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Fuel & Power Budgeting In World Class Factories

Posted June 04, 2014 1:00 AM by larhere

Designing and supervising operation of efficient manufacturing facilities is what I have done for most of my career. Here is a simple step-by-step procedure for Fuel & Power budgeting to bring your factory to the world-class level.

Step 1. Determine the facility operating Base & Process energy loads by audit. HVAC energy consumption is an example of a base load. The motor energy required to exhaust air from a cleaning booth including the energy to produce steam or hot water is an example of a process load. The heating or cooling of the make-up air to this process is part of the base load. Energy cost reduction savings become apparent with these audits.

Step 2. Secure the Climatological Data for the location from NOAA. Heating & cooling degree-days are listed including normal and variation to the current day/month/ years. This data is required to set a standard ratio of base load energy to heating/cooling degree-days. Budgets are set to the normal ratio. Departure from normal provide detail of the variation to current month/day & previous year.

Step 3. Define the operation's productivity factor. Tons of product shipped, direct labor hours to produce are examples of factors that affect the process load. The ratio of these factors to the process loads set the standard for the current day/month/year performance to budget. Variations to budget either favorable or unfavorable result from changes in productivity, however, only the process portion of the total Fuel & Power load is affected by the changes

Step 4. Set the current year Fuel & Power budget based on previous year's performance. The base load should be based on normal degree-days. Previous years base load adjusted to normal is the starting point with changes to plant size &/or HVAC energy cost reduction as examples of projected changes. The process load is based on equal performance to previous year's budget. Additions or reductions to the productivity factor including any energy-influenced process changes will influence the current years process load.

Step 5. Provide ongoing projections of Fuel & Power budget variations based on changes to productivity & weather. Establish a score sheet on performance to budget with the objective to maintain/reduce costs & provide updated reports to operations personnel.

The procedure outlined above takes the responsibility of Fuel & Power Budgeting out the traditional Factory Cost Accounting function and places it properly with the Facility Engineering group. Operational management will understand variations to the current Budget and take logical steps forecasting future energy costs.

Editor's Note: CR4 would like to thank John Ramsden, GEA Consulting Associate, for contributing this blog entry.

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