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How to Cut Costs When Money Doesn’t Grow on Trees!

This might be a shock to you: it costs a lot of money to run your manufacturing facility! I know, right? That idea came out of left field. As you’ll see, operating expenses are consistent. Hopefully, you’ll take away some ideas on cutting costs. Plus, if your facility uses them, some ideas to make your pumps more efficient.

Operating Costs

In any manufacturing facility, there are a variety of expenses that make up the operating costs. These costs consist of four basic types:

  • Steel Coil Raw Material

    Raw materials: what you buy from somebody else to make your product.

  • Direct labor: what you pay your employees working on the line
  • Variable overhead costs: variable overhead costs are indirect production costs tied to production. If you produce more product, your variable overhead costs go up, and if you create less product, your variable costs go down.
  • Fixed Overhead: Indirect production costs NOT affected by the product line. These fixed costs include:
    • Salaries for office personnel
    • Safety inspectors
    • Accountants
    • Shipping and receiving people
    • Depreciation of production buildings, equipment, and other manufacturing fixed assets
  • Occupancy costs: These types of costs include:
    • Building insurance
    • Property taxes
    • Heating and lighting charges

Ideas to Reduce Costs

As you see, there is plenty of opportunities to change how your bottom line looks at the end of each month. Phil Cerria, writing at the South Jersey Energy Blog, shares five tips to reduce your facility’s energy costs.

1) Control Facility Lighting Based On Occupancy

A simple way to improve your industrial energy efficiency and reduce overall costs is to match the lighting to occupancy.

Cerria suggests that investing in a smart energy system that regulates lighting based on activity or time. For reasons of safety and security, some lights need to remain turned on. Others, however, don’t.

Smart Climate Control System

2) Implement A Smart Thermostat

A smart thermostat helps reduce your industrial energy costs by adjusting the temperature based on learned behavior. By connecting to the cloud via WiFi and gathering data on user behavior across your entire facility, the thermostat “learns” and employs algorithms to automatically set heating and cooling based on evidence, instead of manual adjustment.

Thermostats are becoming smarter every day. You can tie your smart thermostat with online weather forecasting services. Temperatures raise or lower depending on the predicted weather.

3) Design Your HVAC Intelligently

Commercial HVAC System

Your HVAC is a critical component affecting your industrial energy efficiency. In fact, for most businesses, HVACs are responsible for 65% of all electricity costs.

Your chosen HVAC must account for your facility’s size, materials, and other factors. For example, a business owner might choose to install a small, undersized HVAC solution in an attempt to reduce energy costs, only to wind up paying more when the system works harder to cool the space, suffers strain and inevitable issues and requires costly maintenance or replacement. When putting together your industrial energy plan, it’s important to think long-term.

Cerria suggests that you should also use a smart energy system that compares to an intelligent lighting system.

4) Keep An Eye On Compressed Air

Compressed air is the single most expensive industrial energy utility. Certain industries spend up to 20% of their energy utility on air compression systems. A single Compressed Air leak carries a potential price tag of $10,000 a year, and most compressed air systems leak several times over the course of a year.

We’ve written about how much an air leak ends up affecting your bottom line. Do not ignore leaks. They only get worse as time goes on.

Analyze Your Air Consumption

Cost of an Air Leak

Most businesses use compressed air on an ongoing basis without ever actually considering how to use it. Many facilities use only 50% of the compressed air for its intended purpose and are wasting the other half in leaks or misusing the system. There is also a problem with artificial demand, which is associated with an oversized compressed air system and requirements. Often, this issue results in up to 15% of your compressed air costs.

Sometimes, compressed air is used for unnecessary purposes, such as cooling personnel, cabinets, or machinery, as well as the open blowing of the compressed air. In many cases, the same objective is better served with an oscillating fan or blower while reducing energy consumption.

5) Take Advantage Of State Subsidies

State-subsidized energy programs, such as New Jersey’s Direct Install, are excellent ways to lower your long-term industrial energy costs with a small upfront investment.

Direct Install, for example, pays for 70% of all energy upgrades designed to make a business’s energy use cleaner and more efficient (for investment up to $150,000). When you only pay 30% total cost, you see a significant return on investment, quickly.

Take time to research whatever subsidies are available in your area. Taking advantage of them costs you a little time and upfront expenses, but in the end, subsidies pay off.

Cerria shares what he calls “high-impact” tips to reduce costs today. He makes a good argument for each of his suggestions, yet I’d like to take his idea one step further. As he mentioned, HVAC accounts for nearly two-thirds of electrical expenses. Electric motors and pumps are no slouches themselves in using power.

Past posts (here, here, and here) have covered several ways to help make your motors more efficient. But, we haven’t talked about ways to increase pump efficiency.

Pump Modification

By modifying the way you use pumps or by altering the size of the pumps you use, you reduce energy consumption by up to 75% in some cases. Besides the energy savings, the lifespan of the pump increases from minimizing wear and tear. Both the pump and associated equipment benefit from positive modifications.

Pump Sizing: Getting Things Right the First Time

Another critical factor in optimizing pump energy use is to size the pump for the task correctly. It is essential to analyze what the pump needs to do, then choose and the size that is right for the job. An undersized pump does not deliver the performance required for the task and results in excessive energy use.

Many facilities face the problem of an oversized pump. Rather than pre-determining the size necessary, they merely over-size to ensure that they have enough power available. If the pump is too large for the job, it takes care of the task but also wastes a significant amount of energy. To size the pump properly, determine how much liquid to pump, the flow rate, and other factors.

Variable Speed Drives

Variable Speed Drives

Adding a variable-speed drive (VSD) helps to reduce pumping energy consumption. Throttling is an option. It is not possible under certain conditions, such as pumps used for food processing or wastewater management. A VSD minimizes the amount of energy used because the pump uses only as much as necessary. When a pump runs at 50% of full capacity after installing a VSD, the pump uses 70% less energy. Over a short amount of time, the VSD pays for itself.

Routine Maintenance

If you don’t already use a routine preventative maintenance program, start one! Regular pump maintenance extends the pump’s life, and the pump operates at peak efficiency. Plus, a routine program spots trouble before it becomes a problem. It’s easier to plan a repair ahead of time instead of shutting half the plant down to deal with it.

In Sum

Inside all the expenses of running a manufacturing facility lay plenty of opportunities to cut costs. This opportunity includes updating lighting, thermostats, keeping your air systems tight, and taking advantage of subsidies. Another solution is to make changes to your pumps, making them more efficient. Using the right size pump, adding a VSD to run it, and using an effective maintenance program to keep an eye on your pumps helps cut your costs.

The post How to Cut Costs When Money Doesn’t Grow on Trees! appeared first on L&S Electric.

This post first appeared on Watts NewL&S Electric | The Official Blog For L&S, please read the originial post: here

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How to Cut Costs When Money Doesn’t Grow on Trees!


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