Building a Best Practices Foundation:
Corporate Energy Management at Shaw Industries
A Corporate Energy Management Case Study Sponsored by the U.S. Department of Energy, Industrial Technologies Program
Contact: Christopher Russell, Director of Industrial Sector, (202) 530-2225
Shaw Industries spent the latter half of 2004 developing basic energy efficiency solutions for its 53 manufacturing facilities. A corporate energy team takes thorough advantage of the U.S. Department of Energy’s BestPractices reference materials for identifying and evaluating improvement opportunities. Systematic documentation for potential conservation savings began in mid-2004 and accumulated at a rate of $1 million per month through the latter half of that year.
What was the desired outcome of the corporate energy management (CEM) effort?
Shaw’s energy group was already successful at purchasing energy wisely, and the latest effort is to optimize the use of energy.
What issues (or symptoms) led to the implementation of CEM?
Energy costs for Shaw were historically a small percentage of operating costs, but they were rising after 2000. At the same time, the vice president of manufacturing’s interest in efficiency led to the implementation of Six Sigma quality control programs. Energy was one of many ideal functions for Six Sigma discipline.
What technical, managerial, and behavioral elements were developed?
Responsibility for implementing energy efficiency at Shaw falls on the shoulders of plant engineers and maintenance supervisors at individual plants. Members of the corporate energy team act as advisors, helping plants to identify and quantify savings opportunities.
Shaw’s corporate energy team refers to the U.S. Department of Energy’s BestPractices as a framework for identifying energy improvement opportunities. They also react to suggestions that float up from plant staff. The energy team ensures that good ideas are shared with other plants. Intranet systems are used to communicate energy management information.
When Demand-Side Engineer Jerry Zolkowski joined Shaw in July 2004, he brought with him plant auditing techniques from his earlier experience with the U.S. DOE’s Industrial Assessment Centers (www.oit.doe.gov/iac). Mr. Zolkowski’s methodologies are complemented by Six Sigma practices, which demand quantitative monitoring of inputs, outputs, and activities.
How are empowerment and accountability addressed?
Shaw’s senior management holds business units responsible for operating costs. In late 2003, management decided that 15 percent energy savings were possible—as a goal to be reached “someday.” Zolkowski began systematically quantifying savings potential at all North American plants when he came on board, giving individual plants responsibility for implementing the solutions suggested by the corporate energy team. Most plants are receptive to this assistance.
What were the barriers to implementation, and how were they overcome?
Due to high variation among facilities’ products, processes, and plant management styles, corporate energy management at Shaw resists a one-style-fits-all approach. The power to implement energy solutions is concentrated in the hands of key managers at each site; these individuals prioritize the corporate team’s advice to best fit the needs of their plants.
How are results monitored and communicated? Shaw’s corporate energy team tracks energy consumption per unit of production (usually square yards or pounds). Documentation of successful initiatives are picked up and replicated through quarterly meetings and website communications organized as a part of Six Sigma functions.
What are the tangible results to date (consumption, emissions, financial, etc.)?
During each month from July through December 2004, Mr. Zolkowski identified improvement opportunities that would yield about $1million annual savings. By February 2005, about $100,000 a year was being saved through completed projects, while projects totaling another $2 million in annual savings would soon be in place.
Who is the audience for the results?
Internally at Shaw, the vice president for manufacturing urges the general improvement of operational efficiency. While Shaw has not yet started cultivating an external audience for its energy management accomplishments, the company does note that the commercial market (offices, schools, healthcare, etc.) is increasingly interested in using building materials with less environmental impact-- including the energy used in production. Shaw is positioning itself to be responsive to this emerging market.
In what way have Best Practices and related U.S. Department of Energy resources contributed to energy management?
As mentioned above under “technical, managerial, and behavioral elements,” Shaw Industries’ energy team adopts plant assessment methods and BestPractices reference material developed by the U.S. Department of Energy. See www.eere.energy.gov/bestpractices.
What are the threats to the durability of the CEM effort, and how are these addressed?
Initial energy management efforts at Shaw Industries have captured most of the “low hanging fruit.” As energy cost issues grow, there will be more incentive to act on the recommendations made by the corporate energy team.
What remains to be done?
Some Shaw Industries facilities still await an initial assessment using the BestPractices methods championed by Zolkowski. Plants that have received an initial assessment need follow-up visits to help with implementation and evaluation. Six Sigma methods need to be applied to these facilities to monitor results. At this stage, Shaw Industries is getting better at sorting, prioritizing, and replicating energy-saving opportunities. Over time, project emphasis will shift from initiation to replication.