Resource Efficiency: Improving the Management of Major Resources Used in Business

Resource Efficiency Improving the Management of Major Resources Used in Business

April 2014

Resource Efficiency Improving the Management of Major Resources Used in Business

Contents Click the page name to navigate through the document.

1.0 Introduction ...................................................................................................... 2 1.1 1.2

Background ........................................................................................................................ 2 Where Can I find Out More? .............................................................................................. 2

2.0 Improving Process Optimisation in Business .............................................. 3 3.0 Efficient Use of Raw Materials in Business ................................................... 5 4.0 Waste Minimisation in Business .................................................................... 7 5.0 Improving Water Efficiency in Business ....................................................... 9 6.0

Energy Management and Efficiency in the Industrial Environment ......... 10

7.0 Minimising Wastewater in Business ............................................................ 12

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1.0

Introduction

1.1 Background

1.2 Where Can I find Out More?

With the ever increasing pressure on businesses to become more sustainable and, yet, more competitive in today’s market, one growing area of focus is the efficient use of resources.

For more information about improving resource efficiency or how CRA could support your organisation, please contact Sharon Abram on 0151 207 7850 or sabram@cra.co.uk. Alternatively visit our Resource Efficiency webpage to find out more about our capabilities in this area. Where our website contains a more specific webpage about each resource, these are pointed out at the end of the relevant article.

Businesses face pressure from the increasing costs for materials and transportation, coupled with the ever more noticeable impacts of climate change, environmental legislative and compliance requirements, geopolitical instability, potential resource scarcity and an unstable economic climate. In order to succeed in competitive markets, efficient resource use is paramount.

Efficient use of resources has a direct effect on business profitability by cutting costs associated with unnecessary use and wastage of materials and energy.

Other benefits include reduced environmental impacts, improved operational efficiency, improved business sustainability and brand reputation, and in some cases aiding an organisation’s legal compliance.

This series of six articles gives an insight into key approaches that can be used to improve the efficient use of different types of resources commonly utilized by businesses. The series has been put together by CRA and guest writers from JRP Solutions and Ashact Consulting Ltd, and covers:      

Process Design and Optimisation Energy Raw Materials Water Waste Minimisation Wastewater

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2.0

Improving Process Optimisation in Business

Most things can be improved, typically by looking at the materials, technologies and the approach to processes involved. When designing systems and products, in addition to requiring a deep understanding of influences that achieve desirable performance, there is also a need for an effective and systematic decision-making approach, i.e. a project plan that leads to the development of an optimisation strategy. In this respect project planning is synonymous with process design in that, during the design stage, careful consideration is required of what the project is to achieve, the factors impacting upon success and the management of the relevant risks.

Clearly, there are many factors impacting upon the success of a project. Ultimately, the optimisation strategy must focus upon the cost-effectiveness of the process and/or the ‘value-add’ in product manufacture. More so now than ever before, there is a need to consider environmental factors as part of that strategy, such as:  availability/scarcity and security of supply of raw material, including water;  choice of process technologies and techniques to optimise material and energy use; and  minimisation of waste and wastewater and their options for disposal.

The European Commission estimates that for a typical manufactured item the cost of materials accounts for 35%-40% of the total cost, with labour and energy costs accounting for 20% and 10%15% respectively. Traditional reliance on ‘end-ofpipe’ measures such as waste disposal, wastewater treatment, etc is no longer cost-effective and businesses need to adopt more environmentally sustainable approaches to using fewer resources and optimising their use in order to be more competitive and profitable. For example, a study by DEFRA in 2007 estimated that through using low

cost changes, UK business could save €7.7 billion per annum, or put another way, a €1 saving in disposal costs can result in about a €7 – €12 saving of other costs for buying, processing and storing materials.

Environmental standards and regulations can also drive resource efficiency. Businesses falling within the scope of the Environmental Permitting Regulations have to demonstrate that their production process design and operation comply with the requirements of Best Available Techniques (BAT) and Reference Documents published by the European Commission.

For example, CRA personnel were invited to assist a motor vehicle manufacturer demonstrate that a proposed change to their engine manufacturing plant would represent BAT. The engines are produced by casting aluminium, with ‘moulds’ and ‘cores’ used to define, respectively, the outer and inner shape of the engine. The proposed changes to the plant included optimising the casting process to allow the manufacture of lighter engines (i.e. a reduced aluminium use). This led to less energy consumption and a reduction in the number of sand ‘cores’ required during casting, from five to three per engine (i.e. less waste). The new engine plant, albeit at a high capital cost, provided significant production efficiencies; resource minimisation; and full compliance with regulatory environmental requirements. The use of a lighter more efficient engine also provided significant environmental benefits in terms of reduced fuel consumption and lower polluting emissions.

Large capital expenditure is not a prerequisite for environmental improvement.

Relatively small changes to the manufacturing process can have a large impact upon manufacturing efficiency, with typical improvement measures including:

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    

optimised operating parameters; reduction in reject materials; reduction in water consumption; recycling of production wastes; and improved storage and logistics.

For example, CRA was commissioned to review the production techniques employed by a small manufacturer of cellulose fibre insulation with the objective of identifying process inefficiencies and opportunities for improvement. CRA worked with the client to identify and quantify material flows and

wastage, and specifically to categorise areas of the production processes giving rise to off-specification product. The study identified a variety of opportunities for reworking reject materials, reducing wastage through recycling and improving material flows through the process, resulting in a saving of £10,000 per annum for no capital outlay.

More information about CRA’s capabilities in this area can be found on our Process Optimisation webpage.

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3.0

Efficient Use of Raw Materials in Business

The efficient use of raw materials is fundamental to all businesses, and the need to ensure an uninterrupted supply to ensure business continuity is essential. With global financial costs for materials and transportation typically increasing, the impacts of climate change, onerous environmental legislative and compliance requirements, market competition, geopolitical instability, and the unstable economic climate we currently live in, the need to use raw materials as efficiently as possible is paramount.

A 2012 survey of members of the Engineering Employers Federation (EEF), the Manufacturers’ Organisation, revealed that over 80% of chief executives of manufacturing companies in the UK acknowledged that raw materials shortage was a risk to their business. The scarcity of raw materials has also been recognised at EU level with the establishment of the EU’s Raw Materials Initiative (RMI). The aim of the initiative is to provide framework conditions that can establish an integrated strategy to face the challenges related to accessing (non-energy and non-agricultural) raw materials and to facilitate sustainable supply. A new strategy document setting out targeted measures to secure and improve access to raw materials for the EU was adopted on 2 February 2011.

What is now ever more evident is that resource scarcity is becoming an increasing force in driving the success of businesses, and that the availability of raw materials, and other resources, should be a key consideration in the strategic planning for business.

Opportunities which exist for the efficient use of raw materials can range from easily implemented measures with little or no cost, through to more complex measures requiring investment in terms of time and capital. A recent McKinsey report (Resource Revolution: Meeting the World’s Energy, Materials, Food and Water Needs, November 2011)

indicates potential global savings of between $2.9$3.7 trillion by 2030 through the implementation of a range of resource productivity measures, with 70% of such measures having investment returns of 10% or more per year.

Some simple, relatively low cost initiatives which could be considered include:  Minimising quantities of raw materials stored on site, by purchasing materials on more of a just-in-time basis. This will avoid the potential for out-of-date materials due to over stocking, and reduce pressure on storage facilities.  Negotiating with suppliers to enable the purchase of the amount needed rather than having to order the supplier’s minimum amount.  Minimising the spoilage of raw materials by optimising storage arrangements.  Working with suppliers to source suitable substitutes or alternatives, or materials that can be sourced more locally, reducing transport time and costs. A recent survey carried out by research specialist TLF on behalf of international metals stockist Broder Metals Group revealed that the UK manufacturing industry could potentially be losing up to £166 million a day due to the late delivery of key raw materials, with 11% of respondents believing that just one late delivery could cost £1,000 to £10,000.  Reducing the dependency on primary raw materials by investigating the feasibility of using more recyclables within the process, or even using site-generated by-products which would otherwise require costly off-site disposal.

Human behavior should also be a key consideration; making individuals more aware of the implications of their everyday activities on the

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use of raw materials and instigating simple behavioral changes in employees and contractors can have a notable impact at no or very little cost.

Also the involvement of employees in identifying wasteful activities and developing ideas to improve practices can be of great value to a business.

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4.0

Waste Minimisation in Business

Waste minimisation often regarded as the easiest, most cost effective and environmentally sound option when businesses look at improving their resource efficiency. Waste prevention sits at the top of the waste hierarchy, making it the primary objective in any waste strategy.

The minimisation of waste can involve a range of methods, some more straightforward and less costly than others, to ‘design-out’ and/or limit waste arisings. The development and implementation of an appropriate strategy, with associated objectives and targets, to prevent/reduce waste production, can aid in focussing a business on reducing waste generation. The adoption of such a strategy will also demonstrate to stakeholders, customers and employees alike that there is a commitment to reducing the environmental impact of a business, all of which will improve reputation and competitiveness. Other key benefits associated with the introduction of an effective waste strategy include:  Financial savings associated with excessive raw material usage, storage and waste disposal costs;  Improved process performance;  Improved environmental performance; and  Legislative compliance, through reducing the risk of potential fines associated with inappropriate waste handling/disposal.

The key to the success of any waste management strategy is obtaining a commitment from senior management through to staff on the shop floor; with a focus on culture change with regard to waste management across the business. By engaging every member of staff, significant progress can be achieved in the minimising waste.

It is widely considered that, on average, businesses can save up to 4% of turnover by successfully reducing the total amount of generated waste.

When looking at potential cost savings as a result of waste minimisation, in addition to the potential savings with respect to storage and disposal costs, there are a number of hidden costs associated with the production and management of waste which are often overlooked but which should be considered, for example:  Time e.g. lost production hours, wasted labour;  Wasted raw materials e.g. packaging and consumables;  Transportation of waste;  Excessive energy and water consumption; and  Handling costs.

As an example, CRA was commissioned by a major aerospace manufacturer in the UK to assist with the improvement of waste management practices at one of their manufacturing facilities. The objective was to identify opportunities to minimise waste, and to test and improve management tools and activities currently used to reduce waste and associated disposal costs. The client’s waste management system was improved by identifying each waste stream and then applying the waste hierarchy to govern the fate and handling of these wastes. In addition, a communication system was implemented to enable ease of communication between all departments in the production chain.

This approach encouraged continuous improvement and enabled discussion of potential technologies that could be adopted to increase reuse or recycling. Good practices that were also identified on-site were documented and included in a business case model, to promote the approach across the client’s other sites.

The waste minimisation opportunities identified demonstrated

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potential savings of approximately ÂŁ70k per annum, excluding any associated environmental benefits.

Some of the initiatives required zero or very low capital investment, with behavioural change identified as being the key to the success of the project.

More information about CRA’s capabilities in this area can be found on our Waste Management webpage.

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5.0 Improving Water Efficiency in Business

By Richard Barnard, Ashact Consulting Ltd

Water: Potential Cost Savings Misunderstood and Underestimated

So What Can be Done?

Often

With rising utility prices and ever increasing competitiveness in the marketplace, the importance of raw material costs, including water, in determining product costs and profitability cannot be ignored.

Evidence shows that the true financial gains possible by water efficiency improvements are often underestimated. Many sites have a lack of understanding of the true costs of water to their business. Whenever water is pumped, treated or heated then the water gains additional value due to the expenses associated with undertaking these processes. It is often this added value, or ‘hidden cost’, which makes saving water so worthwhile.

Some typical values of water can be seen in the table below: Table 1. Typical Values of Various Treated Waters (based on 2013/14 Prices)

Most businesses are aware of the more usual advice, such as: turn off taps and hoses, fit water saving devices in cisterns and fit flush control on urinals (they all save a lot of water) but in addition to this usual advice, the following often prove worthwhile: 1. Where water is supplied via on-site booster pumps, ensure the pressure is set to the minimum acceptable for the site. Most equipment will work at around 1.5 bar – anything in excess of this can lead to over-use of water.

2. Where hoses are is used, ensure these have the smallest diameter practicable to minimise the flow of water through the hose – flow through a 25mm hose compared to a 15mm hose will be nearly four times greater at a given pressure.

3. Ensure all break tanks and cisterns are fitted with an overflow inspection device so that no overflows are hidden.

4. Where equipment has a ‘purge’ or ‘blow-down’ (e.g. steam boilers or cooling towers) make sure this is only undertaken at the minimum frequency necessary.

5. Where steam is used on site, ensure that condensate recovery is as good as possible – the value of condensate is high, around 3 £5.50/m , making potential cost recovery significant. www.ashactconsulting.com

1 2 3

– assumed untreated water, heated by gas @ 2.5p/kWh – assumed untreated water, heated by electricity @ 7.0p/kWh – assumed softened water and excludes boiler water feed chemical treatment costs

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6.0 Energy Management and Efficiency in the Industrial Environment

By Dan Smith, JRP Solutions Ltd

With the continuing rise of energy prices and subsequent increasing costs to businesses in all sectors, energy efficiency and the reduction of energy consumption and costs is now a higher priority than ever. This is especially true in the industrial sector which is more energy intensive than the commercial and domestic sectors. Many businesses may not have the skills, knowledge or resources to undertake a pro-active, strategic and successful approach to energy management; this article will give a brief insight into the requirements of such a scheme.

1. Commitment and Policy It is essential that the company has a commitment to energy efficiency. This should include responsibility for energy management being owned by a Senior Manager, who must make time and resource available to tackle the issues, having an Energy Policy, and a short, medium and long term energy plan.

2. Resource As well as being the responsibility of a Senior Manager, resource must be available to own and drive forward energy management through an energy champion who may also have an energy team or facilitate a regular energy forum.

3. Monitoring and Targeting “You cannot manage what you cannot measure” is very true with respect to energy. Consideration

must be given to undertaking an audit of what meters are available and how frequently they are read and recorded. In an industrial site an automatic monitoring and targeting (M&T) system comprising submeters and a software based system to capture, analyse and report on consumption data is very beneficial. Opportunities identified through M&T can often lead to savings of around 10%. As well as giving a view on overall consumption, an M&T system can show patterns of consumption to identify potential areas and occurrences of excessive energy use.

Setting realistic targets for energy consumption can be carried out on an M&T system, and this should include some further metrics to benchmark energy consumption against, for example production, number of employees, floor area, weather conditions (using degree days), etc.. Companies can benchmark their performance against many things including industry standards, other buildings in the portfolio, or the same period last year/month/week.

4. Carry out Audits and Surveys Surveys should be carried out regularly in order to identify energy consumption within an area / building / site and more importantly identify any areas where energy efficiency can be improved.

This is a step that is often the most difficult for companies to carry out in-house and benefits greatly from hiring in external specialists. Energy efficiency improvements can be split under two headings, both as important as each other, which are ‘behavioural’ and ‘technical’.

Behavioural improvements can include obvious ways of working, for example leaving machines running with no product throughput and leaving lights on, but can also include less obvious issues

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such as having the compressed air setpoint too high requiring the air compressors to work harder than required, or hydraulic packs operating under no load. Behavioural fixes are often no or low cost.

Technical improvements or engineering solutions can include replace, refurbish and control issues.

For example replacement could be replacing a boiler with a high efficiency equivalent; refurbish could include upgrading the insulation around a furnace or pipes that has deteriorated; and control could be installation of variable speed drive on a motor.

Technical issues must also consider wider issues such as can the heat or energy be sourced from a cheaper place (e.g. renewable energy?); can any heat be recovered from the processes to be utilised elsewhere (e.g. can a heat exchanger be fitted on an exhaust to preheat combustion air?).

As previously stated this is a step which benefits from specialist help, and can reap great rewards.

For example through a series of audits at McVities’ biscuit factory in Glasgow, JRP Solutions identified potential savings of 41% of the total energy consumption.

5. Continuous Improvement Once opportunities have been identified through surveys and audits, it is imperative all opportunities are recorded and categorised, with the simplest being no, low or high cost categories with associated payback. In order to continue the energy management drive, and to keep both senior management and shop floor staff ‘on-board’, projects must be seen to be carried out and the whole system not just stop after the audits. Whilst funding for engineering projects may not be immediately available, identified no cost behavioural improvements should be continuously

implemented projects.

in

conjunction

with

engineering

6. Staff Awareness Training and Communication It is important that all staff are made aware of energy management throughout the business in order to achieve buy-in for behavioural changes and projects, and to ensure the huge importance of reducing energy and costs is known. This can be done in many ways to suit the culture of the company but can include email, newsletters, poster schemes and toolbox talks.

7. Verification and Review Periodically there should be a review of all actions to ensure that they are fit for the organisation and that they are working, anything that is not working should be reviewed and changed if required.

Similarly, all changes carried out, whether behavioural or engineering, should have their claimed savings verified.

Energy Management is not a simple process, it requires time, resource and specialist knowledge.

Many companies do not have these available and may require the assistance of specialists such as JRP Solutions to navigate down the energy management route by providing a ‘Part Time Energy Manager’ service, or to assist with more specialist activities such as auditing or legislation compliance. www.jrpsolutions.com More information about CRA’s capabilities in this area can be found on our Energy Management webpage.

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7.0 Minimising Wastewater in Business

By Richard Barnard, Ashact Consulting Ltd

From a resource efficiency perspective, all types of wastewater – whether trade effluent, sewage or rainwater - are a potential source of water. While any of these types of wastewater, either separately or combined, may be reused for most purposes following adequate treatment, it is often not undertaken. So the wastewater will usually have to be disposed of, at a cost.

Consequently, wastewater management is becoming increasingly important to businesses, particularly regarding trade effluent disposal where cost, performance and legal compliance are significant ‘drivers’.

Many companies are also facing the prospect of having to meet tightening discharge consent standards or paying ever increasing charges for their trade effluent discharge.

However, while simply relying on an 'end-of-pipe' treatment approach is likely to achieve compliance, it is not usually cost-effective or ‘resource efficient’.

interpretation of analytical data, production data etc, but the rewards are high. Often, effluent streams can be easily identified that can be segregated and recovered for re-use, sometimes with little or no treatment. Costs can be recovered many times over, not only from reduced effluent treatment costs and disposal charges but also by savings in raw water, raw materials, energy etc.

This is because investigations into resource efficiency frequently identify other significant operational or production benefits; typically:  reducing water use within the process  recovery and reuse of product and/or raw materials (including water)  reduction of ‘hidden costs’ (energy, chemicals, pumping costs, CO2e emissions etc)  increasing process efficiency  reduced loss of product and/or raw materials (including water)  improving yields, reducing downtime  improving plant operation  improving process control  scope for cleaner design and technology  improving cleaning operations

Employing good resource efficiency techniques within the factory or site to reduce effluent flow or pollution loads will generally pay dividends in effluent disposal terms – whether by reducing the size (and operating costs) of any ‘end-of-pipe’ treatment plant required and/or reducing trade effluent charges paid.

A proper assessment of the scope for resource efficiency can be made on the basis of a detailed site investigation orientated towards those processes producing waste streams. This can be a complex exercise involving sampling and analysis,

 improving ancillary water (hot/cold water and steam) use  meeting regulatory requirements Environmental Permitting Regulations)

(e.g.

 improving environmental performance.

The potential cost savings and other benefits clearly make resource efficiency a key ‘first step’ in effluent management. www.ashactconsulting.com

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