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

3.3.4 Energy Management Concepts Using Triple Bottom Line (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.

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 In energy management, these activities aid detection of viable improvement areas in manufacturing (see [BuVo11]).

Fig.        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]).

Continuation in next subsection (3.3.4b).

Course section 3.3: Subsections and their intended learning outcomes