Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

3.3.4 Energy Management Concepts and Measures for Improved Environmental Performance Using TBL Thinking

Intended learning outcomes: Describe energy management in production systems. Differentiate between energy-aware manufacturing processes and integrating energy efficiency in production information systems. Produce an overview on major aims of industrial symbiosis. Present measures such as enhanced utilization of wastes, the recovery of medium and low temperature waste heat, and the framework for alternative fuels and resources.


Considering the two sections above, there are various opportunities for industries to improve their performance with the aim of sustainability. As a basis, energy management has to take place at different company levels.

According to [Pato01], energy management may apply to resources as well as to the supply, conversion, and utilization of energy. Essentially, it involves monitoring, measuring, recording, analyzing, critically examining, controlling, and redirecting energy and material flows through systems, so that the least power is expended to achieve worthwhile aims.

Energy management is an enabling and supporting activity for energy efficiency. Its integration into production management may allow implementation of further improvement measures in production systems (see Figure 3.3.4.1). In energy management, these activities aid detection of viable improvement areas in manufacturing (see [BuVo11]).

Fig. 3.3.4.1        Energy management in production systems [BuVo11].

Firstly, energy-aware manufacturing processes: An effective energy control system has to be developed, using information from in-process and performance measurement. This control system needs to focus on concepts that facilitate the evaluation, control, and improvement of energy efficiency in manufacturing processes.

  • Appropriate and standardized energy efficiency metrics on machine, process, and plant level are needed.
  • New sensor and in-process measurement technology should be integrated in existing monitoring and control mechanisms to feed decision support tools for production management.
  • Benchmarks for production performance with regard to machine/equipment energy efficiency and energy profiles are required. Standardized energy efficiency KPIs are the basis for effective benchmarking across plants and companies.

Secondly, integrating energy efficiency in production information systems: A framework that manages and optimizes energy efficiency with respect to production planning and control needs to be developed and implemented in enterprise control and information systems, such as enterprise resource planning (ERP), manufacturing execution systems (MES), and distributed control systems (DCS).

  • Information and communication technologies (ICT) tools and standardization can be significant enablers for supporting the measurement, control, and improvement of energy efficiency in manufacturing processes, as software can support visualization and simulation of energy efficiency.
  • Energy performance evaluation in real-time facilitates more effective business decisions based on accurate and timely information. Energy efficiency-adapted MES and ERP systems and simulations can deliver appropriate information.

Once viable improvement areas are identified, there may be barriers to implementation. To name a few: decisions based on payback periods instead of interest rate calculations, unrealistically high implicit discount rates, difficult-to-measure components of energy investments (such as transaction or monitoring costs), and limited capital or a low priority given to energy efficiency by the management. The human factor can be a barrier, as bounded rationality, principal-agent problems, and moral hazards represent obstacles to energy efficiency improvement measures (see [BuVo11]).

The following presents exemplary approaches for improvements that can be classified under the term industrial symbiosis.

Industrial symbiosis is defined as an approach for companies, where a by-product (or waste) of one company serves as feedstock to another company. See, for example, [ChLi07].

Figure 3.3.4.2 shows the major aim of industrial symbiosis, namely, the implementation of cycle flows that reduce material and energy waste. Similarly, Figure 3.3.3.1 showed an example of an industrial symbiosis kind of concept that can reduce the amount of waste and simultaneously achieve cost savings. To become a viable option for a broader spectrum of companies, the alternative materials need to fulfill certain criteria and be less costly than virgin raw materials. Besides processing issues, several risks from Figure 3.3.3.2 need to be taken into account.

Fig. 3.3.4.2        Major aims of industrial symbiosis. Adapted from [KoMa04].

The following examples are measures that may be taken in the field of industrial symbiosis (based on [ScVo10]).

Firstly, the enhanced utilization of wastes: Industry is increasingly interested in access to by-products, which were previously considered “wastes.” Pretreatment, transport, storage, and an efficient use of alternative fuels in existing processes enables higher substitution rates of scarce resources and fossil fuels to be obtained.

  • Production processes need to cope with alternative feedstocks related to product quality, energy efficiency, and emissions.
  • Mapping and integration of the possible flows of materials and energy is required, while efficiently identifying the best possible reuse (in both economic and environmental matters).
  • Complexity in the market needs to be reduced on different levels to detect sources and sinks of by-products.

Secondly, the recovery of medium and low temperature waste heat, i.e., heat around and below 150 °C: The respective amount of heat is significant. In contrast to current approaches, the analysis needs to take place at various production plants from different sectors.

  • A suitable method needs to be developed for plant, industry, and cross-industry analysis to detect heat recovery potentials.
  • Collaboration potentials need to be explored and promising partnerships between heat sources and sinks identified to apply advanced technologies for heat recovery, transport, and exchange and benefit from synergies

Thirdly, the framework for alternative fuels and resources: This approach is reminiscent of the eco-industrial parks, in which nearby located plants share and use their by-products, energy, information, and capacities in order to increase overall efficiency and productivity. Planning an industrial park of this kind seldom resulted in real eco­logical and economic benefits. This approach therefore aims at supporting existing industries in efficiently sharing and distributing information and by-products.

  • Research should address the collaboration of alternative fuel and resource (AFR) suppliers and users on a cross-sectoral basis to learn about the amounts and suitability of by-products.
  • Integrated process chains across industries should be formed in networks of industrial partners to increase the AFR availability. The risk of dependencies requires attention.
  • Awareness needs to be fostered so that available materials find their way into a suitable reuse as a standardized commodity, in spite of the fact that today’s waste market is rather localized.


Course section 3.3: Subsections and their intended learning outcomes

  • 3.3 Sustainable Supply Chains

    Intended learning outcomes: Explain the changing concept of sustainability with reference to the triple bottom line. Disclose economic opportunities for social commitment and for environmental commitment. Describe energy management concepts and measures for improved environmental performance. Produce an overview on the measurement of the environmental performance. Present social and environmental dimensions in industrial practice.

  • 3.3.1 The Changing Concept of Sustainability with Reference to the Triple Bottom Line (TBL)

    Intended learning outcomes: Produce an overview on the concept of the triple bottom line. Present the paradigm change that correlates to the evolution of sustainability aspects and their interaction.

  • 3.3.2 Economic Opportunities for Social Commitment of Sustainable Supply Chains

    Intended learning outcomes: Disclose the term “double bottom line”. Produce an overview on ethical standards, or code of conduct (CoC). Differentiate between groups of company-internal ethical standards and groups of company-external ethical standards. Present the supplier code of conduct (SCoC) and the certificate of compliance.

  • 3.3.3 Economic Opportunities for Environmental Commitment of Sustainable Supply Chains

    Intended learning outcomes: Produce an overview on energy-intensive industries. Disclose examples of using alternative fuels and raw materials in order to decrease the carbon footprint and the amount of fossil fuels required in the cement industry. Differentiate between opportunities and threats favoring proactive and reactive environmental involvement.

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