Cutting costs and raising productivity with lean practices

Cutting costs and raising productivity with lean practices

Experts are increasingly pointing to lean manufacturing practices as the best way to ramp up productivity and drive overall costs lower, and when this is paired with energy savings initiatives through an integrated approach, the benefits are even greater.

According to Pallet Enterprise, cutting energy costs is one of the major pillars of lean operations, and if these are implemented correctly, they can help businesses perform self assessments that can guide the energy audit process.

By identifying the most beneficial energy improvement processes, companies can use lean practices to eliminate these inefficiencies and improve overall performance. The media outlet stated that within the pallet and skid manufacturing industry, only 19 assessments have been performed since 1985, which brought about a total of 138 recommendations. Only 45 percent of the recommendations have been implemented in the industry.

"The average savings per implementation was estimated to be $60.40 for each employee or $0.09/ft2 with an average payback period per implementation of 0.84 years," wrote Henry Quesada, assistant professor of sustainable biomaterials at Virginia Tech, and associate professor Brian Bond. "When comparing the recommendations to actual implanted practices, it was determined that pallet and skid manufacturers preferred to implement recommendations with the lowest payback period."

According to the media outlet, the most commonly implemented energy recommendation was "elimination of leaks in inert gas and compressed air lines/valves." Thanks to energy assessments that have been conducted in the U.S., American manufacturing companies have seen huge savings and quick payback periods after implementing lean practices in their energy management programs. Research shows that in eight out of 10 cases, manufacturing firms have a payback period of less than one year.

"Given that the savings per employee ranges from $60.24 to $ 1,118.29 and savings based on plant’s area go from $0.08/ft2 to $1.92/ft2, it is clear that recommendations based on lean principles can lead to greater savings and relative shorter payback times," the team wrote in the report. "The underlying strength of lean-based recommendations is that not only energy consumption is decreased but productivity is improved at the same time."

According to the media outlet, now that the data has come to light that shows a significant relationship between lean practices and energy reduction methods, companies can use a lean-based energy audit resource to perform a self-assessment to improve overall operations.

This self-assessment includes having a firm understanding of all energy consumption and charges, walking through the entire audit process beforehand, performing an electricity consumption analysis and holding an event to explain lean processes. 

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