Achieving Process Excellence 

Through Energy Efficiency 

and Greenhouse Gas Reduction 

LEAN, ENERGY & CLIMATE TOOLKIT 

www.epa.gov/lean 
How to Use This Toolkit 

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

follow important information in each chapter. 

Identifies an important point to remember 

Defines an important term or concept 

Presents a technique or resource that helps capture, 

communicate, or apply new knowledge 

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, Energy & Climate 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), The Pew Center on Global Climate Change, and the U.S. Department of Energy. 

EPA’s Office of Policy and the Office of Chemical Safety and Pollution Prevention 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 

Michelle Gaither, Technical Research Coordinator, Pacific Northwest Pollution Prevention 

Resource Center 

Gretchen Hancock, Project Manager, GE Corporate Environmental Programs 

Ernie Kulik, Corporate EHS, Eaton Corporation 

Scott Lesnet, Member EHS Manager, HNI Corporation 

Mike Molnar, Sustainability Manager, Cummins, Inc. 

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 

Ken Somers, Senior Expert, McKinsey Corporation 

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

Company 

Carroll Thomas, Partnership Catalyst, NIST MEP 
Walt Tunnessen, National Program Manager, ENERGY STAR 

Sarah Wendel, The Monterey Institute of International Studies 

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, Energy & Climate Toolkit 

Table of Contents
�

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

Preface...................................................................................................................................................iv
�

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

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

Cost Savings.....................................................................................................................................................2
�

Greenhouse Gas and Environmental Risk Management...............................................................................2
�

Competitive Advantage....................................................................................................................................3
�

Chapter 2 Integrating Lean, Energy Efficiency and Greenhouse Gas Management.....................................5
�

Energy In-Line Management..........................................................................................................................5
�

Guidelines for Energy Management...............................................................................................................5
�

Lean Windows of Opportunity for Energy Savings........................................................................................7
�

Chapter 3 Overview of Energy Use and Lean .................................................................................................9
�

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

Understand the Costs of Energy Use.............................................................................................................10
�

Energy Efficiency Benefits of Lean Implementation....................................................................................11
�

Chapter 4 Energy and Greenhouse Gas Assessment Strategies...................................................................13
�

A. Observe Energy Use on the Shop Floor ....................................................................................................13
�

B. Energy Audits and Measuring Energy Use...............................................................................................15
�

C. Greenhouse Gas Inventories.....................................................................................................................18
�

D. Examine Energy Use with Value Stream Mapping ..................................................................................19
�

E. Use Six Sigma to Find and Eliminate Energy Waste and Variation.........................................................23
�

Chapter 5 Energy and Greenhouse Gas Emission Reduction Tools and Strategies....................................25
�

A. Conduct Energy Kaizen Events.................................................................................................................25
�

B. Use Total Productive Maintenance to Reduce Equipment Energy Waste................................................27
�

C. Replace Over-Sized and Inefficient Equipment with Right-Sized Equipment........................................30
�

D. Design Plant Layout to Improve Flow and Reduce Energy Use..............................................................31
�

E. Encourage Energy Efficiency with Standard Work, Visual Controls, Employee Engagement
�

and Mistake-Proofing...............................................................................................................................32
�

F. Reduce Greenhouse Gas Emissions through Transportation Efficiencies...............................................36
�

Chapter 6 Conclusion ...................................................................................................................................41
�

Going Further with Clean Energy.................................................................................................................41
�

The Lean and Energy Journey......................................................................................................................42
�

Appendices ...........................................................................................................................................43
�

Appendix A: Energy and Greenhouse Gas Management Service Providers, Resources, and Tools ............43
�

Appendix B: Sector-Focused Energy Reduction and Greenhouse Gas Management Resources.................46
�

Appendix C: Energy Conversion Resources and Rules of Thumb for Estimating Energy Cost Savings.....48
�
Lean, Energy & Climate Toolkit 

 

Boxes 

Example Results from Lean and Energy Improvement Efforts (Box 1) .......................................................i
�

Benefits of Coordinating Lean, Energy and Greenhouse Gas Management (Box 2)....................................1
�

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

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

Why Be Strategic About Energy Management (Box 5)..................................................................................6
�

Energy End Uses: What Do We Use Energy To Do? (Box 6).........................................................................10
�

Questions for Understanding Energy Use (Box 7).......................................................................................14
�

Energy Treasure Hunts at General Electric (Box 8).....................................................................................15
�

Energy Savings (Box 9).................................................................................................................................16
�

Common Energy Units (Box 10) ..................................................................................................................17
�

Example Results from Value and Energy Stream Mapping Projects (Box 11)...........................................20
�

Six Sigma and Energy Savings at Baxter International (Box 12)...............................................................23
�

What Is An Energy Kaizen Event (Box 13)...................................................................................................26
�

What Is TPM? (Box 14).................................................................................................................................27
�

Strategies for Integrating Energy Reduction Efforts Into TPM (Box 15)....................................................28
�

Energy Reduction Checklist for Combustion, Steam Generation,
�

and Process Heating Systems (Box 16)........................................................................................................29
�

Over-Sized Equipment (Box 17)...................................................................................................................30
�

Three Ways to Right-Size Your Fan System (Box 18) ..................................................................................31
�

Flow and Energy Use (Box 19) .....................................................................................................................32
�

UPS: Fuel Efficiency Through Fleet Optimization (Box 20)........................................................................38
�

Ways to Reduce Your Employees’ Commutes (Box 21) ...............................................................................39
�

Figures 

Figure 1: ENERGY STAR Guidelines for Energy Management.......................................................................6
�

Figure 2: Sources of Energy Used for U.S. Industry and Manufacturing, 2005 ............................................9
�

Figure 3: Example Value Stream Map ..........................................................................................................21
�

Figure 4: Example Process Data Box with Energy Use Data........................................................................22
�

Figure 5: Example Visual Control.................................................................................................................34
�

Figure 6: Dashboard Visual Controls............................................................................................................35
�

Figure 7: Materials Used by Cummins in Employee Engagement Energy-Reduction Efforts....................35
�

Figure 8: Fuel Used for Transportation ........................................................................................................37
�

Tables 

Table 1: Energy Use Hidden in Lean Wastes.................................................................................................12
�

Table 2: Top Ten Energy Reduction Recommendations..............................................................................16
�

Table 3: Example Actions Identified at a Kaizen Event................................................................................26
�

Table 4: Example Energy Use Checklist........................................................................................................33
�
i

Executive Summary 

 

 

 

 

 

Executive Summary
�

The U.S. Environmental Protection Agency (EPA) developed this Lean, Energy & Climate Toolkit to 

assist organizations in reducing greenhouse gas emissions and energy use while improving performance through Lean manufacturing activities. Drawing from the experiences and best practices of 

industry leaders, Lean and environmental service providers, and government partners, this toolkit 

provides practical strategies and techniques for improving energy and environmental performance 

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

There are many reasons to integrate Lean, energy efficiency and greenhouse gas reduction efforts 

including: 

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

though costs may be hidden in overhead or facility accounts. 

2.	�Greenhouse Gas Management 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 go hand-in-hand with 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 other manufacturers, both large and small, have successfully used Lean methods to reduce 

energy use, risks, and costs (see Box 1). 

Example Results From Lean and Energy Improvement Efforts (Box 1) 

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

3 General Electric reduced greenhouse gas emissions by 700,000 metric 

tons and saved $111 million in operating costs at facilities worldwide. 

3 Toyota Motor Manufacturing North America reduced facility energy use 

and greenhouse gas emissions by 19 percent per vehicle since 2000. 

3 Cummins, Inc. saved $1.2 million using visual cues to encourage employees to unplug during their holiday shutdowns. 

Lean manufacturing and its relationship to greenhouse gas management is also addressed in this 

toolkit. Manufacturing companies who commit to reducing energy use are in turn committing to 
ii

Executive Summary 

reducing their greenhouse gas emissions, therefore reducing their impact on the environment and 

mitigating climate change. This toolkit describes a range of strategies for identifying Lean and 

energy improvement opportunities and reducing energy use with Lean methods. With the use of this 

toolkit, manufacturing companies can discover ways to lower their energy costs, improve their energy efficiency, and reduce their impact on the environment. 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. 

Integrating Lean, Energy and Greenhouse Gas Management 

To be most effective, Lean and energy efforts should be proactive, strategic, and systematic. Adopting 

an energy management system and building an energy program 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. Ideas discussed include: 

•	� Energy In-Line Management 

•	� Guidelines for Energy Management 

• Lean Windows of Opportunity for Energy Savings 

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. 

Assessment Strategies 

Lean, energy, and greenhouse gas assessment strategies involve observing shop-floor activities to 

identify signs of energy waste and greenhouse gas emissions, 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 multi-day plant-wide assessment of energy savings opportunities using a cross-functional team of employees. 

•	� Greenhouse Gas Inventories: Create a greenhouse gas inventory to help your company 

understand your emissions reduction opportunities.. 

•	� 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 greenhouse gas emissions and energy wastes and variation. 
iii

Executive Summary 

Emissions Reduction Strategies 

Many energy efficiency and greenhouse gas reduction 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 and greenhouse gases through Lean activities such as the following: 

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

reducing wastes through rapid process improvement events. 

•	� 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: Identify and 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, Employee Engagement and Mistake-Proofing: 

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. 

•	� Transportation Efficiencies: Look at your company’s transportation fleet and mobile 

equipment to see if there are opportunities to improve routes, reduce idling, minimize the 

number of trips, and improve overall efficiency of the fleet. 

Going Further with Lean and Energy 

Companies are increasingly taking additional steps to reduce and offset the environmental and 

climate impacts of their energy use. These activities look beyond standard operational practices. A 

few ideas for going further include: 

•	� Purchasing Green Power: Many utilities offer customers the opportunity to purchase 

power that is generated from renewable sources or “green power.” 

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

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

they do use. 
iv

Preface 

 

 

 

Preface
�

Purpose of This Toolkit
�

This Lean, Energy & Climate Toolkit offers Lean implementers practical strategies and techniques for enhancing Lean results—waste elimination, quality enhancement, and delivery of 

value to customers—while improving energy efficiency and reducing energy use, greenhouse gas 

emissions, 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). 

This toolkit provides strategies and information that can be used throughout your Lean, Energy and 

Greenhouse Gas Management journey. Chapters 1-3 help you understand the relationship of Lean 

to energy use, the benefits of systematically reducing energy use through Lean and ways to integrate 

energy efficiency and greenhouse gas management efforts into your organization’s business strategy 

and management practices. Chapters 4-6 describe how to identify and implement energy savings 

opportunities in the context of Lean. 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. 

Key Questions Addressed by This Toolkit 

Lean focuses on identifying and eliminating waste. Environmental improvement and energy 

reduction efforts that distract from classic Lean efforts 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 traditional Lean wastes and improvement 

opportunities. To accomplish this, the toolkit aims to answer the following questions: 

What is the relationship between Lean and energy use and climate change? 

Energy savings and greenhouse gas reductions are often obtained during traditional Lean events, 

but by explicitly focusing on energy use you can get substantially greater energy improvements. By 

eliminating manufacturing wastes, such as unnecessary processing and transportation, businesses 

reduce the energy needed to power equipment, lighting, heating, and cooling. Chapter 1 describes 

benefits of combining Lean, energy improvement, and greenhouse gas reduction efforts. Chapters 2 
v

Preface 

 

and 3 explore the relationship between Lean and energy use, and provide background information 

on energy use and costs. 

How do you know how much energy is used in a facility and where it is 

being used? 

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

Chapter 4 discusses techniques for assessing energy use and greenhouse gas emissions reductions, 

identifying opportunities to save energy in the context of Lean. Methods include energy treasure 

hunts, greenhouse gas inventories, value stream mapping, and Six Sigma. 

How can you reduce energy use and greenhouse gas emissions with 

Lean methods? 

Chapter 5 examines specific opportunities for using Lean to improve energy efficiency and reduce 

greenhouse gas emissions, including methods such as kaizen events, total productive maintenance, 

right-sized equipment, plant layout, standard work, transportation efficiency and visual controls. 
Lean, Energy & Climate Toolkit 
1

 

 

 

 

CHAPTER 1
�

Introduction
�

Coordinating Lean, Energy and Greenhouse Gas Management is a powerful way to reduce costs. 

This chapter includes: 

• Benefits of Coordinating Lean Energy and Greenhouse Gas Management 

• Cost Savings 

• Greenhouse Gas and Environmental Risk Management 

• Competitive Advantage 

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 “waste,” Lean implementers can significantly 

reduce costs and enhance competitiveness, while also achieving environmental performance goals. 

Benefits of Coordinating Lean, Energy & Greenhouse Gas Management 

(Box 2) 

3 Reduce operating and maintenance costs 

3 Reduce vulnerability to energy and fuel price increases 

3 Meet customer expectations 

3 Enhance productivity 

3 Improve safety 

3 Improve employee morale and commitment 

3 Improve environmental quality 

3 Reduce greenhouse gas emissions 

3 Remain below air permitting emission thresholds 

3 Increase overall profit 

Many organizations can find it difficult to get senior managers to focus attention on energy use, 

since it is often viewed as a necessary cost of doing business and is accounted for as overhead. By 

linking energy management and greenhouse gas reduction efforts to Lean activities, these activities 

can be tied more directly to process improvement efforts that are regarded by senior managers as 

being vital to business success. 
2

Chapter 1: Introduction 

 

 

 

 

 

 

 

 

 

 

Cost Savings 

Energy costs can have a significant impact on the financial performance of businesses. A 2009 

survey of corporations conducted by Siemens found that energy cost savings are the top driver for 

corporate sustainability efforts and seventy-two percent of all respondents reported that lowered 

operating costs were the reason their firms participated in sustainability initiatives in general.1 

Lean and Energy Use Reduction: 

Company Cost Savings Experience (Box 3)
�

3 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. 

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

facility due to fuel use reductions realized through Lean implementation. 

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

Lean implementation effort. 

3 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. 

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

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

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

fixed utility costs (including energy) by about 90 percent. 

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. 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. 

Greenhouse Gas and Environmental Risk Management 

The environmental and climate impacts of energy use are 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). Emissions also occur when fuel is combusted during transportation of goods to and from facilities and within. Lean methodologies can help companies with an 

1 Siemens (2009). Greening of Corporate America: The Pathway to Sustainability from Strategy to Action. McGraw-Hill Construction. 
3

Chapter 1: Introduction 

 

 

 

 

 

 

effective way to identify opportunities to improve efficiency and reduce greenhouse gas emissions. 

This reduces business risks associated with greenhouse gas emissions and contributes to reduction 

targets. 

Carbon dioxide is not the only by-product of energy use. On-site 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. 

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. 

When asked by the Economist how the recent economic downturn would affect companies’ approaches to carbon reduction, 47 percent of respondents stated they planned to improve their focus 

as a cost saving measure.2 

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 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’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. 

2

 Economist Intelligence Unit (2009), Countdown to Copenhagen: Government, Business, and the Battle against Climate Change 

Survey published by The Economist Magazine. 
4

Chapter 1: Introduction 

 

 

 

 

 

Lean and Energy at Toyota (Box 4) 

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

is also a leader in energy and environmental performance. 

3	 Since 2000, Toyota Motor Manufacturing North America reduced the average facility energy consumption per vehicle produced by 19 percent, and 

collectively reduced greenhouse gas emissions by almost 150,000 tons. 

3	 Toyota’s continuous improvement of energy performance earned the company the ENERGY STAR Sustained Excellence in 2010, its sixth consecutive 

ENERGY STAR award. 

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

achieve these results (Chapter 4 has more information on these methods). 

Source: Toyota. 2010 North America Environmental Report. Accessed online at 

http://www.toyota.com/about/environmentreport2010/ 
5

 

 

 

 

 

CHAPTER 2
�

Integrating Lean, Energy Efficiency and
�

Greenhouse Gas Management
�

Lean, energy efficiency and greenhouse gas management efforts should all be part of the overall 

organizational strategy, with the ultimate goal being a culture that ensures efficiency. The sections 

in this chapter include: 

• Energy In-Line Management 

• Guidelines for Energy Management 

• Lean Windows of Opportunity for Energy Savings 

Understanding how your energy efficiency efforts and greenhouse gas reduction efforts relate to the 

rest of your company’s operational strategies and goals is the first step in achieving your efficiency 

goals. 

Energy In-Line Management 

Reducing energy and saving money are hand-in-hand principles best understood from a bottomup approach to energy management. Energy efficiency within a manufacturing company can be 

approached and addressed while still maintaining product quality and production line reliability. 

If energy efficiency is managed in a narrow “top-down” approach, energy efficiency projects are 

sometimes examined on a case-by-case basis without understanding its effects on total productivity 

and thus may not promote innovative “shopfloor” energy-saving ideas. 

While corporate support for energy efficiency in lean manufacturing is critical to the success of the 

energy-saving techniques, building a strong organizational structure to promote employee accountability and systematizing the program is key. Establish clear goals for energy efficiency, effectively 

communicate those goals throughout the organizational structure, and track your progress within 

the company to achieve the best success. 

It is the individual responsible for consumption or waste who will be the most innovative. For 

example, by having a line manager take the lead on the energy efficiency goals, responsibility for 

improvement is in the hands of the person who owns the consumption. The sustainability manager, who is typically responsible for these activities, cannot obtain significant energy improvements 

without the help of employees working on the shop floor who best know the equipment and operating procedures. 

Guidelines for Energy Management 

Pro-actively managing your organization’s energy use is the first step toward efficiency improvements. Energy management is a systematic framework for understanding and identifying energyrelated improvement opportunities similar in many ways to the Lean tools that you already use. 
 

 

 

 

 

 

 

 

 

Chapter 2: Integrating Lean, Energy and Greenhouse Gas Management
�

Strategically and systematically integrating energy and Lean improvement efforts will enhance 

their effectiveness and the value they bring to your company. Energy management systems can 

be tailored to suit your facility’s needs, business opportunities, market risks, and specific goals and 

targets. 

Figure 1: ENERGY STAR Guidelines for EPA’s ENERGY STAR program’s Guidelines 

Energy Management	� for Energy Management provide an organizational framework for establishing management structures, procedures, and processes 

that help establish an organizational culture 

that supports energy efficiency and Lean 

approaches. These guidelines have been 

implemented with great success by many U.S. 

Companies.3 

Make Commitment

Assess Performance

& Set Goals

Create

Action Plan

Re­Assess

Evaluate

Progress

Recognize Implement

Achievements Action Plan

The ENERGY STAR program has a variety of 

resources that can help establish an energy 

management program. For additional information please visit: http://www.energystar.gov. 

These guidelines are just one way of managing your organization’s energy use. There are 

numerous practical ways to consider energy 

waste and improvement opportunities during 

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. 

Why Be Strategic About Energy Management? (Box 5) 

3 Find new opportunities to reduce wastes, energy use, and costs 

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

energy prices, and potential future climate change regulations 

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

performance 

3 Ensure that energy efficiency efforts support other organizational objectives and improvement processes, such as Lean and Six Sigma 

3 GBN Global Business Network, Energy Strategy for the Road Ahead (2007) 

6
 
7

Chapter 2: Integrating Lean, Energy and Greenhouse Gas Management 

 

 

 

 

	 	 	 	 	 	

	 	 	 	 	

	 	 	 	 	 	 	

	 	 	 	 	 	

	 	 	 	 	

 

 

Lean Windows of Opportunity for Energy Savings 

Another reason to coordinate your organizational strategies is to ensure that you are looking for 

all the improvement opportunities. While significant energy efficiency gains go hand-in-hand with 

Lean implementation, some energy use and cost reduction opportunities may be left on the table. 

This chapter focused primarily on energy efficiency, greenhouse gas management and ensuring 

that those activities are coordinated with your Lean efforts. 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 efficiency 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 (retrofitting). 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 fleet. 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. 

These are just some of the more common opportunities that may be discovered during Lean, energy 

and greenhouse gas management events. We will discuss them in greater detail in later chapters. 
8

Chapter 2: Integrating Lean, Energy and Greenhouse Gas Management 

 

 

 

 

To Consider
�

3 How well coordinated are Lean activities with energy-efficiency and 

greenhouse gas management efforts in your organization? 

3 Who makes decisions involving energy use and power sources at your 

facility or company? 

3 How are energy costs allocated in your company? Are costs billed to 

overhead accounts or are they assigned to individual departments or 

value streams? 

3 How could your company benefit from improved Lean and energy 

management? 
9

 

 

CHAPTER 3
�

Overview of Energy Use and Lean
�

Before your company can begin to reduce its energy use and greenhouse gas emissions, you need to 

understand where your energy comes from. This chapter provides some basic background information on energy use including: 

• Energy Sources and End Uses 

• Understanding the Costs of Energy Use 

• Energy Efficiency Benefits of Lean 

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. It is also important to note that different fuel sources 

can have dramatically different greenhouse gas emissions. Figure 2 lists major energy sources used 

by the industry and manufacturing sectors in the U.S. economy. 

Figure 2: Sources of Energy Used for U.S. Industry and Manufacturing, 2005 4 

Natural Gas

36% 33%

17% 7% 4% 2% 1%

Other Sources Electricity Coal Coke & Fuel Oil LPG

Breeze (propane)

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

tells part of the story. Understanding the energy end uses—how the energy is actually being used 

within the facility—reveals more useful information when identifying opportunities for improving 

efficiency and reducing costs. Box 6 lists several of the common end uses for energy in manufacturing. In an office setting, end-uses primarily include heating, ventilating and air conditioning 

(HVAC), lighting, and operation of appliances and computers. 

4 U.S. Energy Information Administration, Annual Energy Review 2005, Washington, DC, July 2006. www.eia.doe.gov. 
10

Chapter 3: Overview of Energy Use and Lean 

 

 

 

 

 

 

 

 

 

 

 

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

by each process 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 4 discusses some strategies and 

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

Energy End Uses: What Do We Use Energy To Do? (Box 6) 

3 Heating, ventilating and air conditioning (HVAC) 

3 Lighting 

3 Process equipment operation 

3 Process heating and cooling 

3 Transportation 

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 study by the National 

Association of Manufacturers5

. Consider targeting your facility’s energy efficiency efforts on end 

uses that are likely to account for a significant portion of your facility’s energy use. Chapters 

4- 5 describe specific strategies identifying and reducing the energy used by these and other types of 

processes. 

Understand The Cost 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. 

One of the primary 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 

5

 National Association of Manufactures, Efficiency and Innovation in U.S. Manufacturing Energy Use, Washington DC. 2005. 
11

Chapter 3: Overview of Energy Use and Lean 

 

 

 

 

 

 

 

 

based on the time of year (e.g., winter or summer season) and/or the time of day (peak or offpeak 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 MMBtu, or, thousands of cubic feet- Mcf) 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 provided in Appendix C. ENERGY STAR also offers a free Energy Tracking Tool that helps organizations track all fuels, track progress towards reduction goals and generate reports. 

Energy Efficiency Benefits of Lean 

Implementation 

Significant energy savings are typically related to a manufacturing company’s involvement 

in Lean activities—even without explicit consideration of energy use. The greatest benefits for 

lean implementation can be understood by thinking about energy in the context of Lean’s “deadly 

wastes:” 

1. Overproduction	� 5. Defects 

2. Inventory 6. Over processing 

3. Transportation	� 7. Waiting 

4. Motion 

Energy Use Reductions as an Indirect Result of Lean Activities 

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

Toyota Production System. This does not mean that these wastes are unrelated to Lean. 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 1 

lists energy impacts associated with wastes targeted by Lean methods. 
 

 

 

Chapter 3: Overview of Energy Use and Lean
�

Table 1: 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 reprocessing, as 

well as heating, cooling, and lighting 

Over Processing • 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 

Despite these relationships between Lean 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 and fuel 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 energyefficiency improvement efforts? 

12
 
13

 

 

 

 

CHAPTER 4
�

Energy and Greenhouse Gas Assessment Strategies
�

This chapter describes strategies and techniques for understanding how energy is used at your facility and identifying opportunities to reduce energy use, greenhouse gas emissions and costs. This 

chapter discusses the following strategies: 

1. Observe Energy Use on the Shop Floor 

2. Energy Audits and Measuring Energy Use 

3. Greenhouse Gas Inventories 

4. Examine Energy Use with Value Stream Mapping 

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

A. Observe Energy Use on the Shop Floor 

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 7), to learn more about potential opportunities to reduce energy 

use. These are just some of the potential energy opportunities; see Appendix A for additional assessment tools and resources. 
14

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Questions for Understanding Energy Use (Box 7) 

Motors and Machines 

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

•	 3 Are energy efficient motors, pumps, and equipment used? 

•	 3 Are motors, pumps, and equipment sized according to their loads? 

Do motor systems use variable speed drive controls? 

Compressed Air 

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

air system? 

•	 3 Do compressed air systems use the minimum pressure needed to 

operate equipment? 

Lighting 

•	 3 Is lighting focused where workers need it? 

•	 3 Is lighting controlled by motion sensors in warehouses, storage areas, and other areas that are intermittently used? 

•	 3 Is energy-efficient lighting used? 

Process Heating 

•	 3 Are oven and process heating temperatures maintained at higher 

levels than necessary? 

Facility Heating and Cooling 

•	 3 Are work areas heated or cooled more than necessary? 

•	 3 Do employees have control over heating and cooling in their work 

areas? 

•	 3 Are exterior windows or doors opened or closed 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 8). 

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. 
15

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

 

 

Energy Treasure Hunts at General Electric (Box 8) 

With mentoring assistance from Toyota, General Electric (GE) launched an 

integrated Lean and energy initiative that has identified upwards of $110 

million in energy savings through energy treasure hunts. GE’s corporate 

commitment to energy use and greenhouse gas reductions has helped 

drive this effort. As of March 2009, GE: 

•	 3 Conducted over 200 energy treasure hunts at GE facilities worldwide, 

and trained over 3,500 employees on how to conduct treasure hunts 

•	 3 Used energy treasure hunts to identify 5,000 related kaizen projects, 

most of which are funded and in various stages of implementation 

•	 3 Through those project have identified opportunities to eliminate 

700,000 metric tons of greenhouse gas emissions and $111 million 

operational cost. 

Source: Gretchen Hancock. (2009, May 13). How GE’s ‘Treasure Hunts’ Discovered More Than $110M in Energy 

Savings. Retrieved from http://www.greenbiz.com/blog/2009/05/13/how-ges-treasure-hunts-discovered-more110m-energy-savings . 

B. Energy Audits and Measuring Energy Use 

While a walk-through is an excellent way to identify and fix energy wastes that are clearly visible, 

you may still want to examine energy use more closely. Two strategies for learning more include: 

1.	� Conducting an energy audit to understand how energy is used—and possibly 

wasted—across your facility. 

2.	� Measuring the energy use of individual production and support processes. 

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 saving opportunities. Table 4 below provides examples of the top ten reduction recommendations based on data 

collected by the U.S. Department of Energy’s Industrial Technologies Program. 
- -

 

 

 

 

 

 

 

 

Chapter 4: Energy and Greenhouse Gas Assessment Strategies
�

Table 2: Top Ten Energy Reduction Recommendations 6 

# Description Times Average 

Cost 

Average 

Savings 

Pay 

back 

Implemen 

tation Rate 

1 Utilize higher efficiency lamps

and/or ballasts 10,532 $11,012 $5,592 2.9 56.71% 

2 Eliminate leaks in inert gas and 

compressed air lines/valves 

6,609 $1,317 $5,638 0.4 81.81% 

3 Use most efficient type of electric 

motors 

4,978 $10,733 $4,623 4.1 64.99% 

4 Install compressor air intakes in 

coolest locations 

4,625 $776 $1,755 0.9 48.56% 

5 Utilize energy-efficient belts and 

other improved mechanisms 

3,825 $2,339 $3,128 0.8 56.03% 

6 Reduce the pressure of

compressed air to the minimum

required 

3,448 $1,502 $3,550 3.6 49.36% 

7 Insulate bare equipment 3,142 $3,610 $6,279 1.2 47.96 

8 Install occupancy sensors 3,056 $2,082 $2,058 1.3 34.33% 

9 Use more efficient light source 3,036 $8,807 $4,984 1.9 52.82% 

10 Analyze flue gas for proper air/fuel

ratio 

2,160 $2,308 $8,011 0.6 68.70% 

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

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

assessments. 

Energy Savings (Box 9) 

3	 The E3 (Environment, Energy, and Economy) framework is a coordinated federal and local technical assistance initiative to help manufacturers adapt 

and thrive in a new business era focused on sustainability. 

3	 An E3 pilot project in San Antonio, TX, resulted in a local detention equipment manufacturer realizing $85,000 in potential energy savings, reduced 

annual electric consumption of 159,000 kwh, reduced monthly electric 

demand of 48 kW, and reduced annual natural gas usage of 36,000 CCF. 

3	 In Columbus, Ohio, six companies participated in an E3 pilot that identified 

energy savings of $1.7 million, environmental savings of $2.6 million, over 

250,000 pounds of water pollutants avoided, and solid waste reductions of 

24,000 pounds. 

3	 See http://www.epa.gov/greensuppliers/e3.html for more information 

6 Table developed using U.S. Department of Energy’s Industrial Technologies Program, ITP-IAC database. Accessed online Oct. 2010 

16
 
17

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

 

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) 

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, install a flow meter to track natural gas inputs to ovens that provide process 

heat, or install electric meters in a particular process area to monitor electricity use. 

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

•	� Estimating: Another techCommon Energy Units (Box 10) nique is to estimate energy 

use based on information Energy Units	� Energy Equivalent 

provided by equipment 1 kilowatt-hour	� 3,412 Btu

manufacturers. Calculate 1 Therm 100,000 Btu 

energy use for specific 1 cubic foot natural gas 1,000 Btu 

equipment or process ac- 1 horsepower 746 Watts 

tivities using equipment 

energy specifications 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 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? 
18

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

 

 

C. Greenhouse Gas Inventories 

In addition to energy use, your organization may also want to look at your overall impact on global 

climate change. Corporate greenhouse gas inventories help your company identify where emission 

reduction opportunities exist. A greenhouse gas inventory is simply an accounting of the amount of 

greenhouse gas emissions emitted to or removed from the atmosphere over a given period of time. 

Corporate greenhouse gas inventories focus specifically on the emissions of a company. 

It is important to note that depending on the quantity of your greenhouse gas emissions you may 

be required to report your emissions to EPA. In October of 2009, EPA passed a rule requiring the 

mandatory reporting of greenhouse gases from large emissions sources in the United States.7 In 

general, the reporting threshold is 25,000 metric tons or more of carbon dioxide equivalent per year. 

Most small business will fall below this threshold, and therefore not be required to report. For more 

information on this rule, and to better understand how your company may be affected please visit: 

http://www.epa.gov/climatechange/emissions/ghgrulemaking.html. 

Greenhouse gases are released into the atmosphere and trap heat, slowly warming the earth. 

Carbon dioxide is the most talked about greenhouse gas, but it is not the only one. The principal 

greenhouse gases that enter the atmosphere because of human activities are: 

•	� Carbon Dioxide (CO2

): Carbon dioxide enters the atmosphere through the burning of 

fossil fuels (oil, natural gas, and coal), solid waste, trees and wood products, and also 

as a result of other chemical reactions (e.g., manufacture of cement). Carbon dioxide is 

also removed from the atmosphere (or “sequestered”) when it is absorbed by plants as 

part of the biological carbon cycle. 

•	� Methane (CH4

): Methane is emitted during the production and transport of coal, natural gas, and oil. Methane emissions also result from livestock and other agricultural 

practices and by the decay of organic waste in municipal solid waste landfills. 

•	� Nitrous Oxide (N2

O): Nitrous oxide is emitted during agricultural and industrial 

activities, as well as during combustion of fossil fuels and solid waste. 

•	� Fluorinated Gases: Hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride 

are synthetic, powerful greenhouse gases that are emitted from a variety of industrial 

processes. Fluorinated gases are sometimes used as substitutes for ozone-depleting 

substances (i.e., CFCs, HCFCs, and halons). These gases are typically emitted in smaller 

quantities, but because they are potent greenhouse gases, they are sometimes referred 

to as High Global Warming Potential gases (High GWP gases). 

7 U.S. Environmental Protection Agency. Fact Sheet: Mandatory Reporting of Greenhouse Gases (40 CFR part 98). Washington, D.C., 

August 2010. Accessed online, July 5,2011. 
19

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

 

 

Corporate greenhouse gas inventories help your company calculate the emissions your organization is responsible for and provide you an idea of potential areas for improvement. For more information on greenhouse gases and how to develop a corporate greenhouse gas inventory please visit: 

http://www.epa.gov/climatechange/emissions/index.html. 

Typically, when you reduce your energy use, you are also reducing your greenhouse gas emissions, 

but there are additional improvements that can be made to further reduce your company’s global 

warming impact such as switching to fuel that emits fewer greenhouse gas emissions. Lean activities can be targeted at processes with high greenhouse gas emissions, or greenhouse gas emissions 

can simply be calculated in addition to energy efficiency reductions. This is just one more metric 

that could be calculated as part of a Lean and Energy event. 

D. 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 previously for 

observing and measuring energy use to collect energy data for processes in the value stream, or consider 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 3: Example Value Stream Map shows a value stream map from a value and energy stream 

mapping project. 
20

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

 

 

Example Results from Value and Energy Stream Mapping Projects 

(Box 11) 

3	 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 sales8. 

3	 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 events9. 

3	 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 costs10. 

8

 California Manufacturing Technology Consulting (CMTC). “Automotive Case Study: Mission Rubber.” 

www.cmtc.com/success_stories/mission_rubber_Auto.html, accessed 23 Aug. 2007. 

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

10 CMTC. “Trojan Battery Company Case Study.” Case Study No. 05-80760. 
Chapter 4: Energy and Greenhouse Gas Assessment Strategies
�

Example Value Stream Map (Figure 3) 

Look for energy reduction opportunities here! 

21
 
 

 

 

 

 

 

Chapter 4: Energy and Greenhouse Gas 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 Figure 4: Example regularly collected metrics. This will make it easier to spot key Process Data Box with energy savings opportunities in the context of other improve- Energy Use Data ment opportunities. Figure 4 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, California Manufacturing Technology Consulting, a Manufacturing Extension Partnership center in 

California, 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 11 for examples). 

Milling 

2 people 

C/T= 2 min 

C/O = 2 hr 

Uptime = 74% 

Energy/pound 

output = 1 kWh 

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. When you look at energy use in the context of the entire value stream, ask two 

fundamental questions: 

•	� Is this energy end use needed? 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.11 

•	� Is there a way to deliver this end use more efficiently in 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. 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. 

11	� 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) 

22
 
23

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

 

 

E. 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 

substantial 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 reduced worldwide energy use by 46 percent (when indexed to net sales) from 2000 to 2010. 3M set a corporate goal for further energy use reductions of 

25 percent for the period from 2005 to 2015, and the company views Lean Six Sigma as critical to 

realizing this performance goal.12 

Six Sigma and Energy Savings at Baxter International (Box 12) 

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. 

12 3M Corporation. Sustainability at 3M. Accessed at http://solutions.3m.com/wps/portal/3M/en_US/3M-Sustainability/Global/ 
24

Chapter 4: Energy and Greenhouse Gas Assessment Strategies 

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? 

•	� Do you know what processes and areas of your facilities have the most 

greenhouse gas emissions? What ideas do you have for reducing those 

emissions? 

•	� 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? 
25

 

 

CHAPTER 5
�

Energy and Greenhouse Gas Emission 

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. Conduct Energy Kaizen Events 

B. Use Total Productive Maintenance to Reduce Equipment Energy Waste 

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

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

E. Encourage Energy Efficiency with Standard Work, Visual Controls, and MistakeProofing 

F. Reduce Greenhouse Gas Emissions through Transportation Efficiencies 

A. Conduct Energy Kaizen Events 

After identifying the production areas that consume large amounts of energy or account for a large 

portion of your greenhouse gas emissions, your facility can further analyze and eliminate wasteful 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 energy waste. 

Revisit the results of energy audits, assessments or your greenhouse gas inventory 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 7, can also help to ensure that 

energy and greenhouse gas 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 
 

 

 

 

 

 

 

 

 

 

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies
�

What is an Energy Kaizen Event (Box 13) 

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

•	 3 Focuses on eliminating energy waste 

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

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

•	 3 Makes changes during the event 

•	 3 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.13 Table 3 shows examples of energy savings opportunities identified during a kaizen 

event. 

Table 3: Example Actions Identified at a Kaizen Event 14 

Energy Waste Identified Counter Measure Savings 

Opportunity 

Main supply fans (air condition- ers) run 24 hours/day Change non-critical systems run time 

schedule 

$47,000 

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

Some exhaust fans run 24 

hours/day 

Change exhaust fans to 2 speed and run 

at slow speed during off hours 

$18,000 

Heat recovery unit from exhaust 

fans run faster than needed 

Bypass tilt coils and slow down fans $24,000 

Room lights are always on and 

emit more light than needed 

Install motion sensors to control lights 

and reduce number of lamps 

$25,000 

Water recirculation pumps are 

running but are not required 

Shut down and remove $20,000 

Total Opportunity $161,000 

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

2007. 

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

26
 
27

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B. 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 14) 

•	 3 The goal of TPM is to build a robust enterprise by maximizing production system efficiency (overall effectiveness). 

•	 3 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. 

•	 3 TPM involves all departments, from production to development, sales, 

and administration. 

•	 3 Everyone participates in TPM, from the top executive to shopfloor employees. 

•	 3 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 Losses That Lower Equipment Efficiency 

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 

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 in energy costs. 

Consider using one or more of the strategies for integrating energy-reduction efforts into TPM (Box 

15) to improve energy and equipment efficiency at your facility. This chapter focuses on describing energy savings opportunities associated with autonomous maintenance (strategy #1); previous 
28

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

 

 

 

 

chapters of this toolkit provided guidance on identifying energy wastes, conducting energy kaizen 

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

Strategies for Integrating Energy Reduction Efforts Into TPM (Box 15) 

1. Integrate energy-reduction opportunities into autonomous maintenance 

activities 

2. Train employees on how to identify energy wastes and how to increase 

equipment efficiency through maintenance and operations 

3. Conduct energy kaizen events to make equipment more efficient 

4. Build energy-efficiency best practices into systems for management of 

safety, health, and environmental issues 

Autonomous Maintenance Improves Energy Efficiency 

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. 

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

Process Heating Systems (Box 16) 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. DOE has a variety of software 

tools, fact sheets, and other publications that can be helpful in optimizing the efficiency of your 

equipment. 
29

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy Reduction Checklist for Combustion, Steam Generation and 

Process Heating Systems (Box 16) 

Combustion Systems 

•	 3 Operate furnaces and boilers at or close to design capacity 

•	 3 Reduce excess air used for combustion 

•	 3 Clean heat transfer surfaces 

•	 3 Reduce radiation losses from openings 

•	 3 Use proper furnace or boiler insulation to reduce wall heat losses 

•	 3 Adequately insulate air or water-cooled surfaces exposed to the furnace environment and steam lines leaving the boiler 

•	 3 Install air preheat or other heat recovery equipment 

Steam Generation Systems 

•	 3 Improve water treatment to minimize boiler blowdown 

•	 3 Optimize deaerator vent rate 

•	 3 Repair steam leaks 

•	 3 Minimize vented steam 

•	 3 Implement effective steam trap maintenance program 

Process Heating Systems 

•	 3 Minimize air leakage into the furnace by sealing openings 

•	 3 Maintain proper, slightly positive furnace pressure 

•	 3 Reduce weight of or eliminate material handling fixtures 

•	 3 Modify the furnace system or use a separate heating system to recover furnace exhaust gas heat 

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

processes 

For more information and best practices for improving the efficiency of the systems above visit DOE’s website: 

http://www1.eere.energy.gov/industry/industries_technologies/ 

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. 
30

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

 

 

 

 

C. 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 is often over-sized to accommodate the maximum 

anticipated demand. Since purchasing a new large piece of equipment can be costly and time-consuming, engineers sometimes design with an additional “buffer capacity” to be sure that the equipment does not bottleneck production. Box 16 shows results from studies documenting equipment 

over-sizing. 

Over-Sized Equipment (Box 17) 

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

3 Most chillers are oversized by 50–200 percent. 

3 Potential energy savings from right-sizing, 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 05 July 2011. 

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. Another option 

is to use this opportunity to look for equipment that uses a cleaner burning fuel source. This could 

help reduce your greenhouse gas emissions. 
31

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

Three Ways to Right-Size Your Fan System (Box 18) 

3 Use smaller, energy-efficient motors. Right-sizing a 75-horsepower (hp) 

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

motor energy consumption by about 33 percent. 

3 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. 

3 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, 

2008 Edition. http://www.energystar.gov/ia/business/EPA_BUM_Full.pdf, accessed 05 July 2011. 

D. 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 19 provides an example of the significance of plant 

layout and flow in reducing energy use. 
32

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

Flow and Energy Use (Box 19) 

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: 

3 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. 

3 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.”)
�

E. Encourage Energy Efficiency with Standard 

Work, Visual Controls, Employee Engagement and 

Mistake-Proofing 

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 7 and 16 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 

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. 
 

 

 

 

 

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies
�

The Pacific Northwest Pollution Prevention Resource Center (PPRC) prepared a Facility Checklist 

for Identifying Environmental Issues During Lean.

16 This checklist is intended for use on the 

manufacturing floor to help companies identify additional environmental opportunities, including, 

but not limited to, energy efficiency and greenhouse gas emission reduction opportunities. Table 

4, below, is an adaptation of the Energy Use portion of the checklist highlighting the things to look 

for and some of the questions you should ask when assessing your facility. The full checklist can be 

found at http://www.pprc.org/solutions/Lean_Green_facility_checklist_4_10.pdf. 

Table 4: Example Energy Use Checklist 

Energy Use Checklist 

Things to Look For: 

•	� Old lighting systems (T-12, yellow/blue/greenish hue lighting, incandescents) 

•	� Unnecessary lights/heat on, possible over-lit areas, or less lighting possible with better placement? 

•	� Standard efficiency pumps, motors, fans, belts 

•	� Motors, fans, pumps running idle when not needed 

•	� Throttled pumps and fans to control flow rate 

•	� Older refrigeration/heating systems, space heating 

•	� Older kilns/ovens (including baffles, fans, etc.) 

•	� Listen/feel for air leaks, especially at connections 

•	� Read readily visible air capacity and pressure gauges for high pressure 

drops through lines and equipment) 

•	� Aged compressed air and supplied air systems, or throttle controls, poppet 

valves 

•	� Using compressed air to dry parts, other poor choices 

•	� Air compressor running when not needed 

•	� No evidence of heat recovery from coolant waters, ovens, other low grade 

or higher-grade heat 

•	� Onsite wastewater treatment (possible to reduce generation of wastewater, 

and thus, energy to treat) 

•	� Uninsulated ovens, kilns, heater bands on extrusion, etc. 

16 Pacific Northwest Pollution Prevention Resource Center. Facility Checklist for Identifying Environmental Issues during Lean. 

March 2009. http://www.pprc.org/solutions/Lean_Green_facility_checklist_4_10.pdf. Accessed 06 July 2011. 

33
 
34

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

Energy Use Checklist 

Questions to Ask: 

•	� Do you have energy management system in place? 

•	� Employee suggestion system for energy improvement? 

•	� What is payback criteria for energy projects? 

•	� When did you last conduct an energy audit? 

•	� Recent upgrades of motors, lighting, belts, drives, pumps for energy efficiency? 

•	� Do you know efficiency ratings of any of above that have not been upgraded? 

•	� Are any motors over-sized for their purpose? Operating at partial load? 

•	� Air: centrifugal screw compressors that operate at more than full load capacity for >70% of the time? Are throttle controls, or poppet valves used? 

(May be improvement opportunity for variable speed drive, load/unload 

instead of throttle, on/off controls or low/unload instead of poppet). 

•	� Is compressor cooling water discharged to sewer? Air discharged to atmosphere? (Opportunity for heat recovery?). 

•	� Do you use most-efficient nozzles for air applications? 

•	� Do you have regular maintenance schedule for above equipment? 

•	� Have refrigeration system(s) been optimized? 

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 standardize best practices 

for energy and equipment use, and can be adopted facility-wide. 

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

(Figure 5) techniques: 

•	� Color-code pipes and other facility conveyances Unplug When Not to help operators quickly identify and report key in Use 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 5) 

•	� Identify the annual energy cost, energy use, and/
�

or carbon emissions of equipment if it is left on 

continuously and display it on the equipment to 

raise awareness and encourage conversation.
�
35

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

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

encourage additional improvement. Figure 6 shows a dashboard representation of how energy use 

and cost at a facility compares to annual goals. 

Dashboard Visual Controls (Figure 6) 

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 

1.4 

1.6 

Energy Cost 

(cent/$ Value Added) 

0 

0.8 

4.4 

1.6 

2.4 

3.2 

4.0 

4.8 

5.6 

6.4 

3.9 

Engaging Employees in Energy & Greenhouse Gas Management 

Efforts 

Employees are one of your strongest assets when implementing your energy and greenhouse gas 

management programs. Getting them involved through competition, awards, and recognition is 

a great way to help employees feel like part of these Figure 7: Materials Used by efforts, and if they own the improvements it will be Cummins in Employee Engagement much easier to sustain any changes. There are several Energy-Reduction Efforts ways companies have engaged employees including: 

1. Competition and Pledges 

2. Recognition and Rewards 

Competition and Pledges 

By fostering interest in energy reduction and encouraging employees to take the initiative to reduce their energy 

consumption, a company can save thousands of dollars 

each year. Cummins, Inc., an engine manufacturing 

company in Columbus, Indiana, created a program to 

encourage employees to keep energy use to a minimum 

over holiday shutdowns. The 2008 and 2009 “Unplugged 

Challenge” campaigns saved a combined 1,900 tons of 

greenhouse gas emissions and $1.2 million .17 

17 Cummins, Inc. Sustainability Report 2009-2010. Accessed on-line http://cmipef.cummins.com/CMIPEFMIG/CumminsNA/SiteContent/en/BinaryAsset/Attachments/Cummins/Cummins_2010_SustainabilityReport_FULL.pdf 
36

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

Cummins has also piloted an “Energy 

Champion” program, an intensive weeklong program to empower employees 

and equip them with the knowledge to 

implement energy saving practices both 

at work and at home. Figure 7 shows 

examples of the materials Cummins 

developed for this campaign. 

Recognition & Rewards 

Another way to engage employees is to create recognition programs or other incentives for improving energy use within the company. This is an area where you can get creative. Look at creating 

a program that recognizes the team or organizational unit who has reduced their energy use the 

most, or who has had the most inventive solution to an energy or greenhouse gas issue. Post this 

information in a break room or other prominent common space. 

You may also want to consider a monetary award or paid time off to the employee who comes up 

with a great cost saving idea. Sharing the benefit of these improvements with the employees only 

makes them want to work harder to identify additional areas where energy and cost savings can be 

found. 

Mistake-Proofing 

Mistake-proofing (also known by the Japanese term poka-yoke) refers to technology and procedures 

designed to prevent defects and equipment malfunction during manufacturing processes. Mistakeproofing 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. 

Mistake-proofing 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. 

F. Reduce Greenhouse Gas Emissions Through 

Transportation Efficiencies 

Transportation in the form of personnel travel, product shipment, and product movement between 

facilities is often a large contributor to a company’s greenhouse gas emissions. Companies can 

significantly reduce their greenhouse gas emissions using a variety of tools including employee 

commuting programs, looking into alternative fuels, and well-planned just-in-time deliveries. 
37

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

Note: Due to rounding, data may not sum to exactly 100%

Source: U.S. Department of Energy, Transportation Energy

Data Book Edition 28 (2009).

 

 

Finding Efficiencies in Vehicle Fleet and Mobile Equipment 

In America today, about 28% of the energy we use goes to transporting people and goods from 

one place to another.18 The majority of companies use vehicles and other mobile equipment as an 

integral part of their daily operations—from maintenance trucks used for parks and recreation to 

indoor and outdoor forklifts and other gas-powered equipment. These vehicles and equipment burn 

gasoline, diesel, and other fuels, which results in greenhouse gas emissions. In addition, vehicles 

with air conditioning or refrigeration equipment use refrigerants that can leak. 

Emissions from vehicles and mobile equipment 

are a great place to look for savings. Several 

strategies for reducing emissions and maximizing efficiency include: 

•	� Use alternative fuels (including corn or 

cellulosic ethanol, bio-diesel, natural gas 

and even diesel, and possibly in the future, 

hydrogen fuel cells) 

•	� Use hybrid electric vehicles 

•	� Reduce total vehicle miles traveled 

•	� Reduce overall idling time for all vehicles 

The U.S. Department of Energy has developed a 

tool to help determine where the most significant energy savings are in your vehicle fleet. 

Please visit their Energy Efficiency & Renewable 

Energy Alternative Fuels website at https://www. 

afdc.energy.gov/afdc/prep/index.php for more 

information. 

Figure 8: Fuel Used for 

Transportation, 2007 

Natural Gas 

5% 

Other 

2% Jet Fuel 

(Petroleum) 

9% 

Gasoline 

(Petroleum) 

62% 

Diesel 

(Petroleum) 

22% 

EPA also has a program that can help you reduce emissions from your vehicle fleet. SmartWay is 

an innovative brand that represents environmentally cleaner, more fuel-efficient transportation options. The SmartWay brand identifies a variety of different products and services related to transportation. Vehicles, fuel options, partnerships, and financing information are available on the website: 

http://www.epa.gov/smartway . 

These strategies do not just apply to transportation outside of you facility. Consider what changes 

can be made to the way you transport your materials around your facility. Forklifts can be a major 

emission source. Using Lean techniques you may be able to optimize the plant layout in such a way 

that you no longer need forklifts (see section D above). If, however, you just cannot get away from 

using forklifts, consider purchasing electric models. 

18 Source: U.S. Energy Information Administration, Annual Energy Review 2009. http://www.eia.gov/energyexplained/index. 

cfm?page=us_energy_use, accessed 07 Jan. 2011 
38

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

 

 

 

 

 

 

 

 

UPS: Fuel Efficiency Through Fleet Optimization (Box 20) 

3 UPS has one of the largest and most extensive ground delivery networks in the world and in 

2009, improved the fuel efficiency of that network by 4.7%. 

3 The company focuses heavily on improving the efficiency of their network using both improved routing technology and alternative fuel/technology vehicles. 

3 Fleet optimization strategies include: 

•	� Allocating pick-ups and deliveries to the most efficient number of vehicles 

•	� Loading vehicles most efficiently for the order of delivery, so that routes and miles 

driven can be kept to a minimum. 

•	� Routing vehicles so that they reach required destinations in the least amount of 

time and miles driven. 

•	� Selecting route options that minimize idling time spent waiting for lights and 

turns. 

•	� Identifying stopping locations that enable multiple deliveries. 

• Keeping drivers on route and on schedule via a handheld compute 

3 In 2009, these strategies allowed UPS to avoid driving 20.4 million miles and 20,000 metric 

tons in emissions. 

3 In 2009, UPS also reached a total of 1,883 alternative fuel/technology vehicles in their fleet. 

Source: UPS. Delivering the World, Sustainability at UPS 2009. Accessed on-line at http://www.responsibility. 

ups.com/Sustainability, 6, July 2011. 

Just-in-time delivery is another Lean principle which means you are only receiving supplies as 

they are needed. This methodology can also be applied to delivery schedules, maximizing delivery 

volume, while minimizing distance traveled with each drop. By optimizing your delivery schedule so 

that trucks are being loaded and deployed efficiently you should be able to limit the number of trips 

taken and therefore reduce your emissions. Box 20, shows how UPS optimized its fleet to reduce 

vehicle miles traveled and optimize delivery efficiencies. 
39

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 

Ways to Reduce Your Employees’ Commutes (Box 21) 

Fuel combustion from employees commuting to work is another important emissions source 

to consider. Similar to a vehicle fleet, personal employee vehicles use gasoline and other fuels 

which, when burned, generate greenhouse gas emissions. Encouraging carpooling and other 

commute-reduction strategies can reduce your overall emissions. It is also a great way to encourage employee participation and empower them to make a difference. 

Some additional ideas to help reduce greenhouse gas emissions from employee commutes 

include providing: 

1.	� Financial incentives for commuters (mass transit allowances) 

2.	� Preferred parking for hybrid vehicles 

3.	� Vans for carpooling 

4.	� Financial incentives to help with purchase of fuel-efficient vehicles 

5.	� Alternative scheduling (flexible work schedules and compressed work weeks) 

6.	� Encouragement to walk and cycle to work 

7. Shower facilities, bike locks, and parking for bicycles 

While the employee commute does not have as direct a link to your lean manufacturing activities, it is a direct way to involve your employees and often will improve morale, creating a 

culture that is more open to innovation. 

To Consider 

•	� Which of the Lean techniques mentioned in this chapter—TPM, 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? Into your workforce?
�

•	� In what ways could your company improve shipping practices or fleet management to reduce greenhouse gas emissions? 
40

Chapter 5: Energy and Greenhouse Gas Emission Reduction Tools and Strategies 
41

 

 

CHAPTER 6
�

Conclusion
�

Going 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 supplement their efforts to reduce energy use by 

offsetting some of their carbon emissions with the purchase of carbon offsets. While 

the development of markets for selling and verifying carbon offsets is in the early 

stages, a number of organizations have emerged to broker 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. Visit http://www.carbonfund.org/ to calculate your carbon footprint and purchase 

an offset to reduce your footprint. 

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 efforts you could undertake to help your customers and/or suppliers reduce their energy use and greenhouse gas emissions? 
42

Chapter 6: Conclusion 

 

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. EPA hopes that this toolkit spurs creative thinking and innovation 

within your organization and encourages you to explore these opportunities. 

EPA hopes to learn from your Lean and energy experiences and to refine the techniques presented 

here in future versions of this toolkit. EPA wishes you success on your Lean and energy efficiency 

journey. 

Your Thoughts on the Lean, Energy & Climate 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, energy, and greenhouse 

gas management integration in 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, energy efficiency, and greenhouse gas management efforts? 

Please contact EPA to share your experiences with Lean and energy improvements and/or to discuss partnership opportunities by emailing 

lean@epa.gov 
43

 

 

 

Appendices
�

Appendix A 

Energy and Greenhouse Gas Management 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 Resources and Tools 

E3 & Green Suppliers Network 

www.e3.gov 

E3 – Economy, Energy, and Environment – is a coordinated federal and local technical assistance 

initiative that is helping manufacturers across the nation adapt and thrive in a new business era 

focused on sustainability. In the process, E3 is boosting local economies and benefiting the communities with creation of “green jobs” and reduced environmental impacts. 

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. 

Energy Efficiency Opportunity Calculator for Small and Medium Sized Manufacturers 

http://texasiof.ces.utexas.edu/tools.htm 

Texas Industries of the Future has developed a tool to provide managers or engineers at small- or 

medium-sized manufacturing plants with a list of questions and a calculator so that they can 

quickly assess whether they have opportunities for energy and cost savings at their facility. 

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. 
44

Appendix A: Energy and Greenhouse Gas Management Service 

Providers, Resources and Tools 

 

 

 

 

 

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/technicaldocs/ 

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. 

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 

http://www.energy.wsu.edu/PublicationsandTools.aspx 

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. 

U.S. DOE Save Energy Now Energy Program 

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. 

Energy Assessment Service Providers 

ENERGY STAR Directory of Energy Service and Product Providers 

http://www.energystar.gov/index.cfm?c=expert_help.find_exp_help 

U.S. EPA’s 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. 
45

Appendix A: Energy and Greenhouse Gas Management Service 

Providers, Resources and Tools 

 

 

 

 

 

 

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

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

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. 

Greenhouse Gas Management Tools and Resources 

EPA Resources for Greenhouse Gas Emissions 

http://www.epa.gov/climatechange/emissions/index.html#ggo 

This website provides a variety of resources and information related to greenhouse gas emissions 

and greenhouse gas inventories. 

EPA’s Greenhouse Gas Equivalencies Calculator 

http://www.epa.gov/cleanenergy/energy-resources/calculator.html 

This calculator may be useful in helping you communicate the results or targets of your greenhouse 

gas management strategy. It converts your emissions into carbon equivalents and then equates that 

to common terms (e.g. your emissions are equivalent to the electricity use of 3000 homes for one 

year). 

PPRC ‘s Climate Change Solutions 

http://pprc.org/hubs/index.cfm?page=subsection&hub_id=1012&subsec_id=101 

This website is part of the Pacific Northwest Pollution Prevention Resource Center’s topic hub for 

climate change. It provides access to a variety of tools, calculators, strategies and technologies that 

can help reduce your greenhouse gas emissions. 

For additional resources please visit our website, www.epa.gov/lean 
 

 

 

 

 

Appendix B 

Sector-Focused Energy Reduction and 

Greenhouse Gas Management 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 

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

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

46
 
47

Appendix B: Sector-Focused Energy Reduction and Greenhouse 

Gas Management Resources 

 

 

 

 

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 

EPA’s High Global Warming Potential (GWP) Programs 

http://www.epa.gov/highgwp/voluntary.html 

High GWP gases are part of a family of non-CO2 gases that contribute to global climate change. 

EPA is currently working with several industries to make substantial progress in reducing emissions 

by developing and implementing cost-effective improvements to industrial processes. Industries 

involved include: 

• Electric Power 

• Aluminum (VAIP) 

• Magnesium 

• Semiconductor 
 

 

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 Savings19 

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 

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

leak per shift per year. 

19 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. 

48
 
 

 

 

 

 

 

49

Appendix C: Energy Conversion Resources and Rules of 

Thumb for Estimating Energy Cost Savings 

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 $0.54 

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. 
50

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. 

United States Environmental Protection Agency
�

www.epa.gov/lean
�

Revised-August 2011
�

EPA-100-K-07-003
�