Lean Manufacturing Processes Improve Energy Intensity and Profitability for Industrial Facilities

Lean manufacturing, or simply “lean,” is a philosophy aimed at trimming away the “fat” of a production process, or any expenditure of any resource that does not create value for the end-use customer. For example, because customers are not willing to pay for scrap, for parts waiting for processing or for moving parts from one point to another, these would be considered fat to be eliminated or minimized.

Originally implemented in the Toyota Production System, lean seeks to reduce the energy intensity of a process, which is the total energy input needed to create one unit of manufactured product. In addition, it can benefit energy efficiency and increase profits through greater output with fewer breakdowns, errors and defects, and less waste and scrap. Scrapping just a few parts per shift can have a large impact and represents a significant waste of energy.

A bar chart showing $50K profits and $950K operating costs for a manufacturer that does not use lean manufacturing and $200K profits and $800K costs for a manufacturer using lean manufacturing.
Lean manufacturing can have a dramatic effect on profits

The following four areas can help measure, record and document lean characteristics of industrial process equipment.

Andon — Andon is an informational tool that uses visible and audible signals and real-time communication displays to bring immediate attention to process problems, notifying personnel who can correct the issue. For example, when an operator runs short of a part, they may activate a light that signals employees who can bring more parts without causing downtime. Andon is key to eliminating waste, improving overall equipment effectiveness and guiding continuous improvement.

Muda — Muda is waste in the manufacturing process that may be categorized into the following areas: transportation, inventory, motion, waiting, over-processing, over-production, defects and plus one, which is the ineffective use of the full range of employee talent. Even though energy is not explicitly noted, it is captured in many of the categories.

Overall Equipment Effectiveness (OEE) — OEE is a way to assess how effectively a machine or production line is utilized. It is made up of the product of three factors — availability, performance and quality — each measured as a percent (with a maximum of 100). Losses and wastes reduce these factors, and it is nearly impossible for any manufacturing process to run at 100% OEE.

Kaizen — Kaizen is a continuous improvement process with the aim of eliminating waste. Kaizen involves all employees in improving manufacturing activities through four iterative steps: plan, do, check and act.

By helping customers adopt lean, utilities can support energy efficiency efforts and enhanced profitability. To encourage its use, utility executives should consider developing surveys and case studies, creating educational materials and training, designing a return-on-investment tracking tool and investigating the feasibility of financial incentives.

To learn more about the principles and benefits of lean manufacturing, check out this report by Mike Stowe, one of our senior energy engineers.