“Hey, close the door — what do you think, we’re heating the neighborhood?” These are words I heard uttered by Mom and Dad over and over when I was a little boy. As intended, and probably for you too, it instilled upon me the need to be a little more aware of our family’s heating and cooling bills.
Fast-forward to many years later. As a business owner, I’m tasked, along with my team, to continually look for ways to save money, increase our energy efficiency, and improve our cost of services for our customers. But, more importantly, those early words gave me a curious mindset in trying to be more investigative and business-focused toward the company’s energy consumption.
As a commercial heat treating company specializing in distortion sensitive processing, Kowalski Heat Treating Company (KHT) is highly energy intensive. The cost of electricity and the myriad of regulations we deal with dramatically affect our small business. In a nutshell, it all comes down to two main cost drivers: people (time) and energy use. Our unrelenting focus is simple — drive out inefficient kilowatt-hours used to process a pound of treated components. Although we are fortunate to be located on the beautiful “North Coast” here in Cleveland, we are also handcuffed as an all-electric operation due to lack of high-pressure natural gas lines in the neighborhood and the specialty heat treating and cooling equipment we utilize. As my operations director tells me, when we’re at full capacity, running all six plants, 24 hours a day, “The e-meters spin fast enough to be used as cooling fans.”
In 2009 (those challenging economic times), to address a key driver in our long-term sustainability initiatives, we launched a comprehensive cross-functional team to address both our current and projected energy requirements. For more than just a quick review, we decided to turn everything upside-down, looking everywhere for savings. Our team, from its inception, focused on all aspects of energy use within the organization, with a macro-mandate to become more energy-efficient. Early on, we realized that this was not something we could or should do on our own. To do it right and maximize the long-term outcomes, we decided to leverage the tremendous resources available locally within the state of Ohio and nationally.
We began by reaching out to our local utility, First Energy, the state’s Department of Energy (DOE), the Ohio Development Services Agency, and the U.S. DOE that had a program in place with the University of Michigan.
And much to my delight, every one of them responded, “Sure, we can help.”
With funding from the U.S. DOE’s Office of Energy Efficiency and Renewable Energy (EERE), we started with an extensive energy audit, conducted by the University of Michigan, which resulted in a comprehensive list of potential energy improvements. At first, I must admit I was skeptical, (being a lifelong Buckeyes fan and trusting “Big Blue” from up north), but once I read their reports, I realized just how valuable the audit was. It included a full range of recommendations — from simple tasks for soft energy savings (lighting, power supplies, copiers, computers, printers, and insulation), to major operation shifts, furnace rebuilds, and better time and materials utilization metrics. We took every recommendation they had and plugged each into our operations and behaviors.
Next, realizing that we were in the crosshairs of the Public Utilities Commission of Ohio (PUCO’s) regulated energy-efficiency mandates, we calculated our current and projected energy use and put a plan in place to help us remain exempt from consumption reduction and reallocation payment penalties. The projected penalties alone had us looking at a 20-30 percent cost increase with no changes in production — scary!
And the third step we took was a four-phase “deeper dive” audit, managed by the Ohio DOE. Phase One was the audit, measuring our accomplishments to date and improvement steps to take. Phases Two and Three were the planning, extensive upgrades, and installation of new and better equipment and systems in three of our plants. Phase Four was measuring and monitoring.
The results have been fantastic. Looking at everything, from our employee mind-shift appreciation for savings and implementing the tactical improvements and time/energy studies, we can quantify improved energy-efficiency savings of over 25 percent company-wide. For our business, that translates to managing more pounds of product in more efficient cycles and lower energy costs — driving down our costs per pound, which we can now pass on to our customers.
Today, our production efficiency is up by double digits, and our energy consumption is down 15 percent. My team tells me, “Boss, not only did we ‘shut the door’ – we slammed it shut!”
If energy consumption and cost management are core areas you face in your business, I highly recommend that you get engaged in an effort like ours. Start with a realistic energy audit or review. Reach out to your local vendors and state and federal agencies, and instill a mindset within the staff that this can really make a difference. And, if you have any questions or want to hear more details on our efforts, feel free to call or email me.
And when you leave your office tonight, shut down your computer and turn off the lights. Believe me, it works!
