FMF Monthly Meetings Reviews

For the first meeting of 2006 we welcomed Andrew Parker of Linden Consulting - a firm of consultant Energy Engineers with some useful and relevant experience of the food manufacturing sector.

• National Energy use and the Food sector
• Climate change targets and CCL agreements
• Planning an Energy waste reduction programme
• Monitoring and target setting
• Making use of the Data
• Case studies Dairy. Animal Feed, Bakery and Confectionery
• Help from the Carbon Trust
• Finance

With a turnover of £70 billion and 500,000 direct employees, the Food sector is the largest in the UK and it is the second largest (11.3%) industrial user consuming 44.8TWh. Fuel tariffs in the sector have risen by between 50 and 80% in the last 18 months.

The Climate Change Levy (CCL) was introduced by the UK Government in April 2001 to stimulate action by industrial, commercial and business sector users in terms of energy efficiency. It amounts to a £1bn levy which increased electricity charges by 0.43p/kWh and gas by 0.15p/kWh.

The levy was positioned as “tax neutral” as the income to the Exchequer was offset by a balancing reduction in National Insurance charges. But many businesses have “accepted” the levy without taking action to reduce their energy consumption and receive a rebate of the levy as a reward via a CCL agreement. If yours is one of those businesses that has not entered into such an agreement, you have surrendered competitive cost advantage (perhaps without even noticing!

The Government income from CCL has also been “recycled” to support energy efficiency initiatives and the provisions also allow exemptions from the Levy for businesses that operate CHP (Combined Heat and Power) initiatives (see below) and utilise renewable energy sources.

All of this forms part of the UK’s drive to bring so called Greenhouse emissions into line with the Kyoto target of a 12% reduction from 1990 levels achieved by 2010. In fact the UK target is set at 20% and looks likely, on current forecasts to reach somewhere between 14 and 15%.

A large part of the Food sector’s involvement in CCL (in terms of energy use) is managed under the umbrella of the Food & Drink Federation (FDF) whose member companies have agreed to a negotiated strategy that has provided for an 80% rebate on the CCL. In response to appeals from Government for more to be achieved, the FDF agreed to tighten the 2010 target for its members by a further 3%.

Andy pinpointed a number of key requirements/stages:

• Businesses must establish and work to a clear but succinct Energy policy. This needs to be communicated across the business.
• Use life-time costing in purchasing decisions – it’s not just the cost of the equipment but the cost of the energy that it will use over its life-time that you MUST consider – e.g. paying £100 extra for a more efficient pump or compressor might save hundreds of pounds over its life
• Businesses using more than 100kW can, and should, ask there electricity supplier to set them up to receive Half-Hourly data – free of charge; emailed in an Excel spreadsheet (see below regarding the benefits of this data)
• A senior manager should be made responsible for managing the Energy policy
• Monthly consumption needs to be recorded – and invoices MUST be checked
• Achievable targets should be set for improving (reducing) energy consumption and a programme of continuous improvement put in place.
• Energy efficiency MUST be built into staff training procedures
• Businesses spending in excess of £10,000 should undertake an energy audit

The key data is energy use in relation to production activity and output. Sub-meters can be installed to identify consumption in separate production departments. This might also be linked to a structure of separate energy accounts.

Once the monitors are in place, achievable targets can be agreed with accountable managers. This might be done using specialised software but in many cases a simple spreadsheet will suffice. Monitor and report on savings achieved in response to initiatives so as to feedback and reinforce progress. Review targets annually.

There is absolutely no point in collecting all this data if you’re not going to make good use of it. And, it’s just amazing what becomes apparent when you do!

• Plot consumption in GJ (a handy way of combining data relating to different energy sources) on the vertical axis against production (say measured in tonnes of product) on the horizontal axis.
• Do this over a period of time to create a “scatter diagram” of points representing the energy efficiency of the plant on a number of dates.
• Draw (or if your maths is good enough, calculate) a line of best fit.
• Now ask yourself the question why are some points “above the line”-indicating higher consumption per tonne? And just as important, why are some “below the line” – indicating better energy efficiency?
• What are the similarities? What are the points of difference? Look at all possible factors:
• Was the product different?
• Was the team different?
• Was the weather different?
• Were there more interruptions to thoughput? Shorter runs etc
• Was it a different day of the week?
• What happens on “good days”? Could you make those things happen every day?

• What’s using all that energy when you’re not even running? How can you get that ”base-loading” down?
• Which days of the week (because it’s delivered in a spreadsheet you can easily aggregate the data) are most energy efficient? Why?

1. Dairy – in a large UK plant; consuming 47m kWh of electricity at a cost of £1.9m pa and 40m units of gas costing £750k pa overall; savings of £150k were identified on:
• Compressed air leaks and sequence control
• VSD’s on boiler combustion fans and cooling tower pumps and fans
• Lighting refurbishment and control
• Monitoring and target setting
• Insulation on steam distribution
2. Animal Feed – the largest of the food sub-sectors in terms of energy consumption – in a typical pig-feed manufacturer consuming 5.3m kWh of electricity (£340k pa) and 4.5 kWh oil (£120k pa); annual savings of £48k were identified with a 2 year payback through:
• Plant scheduling
• Motor management policy
• Lighting refurbishment and control
• VSD’s on motors >10kW
• Dormant boiler isolation/flue flaps
• T12 lighting replacement and occupancy controls
3. Cereal Manufacture – working with a large UK cereal bakery; 24m kWh electricity (£1m pa); 83m kWh of gas use (£1.5m pa); £250k payback over 3 years achieved by:
• Oven combustion control setup
• Heat recovery from cooking waste water
• Relamping and controls in warehouse area
• Control of roof ventilation fans
• Improved boiler combustion set-up
4. Confectionery – a small traditional boiled sweet maker using 120k kWh of electricity pa (£12k pa) and 600k kWh of gas (£10k pa):
• Switched from electric to steam for more cost effective process heating
• Replaced (400% oversized) steam boiler with steam generator
• Changed the time-switch settings on an 8 kW heater element – using a facility already installed but never properly set-up
• Replaced “town gas” nozzles with “natural gas” nozzles to give more efficient (and safer) burning in hotplate burners
• Replaced T12 lamps with Halogen floodlights and tungsten lamps
All in all significantly reducing electricity consumption.

The Carbon Trust are funded to promote and develop energy efficiency across the UK. For industry they provide:

• FREE on site surveys* – for businesses spending >£50,000 per annum
• (Telephone Advisory Service for smaller business consumers)
• CHP advice
• Design advice – on buildings
• Events and training
• An Energy Helpline 0800 0852005
• Publications
• On-line calculation tools and wizards
• Benchmarking and sectoral initiatives

Finance Enhanced Capital Allowances are available; offering 100% (rather than 25%) tax relief in the first year on items such as : boilers, CHP, compact heat exchangers, compressed air equipment, heat pumps for space heating, lighting, motors, pipe-work insulation, refrigeration equipment, VSD’s and warm-air and radiant heaters.

A Loan Scheme for SME’s is available in all sectors (except agriculture and fisheries). Loans of between £5,000 and £100,000 are available. These are interest free, with no arrangement fee and repayable over 48 months. Yet, Andy noted, very few loans had been taken up by food manufacturing businesses. Qualification criteria are:

• Less than 250 employees
• Less than £50m turnover
• Loan is limited to schemes in which loan size = 5 years saving e.g. for a £50k loan the payback must be at least £10k pa
• Carbon emission savings must be achieved

• Compressors
• Wood-fired boilers
• Lighting schemes
• Building insulation
• Plastic injection machines,
and
• FOOD PROCESSING !!!

• Envirowise: www.envirowise.gov.uk
• Carbon Trust: www.thecarbontrust.co.uk/loans
• Enhanced Capital Allowances: www.eca.gov.uk

In the last session of 2005, the FMF turned the focus onto the individual and explored some of the issues that stop individuals from optimising their intellectual capacity at work.

In a lively and interactive session we explored:

• Memory and Mind-Mapping - presented by Phil Chambers
• Listening, Thinking and Believing - presented by Norman Smyrell
• Avoiding Conflict - presented by Carl Kovacs

Memory…

Phil Chambers is the reigning World Mind-Mapping Champion. He opened the session by explaining how our memory can be made more effective by the use of practiced techniques. To illustrate this, Phil lead the group through a series of simple tests and exercises to reinforce the real impact of these techniques. For the delegates this proved a real eye-opener – not so much in realising how little data we retain in what we read and hear but, more importantly, how we can improve this retention through the application of some simple techniques such as linking and a process of systematic review.

Linking is a simple technique of associating things to be remembered to items that can be more easily recalled and make use of as many of our senses as possible (images, tastes, feelings, places, journeys, rhymes and humour to name a few).

The systematic review process harnesses the “recall peaks” by reviewing the information in the cycle:

• 10 minutes
• 1 day
• 1 week
• 1 month
• 3 months

Mind-Mapping…

This approach is linked to the use of mind-maps to maximise recall by utilising links, words and images. A mind-map is a systematic way of making notes in a non-linear format - by comparison, this report is in a linear format so you probably won’t retain as much as you would from a mind-map! - that aids recall and can be easily used in the review process outlined above.

Philip illustrated these points by reference to a number of examples (there’s an example below) and also, having explained the “rules of mind-mapping”, encouraged the group to have a go. Needless to say, it’s not as easy as it looks and certainly you need to practice to be as eloquent on paper as the current World Champ showed himself to be. But no doubt, like me, the other delegates had a pack of coloured pencils for Christmas and have been practicing ever since.

The benefits seem clear but the requirement, for your correspondent at least, is for determined practice (or perhaps a training course with Philip) to get me using these powerful techniques. You can find out more about these techniques at www.learning-tech.co.uk where you can also purchase a copy of Philip’s excellent book “A Mind to Do Business” - which the FMF was delighted to present as a token of thanks for their support to ALL our members at the end of the first year of the Forum – if you didn't pick up your copy you can do so at the next meeting on 31 January 2006.

Listening…

Norman Smyrell from the Shropshire based Business Improvement Academy opened his session by helping the group to improve the essential business skill of listening. Focusing on the desire to be heard and illustrating techniques to clear the deck and ensure that we receive communications fully and clearly.

In a reference back to Philip’s session, Norman extolled the benefits of active listening:

L – Look Interested
I – Inquire with questions
S – Stay focused
T – Test your understanding
E – Evaluate the message
N – Neutralise your feelings

Thinking and Believing…

“If only you believe with sufficient conviction and act in accordance with your faith; whatever the mind can conceive and believe the mind can achieve” - Napoleon Hill

Norman opened this session by quoting this author extolling the virtues of positive thought as an essential pre-requisite to achieving goals. He moved on to explain the action of the Behaviour Cycle as indicated by the diagram.

Belief is at the heart of success and to develop belief Norman recommends:

1. Think Success, don't think Failure
2. Never sell yourself short
3. Believe Big
4. Plan your Personal Development Growth, and
5. Take Responsibility for Yourself

You can find out more about how the Business Improvement Academy works to improve productivity, performance and profit by visiting their website: www.business-improvement-academy.co.uk or call Norman (toll free) on 0870 1149292.

Conflict...

Whilst conflict is often viewed as a constructive driving force within an organisation, an expression of healthy competitiveness that creates new ideas and actions - in many circumstances, it arises from, we know-not-where and wastes valuable time and energy that the organisation can ill-afford.

So, Carl Kovacs introduced the concept of ten Conflict Triggers:

1. The Caustic Opener
2. Mind-reading
3. Everywhere, for ever
4. That’s you all over
5. The blame game
6. Exaggerate? Me?
7. You say potato
8. Yesterday’s hangover
9. What I mean, not what I say
10. Irreconcilable differences

Showing the group how to recognise them and, most importantly how to avoid them and thus save significant waste of effort.

The process starts by taking responsibility:
   - often YOU are the cause of conflict
   - in any event YOU can only change YOUR behaviour and that’s all that’s needed!

It’s also about listening – much conflict arises from misinterpretation and misunderstanding.

The group were asked to survey (over a week at work) and identify their “Personal Top 3” conflict triggers and then develop personal avoidance strategies for each. They were also asked to review their relationship with the person with whom they most often clash and then reflect on what they do to trigger conflict with this other person.

By now, like me, they will have had the opportunity to put this plan into action – thus saving time and energy to read this article!

If you would like to find out more about how this approach to conflict could save valuable time and effort for your team, why not contact Carl at: ckovacs@food-manufacturing-forum.com

• What will your customer want?
• The BRC and any other new standard that comes along?
• And what is around the corner?

• greater buying power in specialist logistics equipment (e.g. vehicles)
• improved flexibility to meet fluctuating resource needs (e.g. seasonality and shared user resources)
• focused depth of expertise to provide leading edge solutions (e.g. latest technology and information systems)
• tighter client control through key performance indicators and continuous improvement