IoT Sensors Reveal New Ways for Manufacturers to Cut Energy Usage

Removing inefficiencies on the factory floor and in the supply chain can cut costs

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The next big effort to reduce carbon emissions and hold the line on climate change will be enabled by the Internet of Things. Companies can rethink their costs of operations, taking into account the energy used, with a combination of more granular data from cheap sensors and faster, more in-depth analytics from cheap computing.

At Schneider Electric’s factory in Lexington, Ky., workers make electric components, including load centers and switches. The plant is four years into a company-mandated five-year goal to reduce energy consumption by 5 percent each year. The first two years, it achieved that goal. Then, management decided to deploy sensors and richer analytics to take a closer look at the mix of products made in the plant and the order in which those products were manufactured. They realized that by changing the production mix and order, they could save a lot of energy.

How much? After tweaking the production mix, the plant reduced consumption by 12 percent in year three and 10 percent in year four. “The entire group had been focused on the processing side, and now every process decision is dictated by energy savings,” says Andy Bennett, former senior vice president of Schneider Electric’s EcoStruxure platform, which drove the factory innovations. “What has changed in the last five years is the technology and the drive and need to have a sustainable message.”

Bennett says that despite the United States pulling out of the Paris Agreement, many U.S. business leaders are still focused on reducing carbon emissions. Reduced energy consumption improves the bottom line, but it’s something that manufacturers hadn’t focused on because they didn’t have the tools or impetus.

A similar shift in thinking played out in the 2000s in data centers, as companies such as Amazon, Facebook, and Google realized that power was a significant aspect of their costs of doing business. To address this, they prioritized the metric of performance per watt and forced Intel and Advanced Micro Devices, their suppliers, to focus on that metric.

The results were impressive. In 2016, a report by Lawrence Berkeley National Laboratory showed that energy consumption in those companies’ data centers had remained flat, despite the growth in computing power, and had saved them roughly US $60 billion in energy costs each year.

Now it’s the manufacturing world’s turn. Schneider Electric isn’t the only company using sensor data and artificial intelligence to optimize its energy conservation. This year at the Bosch ConnectedWorld IoT conference, in Berlin, the German industrial giant exhibited software that tracks the energy consumption of industrial processes and calculates how much energy they require.

Ikea, another huge European company, also tracks its energy use, and has gone a step further, calculating the energy used in production to determine whether it should make the product at all. The company, famous for its conservation efforts, looks at energy consumption used in manufacturing and the expected lifetime of a product. If something requires a lot of energy or can’t be recycled effectively, it doesn’t get made, according to Lena Pripp-Kovac, Ikea’s sustainability manager.

Ikea may have an entire business unit dedicated to sustainability, but that’s not feasible for many manufacturing companies. Fortunately for them, the Internet of Things will allow them to re-create similar analyses with much less fuss. And that will be good for all of us.

This article appears in the October 2018 print issue as “The Frugal Factory.”

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