Improving Productivity through Energy Management

For every $1 of energy cost saved, a typical US business would have to make $10 worth of extra sales

to make the same additional profit.

Energy costs will continue to

rise. (Of course they will fluctuate

over time but the overall trend is upwards.) This means that energy is likely

to become an increasing burden and an increasing proportion of total costs. If

energy costs are not important to you now … just wait!

All energy usage involves

waste. We all know about hot pipes producing

warm spaces but waste occurs throughout all energy systems. The best systems use measures to minimise

this waste but it occurs nevertheless.

This waste reduces your business profits. All businesses should be

striving to ensure that the percentage of energy that is wasted is as small as

it can practicably be.

Energy usage, as we know,

also contributes to CO2 emissions. The regulatory regime relating to carbon

emissions will get tougher …. So, as part of your energy management activity,

it makes sense to address your ‘carbon footprint’ … though the main reason is

to save money and increase profit!

So, how do we set about

establishing an energy management strategy … that works!


The first stage is to

commit! All approaches to business

improvement suggest that commitment from top management is crucial … because it

is. Managers have to commit if they

expect otherwise to commit. So …


establish a

policy which you mean – and share that policy widely


make a senior

manager the ‘energy champion’


add energy

management to the agenda for key meetings.


The sayings “You get what you

measure” and “What gets measured, gets done” reflect a universal truth. If staff know their results in certain directions

are measured and noted, they are much more likely to strive to move those

measures in the right direction. So,

find out what measures you currently have (and are not using) and then work out

what measures you need to:


Understand where

your significant energy costs are incurred



unexpected or exceptional usage


Benchmark usage

and costs against previous years


Compare usage and

costs across different sites, plants or offices

When you decide what measures

you need, construct a plan to make them available and to make sure they are

presented regularly and in easily-accessible and understandable form.

Shop around

Energy costs do vary from

different suppliers and with different tariffs from the same supplier. Find out

if you can buy and/or use fuel at times which make it cheaper. Similarly, work

out if your pattern of business creates peak energy demands which affect what

you pay.

Consider alternative forms of energy

Is it technically and

financially feasible to use fuels or energy sources that can reduce your

liability to pay the Climate Change Levy.

These would include renewable energy sources and, where sufficient heat

demand exists, Combined Heat and Power systems.

Walk the Talk

Make senior – and middle –

managers take a regular ‘energy walk’ around the parts of the business for

which they are responsible … to see what happens ‘on the ground’ (as distinct

from on the plan) and identify energy management issues or opportunities. Do this at different times of the day and

week so that you see things which happen occasionally.


Combine all the above (having

taken external advice and help if appropriate) into an energy management

strategy and action plan with clear targets and with clear processes for

execution, monitoring and review … especially checking your (lower) energy



Productivity is my 'bag' ... it is what I know about. I am President of the World Confederation of Productivity Science - and Director of the National Productivity Centre in the UK - go to this site for some good free resources and some (paid for but low price) e-learning on productivity. I also edit the International Journal of Productivity & Performance Management. My views on productivity and on learning (which I think are related) are su...

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