Energy, Waste & Water Efficiency and Productivity – It Just Makes Sense (and saves you $)
Recently, KMH teamed up with the NSW Business Chamber to deliver a breakfast seminar for manufacturing businesses in and around the Western Sydney area. The event was supported by the NSW Office of Environment & Heritage who presented their Energy Saver Program and Moody Kiddell & Partners who presented the many and varied ways of financing resource efficiency projects.
There were some great takeaways from the presentations delivered that morning that businesses would be crazy not to consider in their day to day operations. Energy, Waste and Water costs, whether direct or indirect, are material to your business and making sure these costs are managed well can only have a positive impact on your business.
Let’s have a quick look at some of the main points presented.
Energy – Making It Productive
Energy expense was identified as one of the challenges facing manufacturers today. There is also the challenge of adding value to the finished goods and the role energy plays in that value. Energy is a significant cost factor in many and most manufacturing businesses. Typical costs of energy in manufacturing often represent upwards of 5% of variable operating costs. Reducing variable costs means adding to your bottom line.
The alternative is to sell more, but in challenging markets variable cost reduction is an attractive proposition as the following analysis of ABS data shows:
The value of $1 in energy saved is equivalent to between $13-$18 in sales at the factory gate!
Driving costs down and increasing product value allows you to add value by maximising efficiencies. Energy efficiency is a great place to start.
KMH works with our clients to make their energy use more productive. Starting with efficiencies and better utilisation to add value to your process makes good business sense.
Waste – How Many Times Do you Pay For It?
Waste in manufacturing has many cost implications and in many cases may be an area that is not reviewed in detail other than renewing and negotiating contracts for collection. It is clearly much more than that.
A key point made in the presentation was the number of times and the amount you pay for your waste. Everything you throw away has already been paid for when you bought it and now you’re paying for it again when it goes in your bin.
Take plastics for example. Typical cost of plastic raw materials are at least $2 per kg. You pay about 40¢ per kg for disposal costs. This means 20% of your purchase cost has now been added in disposal costs. For food, purchase and disposal costs can be much higher. There are great opportunities currently in the market to recover waste products and reduce your cost of disposal. KMH is currently working with a number of clients to effect this and the NSW EPA is offering a range of rebates and program support for businesses.
One of these is the Bin Trim program which helps businesses reduce waste and increase recycling through funded site audits, improve your waste services contract and encourage behaviour change.
In addition, participating businesses of Bin Trim may also be eligible for rebates on purchases of equipment to assist with efficient waste disposal such as compactors and composting equipment.
The world of waste is changing and it effects every business. How many times are you paying for it?
Water – Doing More With Less
Water is often overlooked in the manufacturing process. The poor cousin perhaps to the bigger, more noticeable costs of energy and waste. Water too, is still relatively cheap to purchase – but not so cheap to pour down the drain!
What is the true cost of water in your operation? How much water do you use in your process and how much is discharged as waste water?
Water is used for many manufacturing processes. A few include: plant and process cooling; product cooling; steam and hot water generation in boilers; process water for paints, dyes and lubricants, etc. On the back end of the process it is used for washing of equipment; general cleaning and rinsing; and sanitation. In these cases, often it is heated combining the costs of water and energy.
Saving water means saving money. Investigating water recycling and reuse initiatives can reduce your water and waste water costs considerably in your manufacturing process. Treating waste water and reclaiming chemicals also helps reduce input costs.
Auditing your water use in your manufacturing process can help stop your water – and your money – from going down the drain unnecessarily. Water efficiencies can also be extremely cost effective. The presentation sited a number of examples where thousands of dollars in water costs were prevented with just a few hundred dollars of investments. Process change, rain water retention, pH control monitoring and sub-metering your water use can all be very cost effective solutions.
KMH Environmental is your resource efficiency specialist consultancy and our client partnership promise means you can focus on your business while we work on reducing your resource inputs.