Production scheduling and electricity consumption
Many of you may be struggling with the high costs of electricity and other technical utilities such as gas, process water, steam. Have you ever wondered how good production scheduling affects the unit costs of electricity consumption? Can production planning reduce the costs of electricity, gas or water consumption? In many production processes and in many industries – certainly YES.
Production scheduling – why is it so important?
Of course, one may wonder what does a good production schedule mean. It may look differently for each company and can be characterised by various parameters and effects. For the sales department, it will concern timely deliveries to customers and ensuring the availability of products in stock. For the production department, it is, for example, high productivity and reduction of the number of changeovers. The supplies department can focus on low inventory levels of raw materials and components and ensuring them for production. Other effects are important for the maintenance department, where the failure rate of machines is a frequently analysed indicator. It also happens that the goals of individual departments are contradictory. In fact, it is all about the best financial result of the enterprise. We will achieve it by providing the best service to our customers: fulfilling their orders on time, flexibly responding to their needs and guaranteeing acceptable prices. At this point, it is impossible to ignore the subject of production costs.Let us narrow the discussion to the following issues:
- Can we talk with the electricity supplier about more favourable terms of billing for the consumption of this energy? About lower unit costs or a different billing structure?
- Can we reduce the consumption of electricity, gas or water in relation to the finished product unit we produce?
Electricity – prices are negotiable
When you start talking to an electricity supplier, you are probably faced with the question of how reliable your company’s history of electricity consumption is. The energy consumption schedule is analysed – often from the last 2-3 years, with accuracy to the hour. On this basis, a price offer is created for your company. But why not to change the pattern of the conversation and try to present what a stable and predictable partner we can be? Let us not only talk about the history of electricity consumption, but also (and perhaps above all) about the possibility of planning this energy consumption. Let us have a specialised consumption forecasting department that will create day-to-day plans.
Electricity bills – adjusted to consumption
Or maybe let’s try to deviate from the current purchasing policy, when one round-the-clock price is often set, regardless of consumption (possibly with a percentage tolerance of deviations from consumption and a set price for consumption within the tolerance)…?
What if our consumption is outside the established tolerance? Our supplier probably has to buy the missing quantity for us or resell the quantity we have not used at the current price. Remember that each supplier cares about a predictable and stable customer. It is with him that he is able to talk about better purchase parameters. On the other hand, a well-known, more predictable customer may develop a better negotiating position in talks with the electricity supplier. In this way, the slogan: “I pay for what I used at a negotiated low purchase price” will be realised.
Production scheduling and technical media
What about technical media? Their consumption is often independent from the degree of filling of the batch in the feedstock resource. What processes are we talking about? Among other things, about painting in chambers, annealing and homogenising in ovens, dyeing.
Let us focus on the case where the technology allows for filling the resource not fully. If the machine is filled with a full load, the risk that the parameters will not come out is lower. If the machine has not been completely filled, it is easier for the process to have to be repeated, gaps and losses will arise. Some electricity, gas, water, chemicals or dyes are consumed regardless of how full the input resource is. It happens that the cost of using machines and people is almost the same.
If the batch is incomplete, the company incurs losses. The task of the planners is therefore to provide as many batches as possible with 100% filling. Why? Because unfilled batches are particular costs that went into the sewer or into the employee’s pocket.
In practice, production planning lowers costs
It is also connected with the proper planning of previous operations in the production process. There are processes where the amount of full batches has been increased by more than 30%. It was calculated that the sum of the losses decreased.
This change is clearly visible on the example of water consumption, which does not depend on the amount of load – the machine must be fully filled with water. Due to the increase in the amount of full batches, water consumption, calculated in m3 / kg of processed material, decreased by over 25%.
Production management is the key to success
All this is not possible without the involvement of advanced solutions supporting production planning and scheduling. For this purpose, it is worth using IT solutions that will provide the company with a new management dimension and show a new perspective that will allow you to arrange your business differently.
expert in the business analysis department in eq system