Energy Cost Reduction
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American Energy Partnership
Tompkins Associates partners with American Energy, a leading energy consulting firm, to address the full range of tactical and strategic energy challenges companies face today.
Our combined team of professionals can complement your internal resources and improve your ability to implement corporate initiatives and manage energy costs. The services we provide through American Energy include:
- Compile data to measure and benchmark utility costs, consumption and greenhouse gas (GHG) emissions
- Provide energy market analysis in regards to price risk management and budget management
- Manage procurement activities to include identification of alternative suppliers, tariffs and products that will reduce your energy cost per unit
- Identify and implement energy conservation measures that will cost effectively reduce facility energy consumption and the related GHG emissions
- Develop GHG emission corporate strategy to include measurement of GHG inventory and reporting, emission reduction goals and targets, and carbon credit certification and trade execution
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Companies must examine every opportunity to improve energy management and reduce emissions in all operations in order to reduce expenses while improving environmental sustainability.
Have you faced a moment of truth when your customers push back on price increases, or worse, leave as you attempt to pass on higher energy costs?
Are you prepared for the moment when stakeholders ask tough questions such as, “What is your environmental impact, and what are your sustainability goals?”
These moments are real, and your action will determine varying degrees of success. What does it take to prevail in this environment?
Deficiencies that Drive Up Distribution Operations Energy Costs
Facility:
- Unsealed Docks
- Excessive Travel
- Poor Insulation
- Inefficient Lighting
- Lack of Natural Lighting
Resources:
- Material Waste
- Poor Energy Management
- Excessive Packaging
- Poor Scrap Management
Equipment:
- Poorly Maintained Motors and Drives
- Old Technology
- Running Equipment
- Wrong Power Type
Opportunities to Reduce DC Energy Costs
Reduce lost heating and cooling
Poorly insulated roofs and walls, non-sealed dock doors, lack of airflow, and inefficient and poorly maintained HVAC equipment account for the majority of energy losses in a distribution center. Correction of these deficiencies, no matter the age of the building, is critical to minimize energy costs.
Improve lighting and energy management systems
Every day, large areas of distribution facilities are generally unoccupied. However, the lights are always on. And many facilities older than 5 years use low-efficiency lighting. Upgrading the technology of lighting fixtures, bulbs and sensors generally yields solid payback and returns on total energy consumption and costs.
Reduce equipment energy usage
In most distribution facilities, conveyors and related material handling equipment run continuously, burning significant energy. Upgrading the types of equipment in use, the efficiency of motors, maintenance practices, the use of energy management systems, and improved controls that operate equipment only when needed can reduce energy use by 10-50%.
Reduce facility operating window
Obsolete operational processes and information system capabilities often artificially create much longer operating days (and associated energy consumption and cost) than necessary. Process optimization, workload balancing, and wave management can reduce system energy costs, labor and other indirect costs by shortening the time required to get each day’s work done.
Reduce material usage and waste
Reducing waste generation saves waste removal costs, handling labor and space requirements, and new material production cost. Analyzing inbound and outbound packaging materials and the reuse of all types of scrap can identify surprising amounts of excess. Implementing proper packaging will reduce packaging costs and inbound and outbound transportation costs through weight and/or cube reduction.
Business Opportunities |
Solutions |
Typical Benefits |
Contain and/or decrease energy spend while maintaining or improving service |
- Audit and analyze current spend; quantify reduction opportunities; define actions to capture benefits
- Review facility, layout, equipment, and technology, and identify beneficial best practices
- Analyze performance and condition of existing facility and equipment
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5-15% |
Realize energy cost reduction on facility and equipment investments |
- Assess appropriate equipment and automation levels to identify value-added upgrades
- Review energy efficient technologies and practices and quantify new benefits
- Audit operational processes and information systems to identify opportunities to increase productivity/reduce operating time
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5-20% |
Reduce energy management cost |
- Define key metrics to drive cost reduction without disrupting service
- Renegotiate supply contracts and manage procurement activities to reduce purchase costs
- Audit bills to drive out excessive costs
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5-15% |
Identify and size other opportunities to improve the long-term energy strategy |
- Manage and analyze energy data
- Plan for budget and long-term
- Manage energy price risk
- Manage energy supply and demand-side
- Manage greenhouse gas (GHG)
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5-10% |
Our Energy Cost Reduction (ECR) service yields quick and significant return on investment. We help you:
- Analyze your operations’ energy cost drivers, including material handling equipment, facility lighting, and docks to document the benefits of alternative equipment, fuel, and energy management systems and techniques
- Reduce costs without disrupting service
- Find the hidden costs often buried in equipment performance and utility rates
- Focus on tactical operational improvements that can be implemented rapidly with minimal capital investment or short payback periods
- Define a comprehensive energy management strategy through our partner, American Energy (see sidebar)
- Realize savings of 5-20%, which begin in as few as 3 months
Tompkins Associates’ ECR service analyzes and addresses your energy cost drivers with the right initiatives. You gain lower costs and increased sustainability.
Learn More
To learn more, please complete our Information Request form.
Visit the sustainable supply chain page for more resources.
Solving the Cost Reduction Riddle
For a complete overview on aggressive, intelligent supply chain cost reduction on all of the Buy-Make-Move-Store-Sell-Return elements of the supply chain, read the article "The Riddle of Supply Chain Cost Reduction" by CEO James Tompkins.
There are significant cost improvements that can be accomplished with little to no capital investment and with minimal resources. For detailed information, see what top performing companies are doing in areas such as transportation, inventory and outsourcing.
Bottom Line Impact Now:
Ways to reduce costs in specific sectors.
Five Key Opportunities to Reduce Distribution Costs
Three Key Opportunities to Reduce Transportation Costs
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