinating Lean & Energy Management (Box 1) .....................................................1
 

Lean and Energy Use Reduction: Company Cost Savings Experience (Box 2) ...............................3
 

Lean and Energy at Toyota (Box 3) .................................................................................................4
 

Why Be Strategic about Energy Management? (Box 4) ...................................................................5
 

Energy End Uses: What Do We Use Energy to Do? (Box 5) ...........................................................10
 

Questions for Understanding Energy Use (Box 6) .........................................................................15
 

Energy Treasure Hunts at General Electric (Box 7) ......................................................................16
 

Energy Savings From “Lean and Clean” Assessments (Box 8) .....................................................17
 

Common Energy Units (Box 9) ......................................................................................................17
 

Example Results from Value and Energy Stream Mapping Projects (Box 10) .............................19
 

Six Sigma and Energy Savings at Baxter International (Box 11).................................................22
 

What is an Energy Kaizen Event? (Box 12) ...................................................................................23
 

What is TPM? (Box 13) ...................................................................................................................25
 

Four Strategies for Integrating Energy-Reduction Efforts into TPM (Box 14) .............................26
 

Energy-Reduction Checklists for Combustion, Steam Generation,
 

and Process Heating Systems (Box 15) .................................................................................27
 

Over-Sized Equipment (Box 16) .....................................................................................................28
 

Three Ways to Right Size Your Fan System (Box 17) ....................................................................29
 

Flow and Energy Use (Box 18) .......................................................................................................29
 

Figures 

Share of Energy Consumed by Major Sectors of the U.S. Economy, 2005 (Figure 1) ....................2
 

Lean and Energy Management Roadmap (Figure 2) ......................................................................6
 

Sources of Energy Used for U.S. Industry and Manufacturing, 2005 (Figure 3) ............................9
 

Example Value Stream Map (Figure 4) ..........................................................................................20
 

Example Process Data Box with Energy Use Data (Figure 5) .......................................................21
 

Example Visual Control (Figure 6) ................................................................................................30
 

Dashboard Visual Controls (Figure 7) ...........................................................................................31
 

Tables 

Table 1: Manufacturing Sector Inputs for Heat, Power, and Electricity Generation by End Use .11
 

Table 2: Electrical Power Bill Analysis Worksheet .........................................................................13
 

Table 3: Energy Use Hidden in Lean Wastes ..................................................................................14
 

Table 4: Example Actions Identified at a Kaizen Event .................................................................24
 
 

 

Executive Summary
 

Executive Summary
 

The U.S. Environmental Protection Agency (EPA) developed this Lean and Energy Toolkit to assist 

organizations in reducing energy use and improving performance through Lean manufacturing— 

the production system developed by Toyota. Drawing from the experiences and best practices of 

multiple industry and government partners, this toolkit describes practical strategies and techniques 

to improve energy and environmental performance while achieving Lean goals such as improved 

quality, reduced waste, and increased customer responsiveness. 

There are at least three reasons for integrating Lean and energy efficiency efforts: 

1.	 Cost Savings: Reducing energy costs has a significant impact on business performance, 

though costs may be hidden in overhead or facility accounts. 

2.	 Climate Change and Environmental Risk: Proactively addressing the environmental and 

climate impacts of energy use is increasingly important to industry and society. Failure to 

do so is a potential business risk. 

3.	 Competitive Advantage: Lowering recurring operating costs, improving staff morale, and 

responding to customer expectations for environmental performance and energy efficiency 

increases your competitive advantage. 

Linking Lean and Energy Use 

Considerable energy savings typically ride the coattails of Lean activities because of Lean’s focus 

on eliminating non-value added activities (waste). Without explicit consideration of energy wastes, 

however, Lean may overlook significant opportunities to improve performance and reduce costs. 

Companies such as Baxter International, Eastman Kodak, General Electric, Toyota, and 3M, as well 

as many smaller manufacturers, have successfully used Lean methods to reduce energy use, risks, 

and costs (see textbox). 

Example Results From Lean and Energy Improvement Efforts 

✓ A Baxter International facility saved $300,000 in energy costs in one year. 

✓ General Electric has reduced greenhouse gas emissions by 250,000 

metric tons and saved $70 million in energy costs since 2005 at facilities 

worldwide. 

✓ Toyota Motor Manufacturing North America reduced facility energy use 

and greenhouse gas emissions by 30 percent per vehicle since 2000. 

This toolkit describes a range of strategies for identifying Lean and energy improvement opportunities and reducing energy use with Lean methods. It is not necessary to implement all the techniques 

in the toolkit to succeed; instead, select and adapt the approaches that make the most sense for your 

organization. 

i
 
Executive Summary
 

Lean and Energy Assessment Strategies
 

Lean and energy assessment strategies involve observing shopfloor activities to identify signs of 

energy waste, measuring actual energy use and costs over time, and implementing energy savings 

opportunities through short, focused events. Strategies described in this toolkit include: 

• 	 Energy Treasure Hunts: Conduct a three-day plant-wide assessment of energy savings opportunities using a cross-functional team of employees. 

• 	 Value and Energy Stream Mapping: Integrate energy-use analysis into the Lean value 

stream mapping process to identify improvement opportunities within the context of the 

entire “value stream” of a product or service. 

• 	 Six Sigma: Use statistical process analysis and control tools to find and address root causes 

of energy wastes and variation. 

• 	 Energy Kaizen Events: Identify and implement employee ideas for saving energy and 

reducing wastes through rapid process improvement events. 

Lean and Energy Reduction Strategies 

Many energy efficiency best practices can be implemented without extensive analysis or planning. 

The Lean and energy reduction strategies in this toolkit describe ways to reduce energy use through 

Lean activities such as the following: 

• 	 Total Productive Maintenance (TPM): Incorporate energy reduction best practices into 

day-to-day autonomous maintenance activities to ensure that equipment and processes run 

smoothly and efficiently. 

• 	 Right-Sized Equipment: Replace oversized and inefficient equipment with smaller equipment tailored to the specific needs of manufacturing cells. 

• 	 Plant Layout and Flow: Design or rearrange plant layout to improve product flow while 

also reducing energy use and associated impacts. 

• 	 Standard Work, Visual Controls, and Mistake-Proofi ng: Sustain and support additional 

Lean and energy performance gains through standardized work procedures and visual 

signals that encourage energy conservation, and by making it easy or “mistake-proof” to be 

energy efficient. 

Maximizing Lean and Energy Improvement Opportunities 

In addition to explicitly using Lean methods to target energy wastes, facilities can take advantage of 

other windows of opportunity for energy savings that arise during Lean, including opportunities to 

install energy-efficient equipment, switch to less polluting fuel sources, and design products to use 

less energy. To be most effective, Lean and energy efforts should be proactive, strategic, and systematic. Adopting an energy management system that aligns with and supports your organization’s 

Lean initiatives will enable your organization to achieve the greatest improvements in operational, 

energy, and environmental performance. 

ii
 
Preface
 

Preface
 

Purpose of This Toolkit
 

This Lean and Energy Toolkit offers Lean implementers practical strategies and techniques 

for improving Lean results—waste elimination, quality enhancement, and delivery of value to 

customers—while reducing energy use, costs, and risk. The toolkit is also intended to introduce 

Lean practitioners to the extensive array of energy management resources available from EPA, the 

U.S. Department of Energy (DOE), and other organizations. 

The “Lean” methods discussed in this toolkit are organizational improvement methods pioneered 

in the Toyota Production System. Lean production and Lean manufacturing refer to a customerfocused business model and collection of methods that focus on the elimination of waste (non-value 

added activity) while delivering quality products on time and at a low cost. The toolkit assumes that 

you are familiar with Lean methods. For those who want to learn more about Lean, see EPA’s Lean 

and Environment website (www.epa.gov/lean). 

Key Questions Addressed by This Toolkit 

Lean works well when it focuses on identifying and eliminating waste. Environmental improvement and energy reduction efforts that could distract Lean efforts from this prime focus may not 

get much traction. By contrast, this toolkit contains strategies and techniques that can enable Lean 

practitioners to easily identify energy wastes and improvement opportunities alongside the myriad 

other wastes and improvement opportunities uncovered by Lean. To accomplish this, the toolkit 

aims to answer the following questions: 

What is the relationship between Lean and energy use? 

Substantial energy savings typically ride the coattails of Lean. By eliminating manufacturing wastes, 

such as unnecessary processing and transportation, businesses also reduce the energy needed to 

power equipment, lighting, heating, and cooling. Chapter 1 describes benefits of combining Lean 

and energy improvement efforts. Chapter 2 explores the relationship between Lean and energy use, 

and provides background information on energy use and costs. 

How does one know how much and where energy is used in a facility? 

A key step in effective Lean and energy efforts is learning where to target energy-reduction activities. 

Chapter 3 discusses techniques for assessing energy use and identifying opportunities to save energy 

in the context of Lean. Methods include energy treasure hunts, value stream mapping, Six Sigma, 

and kaizen events. 

How can one reduce energy use with Lean methods? 

Chapter 4 examines specific opportunities for using Lean to reduce energy use, including Lean 

methods such as total productive maintenance, right-sized equipment, plant layout, standard work, 

iii
 
Preface
 

and visual controls. Chapter 5 discusses additional ideas for achieving process excellence with less 

energy use and environmental impacts. 

iv
 
 

 

 

CHAPTER 1 

Introduction 

Benefits of Coordinating Lean and 

Energy Management 

Energy is a vital (and often costly) input to most production processes and value streams. By 

thinking explicitly about unnecessary energy use as another “deadly waste,” Lean implementers 

can significantly reduce costs and enhance competitiveness, while also achieving environmental 

performance goals. 

Benefits of Coordinating Lean & Energy Management (Box 1) 

✓ Reduce operating and maintenance costs 

✓ Reduce vulnerability to energy and fuel price increases 

✓ Meet customer expectations 

✓ Enhance productivity 

✓ Improve safety 

✓ Improve employee morale and commitment 

✓ Improve environmental quality 

✓ Reduce greenhouse gas emissions 

✓ Remain below air permitting emission thresholds 

✓ Increase overall profit 

Many organizations can find it difficult to get senior managers to focus attention on energy use. Energy use is often viewed as a necessary support cost of doing business, and energy-efficiency efforts 

can sometimes have difficulty competing for organizational attention with other core operational 

needs. By linking energy management to Lean activities, energy-reduction efforts can be tied more 

directly to process improvement efforts that are regarded by senior managers as being vital to business success. In effect, energy improvements can ride the coattails of Lean activity while bringing 

significant benefits to the organization. 

1
 
Share of Energy Consumed by Major 

Sectors of the U.S. Economy, 2005 

(Figure 1) 

Industry & 

Manufacturing 

32% 

Transportation 

28% 

Commercial 

Residential 

22% 

18% 

Source: U.S. Energy Information Administration, Annual 

Energy Review 2005, Washington, DC, July 2006. 

www.eia.doe.gov. 

Cost Savings
 

Energy costs can have a significant impact on the financial performance of businesses. A September 

2005 poll taken by the National Association of Manufacturers (NAM) revealed that 93 percent of 

directors from small and medium-sized manufacturing companies believe that higher energy prices 

are having a negative impact on their bottom line.1 

Substantial opportunities exist to reduce energy 

waste in the industrial and manufacturing sectors. 

No segment of the U.S. economy has as much to 

gain from energy-use reduction as the manufacturing sector, as Figure 1 illustrates. Manufacturers are 

affected directly by the energy cost of making products (manufacturing), maintaining office operations 

(commercial), and receiving raw materials and 

delivering finished goods (transportation). 

Energy use and cost information is, however, often 

decentralized and hidden from view in overhead 

or facilities accounts. Explicitly considering energy 

use in Lean implementation can reveal these hidden 

cost-reduction opportunities. And these opportunities have proven to be worth uncovering, as many 

companies have achieved significant cost savings as 

a result of energy reductions from Lean implementation. Reducing energy use and increasing energy 

efficiency is a proven strategy for cutting and controlling costs.
 

Chapter 1: Introduction
 

1 National Association of Manufacturers (NAM), Energy Efficiency, Water and Waste-Reduction Guidebook for Manufacturers: 

Proven Ways to Reduce Your Costs and Improve Operations. www.nam.org/s_nam/bin.asp?CID=202138&DID=233434&DOC=FI 

LE.PDF,( viewed September 2007), p. 5. 

2
 
 

 

 

 

 

 

Chapter 1: Introduction
 

Lean and Energy Use Reduction: 


Company Cost Savings Experience (Box 2)
 

✓	 Eastman Kodak Company (New York) conducted energy kaizen events that 

significantly reduced energy use and resulted in overall savings of $15 million between 1999 and 2006. 

✓ General Electric (Ohio) achieved cost savings of over $1 million at one 


facility due to fuel use reductions realized through Lean implementation.
 

✓ Howard Plating (Michigan) reduced energy use by 25 percent through a 


Lean implementation effort.
 

✓	 Lasco Bathware (Washington) eliminated the need for a shrink-wrap oven 

when planning for a Lean event, reducing natural gas consumption by 12.6 

million cubic feet and saving about $99,000. 

✓ Naugatuck Glass Company (Connecticut) used Lean to cut product lead 

time and improve quality, while also reducing energy use by 19 percent. 

✓ Steelcase Inc. (California) used Lean to improve operations, reducing fixed 

utility costs (including energy) by about 90 percent. 

Climate Change and Environmental Risk Reduction 

The environmental and climate impacts of energy use are rapidly becoming a major issue facing 

industry and society. Carbon dioxide (CO2

), a major greenhouse gas, is emitted to the atmosphere 

directly when fuels are combusted on-site and indirectly when electricity is consumed (particularly 

when fossil fuels are used to generate the electricity). Identifying and eliminating energy waste 

during Lean offers a smart, efficient way to reduce greenhouse gas emissions. As pressures increase 

for limits on greenhouse gases, documented early action by businesses can reduce business risk and 

contribute to reduction targets. In the meantime, publicly held businesses are finding that failure to 

proactively reduce climate risk can result in shareholder resolutions to force action.2 

Energy use can have significant environmental impacts and risks in addition to climate change. Onsite combustion of fuels in boilers, ovens, vehicles, and equipment can emit a variety of regulated 

pollutants, including carbon monoxide (CO), sulfur dioxide (SO2

), nitrogen oxide (NOx), particulate 

matter (PM), volatile organic compounds (VOCs), and a variety of air toxics. Combustion pollutant emissions can affect worker health, and trigger the need for costly permitting, monitoring, and 

emission controls. More broadly, reducing air emissions from combustion activities can help protect 

neighboring communities and public health. Storage and handling of fuels also pose a variety of 

worker health, safety, and environmental costs and risks, even in the absence of spills. Lean efforts 

can directly target and mitigate these impacts and risks. 

See the Investor Network on Climate Risk (www.incr.com) for current information on investor and shareholder initiatives related 

to climate change. 

3
 

2 
 

 

 

 

Chapter 1: Introduction
 

Competitive Advantage 

Identifying and eliminating energy waste through Lean can improve a company’s ability to compete 

in several ways. First, reducing the energy intensity of production activities and support processes 

directly lowers recurring operating costs with direct bottom line and competitiveness impacts. A recent study by the NAM and the Manufacturers Alliance (MAPI) found that U.S. companies have a 22 

percent unit-cost disadvantage compared with overseas competitors in a number of process support 

cost areas, including energy.3 

Second, eliminating energy waste and the associated environmental impacts through Lean can 

foster competitive advantage for some businesses. Customers and employees may view proactive 

environmental improvement efforts as an important attribute, affecting customer loyalty and the 

ability to attract and retain employees. Participation in climate partnership programs, such as EPA’s 

Climate Leaders or local climate initiatives, can also provide businesses with public recognition for 

their energy use reduction achievements. For businesses that manufacture appliances, electronics, 

and other products that consume energy, Lean design methods can be used to lower the lifetime 

energy use of products. 

It is not surprising that most of the major companies that have received awards from the EPA and 

Department of Energy’s ENERGY STAR Program—companies such as 3M, Eastman Kodak, and 

Toyota—are also leaders in implementing Lean and Six Sigma. Energy waste is clearly on the radar 

of leading Lean companies. In addition, ENERGY STAR certification for energy-efficient products is 

an increasingly important factor in consumer-purchase decisions. For more information on ENERGY STAR, see www.energystar.gov. 

Lean and Energy at Toyota (Box 3) 

✓	 Toyota, the model for “Lean” production systems at companies worldwide, 

is also a leader in energy and environmental performance.4 

✓	 Since 2000, Toyota Motor Manufacturing North America has reduced the 

average facility energy consumption per vehicle produced by 30 percent, 

resulting in a corresponding reduction in the CO2 emissions of its facilities. 

✓ In fiscal year 2006, Toyota’s North American facilities reduced energy use 

per vehicle by 7 percent while increasing production by 4 percent. 

✓ Toyota used methods such as energy treasure hunts and kaizen events to 

achieve these results (Chapter 3 has more information on these methods). 

3

 National Association of Manufacturers (NAM), Energy Efficiency, Water and Waste-Reduction Guidebook for Manufacturers: 

Proven Ways to Reduce Your Costs and Improve Operations. www.nam.org/s_nam/bin.asp?CID=202138&DID=233434&DOC=FI 

LE.PDF, (viewed September 2007), p. 5. 

4

 Information in this box is from: Toyota North America, 2006 Environmental Report, November 2006, p. 26, available at www. 

toyota.com/about/environment/news/enviroreport.html. 

4
 
 

 

 

 

Chapter 1: Introduction
 

Lean and Energy: A Powerful Opportunity
 

This toolkit discusses how Lean can play a powerful role in reducing energy use and costs. In many 

cases, energy efficiency improvements ride the coattails of Lean. For example, right-sized equipment typically consumes less energy, and inventory reductions reduce demand for floor space that 

requires lighting, heating, ventilation, and air conditioning. By explicitly considering energy use in 

Lean efforts, organizations can often identify additional opportunities to save energy. 

While the U.S. economy has made substantial improvements in energy efficiency in recent decades, 

there are significant opportunities for businesses to further improve energy efficiency. From 1975 to 

2005, U.S. energy intensity (defined as the primary energy consumption per dollar of real gross domestic product, or GDP) dropped by 46 percent. Several recent studies, however, suggest that energy 

use could be reduced in the manufacturing and industrial sector by 75 percent at little cost using 

currently available technologies. Lean can help to identify and address these opportunities. 

Strategic Lean and Energy Management 

Creating a Roadmap for Lean and Energy Efforts 

For a variety of reasons, your facility may wish to pro-actively manage and reduce its energy use, 

while also achieving Lean goals such as improved quality, reduced waste, and increased customer 

responsiveness. Energy management is a systematic framework for understanding and identifying energy-related improvement opportunities. Energy management systems can be tailored to suit 

your facility’s needs, business opportunities, market risks, and specific goals and targets. If you are 

interested in gaining outside assistance, the ENERGY STAR program is a resource for manufacturers 

interested in developing energy management programs. 

An energy management framework can help you coordinate your company’s energy reduction efforts with its Lean efforts. Strategically and systematically integrating energy and Lean improvement 

efforts will enhance their effectiveness and the value they bring to your company. 

Why Be Strategic About Energy Management? (Box 4) 

✓ Find new opportunities to reduce wastes, energy, and costs 

✓ Reduce risks associated with an unreliable supply of energy, variable 

energy prices, and potential future climate change regulations 

✓ Position your company to be a leader in energy and environmental 

performance 

✓ Ensure that energy efficiency efforts support other organizational objectives 

and improvement processes, such as Lean and Six Sigma 

Even if your organization decides not to pursue a strategic approach to energy management, there 

are numerous practical ways to consider energy waste and improvement opportunities during Lean 

implementation. Chapters 3-5 of this toolkit contain many ideas for doing this. 

5
 
Chapter 1: Introduction
 

There are four general steps involved in developing an energy planning and management roadmap 

appropriate to your organization, as follows.5 

1.	 Initial Assessment: Consider the opportunities, risks, and costs associated with strategic 

energy management. 

2.	 Design Process: Understand your company’s energy needs and how to approach energy 

management at your company. 

3.	 Evaluate Opportunities: Identify and prioritize energy-related improvement opportunities, such as energy-efficiency actions, energy-supply options, and energy-related products 

and services. 

4.	 Implementation: Use a management system such as the ENERGY STAR Guidelines for 

Energy Management to implement energy opportunities.6 

Each of these steps is important for developing and implementing a strategy for Lean and energy 

improvements at your organization. Figure 2 presents a roadmap for energy planning and management that identifies potential connections to Lean methods and improvement techniques outlined in 

this toolkit. 

Lean and Energy Management Roadmap (Figure 2) 

Step 1 Step 2 Step 3	 Step 4 

Initial Assessment Design Process Evaluate Opportunities	 Implementation 

Select 

energy 

management 

approach: 

•Set goals and 

metrics 

•Decide scale 

•Allocate 

resources 

•Integrate with 

Lean and Six 

Sigma 

Understand 

baseline and 

identify 

opportunities: 

•Energy 

assessments 

•Value stream 

mapping 

•Energy 

treasure 

hunts 

•Six Sigma 

Understand the 

business 

opportunities 

related to 

strategic energy 

management: 

•Benefits 

•Costs 

•Risks 

Implement with 

kaizen events 

Energy 

efficiency: 

•Total 

productive 

maintenance 

•Right-sizing 

•Standard 

work 

•Plant layout 

Energy supply 

options 

Products and 

services 

Chapter 1 Chapter 2 Chapter 3 Chapters 4 & 5 

Lean and Energy Toolkit Connections 

Source: Adapted from Bennett, Charles J. and Whiting, Meredith Armstrong. Business & Energy in the 21st Century, Navigating 

Energy Management: A Roadmap for Business, The Conference Board Executive Action Series, No. 160. 

5	 Bennett, Charles J. and Whiting, Meredith Armstrong. “Business & Energy in the 21st Century, Navigating Energy Management: A 

Roadmap for Business.” The Conference Board Executive Action Series. No. 160. September 2005. 

6	 The ENERGY STAR Guidelines for Energy Management are available at: www.energystar.gov/index.cfm?c=guidelines.guidelines_ 

index. 

6
 
Chapter 1: Introduction
 

Chapters 1 and 2 of this toolkit support steps 1 and 2 of the roadmap, in that they can help your 

organization understand the relationship of Lean to energy use and the benefits of systematically 

reducing energy use through Lean. Chapters 3–5 of the toolkit describe how to identify and implement energy savings opportunities in the context of Lean, supporting steps 3 and 4 of the roadmap. 

These strategies leverage Lean methods such as value stream mapping, kaizen events, total productive maintenance, and standard work to improve energy and operational performance, while also 

incorporating energy assessment and reduction tools that can enhance Lean implementation. 

Lean and energy management can work together to increase profit, enhance productivity, and decrease energy consumption through sustained and continual improvements. This toolkit is designed 

to help your facility achieve these goals. 

To Consider 

• 	How well coordinated are Lean activities and energy-efficiency efforts at 


your organization?
 

• 	Who makes decisions involving energy use at your facility or company? 

• 	How are energy costs allocated at your company? Are costs billed to overhead accounts or are they assigned to individual departments or value 


streams?
 

• 	How could your company benefit from improved Lean and energy 


management?
 

7
 

 

CHAPTER 2 

Overview of Energy Use and Lean 

This chapter provides background information on energy use and describes how Lean implementation efforts can increase energy efficiency. 

Energy Sources and End Uses 

In the manufacturing sector, the predominant energy sources are natural gas and electricity (a secondary source, typically generated off-site by a utility using one or more primary energy sources or 

fuels). Manufacturers also use other energy sources, such as fuel oil, for producing heat and power 

on-site. Some facilities have on-site co-generation, where they combust a fuel (e.g., natural gas or 

wood scraps) to produce heat and electricity. Figure 3 lists major energy sources used by the industry and manufacturing sectors in the U.S. economy 

Sources of Energy Used for U.S. Industry and Manufacturing, 2005 (Figure 3) 

36% 33% 

17% 7% 2% 4% 1% 

Natural Gas Other Sources Electricity Coal Fuel Oil	 Coke & LPG 

Breeze (propane) 

Source: U.S. Energy Information Administration, Annual Energy Review 2005, Washington, DC, July 2006. www.eia.doe.gov. 

Aggregate, facility-level information on energy use (typically derived from monthly utility bills) only 

tells part of the story. Understanding the energy end uses—what work we use the energy to do—reveals more useful information to identify opportunities for improving efficiency and reducing costs. 

Box 5 lists several of the common end uses for energy in manufacturing. In an office setting, enduses primarily include heating, ventilating, and air conditioning (HVAC), lighting, and operation of 

appliances and computers. 

9
 
 

Energy End Uses: What Do We Use Energy to Do? (Box 5) 

✓ Heating, ventilating, and air conditioning (HVAC) 

✓ Lighting 

✓ Process equipment operation 

✓ Process heating and cooling 

✓ Transportation 

While identifying energy end uses is often straightforward, determining the amount of energy used 

by each end use can be challenging—but end use information is essential to targeting waste and 

improvement opportunities. In the context of Lean, it may even be useful to understand energy 

end use information at the process and equipment levels. Chapter 3 discusses some strategies and 

techniques for better understanding energy uses and costs at your facility. 

Looking at energy end uses across the manufacturing sector in the U.S. economy provides an indication of where efficiency improvement opportunities may exist. Tapping into sector-specific resources 

can help companies identify additional areas of efficiency opportunity within their sector (see Appendix B for information on sector-focused energy reduction resources). 

Process heating accounts for 53 percent of direct energy end use at manufacturing facilities, while 

machine drives and motors account for another 22.1 percent, according to a recent study by NAM 

(see Table 1). Chapter 4 describes specific strategies for reducing the energy used by these and other 

types of processes. 

Consider targeting your facility’s energy efficiency efforts on two key end uses that are likely to 

account for a significant portion of your facility’s energy use. As shown in Table 1, the following 

end uses typically have energy savings opportunities: 

Chapter 2: Overview of Energy Use and Lean 

1. Process heat 

2. Machine drives and motors 

For facilities without these types of energy end uses, HVAC systems and lighting may be good end 

uses to target. 

10
 
Table 1: Manufacturing Sector Inputs for Heat, Power, 

and Electricity Generation by End Use 

Industrial Sector End Use 

Category 

Trillion British 

thermal unit (Btu) 

Percentage of 

Total Direct 

End Use 

Indirect End Use (Boiler Fuel) 3,635 

Direct End Use 7,655 100% 

All Process Uses 6,323 82.6% 

Process Heating 4,055 53.0% 

Machine Drive 1,691 22.1% 

Electrochemical Process 298 3.9% 

Process Cooling and 

Refrigeration 

210 2.7% 

Other Process Uses 69 0.9% 

All Non-Process Uses 1,314 17.2% 

Facility Heating, Ventilation 

and Air Conditioning 

692 9.0% 

Facility Lighting 211 2.8% 

Conventional Electricity 

Generation 

243 3.2% 

Other Facility Support 96 1.3% 

Onsite Transportation 69 0.9% 

Other Non-Process Uses 3 0.0% 

End Use Not Reported 157 

Total 11,447 

Chapter 2: Overview of Energy Use and Lean
 

Source: Prepared by the Leonardo Academy from U.S. Department of Energy data, 1998 Data from Annual Energy View 2003, 


published September 2004.
 

11
 
Chapter 2: Overview of Energy Use and Lean
 

Understand the Costs of Energy Use
 

Understanding the costs of energy use can raise awareness of the potential value of identifying and 

eliminating energy waste during a Lean event. The costs of energy use are not always “visible” to 

production managers because they are rolled up into facility overhead costs, rather than assigned to production areas. Explicitly tracking costs associated with individual processes or equipment can encourage energy conservation. If, however, cost savings from energy efficiency improvements revert to overhead, or result in lower future budgets, production managers may not have 

an incentive to reduce energy use. It may therefore be necessary to create incentives for reducing 

energy use by sharing energy savings. 

One of the primary data sources for energy cost data is your facility’s utility bill. Utility bills often 

include the following types of data: 

• 	 Consumption Charges: Electricity is charged based, in part, on the amount of electricity 

used (in kilowatt-hours, kWh) in a billing period. The per kilowatt-hour rate for electricity 

may vary based on the time of year (e.g., winter or summer season) and/or the time of day 

(peak or off-peak hours). 

• 	 Demand Charges: For many electricity customers (all but small accounts), there will be 

a demand charge (per kilowatt) in the bill that is based on the peak electricity use each 

month averaged over a short time period (e.g., 15 minutes). Your facility may pay more for 

demand costs than consumption costs, although the two costs may be a single line item in 

the utility bill. 

• 	 Fuel Costs: For natural gas and other fuels, you may be charged for the amount of fuel you 

receive (for natural gas this is based on a per therm price) and a delivery charge for the 

transportation and delivery of the fuel. Fuel charges may vary seasonally and based on the 

amount consumed. 

Because of variation in energy use and costs, it can be helpful to use spreadsheets or other systems 

to monitor your facility’s energy performance and costs over time. An example Electrical Power Bill 

Analysis Worksheet is below. Similar worksheets may be used to track monthly costs for natural gas 

and other fuels. 

12
 
Table 2: Electrical Power Bill Analysis Worksheet 

Date Consumption Consumption 

Cost 

Peak 

Demand 

Demand 

Cost 

Total 

Cost 

(months) (kwh) ($) (kW) ($) ($) 

Jan 198,800 $12,975 948 $8,759 21,734 

Feb 331,200 $20,374 912 $8,427 28,801 

Mar 245,000 $13,951 710 $6,560 20,511 

Apr 305,600 $18,902 948 $8,759 27,661 

May 368,000 $22,621 1,222 $11,290 33,911 

Jun 318,400 $19,651 888 $8,205 27,856 

Jul 289,200 $18,855 890 $8,223 27,078 

Aug 335,600 $21,720 964 $8,907 30,627

Sep 367,600 $23,638 952 $8,796 32,434 

Oct 387,200 $25,384 1,144 $10,570 35,954 

Nov 350,000 $22,583 824 $7,613 30,196 

Dec 374,400 $24,701 1,105 $10,210 34,911 

Totals 3,871,000 $245,355 11,507 $106,319 351,674 

Source: Muller, Michael R. Dr. Self-Assessment Workbook for Small Manufacturers Version 2.0, http://iac.rutgers.edu/database/ 

technicaldocs/IAC_Manuals/selfassessment.pdf, October 2003. 

 

Chapter 2: Overview of Energy Use and Lean
 

Energy Effi ciency Benefits of Lean Implementation 

Significant energy savings typically ride the coattails of Lean activities—even without explicit 

consideration of energy use. These coattails can be understood by thinking about energy in the 

context of Lean’s deadly wastes. 

Energy Use Reductions on the Coattails of Lean 

The focus of Lean is on identifying and eliminating non-value added activity, or waste, from processes. Lean typically targets seven so-called “deadly wastes”: 

1. Overproduction 5. Defects 

2. Inventory 6. Over processing 

3. Transportation 7. Waiting 

4. Motion 

13
 
Environmental and energy wastes are not explicitly included in the seven deadly wastes of the 

Toyota Production System. This does not mean that the wastes are unrelated to the environment, 

however. In fact, your company may have already seen large energy use reductions from implementing Lean, because energy and environmental wastes are embedded in, or related to, the seven 

deadly wastes. Table 3 lists energy impacts associated with wastes targeted by Lean methods. 

Table 3: Energy Use Hidden in Lean Wastes 

Waste Type Energy Use 

Overproduction • More energy consumed in operating equipment to make 

unnecessary products 

Inventory • More energy used to heat, cool, and light inventory 

storage and warehousing space 

Transportation 

and Motion 

• More energy used for transport 

• More space required for work in process (WIP) movement, increasing lighting, heating, and cooling demand 

and energy consumption 

Defects • Energy consumed in making defective products 

• More space required for rework and repair, increasing 

energy use for heating, cooling, and lighting 

Overprocessing • More energy consumed in operating equipment related to 

unnecessary processing 

• Use of right-sized equipment often results in significant 

reductions in energy use per unit of production 

Waiting • Wasted energy from heating, cooling, and lighting during 

production downtime 

Chapter 2: Overview of Energy Use and Lean 

Despite these relationships between Lean deadly wastes and energy use, Lean efforts often overlook 

opportunities to save energy. Your company can enhance its Lean performance by ensuring that 

energy-efficiency opportunities are explicitly identified during Lean activities. 

To Consider 

• 	What energy sources does your facility use? 

• 	What are the energy end uses at your facility? 

• 	How much money does your facility spend on energy use each month? 

• 	What energy improvements has your facility realized from Lean efforts? 

• 	What areas of your facility might be good targets for future energy-efficiency 

improvement efforts? 

14
 
 

 

 

 

 

 

CHAPTER 3 

Energy Assessment Strategies 

This chapter describes strategies and techniques for understanding how energy is used at your 

facility and identifying opportunities to reduce energy use and costs. This chapter discusses the 

 following strategies: 

A. Walk Through Processes to Observe Energy Use 

B. Energy Audits and Measuring Energy Use 

C. Examine Energy Use with Value Stream Mapping 

D. Use Six Sigma to Find and Eliminate Energy Waste and Variation 

E. Eliminate Energy Wastes in Kaizen Events 

A. Walk Through Processes to Observe Energy Use 

Walking through and observing processes as they actually run at a facility can be a simple, but effective way to identify waste and find improvement opportunities. During the walk through, look for 

signs of unnecessary or inefficient energy use. Ask questions, such as the Questions for Understanding Energy Use below (Box 6), to learn more about potential opportunities to reduce energy use. 

Questions for Understanding Energy Use (Box 6) 

Motors and Machines 

✓ Are machines left running when not in operation? If so, why?
 

✓ Are energy efficient motors, pumps, and equipment used?
 

✓ Are motors, pumps, and equipment sized according to their loads? Do 


motor systems use variable speed drive controls? 

Compressed Air 

✓ If compressed air is used, do you notice any leaks in the compressed air 

system? 

✓ Do compressed air systems use the minimum pressure needed to operate 

equipment? 

Lighting 

✓ Is lighting focused where workers need it? 

✓ Is lighting controlled by motion sensors in warehouses, storage areas, and 

other areas that are intermittently used? 

✓ Are energy-efficient fluorescent light bulbs used? 

15
 
 

 

 

 

Chapter 3: Energy Assessment Strategies
 

Questions for Understanding Energy Use (Continued) 

Process Heating 

✓	 Are oven and process heating temperatures maintained at higher levels 


than necessary?
 

Facility Heating and Cooling 

✓ Are work areas heated or cooled more than necessary?
 

✓ Do employees have control over heating and cooling in their work areas? 


✓ Are exterior windows or doors opened to adjust heating and cooling?
 

Walk throughs are a key step in value stream mapping and other Lean activities. Companies such as 

Toyota and GE frequently conduct “Energy Treasure Hunts” to find energy savings (see Box 7). An 

Energy Treasure Hunt is a three-day plant assessment event in which a cross-functional team of 

employees identifies opportunities to reduce unnecessary energy use. Project teams then implement 

the ideas that are likely to yield the greatest benefits through kaizen events. 

Energy Treasure Hunts at General Electric (Box 7) 

With mentoring assistance from Toyota, General Electric (GE) launched an integrated Lean and energy initiative that has identified upwards of $100 million in 

energy savings through energy treasure hunts. GE’s corporate commitment to 

energy use and greenhouse gas reductions has helped drive this effort. From 

2005 to 2007, GE: 

✓ Conducted over 200 energy treasure hunts at GE facilities worldwide, and 

trained over 2,500 employees on how to conduct treasure hunts 

✓ Used energy treasure hunts to identify 5,000 related kaizen projects, most 

of which are funded and in various stages of implementation 

✓ Reduced greenhouse gas emissions by 250,000 metric tons and realized 

$70 million in energy cost savings from implemented projects 

Source: General Electric, Ecomagination / Energy Treasure Hunt Team, 2007. 

B. Energy Audits and Measuring Energy Use 

While a walk through is an excellent way to identify and fix energy wastes that are readily apparent, 

you may be leaving energy savings on the table unless you examine energy use more closely. Two 

strategies for learning more include: 

1. Conduct an energy audit to understand how energy is used—and possibly wasted—across 

your facility. 

2. Measure the energy use of individual production and support processes. 

16
 
 

 

 

 

Chapter 3: Energy Assessment Strategies
 

1. Energy Audits
 

An energy audit, sometimes referred to as an energy assessment, is a study of the energy end uses 

and performance of a facility. Energy audits can range in complexity and level of detail, from a 

simple audit involving a facility walk through and review of utility bills, to a comprehensive analysis 

of historical energy use and energy-efficiency investment options. Energy audits allow managers to 

compare a plant’s energy use to industry benchmarks and identify specific energy savings opportunities. 

In many locations, local utilities or non-profit manufacturing assistance organizations provide 

energy audit services for free or at reduced cost. There also are free tools available to help companies conduct energy audits. Appendix A describes service providers, resources, and tools for energy 

assessments. 

Energy Savings From “Lean and Clean” Assessments (Box 8) 

✓	 The Green Suppliers Network, a partnership between EPA and the National 

Institute of Standards and Technology Manufacturing Extension Partnership, 

conducts “Lean and Clean” assessments for small and medium-sized companies. 

✓ As of 2007, 49 assessments have identified energy savings of 247,165 


million Btu and over 72 million kWh. 


✓ These assessments also identified about $7.5 million per year in environmental savings and about $19.1 million per year in Lean savings.
 

✓ See www.greensuppliers.gov for more information.
 

2. Measuring Energy Use of Individual Processes 

You may not really know which process or process step uses the most energy—and therefore 

where the greatest energy savings might be—until you actually measure the energy use. During 

the analysis of the “current state” of a value stream or an individual process, collect data on how 

much energy each operation uses. Typical energy metrics include: 

• 	 Kilowatt-hours (for electricity) 

• 	 Therms (for natural gas) 

• 	 British thermal units (Btu) 

• 	 Energy intensity (energy use 

per production unit) 

• 	 Energy costs (dollar amount 

spent on energy)
 

17
 

Common Energy Units (Box 9) 

Energy Units Energy Equivalent 

1 kilowatt-hour 3,412 Btu

1 Therm 100,000 Btu 

1 cubic foot natural gas 1,000 Btu
 

1 horsepower 	 746 Watts 
Chapter 3: Energy Assessment Strategies
 

There are several techniques for measuring or estimating the energy used by production processes. 

• 	 Metering: One technique is to install meters to track the energy use of a process. For example, flow meters can be installed to track natural gas inputs to ovens used to provide process 

heat and electric meters can be used to monitor electricity use in a particular process area. 

Metering enables a facility to track energy use over short and longer time periods. 

• 	 Estimating: Another technique is to estimate energy use based on information provided by 

equipment manufacturers. Calculate energy use for specific equipment or process activities using equipment energy specifications (often obtained from equipment manuals or 

vendors) coupled with equipment operation data (e.g., number of hours the equipment is 

in different modes of operation). While such calculations are often not precise, they can 

indicate the order of magnitude of energy use. 

• 	 Energy Studies: Energy specialists can also help conduct detailed analyses of energy use 

and costs at both the facility level and the process level. This type of analysis can look not 

only at where and how much energy is used, but also opportunities to reduce energy costs 

through load shifting (shifting electricity use to off-peak times), changing the mix of energy sources, and other strategies. 

To Consider 

• 	How much energy does your facility use? 

• 	Which value streams and production processes contribute the most to your 

facility’s total energy use? 

• 	What are the costs associated with this energy use? 

• 	Where are the best places to look for energy savings? 

C. Examine Energy Use with Value Stream Mapping 

One effective way to understand energy use at your facility is to integrate energy analysis into 

the Lean value stream mapping process. Value stream mapping is a method of creating a visual 

representation of the information and material flows involved in creating a product or delivering 

a service to a customer. Lean practitioners use value stream maps to understand where the largest 

sources of waste are in the value stream and to prioritize future process-improvement efforts. 

Adding Energy Analysis to Value Stream Mapping 

Your value stream mapping team can examine the energy use of processes in a value stream at the 

same time your team examines other data about the “current state,” including Lean metrics such 

as cycle time (C/T), changeover time (C/O), and uptime. Use the techniques described above for 

observing and measuring energy use to collect energy data for processes in the value stream, or con18
 
 

 

 

 

 

Chapter 3: Energy Assessment Strategies
 

sider asking internal or outside experts to assist with the energy analysis. This may involve collecting baseline data in advance of a value stream mapping event. 

The key is to have both Lean and energy use data available when your value stream mapping team 

brainstorms and prioritizes improvement ideas for the “future state” of the value stream. This will 

leverage the whole systems thinking of Lean to maximize operational gains and energy savings. 

Figure 4 shows a value stream map from a value and energy stream mapping project. 

Example Results From Value and Energy Stream 


Mapping Projects (Box 10)
 

✓	 Mission Rubber, a manufacturer of rubber couplings for the construction 

industry, conducted a five-day value stream mapping event and two kaizen 

events to shorten lead times and reduce energy use. The company saved 

an estimated 473,076 kWh and $40,000 in energy costs per year while 

increasing productivity and sales.7 

✓	 Packaging Plus LLC, a packaging provider located in La Mirada, California, 

saved $558,000 per year in labor, improved productivity 41 percent, and 

reduced annual energy use by 613,629 kWh, for a savings of $61,000 per 

year, by conducting a value and energy stream mapping workshop and two 

kaizen events.8 

✓	 Trojan Battery Company, a manufacturer of deep cycle batteries located 

in Santa Fe Spring, California, used value and energy stream mapping with 

kaizen events to decrease energy intensity by 33 percent in four months, 

saving 1,283,639 kWh and $100,000 per year in energy costs.9 

7	 California Manufacturing Technology Consulting (CMTC). “Automotive Case Study: Mission Rubber.” www.cmtc.com/success_stories/mission_rubber_Auto.html, accessed 23 Aug. 2007. 

8	 CMTC. “Industrial Case Study: Packaging Plus LLC.” www.cmtc.com/success_stories/ind_ppllc.html, accessed 13 Nov. 2006. 

9	 CMTC. “Trojan Battery Company Case Study.” Case Study No. 05-80760. 

19
 
Chapter 3: Energy Assessment Strategies 

Example Value Stream Map (Figure 4) 

Look for energy reduction 


opportunities here!
 

Source: Packaging Plus LLC and California Manufacturing Technology Consulting 

20
 

 

Chapter 3: Energy Assessment Strategies
 

Another opportunity is to incorporate energy use data directly into current and future state value 

stream maps. Consider adding data on the average energy use or energy intensity of each process to 

the process data boxes in value stream maps, along with other regularly collected metrics. This will 

make it easier to spot key energy savings opportunities in the context of other improvement opportunities. Figure 5 shows an example process data box with energy use data (in kilowatt-hours per 

pound of output). 

Combining energy use analysis and value stream 

mapping is a proven technique for cutting energy 

costs and improving productivity. For example, the 

California Manufacturing Technology Consulting, a 

Manufacturing Extension Partnership center in California, has partnered with a local utility and an energy 

efficiency firm, Alternative Energy Systems Consulting, 

Inc., to conduct “Value and Energy Stream Mapping” 

projects with facilities (see Box 10 for examples). 

Identifying Opportunities 

Incorporating energy analysis into value stream mapping allows your team to consider energy 

reduction opportunities alongside other process improvement opportunities. You may find ways to 

reduce energy use that will also provide other production benefits, such as fewer defects from more 

reliable equipment. Here are a few things to consider: 

Example Process Data Box

with Energy Use Data (Figure 5) 

Milling 

2 people 

C/T = 2 min 

C/O = 2 hr 

Uptime = 74% 

Energy/pound 

output = 1kWh 

• 	 Key Questions: When you look at energy uses in the context of the entire value stream, ask 

two fundamental questions: 

o Is this energy end use needed? 

o Is there a way to deliver this end use more efficiently? 

• 	 Eliminating Energy End Uses: Eliminating entire energy end uses can result in substantial cost savings, improve production flow, and simplify processes. For example, when 

planning for a Lean and environment kaizen event, a Lasco Bathware manufacturing plant 

found it could eliminate a shrink-wrap heating oven. This resulted in an annual savings of 

$99,290 and 12.6 million cubic feet of natural gas.10 

• 	 Support Processes: Support processes may consume significant amounts of energy. Even 

brief consideration of support processes in value stream mapping enables a Lean team 

to think more broadly when identifying wastes and improvement opportunities. 

10	 Washington State Department of Ecology. “Lean & Environment Case Study: Lasco Bathware.” Prepared by Pollution Prevention 

Resource Center and Ross & Associates Environmental Consulting, Ltd. Publication No. 07-04-009. April 2007. (www.ecy.wa.gov/ 

pubs/0704009.pdf). 

21
 
For example, particular processes may produce air emissions that go to a pollution control 

device (e.g., a natural gas-fired thermal oxidizer) or effluent that is sent to a wastewater 

treatment plant. Other support processes include lighting, heating, and cooling. 

D. Use Six Sigma to Find and Eliminate Energy Waste and Variation 

Six Sigma refers to a collection of statistical analysis and process improvement tools designed to 

identify and eliminate variation (or defects) in a process. Although specific training is needed before 

using Six Sigma, many companies have added these methods to their continuous improvement 

toolbox, developing an improvement approach often known as Lean Six Sigma. Six Sigma analytical 

tools can be particularly useful for identifying energy waste in situations where there is a lot of energy use and when process-level data are available. Statistical analysis and process control methods 

can help isolate the root causes of energy use fluctuations and identify factors that result in energy 

waste. 

Lean Six Sigma helped the 3M Company reduce energy use by 27 percent (when indexed to net 

sales) from 2000 to 2005. 3M has set a corporate goal for further energy use reductions of 20 percent for the period from 2005 to 2010, and the company views Lean Six Sigma as critical to realizing 

this performance goal.11 

Six Sigma and Energy Savings at Baxter International (Box 11) 

In a compelling example of Six Sigma and energy-efficiency integration, a Baxter International facility in Spain saved €220,000 (approximately $300,000) 

in one year by installing energy meters, tracking daily energy use, and using 

kaizen events to reduce energy use. The facility recorded daily energy use for 

one year and used statistical process control (SPC) analyses to set a standard 

range of deviation. Each time energy use exceeded average use by 15 percent, 

the facility held a kaizen event to address the root causes of the peak. In addition to cutting energy costs, this initiative lessened the facility’s overall energy 

use and variability. 

Source: Interview with Jenni Cawein, Manager, Corporate Environment, Health, and Safety Engineering, Baxter International,
 

30 May 2007.
 

E. Conduct Energy Kaizen Events 

After identifying the production areas that consume large amounts of energy, your facility can 

further analyze and eliminate wasteful energy practices through kaizen events, or rapid process 

improvement events. In kaizen events, which typically last 3-5 days, a cross-functional team of 

employees identifies and implements process changes to reduce wastes such as idle time, inventory, 

and defects. Kaizen events create important windows of opportunity to consider ways to eliminate 

Chapter 3: Energy Assessment Strategies
 

11 See U.S. EPA, “3M: Lean Six Sigma and Sustainability” case study, www.epa.gov/lean/studies/3m.htm. 

22
 
Chapter 3: Energy Assessment Strategies
 

energy waste. Revisit the results of energy audits or assessments to familiarize your Lean team with 

information that can be used to identify energy wastes during a kaizen event. Asking key questions 

during a kaizen event, such as those in Box 6, can also help to ensure that energy-reduction opportunities are identified as part of Lean implementation. 

Consider conducting energy-focused kaizen events at your facility to: 

• Understand how energy is used in a particular process 

• Brainstorm opportunities to reduce energy use in that process 

• Implement those ideas in a short time frame 

What is an Energy Kaizen Event? (Box 12) 

✓ Relies on a short burst of intense activity (3-5 days) 

✓ Focuses on eliminating energy waste 

✓ Involves multi-functional teams (e.g., utilities specialists, process 

specialists, product specialists, quality facilitator, and/or others)
 

✓ Makes changes during the event
 

✓ Stresses non-capital improvements
 

Energy kaizen events combine a detailed energy-use assessment with immediate implementation of energy-reduction opportunities. From 1999 to 2005, Eastman Kodak used energy kaizen 

events to generate a total of $14 million in annual energy savings. Since then, energy kaizen events, 

along with other improvement efforts, have enabled Eastman Kodak to shut down one of the 

company’s two powerhouses in Rochester, New York. This resulted in over $20 million in additional 

annual savings.12 Table 4 shows examples of energy savings opportunities identified during a kaizen 

event. 

12 Discussion with James Breeze, Energy Engineer/Project Leader, Worldwide Energy Office, Eastman Kodak Company, September 

2007. 

23
 
Table 4: Example Actions Identified at a Kaizen Event13 

Savings Energy Waste Identifi ed Counter Measure Opportunity 

Main supply fans (air cond­ Change non-critical systems $47,000 

itioners) run 24 hours/day run time schedule 

Fan motors are over-sized Lower horsepower on $27,000 

motors 

Some exhaust fans run 24 Change exhaust fans to $18,000 

hours/day 2 speed and run at slow 

speed during off hours 

Heat recovery unit from ex­ Bypass tilt coils and slow $24,000 

haust fans run faster than down fans 

needed 

Room lights are always on and Install motion sensors to $25,000 

emit more light than needed control lights and reduce 

number of lamps 

Water recirculation pumps are Shut down and remove $20,000 

running but are not required 

Total Opportunity $161,000 

Chapter 3: Energy Assessment Strategies
 

The next chapter outlines practical strategies for reducing energy use through Lean events as well as 

day-to-day maintenance and operations activities. 

To Consider 

• 	Has your facility conducted an energy assessment (such as an energy 


treasure hunt, a facility walk through to identify energy wastes, or a formal 


energy audit and utility bill analysis) recently?
 

• 	Has your facility used value stream mapping, kaizen events, and/or Six 


Sigma to identify energy wastes and reduce energy use?
 

• 	Are there any energy-intensive processes that could be targeted in your 


organization using Lean Six Sigma methods?
 

• 	What practical steps will you take to identify and address energy waste during upcoming Lean events at your facility? 

13 Adapted from a presentation by Eastman Kodak Company to the Business Roundtable Climate Resolve Teleconference, April 2004. 

24
 
CHAPTER 4 

Energy Reduction Tools and Strategies 

This chapter describes best practices for reducing energy use with Lean methods, focusing on process-level opportunities. It includes the following strategies: 

A. Use Total Productive Maintenance to Reduce Equipment Energy Waste 

B. Replace Over-Sized and Inefficient Equipment with Right-Sized Equipment 

C. Design Plant Layout to Improve Flow and Reduce Energy Use 

D. Encourage Energy Efficiency with Standard Work, Visual Controls, and Mistake-Proofing 

A. Use Total Productive Maintenance to Reduce Equipment Energy 

Waste 

Total productive maintenance (TPM) is a Lean method that focuses on optimizing the effectiveness 

of manufacturing equipment. TPM builds upon established equipment-management approaches 

and focuses on team-based maintenance that involves employees at every level and function. 

What is TPM? (Box 13) 

✓ 	 The goal of TPM is to build a robust enterprise by maximizing production 


system efficiency (overall effectiveness).
 

✓ 	 TPM addresses the entire production system lifecycle and builds a concrete, shopfloor-based system to prevent all losses. It aims to eliminate all 

accidents, defects, and breakdowns. 

✓ 	 TPM involves all departments, from production to development, sales, and 

administration. 

✓ 	 Everyone participates in TPM, from the top executive to shopfloor 


employees.
 

✓ 	 TPM achieves zero losses through overlapping team activities. 

Source: The Japan Institute of Plant Maintenance, eds., TPM For Every Operator, (Portland, OR: Productivity Press, 1996), p 11. 

Six Big Losses That Lower Equipment Effi ciency 

Increased equipment operating efficiency reduces energy waste. When machines are optimally 

tuned to accomplish the desired work, energy inputs are most efficient. TPM’s emphasis on equipment efficiency can lead to reduced costs, increased productivity, and fewer defects. TPM focuses on 

25
 
Chapter 4: Energy Reduction Tools and Strategies
 

the six big losses that lead to equipment inefficiency: 

1. Breakdowns 	 4. Reduced speed 

2. Setup and adjustment loss 5. Defects and rework 

3. Idling and minor stoppages 6. Start and yield loss 

Eradicating the six big losses maximizes the productivity of equipment throughout its lifetime. With 

proper equipment and systems maintenance, facilities can reduce manufacturing process defects 

and save an estimated 25 percent in energy costs.14 

Consider using one or more of the Four Strategies for Integrating Energy-Reduction Efforts into 

TPM (Box 14) to improve energy and equipment efficiency at your facility. This chapter focuses on 

describing energy savings opportunities associated with autonomous maintenance (strategy #1); 

other parts of this toolkit provide guidance on identifying energy wastes, conducting energy kaizen 

events, and developing energy management systems (strategies #2-4). 

Four Strategies for Integrating Energy-Reduction Efforts Into TPM 

(Box 14) 

✓	 Integrate energy-reduction opportunities into autonomous maintenance 


activities 


✓	 Train employees on how to identify energy wastes and how to increase 


equipment efficiency through maintenance and operations
 

✓	 Conduct energy kaizen events to make equipment more efficient 

✓	 Build energy-efficiency best practices into systems for management of 


safety, health, and environmental issues
 

Autonomous Maintenance Improves Energy Effi ciency 

One distinctive aspect of TPM is autonomous maintenance. Autonomous maintenance refers to 

ongoing maintenance activities operators undertake on their own equipment. Typical activities 

include: (1) daily inspections, (2) lubrication, (3) parts replacement, (4) simple repairs, (5) abnormality detection, and (6) precision checks. Autonomous maintenance provides an opportunity to 

integrate process-level energy-reduction strategies into ongoing equipment maintenance. 

Many simple energy efficiency best practices can be implemented without extensive analysis or 

effort. Autonomous maintenance already captures a number of best practices, such as cleaning, 

proper lubrication, and standardized maintenance practices. Your facility can enhance TPM effectiveness by integrating energy-reduction best practices for specific types of processes into ongoing 

autonomous maintenance activities. 

14	 Manufacturing Extension Partnership of Louisiana, “Energy Management.” mepol.org/site.php?pageID=180, accessed 13 June 

2007. 

26
 
Chapter 4: Energy Reduction Tools and Strategies
 

Use checklists such as the Energy-Reduction Checklists for Combustion, Steam Generation, and 

Process Heating Systems (Box 15) to identify opportunities to decrease energy consumption while 

also increasing equipment efficiency. These checklists are based on best practices compiled by the 

U.S. DOE’s Energy Efficiency and Renewable Energy Department. 

Energy-Reduction Checklists for Combustion, Steam Generation, 

and Process Heating Systems (Box 15) 

Combustion Systems 

✓ Operate furnaces and boilers at or close to design capacity
 

✓ Reduce excess air used for combustion
 

✓ Clean heat transfer surfaces
 

✓ Reduce radiation losses from openings
 

✓ Use proper furnace or boiler insulation to reduce wall heat losses
 

✓ Adequately insulate air or water-cooled surfaces exposed to the furnace 


environment and steam lines leaving the boiler
 

✓ Install air preheat or other heat recovery equipment
 

Steam Generation Systems 

✓ Improve water treatment to minimize boiler blowdown
 

✓ Optimize deaerator vent rate
 

✓ Repair steam leaks
 

✓ Minimize vented steam
 

✓ Implement effective steam trap maintenance program
 

Process Heating Systems 

✓ Minimize air leakage into the furnace by sealing openings
 

✓ Maintain proper, slightly positive furnace pressure
 

✓ Reduce weight of or eliminate material handling fi xtures
 

✓ Modify the furnace system or use a separate heating system to recover 


furnace exhaust gas heat
 

✓ Recover part of the furnace exhaust heat for use in lower-temperature 


processes
 

Source: U.S. DOE, Energy Efficiency and Renewable Energy Website, “20 Ways to Save Energy Now.” www.eere.energy.gov/
 

consumer/industry/20ways.html, accessed 13 June 2007.
 

By training operators on energy-reduction best practices and checklists applicable to manufacturing 

processes and equipment at your facility, operators will be better able to save energy in their day-today operations and maintenance activities. 

27
 
Chapter 4: Energy Reduction Tools and Strategies
 

B. Replace Over-Sized and Inefficient Equipment with Right-Sized 

Equipment 

Lean thinking often results in the use of right-sized equipment to meet production needs. Rightsized equipment is designed to meet the specific needs of a manufacturing cell or an individual 

process step, rather than the processing needs for an entire facility. For example, rather than relying 

on one large paint booth or parts cleaning tank station to service all painting and degreasing needs 

for a facility, Lean principles typically lead organizations to shift to right-sized paint and degreasing 

stations that are embedded in manufacturing cells. 

In conventional manufacturing, equipment often is over-sized to accommodate the maximum 

anticipated demand. Since purchasing a new large piece of equipment is often costly and time-consuming, engineers often design in additional “buffer capacity” to be sure that the equipment does 

not bottleneck production. Box 16 shows results from recent studies documenting equipment oversizing. 

Over-Sized Equipment (Box 16) 

✓ 	 Over-sizing building fan systems, on average, occurs by 60 percent 

✓ 	 Most chillers are oversized by 50–200 percent 

✓ 	 Potential energy savings from rightsizing, energy-efficient motors, and variable speed drives is 50–85 percent
 

Source: U.S. EPA and DOE, ENERGY STAR Program, “Partner Resources for HVAC contractors.” www.energystar.gov/index.
 

cfm?c=contractors.cont_prod_installcheck, accessed 13 June 2007.
 

Since right-sized equipment is geared toward a specific end use and production capacity, it often 

is much more energy efficient than conventional, large equipment. Large, “monument” equipment often runs well below capacity, significantly reducing energy efficiency per unit of production. 

For example, the natural gas or electricity needed to fire a large dryer oven is typically the same 

whether the line is being run at capacity or if only a few parts are being processed. 

28
 
 

 

 

 

 

 

Chapter 4: Energy Reduction Tools and Strategies 

Three Ways to Right Size Your Fan System (Box 17) 

✓	 Use smaller, energy-effi cient motors. Rightsizing a 75-horsepower (hp) 

standard efficiency motor to a 50-hp energy-efficient motor will reduce your 

motor energy consumption by about 33 percent 

✓	 Use larger pulleys. Replacing an existing belt-driven pulley with a larger one 

will reduce its speed, saving energy costs. Reducing a fan’s speed by 20 

percent reduces its energy consumption by 50 percent 

✓	 Use static pressure adjustment variable air volume (VAV) systems only. 

Reducing static pressure in your VAV system reduces the fan horsepower 

consumption. By gradually reducing the static pressure setpoint to a level 

low enough to keep occupants comfortable, you will reduce energy consumption 

Source: U.S. EPA and U.S. DOE ENERGY STAR Program, Building Upgrade Manual, December 14, 2004. www.energystar.gov/ia/ 

business/BUM.pdf, accessed 13 June 2007. 

C. Design Plant Layout to Improve Flow and Reduce Energy Use 

Lean thinking focuses on improving the flow of product through the production process. Facilities 

arrange equipment and workstations in a sequence that supports a smooth flow of materials and 

components through the process, with minimal transport or delay. The desired outcome is to have 

the product move through production in the smallest, quickest possible increment (one piece). 

Improving the flow of product and process inputs can significantly reduce the amount of energy 

required to support a production process. Box 18 provides an example of the significance of plant 

layout and flow in reducing energy use. 

Flow and Energy Use (Box 18) 

✓	 Dutch engineer Jan Schilham (Interface Nederland) redesigned a heat 

transfer pumping loop originally designed to use 70.8 kW of pumping 

power to use 5.3 kW—92 percent less—with lower capital cost and better 

performance. The new design cut the measured pumping power 12 times 

and only took a change in design mentality. Lessons learned include: 

✓	 Use big pipes and small pumps rather than small pipes and big pumps. 

Optimizing the whole system together will yield fat pipes and tiny pumps, 

leading to dramatically decreased operating costs. 

✓	 Lay out the pipes first, then the equipment. Installing the pipes before the 

equipment will decrease pipe friction and allow equipment to be optimally 

located to improve overall production flow. 

Source: Amory Lovins. Energy End Use Efficiency, September 2005, pp. 16-17. (Commissioned by InterAcademy Council, Amsterdam, www.interacademycouncil.net, as part of its 2005–06 study, “Transitions to Sustainable Energy Systems.”) 

29
 
 

Chapter 4: Energy Reduction Tools and Strategies
 

D. Encourage Energy Efficiency with Standard Work, Visual Controls, 

and Mistake-Proofi ng 

Standard Work and Energy Use 

Standard work is an agreed-upon set of work procedures that establish the best and most reliable 

method of performing a task or operation. The overall goals of standard work are to maximize 

performance while minimizing waste in each operation and workload. Standard work is the final 

stage of Lean implementation in that it helps sustain previous Lean improvements and serves as the 

foundation for future continuous improvement (kaizen) efforts. 

Your facility can maximize Lean and energy gains by incorporating energy reduction best practices 

into standard work (e.g., consider drawing from the Questions for Understanding Energy Use and 

the Energy-Reduction Checklists in Boxes 6 and 13 of this toolkit). Example uses of standard work 

include: 

• 	 Build energy reduction best practices into training materials, in-house regulations, and 

standard work for equipment operation and maintenance 

• 	 Include energy reduction tips in weekly team meetings and monthly facility newsletters 

• 	 Add energy reduction best practices into “shine” checklists used when implementing 5S (or 

5S+Safety)15 

Visual Controls 

Visual controls are used to reinforce standardized procedures and to display the status of an activity so every employee can see it and take appropriate action. Visual controls 

also standardize energy and equipment use best practices 

and can be adopted facility-wide along with other in-house 

standards. 

These easy-to-use cues can be as simple as the following 

techniques: 

• 	 Color-code pipes and other facility conveyances to 

help operators quickly identify and report key information (e.g., leaks) 

• Install a sign over on/off switches or power outlets to remind operators to turn off or unplug equipment that is not in use (for example, see figure 6) 

Example Visual Control 

(Figure 6) 

Unplug When Not

in Use 

15 5S is a Lean method involving five steps (Sort, Set in order, Shine, Standardize, and Sustain) to establish a clean, neat, and orderly 

workplace. Many companies add a sixth “S” for Safety. 

30
 
Chapter 4: Energy Reduction Tools and Strategies
 

Visual controls also provide a powerful way to track actual results against targets and goals, and 

encourage additional improvement. Figure 7 shows a dashboard representation of how energy use 

and cost at a facility compares to annual goals. 

Dashboard Visual Controls (Figure 7) 

Annual Goal: Annual Goal: 0.9 

Energy Use 

(KWh/$ Value Added) 

1.0 

0 

0.2 

0.4 

0.6 0.8 

1.0 

1.2 

1.6 

1.4 

Energy Cost 

(cent/$ Value Added) 

0 

0.8 

4.4 

1.6 

2.4 

3.2 

4.0 

4.8 

6.4 

5.6 

3.9 

Mistake-Proofi ng 

Mistake-proofi ng (also known by the Japanese term poka-yoke) refers to technology and procedures designed to prevent defects and equipment malfunction during manufacturing processes. 

Mistake-proofing is used by manufacturers to prevent and easily identify operational errors; it offers 

an unobtrusive approach to standardizing equipment use. 

One simple energy-efficient action is to automatically power down energy-consuming equipment 

when not in use. Process equipment and lighting do not always need to be on or energized. Mistakeproofing devices such as occupancy sensors and lock-out/tag-out de-energizing steps are a simple, 

low-cost means to power down equipment that is not in use. By mistake-proofing equipment, a 

facility can waste less energy, time, and resources, as well as prevent rework. 

To Consider 

• 	Which of the Lean techniques mentioned in this chapter—TPM, flow, rightsized equipment, standard work, visual controls, and/or mistake-proofing— 

does your organization use? 

• 	What ideas do you have for using Lean techniques to integrate smart energy habits into your organization’s work?
 

31
 

 

CHAPTER 5 

Conclusion 

Lean Windows of Opportunity for Energy Savings
 

While significant energy efficiency gains often ride the coattails of Lean implementation, some 

energy use and cost reduction opportunities may be left on the table. This toolkit provides numerous ideas for leveraging Lean events and methods to explicitly identify and eliminate even more 

energy waste. As discussed in Chapter 4, Lean methods can also be used to ensure that energy-saving 

practices become fully integrated into an organization’s culture and the way it does its work. The 

net result is right-sized energy use that minimizes costs and environmental impacts. 

It is important to remember that when implementing Lean, there are critical windows of opportunity for reducing energy use. When a process is being reconfigured as part of a Lean event, a window of opportunity arises for making additional process changes to improve energy effi ciency at 

a lower marginal cost. 

Failure to explicitly consider energy use during Lean events may miss several key types of opportunities. These opportunity areas include: 

• 	 Upgrade the energy efficiency of equipment. Efficiency upgrades for motors and drives 

for equipment, air compressors, lighting, and other energy consuming equipment often 

have rapid payback periods. 

• 	 Switch to a less-polluting fuel source. In some cases, there may be an opportunity to 

consider switching fuel sources used in a process. For example, it may be more efficient to 

switch from burning wood scrap to natural gas for generating process heat. 

• 	 Design new buildings to be smart energy users. Life-cycle energy costs for new and 

renovated buildings can be significantly reduced when energy conservation is incorporated into decisions at the design phase. See EPA’s Green Building website (www.epa.gov/ 

greenbuilding) for more information. 

• 	 Increase the fuel efficiency of your fl eet. For some businesses, vehicle fuel costs are a 

major portion of operating expenses. Consider vehicle fuel efficiency when making fleet 

purchase and lease decisions. See EPA’s SmartWay Transport Partnership website (www.epa. 

gov/otaq/smartway) to learn how to make your fleet more efficient. 

• 	 Design products to use less energy. If a Lean effort touches on product or service design, 

consider how the product or service affects customers’ energy use. This can open new opportunities for adding value. 

33
 
Chapter 5: Conclusion
 

Going Even Further with Clean Energy
 

Addressing the environmental impacts of energy use does not need to stop with Lean. Companies 

are increasingly taking additional steps to reduce and offset the environmental and climate impacts 

of their energy use. These steps can enhance employee and customer perceptions of a company’s 

environmental commitments and help reduce an organization’s greenhouse gas footprint. Here are 

a few ideas: 

• 	 Green Power. Many energy utilities provide the opportunity for customers to purchase 

a percentage of their electricity as “green power.” Utilities invest the proceeds from green 

power charges in the development of new renewable energy sources. See EPA’s Green Power 

Partnership website (www.epa.gov/greenpower) for more information on purchasing electricity from renewable energy sources. 

• 	 Carbon Offsets. Some organizations have committed to supplement their efforts to reduce 

energy consumptions by offsetting the carbon emitted to the atmosphere by the energy that 

they do use. While the development of markets for selling and verifying carbon offsets is in 

the early stages, a number of organizations have emerged to broker sales of carbon-offset 

sales. Funds generated from the purchase of carbon offsets are invested in energy-efficiency 

projects, renewable-energy projects, or other efforts designed to reduce greenhouse gas 

emissions. 

To Consider 

• 	Can you think of creative ways that your organization can reduce energy use 

and greenhouse gas emissions? 

• 	Do you have any major renovations, construction projects, or purchase 


decisions coming up in which energy savings opportunities could be 


considered?
 

• 	Are there things you could do to help your customers and/or suppliers 


reduce their energy use and greenhouse gas emissions?
 

The Lean and Energy Journey 

This toolkit represents the beginning of an exciting journey. As customer and societal expectations around energy efficiency, environmental performance, climate protection, and sustainability 

continue to increase, Lean initiatives offer compelling opportunities to improve both economic 

performance and energy efficiency. We hope that this toolkit spurs creative thinking and innovation 

within your organization and encourages you to explore these opportunities. 

We also hope to learn from your Lean and energy experiences and to refine the techniques presented here in future versions of this toolkit. We wish you success on your Lean and energy efficiency 

journey. 

34
 
Chapter 5: Conclusion
 

Your Thoughts on the Lean and Energy Toolkit
 

Now that you have finished this toolkit, reflect on what you read by answering 

these questions: 

• 	What strategies and tools in the toolkit seemed particularly interesting 

and useful? 

• 	What steps will you take next to improve Lean and energy management 

integration at your organization? 

• 	What Lean or other process improvement methods do you think might 

have good opportunities for improved Lean and energy performance? 

• 	What other information and tools would assist your organization to improve its Lean and energy efficiency efforts? 

Please contact EPA to share your experiences with Lean and energy improvements and/or to discuss partnership opportunities by using the form found 

at: www.epa.gov/lean/auxfiles/contact.htm 

35
 

Appendices 

Appendix A 

Energy Assessment Service Providers, 

Resources, and Tools 

This appendix describes resources for identifying public and private energy assessment service 

providers and provides information on several resources and tools for identifying energy savings opportunities at manufacturing facilities. 

Energy Assessment Service Providers 

U.S. DOE Industrial Assessment Centers (IACs) 

www1.eere.energy.gov/industry/bestpractices/iacs.html 

IACs, which are located at 26 universities across the United States, provide no-cost energy and waste 

assessments to eligible small and medium-sized manufacturers. Teams of engineering faculty and 

students from IACs conduct energy audits or industrial assessments of manufacturing facilities and 

recommend actions to improve productivity, reduce waste, and save energy. 

U.S. DOE Best Practices Plant-Wide Energy Assessments 

www1.eere.energy.gov/industry/bestpractices/plant_wide_assessments.html 

Mid-size and large manufacturers can apply for a cost-shared Plant-Wide Energy Assessment offered 

by U.S. DOE. The assessments are comprehensive and systematic examinations of energy use reduction opportunities at industrial facilities. All major aspects of energy consumption are addressed, 

including process operations and plant utility systems. Plants are selected through an annual competitive solicitation process, with a maximum award of $100,000. 

U.S. DOE Save Energy Now Energy Savings Assessments 

www1.eere.energy.gov/industry/saveenergynow/ 

Through the Save Energy Now program, the U.S. DOE offers Energy Savings Assessments to the 

nation’s most energy-intensive manufacturing facilities. The focus of these assessments is on immediate opportunities to save energy and money, primarily by focusing on energy-intensive systems 

such as process heating, steam, pumps, fans, and compressed air. 

37
 
 

 

 

 

Appendix A: Energy Assessment Service Providers, Resources, and Tools
 

ENERGY STAR Directory of Energy Service and Product Providers 

www.energystar.gov/index.cfm?fuseaction=SPP_DIRECTORY. 

The U.S. EPA and U.S. DOE ENERGY STAR Program offers a searchable on-line directory of private 

energy service and product providers. The directory includes energy management service companies, energy improvement contractors, and energy service companies, as well as other types of 

service providers and equipment manufacturers. 

Energy Assessment Resources and Tools 

Energy Efficiency Toolkit for Manufacturers: Eight Proven Ways to Reduce Your 

Costs 

www.fypower.org/pdf/manufacturer_toolkit.pdf 

The National Association of Manufacturers has developed this toolkit outlining energy conservation strategies, case studies, and resources for manufacturers seeking to reduce energy use and 

costs. The toolkit is based on the results of an energy-efficiency survey of over 400 manufacturing 

companies. 

ENERGY STAR Guidelines for Energy Management 

www.energystar.gov/index.cfm?c=guidelines.guidelines_index 

The ENERGY STAR website describes a seven-step process for effective energy management. The 

guidelines are based on the successful practices of ENERGY STAR partners for improving the energy, 

financial, and environmental performance of businesses. In addition to practical guidelines, the 

ENERGY STAR website offers several energy assessment tools and resources. 

IAC Self-Assessment Workbook for Small Manufacturers 

http://iac.rutgers.edu/database/technicaldocs/IAC_Manuals/selfassessment.pdf 

This workbook presents a step-by-step methodology for small manufacturers to identify opportunities to reduce energy use, improve operations, and reduce costs at their facilities. The workbook 

includes practical tips, checklists, and examples of common energy cost savings opportunities. 

Industrial Audit Guidebook Developed by the Bonneville Power Administration 

www.bpa.gov/Energy/N/projects/industrial/audit/index.cfm 

The Bonneville Power Administration’s Industrial Audit Guidebook provides practical instructions, 

tips, and guidance for performing walk-through energy audits of industrial facilities to identify 

opportunities to reduce electrical energy consumption. Organized as a checklist of questions, the 

guidebook is intended for technical and non-technical audiences to assist with the first step in an 

energy audit: touring a facility and quickly identifying energy savings opportunities. 

38
 
 

 

Appendix A: Energy Assessment Service Providers, Resources, and Tools
 

Green Suppliers Network Lean and Clean Assessments 

www.greensuppliers.gov 

The Green Suppliers Network (GSN) is a collaborative partnership between EPA and the National 

Institute of Standards and Technology Manufacturing Extension Partnership (NIST MEP) that 

works with large companies to provide low-cost “Lean and Clean” facility assessments to small and 

medium-sized businesses in several sectors. These assessments include detailed consideration of 

energy reduction opportunities. 

Quick Plant Energy Profiler and Other U.S. DOE Software Tools 

www1.eere.energy.gov/industry/bestpractices/software.html 

Available from the U.S. DOE, the Quick Plant Energy Profiler (Quick PEP) is an online software 

tool designed to help personnel at industrial plants understand how energy is being used at their 

plants and how to reduce energy use and costs. Other U.S. DOE software tools allow industrial plant 

personnel to identify and analyze energy efficiency opportunities associated with compressed air 

systems, building and process heating systems, and motors, as well as other applications. 

Resource Efficiency Management Resources from Washington State University 

www.energy.wsu.edu/pubs/default.cfm 

Washington State University’s Resource Efficiency Management Program has developed several 

workbooks, checklists, and other guidance for conducting energy audits. Other resources available 

on the website include fact sheets describing energy-efficiency opportunities for commercial and 

industrial users. 

39
 

Appendix B: Sector-Focused Energy Reduction Resources
 

Appendix B 

Sector-Focused Energy Reduction Resources 

This appendix describes energy conservation and efficiency resources that are tailored to particular 

industrial sectors. 

ENERGY STAR Industries in Focus 

www.energystar.gov/index.cfm?c=in_focus.bus_industries_focus 

ENERGY STAR’s Industries in Focus creates a momentum for energy performance improvements 

within individual manufacturing sectors. Focuses provide industry-specific energy management 

tools and resources, develop the corporate structure and systems to better manage energy, and reduce energy use within an industry. Participation is voluntary; however, most companies welcome 

the opportunity to network with peers. Generally, focuses enjoy the participation of most of the 

major companies within an industry. Participating sectors include: 

• Cement manufacturing • Petrochemical processing 

• Corn refining • Petroleum refining 

• Food processing • Pharmaceutical manufacturing 

• Glass manufacturing • Pulp and paper 

• Motor vehicle manufacturing 

Energy Trends in Selected Manufacturing Sectors: Opportunities 

and Challenges for Environmentally Preferable Energy Outcomes 

www.epa.gov/sectors/energy/index.html 

This EPA publication outlines energy trends, energy-efficiency opportunities, and energy challenges 

across selected manufacturing sectors. This report is an analytical document and does not convey 

any Agency decisions. The report’s findings and policy options are based on the available data used 

in this analysis. Sectors profiled in this report include: 

• Aluminum • Metal casting 

• Cement • Metal finishing 

• Chemical • Motor vehicles 

• Food • Motor vehicle parts 

• Forest products • Petroleum refining 

• Iron & steel • Shipbuilding 

41
 
Appendix B: Sector-Focused Energy Reduction Resources
 

U.S. Department of Energy, Industrial Technologies Program (ITP) 

www1.eere.energy.gov/industry/about/index.html 

ITP leads national efforts to improve industrial energy efficiency and environmental performance. 

ITP’s mission is to improve the energy intensity of the U.S. industrial sector through a coordinated 

program of research and development, validation, and dissemination of energy efficiency technologies and operating practices. ITP partners with industry and its many stakeholders to reduce our 

nation’s reliance on foreign energy sources, reduce environmental impacts, increase the use of 

renewable energy sources, improve competitiveness, and improve the quality of life for American 

workers, families, and communities. Sectors in the ITP program include: 

• Aluminum • Metal casting 

• Chemicals • Mining 

• Forest products • Petroleum refining 

• Glass • Steel 

42
 
Appendix C: Energy Conversion Resources and Rules of Thumb for Estimating Energy Cost Savings 

Appendix C 

Energy Conversion Resources and Rules of 


Thumb for Estimating Energy Cost Savings
 

Energy Metrics Conversion Table 

Energy Unit Energy Equivalent 

1 kilowatt-hour (kWh) 3,412 British Thermal Unit (Btu) 

1 Therm 100,000 Btu 

1 cubic foot of Natural Gas 1,000 Btu* 

1 gallon #2 Oil 140,000 Btu* 

1 gallon #4 Oil 144,000 Btu* 

1 gallon #6 Oil 152,000 Btu* 

1 gallon propane 91,600 Btu* 

1 ton coal 28,000,000 Btu* 

1 boiler horsepower (hp) 9.81 kW 

1 horsepower 746 W 

1 ton refrigeration 12,000 Btu/hr 

*Varies slightly with supplier 

Rules Of Thumb for Estimating Energy Cost Savings16 

The following rules of thumb are a useful resource for understanding the potential cost savings 

of energy conservation and waste minimization efforts. 

Cost Savings are Based on the Following Assumptions: 

• Electricity: $0.05 per kWh 

• Natural Gas: $0.350 per one hundred cubic feet (ccf ) 

• Man Hours: 2,000 hours per year per shift 

16 Adapted from: Office of Industrial Productivity & Energy Assessment. Useful Rules of Thumb for Energy Conservation and Waste 

Minimization. Rutgers, the State University of New Jersey. July 9, 1996. 

43
 
Appendix C: Energy Conversion Resources and Rules of Thumb for Estimating Energy Cost Savings 

1. High pressure steam leaks (125 pounds per square inch gauge [psig]) = $150 to $500 per 

leak per shift per year. 

2. Low pressure steam leaks (15 psig) = $30 to $110 per leak per shift per year. 

3. Compressed air leaks (100 psig) = $30 to $90 per leak per shift per year. 

4. Submetering an evaporative cooling tower can result in sewage treatment savings (assume 1 

percent water loss to evaporation), including: 

• 	 $9 per ton per shift per year based on size of tower in tons. 

• 	 $3 per gallons per minute (gpm) per shift per year based on gpm of water through 

tower. 

5. Typical motor operating cost = $62 per horsepower (hp) per shift per year. 

6. High pressure compressed air system reduction (assume 100 psig system): 

• 	 10 pounds per square inch (psi) compressor discharge reduction = 5 percent reduction 

in energy consumption. 

7. Cost of heat lost through hot, uninsulated pipes: 

• 	 25 psig steam: $375 per 100 feet per shift per year. 

• 	 50 psig steam: $430 per 100 feet per shift per year. 

• 	 75 psig steam: $480 per 100 feet per shift per year. 

• 	 100 psig steam: $515 per 100 feet per shift per year. 

8. Installing insulation can reduce 90 percent heat loss on a hot, uninsulated surface. 

9. Average heating and cooling costs: 

Comfort Cooling 

Costs (per ft2/year) 

Comfort Heating 

Costs (per ft2/year) 

Michigan $0.12 $0.26 

Tennessee $0.30 $0.35 

Texas $0.52 $0.24 

10. Combustion efficiency of a typical boiler or furnace is 80 percent. 

11. Upgrading to an energy-efficient motor can result in savings of about 5 percent over the operating costs of a standard motor. A typical standard motor has an efficiency of 90 percent. 

44
Appendix C: Energy Conversion Resources and Rules of Thumb for Estimating Energy Cost Savings 

12. Benefit of fuel switching: 

• 	 Switching from electric heat to natural gas or #2 fuel oil can reduce heating costs by 78 

percent. 

13. Cost savings for demand reduction (or load shifting): 

• 	 Move operating shift to off-peak times: $75 per hp per year. 

• 	 Move “other electric equipment” to off-peak: $120 per kW per year. 

45
 
United States Environmental Protection Agency
 

www.epa.gov/lean
 

Revised-October 2007
 

EPA-100-K-07-003