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(file path) VeSM (Value & energy Stream Mapping) Expands Opportunities for Energy Savings & Cost Reduction Kirk Prather January 10, 2011

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Page 1: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

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VeSM (Value & energy Stream Mapping)

Expands Opportunities for Energy

Savings & Cost Reduction

Kirk Prather

January 10, 2011

Page 2: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

CMTC

• CMTC (California Manufacturing Technology

Consulting) is a non-profit for-fee consulting

company for manufacturing companies in So Cal

• One of 60 MEP (Mfg Extension Partnership)

organizations in 50 states, many have Fed &

State funding from NIST ( Dept of Commerce)

• CMTC consultants: LEAN, 6 Sigma Quality, ISO

9000,ERP, IT Typically 25 yrs+ of experience

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Page 3: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

VeSM Assessments Potentially Identify

More Mfg Improvement Opportunities

• VeSM originally VSM+ energy (discrete mfg)

• Especially in Process Industries “VeSM ”

Assessments expanded parameters & tools &

kept Value Stream Mapping (VSM) principles to

1. Map more process performance

parameters—energy use, energy intensity,

equipment energy efficiency, heat loss,

statistical process variables

2. Thus identify more OPPORTUNITIES to

reduce waste & cost

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Page 4: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

VeSM Assessments Identify More Mfg

Improvement Opportunities II

• Expanded “VeSM “ assessments to both

– Discrete parts & discrete processes

– Continuous-flow processes (stage by stage) in

process industries (as defined by IIE-PID)

• Expanded assessment concepts & principles

– LEAN Mfg---Continuous improvement, Employee

empowerment, Customer value-added, ABC

– 6 Sigma Quality –DMAIC, Team problem

solving, Statistical tools, DOE, SPC, Simulation

– Theory of Constraints– greatest performance

improvement on whole production process?(file path)

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Page 5: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

CMTC VeSM Study---2 phases

1. Do VeSM Assessment

– Identify promising improvement opportunities

(often pick one product line)

– Select best improvement opportunities (cost &

risk vs. potential benefits)

2. Implement Improvements –investigate & fix

– Form Kaizen team(s) with facilitator/trainer,

engineers & operators (training, doing)

– Obtain Engineering technical support –

equipment efficiency upgrades, heat mapping

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Page 6: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

What Is Common to classic VSM?

• Trace processes from order entry to shipping,

step-by-step with all loops (direct & indirect)

• Make Visual Map: see the whole & components

• Describe various types of performances of each

process step & whole process group --- Times

(cycle, planned & unplanned, changeover…)

rework, scrap, labor, energy use&efficiency, heat

loss….

• Bench mark performance (believe achievability)

• Calculate & select highest ROI $ savings (TOC)

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Page 7: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Current State Map XYZ MANUFACTURING COMPANY

SHORT GOODS PROCESS INFORMATION & FLOW

CURRENT STATE VALUE STREAM MAP

Customers Demand:

Yearly = 4,268,160 lbs

Monthly = 355,680 lbs

Daily = 17,784 lbs

For every 1400 lbs: 738 lbs sold, 370 lbs scrap, 233 lbs changeover, 59 lbs other

Final Inventory:

28 days = Number of Days = Number of Units in inventory Daily Demands

Raw Material

Supplier

Durum Semolina Delivers

3-4 X/Week - 48,00

lbs/Load

XYZ Manufacturing

Company

Phone or Fax

Orders 10 to 20

Orders/Day

Customer

Service

Order Form or

Computer

Data

Shipping

Departmen

t

NOTE:

Batch Size = 15,000 lbs

1 Unit = 1,400 lbs

Prod. Rate = Time/Unit

Discrete Delivery

Schedules

Delivery

Schedules

Order

Inventory as

Required

Purchasing

Department

Raw Material

Purchase

Order

Mix & Extrude/1st

Dryer/2nd Dryer2 80,000 lbs Silos

16,000 lbs

9

Days

I I I I

Prod. Rate = 11 Hrs 1/5/5

Setup = 3 Hrs

% Scrap = 26%

Shift = Day

2 S/R

Mix

(Rainbow) if

Required

Prod. Rate = 1

Hr

Shifts = Day

2 S/RInventory

included in

bin count

PackagingDistribution

& ShippingQC Release

Prod. Rate = 6 Sec/5

lbs or 28 Min

% Scrap = 59 lbs/Unit

Shifts = Day

2 S/R

Prod. Rate = .5

Setup = 0

%Uptime = .33

Shifts = Day

1 S/R 497,805

lb9,600 lb64,600 lb

9 Days 11 Hours 0 Days 3.69 Days .5 Days 28 Days.5 Hours (?).5 Hours0 Hours

bins + gaylords

SHORT GOODS

Total Lead

Time

= 41 Days

Total Value

Added Time

= 12.96 Days

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Page 8: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Why add energy to VSM? 1.Cost of

energy is rapidly increasing!

• Cost ratio of oil/gas discovery & extraction in

energy-units-spent to energy-units-gained---

From 1/100 in 1910 to 10+ /100 in 2010

• Explosive BRICS (China) Energy use growth

• More costly power plants & transmission lines

• Regulation, Carbon tax & caps provide

incentives to reduce CO2 (GHG) & fossil fuel

use, but renewable energy)

– Cap & trade already in Europe, Legislated for

California et al & New England states in 2012

– Mandated renewable energy % for utilities (file path)

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Why add energy to VSM?

2. Great cost reduction opportunity!

New plant equipment energy efficiency has

significantly increased (2X?,3X?) in last 10

years. Thus typical older plant equipment is:

– Energy obsolete

– Offers many high ROI (Return on Investment)

upgrade opportunities specially with

• Equipment lifetime ROI vs. payback

• Escalating energy cost factors

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Page 10: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Equipment Energy Efficiency Upgrade

Opportunity Examples

• Lighting---LED lamps, New Flourescent lamps

– CFLs (compact fluorescent lamps) replacing

incandescent lamps (40+ vs. 12 lumens/watt)

– T-12s to T-8s five years ago, to T-5s last few yrs.

• VFD (variable frequency drive) Motors, Fans,

Pumps, & Compressors in variable load

applications, often 25%-40% energy reduction

• Digital technology & smart control systems

• Air conditioning, 6-21EER, 18 EER=1/3E 6 EER

• New Gas Burners, Multi-modular steam boilers

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Page 11: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Tips about Equipment Energy Maps

• Equipment Energy Maps can be by machine or

by process stage &/or machine groups

– Need equipment(energy use per hr or per

widget) PLUS equipment rated energy efficiency

• Need to Separately Map

– Direct production equipment –energy used/widget

– Indirect production energy equipment – energy/hr

• Lights, HVAC, air compressors, indirect process

heating & cooling systems (steam & water chillers)

– Direct Production w Big Indirect --Gas burning

(furnaces, ovens, boilers )(file path)

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Page 12: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Measuring True vs. False Process

Improvement Energy Savings

1. If raise equip energy efficiency, will save

energy whether direct or indirect energy equip

2. Process energy savings result from Reducing

Total Energy Intensity (EI = energy/widget)

a) Produce more/same operating hours--increased

velocity & usually a capacity increase OR

b) Reduce operation hours for same production

3. Beware simple sales volume increase & no

genuine process improvement (back out

normal sales variation)

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Page 13: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Typical Process Improvements that also

validly save Energy

1. Reduce scrap/rework typically = less direct

energy/widget & maybe less indirect E/widget

2. Increase equipment run time % of shift hours

a) Faster changeovers, faster breakdown recovery,

& Operate thru lunch & breaks often result in

producing more per shift, or reducing hours (OT)

b) Preventive Maintenance, & Startup Check lists

to reduce unplanned downtime,

3. Increase batch equipment utilization (ovens,

furnaces)

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Page 14: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

VeSM Case Studies

1. Plastic Container Plant:

– Film Extrusion, 10 Thermoforming Lines

– Maps: VSM, Energy Maps, daily EI

– Kaizens: Scrap reduction, Changeover time

reduction, (Equipment Energy Efficiency Upgrade)

– Results: +4% yield, Changeovers 5.5 to 1.5 h,

capacity gain almost 1 thermoforming line, 10%

– Process only Savings (w/o equipment upgrades)

Savings: 700,000 kWh, 20,000 therms, $250,000

Labor

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Page 15: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

VeSM Case Studies

2. Plastic imitation Wood fence system Plant

– 2 Processes: a) Recycled fiber line of waste from

Cardboard Recycling plant: b) Fence parts plastic

extrusion line from recycled fiber & recycled plastic

– Maps: VSM, Energy Maps, 6 Sigma input/output

process variable map, Heat loss maps of fiber line

– Kaizens a) Reduce Changeover & Breakdown

recovery times, b) Preventive Maintenance, c)

Heat Map Conservation Simulation

– Savings 20% gas usage, Uptime increase 40 to

70%

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Page 16: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

VeSM Case Studies

3. Continuous Flow Chemical Production Plant

– Energy Processes: Superheated Silicon Fluid

Process Heating

– Maps: Heat gain/loss maps by process stage,

equipment energy maps: Process maps of input/

output variables

– Kaizens: Understanding sources of unexpected

heat losses, Investigating heat recovery options

– Results: Big gas savings, Found large heat loss

variances to design & thus needed equipment

repairs & identified heat recovery opportunities.

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Page 17: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Advantages of the VeSM Approach as

Energy Savings Program

Add Equipment Energy Efficiency Improvement

Opportunities & Increase potential lable Project Cost

Savings

Add calculating Energy Savings to process

improvements for higher ROI beyond materials & labor

Process improvements often require little or no capital

investment, typically increase manufacturing velocity &

capacity, and postpone new capital cost

Process improvement energy benefits can help fund

additional process improvements including equipment

efficiency upgrades

Expands number of opportunity tradeoffs available

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Page 18: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Energy Savings Through Process Improvement

VeSM:

A Comprehensive

Energy Solutions

Roadmap

Energy

Consumption

AuditsProcess

Mapping

Improvement

Event

Process

Improvement

Value Energy Stream Mapping (VeSMTM) Advantage Plus

Innovative and Effective Energy Saving Solutions

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Lean VeSM –Management Techniques

for Continuous Improvement

• Add energy waste as improvement opportunity

• Continuous Improvement Management needs

– Management Sponsorship & Accountability

– Metrics (energy intensity = energy used/widget)

– Lean & Energy Champions (training)

– Employee Awareness & Incentives to cut costs,

save energy, improve quality

– Investments in Employee Involvement,

empowerment, training, team assignment hours

– Kaizens (team, full time for several days)

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Expanding Personal IE Expertise is

Great Career & Company Opportunity

• Equipment Energy Efficiency

– AEE energy efficiency basics on line course

– Utilities courses

– DOE/EPA GHG, Energy Star websites

– DOE factory benchmarks, web tool kits (motors,

air compressor systems, HVAC, data centers)

• Thermodynamics Heat loss calculating &

mapping (especially for gas burning equipment

& process industries)

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Page 21: VeSM (Value & energy Stream Mapping) Expands Opportunities ... · energy is rapidly increasing! • Cost ratio of oil/gas discovery & extraction in energy-units-spent to energy-units-gained---From

Questions? & Contact Info

• www.CMTC.org - Manufacturing newsletter

• Kirk Prather --- [email protected]

• Saeed Madjidi --- [email protected]

• Green Supplier Network(GSN) on EPA website

• New Federal “E3” grant program sponsored by

(EPA, MEP, DOE, DOL, & SBA ) for local

governments and utilities for 3 way cost share

mfg plant assessments (Fed+ local utility or

local gov’t)+ company) Look at EPA or DOE

websites.

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