Environment – Dialog on Environmental Management
Reducing CO2 Emissions from Production
Under its Environmental Vision 2021, Mitsubishi Electric has established an Environmental Plan and is implementing wide-ranging energy conservation measures. We have already seen a number of results under the 6th Environmental Plan (fiscal 2010 to 2012), including the achievement of our CO2 reduction targets two years in a row. At the same time, we also consider it important for outside experts to assess whether our conservation efforts are effective or adequate, since this enables us to discover issues that may have previously escaped our attention and may provide hints for future activities.
With this in mind, on April 6, 2011, we invited Professor Yoshihiko Takamura of Tokyo Denki University to participate in a dialog on environmental management. Well-versed in current issues regarding energy conservation in Japanese industry, Mr. Takamura has on many occasions played a leading role in the process of revising the Act on the Rational Use of Energy and is one of Japan's foremost experts in energy conservation research. In this section, we introduce Mr. Takamura's key points for energy conservation inspections, along with his performance evaluation and advice.
Efforts at Factories
- Cornerstone of Energy Conservation Activities: Measurement of Energy Consumption and Discovery of Waste Based on Measurement Results
- Cornerstone of Energy Conservation Activities: Horizontal Deployment of Effective Energy Conservation Practices and the Introduction of Different Perspectives
- Linkage with Management: Management Involvement in Energy Conservation Activities
- Linkage with Management: Expanding the Scope of Energy Conservation Activities
- On-Site Per-Unit Target Management
Efforts at Offices
Topic 1. Cornerstone of Energy Conservation Activities: Measurement of Energy Consumption and Discovery of Waste Based on Measurement Results
Mr. Takamura: I am often asked, "Where should we start in our energy conservation?" First and foremost, I say, "You don't have to do anything. First gain a grasp of the status quo." If people approach energy conservation with the preconception that "there must be wasted energy around here somewhere," they tend to overlook things, or end up satisfied with measures that only address what they can see. Understanding the status quo is also known as "visualization," the cornerstone of which is measurement. And the results of those measurements, such as discovering waste in the form of certain facilities or equipment that consume electricity even when not in use, lead to energy conservation. How is Mitsubishi Electric working toward greater visualization?
Mitsubishi Electric: Energy visualization is a specialty of Mitsubishi Electric. Our product lineup includes "EcoMonitor" electric power measurement systems that provide highly effective support for energy conservation. As one facet of our Energy Loss Minimum (EM) activities, since 2004 we have been installing EcoMonitors at production lines and facilities at our factories in Japan and engaged in activities to discover and eliminate waste utilizing data collected on energy usage.
For instance, at a laser processing machine production line at one of our factories, continuous measurement of electricity use around the clock for one week revealed that electricity consumption didn't fall to zero even on weekends or weeknights, when no energy should have been used. The cause was a continuously operating cooling tower designed to prevent freezing. Because the electrical source for the pump on this cooling tower could be controlled only with an on/off switch, turning the switch on put it in the same operating mode as if the line was in full operation. We eliminated this waste by converting the pump's electrical switch to an inverter, enabling the pump to be operated at the minimum necessary to prevent freezing.
In addition, we have prepared real-time graphs for each production line displaying per-unit numbers that compare electricity used as measured by EcoMonitors against production volume. Analyzing the data from EcoMonitors on specific lines or individual equipment has enabled us to identify areas, production lines and time periods in which electricity is being consumed even though production is not taking place, and link the results of such measurements to production efficiency improvements. We have also established target per-unit values by factory, facility and workplace, and in the event actual figures exceed the targets set, each department works to analyze the data, identify the cause, and through energy conservation committees and other small group activities, systematically implement improvements.
Mr. Takamura: It is very good that Mitsubishi Electric has measurement devices developed in-house and in its product lineup, and is taking advantage of its expertise in this field to conserve energy. While measurement is a cornerstone of energy conservation, some business owners say that installing such devices doesn't save energy, or fail to see the point of installing them in the first place. I think the fact that Mitsubishi Electric has made measurement the starting point of its energy conservation activities is one reason for these effective results.
Topic 2. Cornerstone of Energy Conservation Activities: Horizontal Deployment of Effective Energy Conservation Practices and the Introduction of Different Perspectives
Mr. Takamura: I have many opportunities to visit the factories of various companies, and I have noticed, unfortunately, that in very large companies, approaches to energy conservation sometimes differ between business groups, or there may be gaps in their level of enthusiasm for such efforts. If there were someone who could see across all of a company's business groups, or all of its factories, it would be possible to deploy measures that were effective in one factory horizontally across the organization. The latest revisions to the Act on the Rational Use of Energy will require companies to manage energy company-wide, rather than on the existing factory-by-factory basis, and one of the goals of this revision is to change this kind of piecemeal approach. What kind of horizontal deployment of positive examples is Mitsubishi Electric working on?
Mitsubishi Electric: Mitsubishi Electric considers horizontal or company-wide deployment of effective practices to be a critical and fundamental business function, and we promote such practices on a variety of levels and through a variety of methods.
For example, our company-wide Environmental Promotion Managers' Conferences, attended by the environmental managers from each business group, and our Energy Conservation Best Practice Presentations, attended by the persons responsible for energy conservation at all of our factories in Japan, ensure that we share information on best practices across the organizational boundaries between business groups and factories. We also compile case files containing effective measures implemented at each factory and utilize them in energy conservation activities.
Other activities include mutual energy conservation inspections and Energy Conservation Expert Inspections, designed to check on our efforts from differing perspectives. These inspections always include proposals for improvements, which help in the horizontal deployment of the best initiatives.
Mr. Takamura: In addition to horizontal deployment between business groups and factories, I think your efforts to introduce differing perspectives in the form of mutual audits can be extremely effective, because there are cases in which one factory may deploy such practices as a matter of course, while another doesn't, or doesn't know how to make improvements. Mutual audits provide an opportunity for each factory to learn where it is lacking, or what its strengths are, and can be a valuable experience for all involved.
Mitsubishi Electric: Since fiscal 2004, the mutual energy conservation inspections have been conducted on average bimonthly, by the Energy Conservation Subcommittee of the Environmental Technology Committee. In these audits, a team of qualified energy managers drawn from the various factories spends an entire day visiting another factory's worksite to make inspections and propose improvements. The factories audited then report on the results of their decisions regarding each of the proposals offered. One of the goals of these mutual energy conservation inspections is the development of young energy managers; by allowing them to see veterans at work in the inspection process, it provides an excellent opportunity for young employees to learn.
At the same time, Energy Conservation Expert Inspections involve a team consisting of energy conservation pioneers and old hands. These employees, selected from among workers involved in energy conservation at our factories in Japan for their wealth of experience and outstanding results, make the rounds of factories in Japan and overseas. These activities are useful for expanding the scope and potential of energy conservation measures at our factories, and also contribute to the development of younger employees.
Please see the feature article for details about Energy Conservation Experts
Mr. Takamura: As with energy conservation, the issue of skills succession to younger employees has become a hot management topic in recent years, so I think this is a very positive trend. I sense that Mitsubishi Electric places an emphasis on awareness attained through the introduction of different perspectives and proactively engages in practices to promote this process. I think it would be good to take this a step further by incorporating perspectives from different industries, as well. For some time now, I have been involved with a cross-industry enterprise exchange group in Nagano. Members of the group first learn the basics of energy management, then visit one another's companies and draw up proposals based on things they've noticed during those visits. Initiatives that may be commonplace in one industry may often represent new discoveries for other industries, and these activities have been effective in revealing and then improving on wasteful practices.
Mitsubishi Electric: We appreciate the advice. In the past, we have spoken with people in other industries and even made visits to their factories, but going forward, we hope to incorporate these kinds of activities more strategically in our own energy conservation efforts.
Topic 3. Linkage with Management: Management Involvement in Energy Conservation Activities
Mr. Takamura: Under the current revised Rationalization in Energy Use Law, companies will be required to have in place an energy management control officer. Until now under the Law, energy conservation was promoted by qualified energy managers at each place of business, but in many cases management was not receptive to ideas that required capital investment or expenditures. It is common in Japan for companies to do fine eliminating waste in ways that don't cost money, but once capital or expenditures are involved, progress tends to stop. The current revisions resulted from the conclusion that in order to change this status quo, it will be necessary to create a structure under which the rationalization of energy use can be promoted from a business management perspective. In other words, the objective is to place among those with management authority someone who truly understands energy. In this respect, how is Mitsubishi Electric attempting to tie its energy conservation activities to corporate management?
Mitsubishi Electric: Mitsubishi Electric believes that environmental conservation initiatives are a corporate issue and, on the occasion of the ISO 14001 revision in 2004, elected to integrate environmental management systems into our main business activities. In response to this, since the launch in fiscal 2007 of our 5th Environmental Plan, a full-scale environmental management plan, we have invested 0.1% of sales in energy conservation.
In addition, in the current 6th Environmental Plan (fiscal 2010 to 2012), we are focusing on reducing CO2 from production by implementing two key measures: The replacement of utility equipment with high-efficiency equipment, which requires planned investment; and production line improvements involving the elimination of waste during production. Of these, specific measures regarding production line improvements are incorporated in each year's fiscal year plan.
Further, to more vigorously promote production line improvements, on April 1, 2011 we launched the Productivity Promotion Group. Some of the issues which arise as a result of the inspections by energy conservation experts may require production line innovations and may be difficult for individual factories to address on their own. We formed this group out of the belief that an organization was needed capable of responding to those issues and empowered to implement improvements, including development of technology.
Mr. Takamura: I think that investing 0.1% of sales in energy conservation is a significant commitment, and one that I have not seen elsewhere. It clearly shows that Mitsubishi Electric is addressing energy conservation as a management priority. Recent years have seen the introduction of a steady stream of excellent materials, products and technologies, including insulating materials, LED lighting, and nano-processing and measurement control technologies. I think that the proactive inclusion of such new technologies in energy conservation investments will enable Mitsubishi Electric to continue to achieve wide-ranging innovations.
Topic 4. Linkage with Management: Expanding the Scope of Energy Conservation Activities
Mr. Takamura: Earlier, we spoke about how energy conservation investments and other money issues tie into management; now I would like to ask about the organizational and personnel side of things. For example, when reviewing a manufacturing process from the perspective of how energy will be utilized, the scope of improvements must often be expanded to include production line design and even the design of the products themselves. Such a broad scope requires decision making from a company-wide standpoint. How does Mitsubishi Electric approach this?
Mitsubishi Electric: At Mitsubishi Electric, even the facilities engineering departments participate in production line improvement activities. We are also expanding the scope of activities to include farther upstream product design processes and have in some cases succeeded in eliminating high energy-consuming equipment through changes in parts and materials, and shortening production lines and increasing efficiency through size and weight reduction at the product design stage. Focusing on the upstream is, we feel, an important step.
We have also begun expanding the scope of energy conservation efforts to the quality control test stage. Since this testing involves verifying whether products can function under harsh conditions, the tendency has been to consider the testing process different from production lines, and off limits for energy reduction. However, actual measurement of electricity use revealed that at some factories, the testing departments account for as much as 15% to 30% of total electricity use, and that testing for product quality is in fact on the rise. This is why we are now in the midst of reviewing the entire process, beginning with initial set-up time, to determine whether a particular test is really needed, or whether it can be simplified or the time required for the test shortened.
Mr. Takamura: It's impressive that you have put aside formerly "off-limits" processes by including the testing department in your efforts. It is important to initiate improvements at departments not previously covered by such improvement efforts. By all means, I hope that you will continue to carry on with this initiative.
Topic 5. On-Site Per-Unit Target Management
Mr. Takamura: In setting forth a company-wide policy of reducing CO2 emissions, what is most important is what results a company's respective divisions and workplaces can deliver toward attaining that goal. And note that, while units for CO2 reduction targets are absolute quantities, the standard under the Rationalization in Energy Use Law is per unit of energy. Because this per unit actually represents efficiency, goals can be difficult for those in the workplace to manage unless it is clear that their objective should be to improve productivity, and the efficiency of their own work, based on that per unit. How is Mitsubishi Electric approaching this issue?
Mitsubishi Electric: In Environmental Vision 2021, Mitsubishi Electric has set a target of a 30% reduction in CO2 emissions from production, and the factories aim to achieve the target. At the same time, to pursue higher productivity at the factories, we manage energy use by employing per-unit indicators. Beginning in fiscal 2011, we have started incorporating energy conservation perspectives in our productivity improvement (Just in Time) activities and are working toward even further improvements in our base energy units. What is difficult in managing per unit in this way is deciding what to use as a unit.
Mr. Takamura: I believe it is necessary to use targets for both total energy consumption and per unit as performance indicators, but as you note, this can present some difficulties. If sales were used as a per unit, for example, figures would change enormously with fluctuations in product prices. This has been pointed out as an issue before in the semiconductor industry, for example, where prices can drop dramatically from one year to the next. As a result, no matter how much energy efficiency is improved at the point of production, when assessed using sales as a per unit, it only seems to worsen.
Mitsubishi Electric: Actually, there is something else we would like to ask your opinion about along with the per unit issue. At Mitsubishi Electric, we would like to carefully assess the cost of our CO2 reduction efforts and give CO2 reductions a higher management priority. Currently, however, there is no indicator for directly translating CO2 reduction volumes to costs. We are thinking that it may be possible, for example, to use the unit price per ton of CO2 in emissions trading as a reference. What do you think? While our policy is not to trade in emissions rights, if CO2 prices are given a high valuation, we believe that in a sense, that may serve as an effective motivation for further energy reduction activities.
Mr. Takamura: The question of whether or not to engage in emissions trading aside, I think CO2 prices can be used to assess the results of your activities. While most people say that it is overwhelmingly less expensive to purchase emissions rights, you gain nothing in technology by trying to solve the problem through such purchases. After all, energy conservation is a cumulative process.
Mitsubishi Electric: Since we believe that reducing CO2 emissions and eliminating waste fundamentally strengthen our corporate constitution, we can certainly identify with your opinion about not gaining anything technologically. If emissions trading means missing out on opportunities to gain energy conservation expertise, that is another reason for us to continue focusing on efforts under our own steam.
Topic 6. Energy Conservation Measures at Offices
Mr. Takamura: We have heard a lot about your energy conservation initiatives at the factory level. What sort of initiatives are you employing in your offices?
Mitsubishi Electric: Mitsubishi Electric sets up model areas in offices and conducts demonstration tests. In 2010, we used EcoMonitors to monitor and analyze electricity consumption and engaged in electricity reduction activities focused on lighting, which accounts for approximately 60% of energy consumption outside of air conditioning. We found that the per unit per person following the end of the workday was particularly bad and are working to devise improvements by, for example, turning on lights only in parts of the office that are still occupied. However, in buildings in which we are just a tenant, use of shared air conditioning systems managed by the building owner may not be included in our measurements, so we may need to make adjustments with the building owners in those cases.
Example of analysis and improvement based on energy use data measured by EcoMonitors
Mr. Takamura: I think that beginning with measurement and analysis and then devising efficient ways of using lighting is an excellent approach. What is key to such initiatives in the office is to be careful in bringing in lighting only those areas actually occupied by people. And, while it is of course important to raise awareness at the individual level, I would also propose that you introduce further support measures utilizing sensor technology. Further, if I might make a proposal, it would be effective to decide upon a person responsible for each model area, and then encourage all employees in that area to follow the lead of the person responsible and devote themselves to energy conservation activities.
Energy conservation activities needed in the office
In Closing: Rolling Blackouts
Mitsubishi Electric: Given the situation with power shortages arising from the recent Great East Japan Earthquake, what do you think our concerns should be going forward?
Mr. Takamura: Once rolling blackouts and restrictions on total energy use have been decided upon, I think you will find that the data you have collected to date can be extremely useful. If rolling blackouts are conducted, that is when you will truly need to be systematic in your use of electrical power. To prioritize which departments to keep running in such cases will require that you have a complete picture of energy use in each department. Energy management is also crisis management.
In addition, proper energy management has a number of ripple effects. For example, using florescent lighting releases heat, but reducing its use will reduce other related energy, such as the load on air conditioning systems. As peoples' awareness changes, products grow smaller and more energy-efficient. In the same way, proper data collection can be useful in a variety of ways.
Mitsubishi Electric: Currently, Mitsubishi Electric is discussing how to adjust its production shifts to so-called peak cuts. These methods might include, for example, running automated feeder lines at night, while having assembly lines requiring manual attendance run only during the day. Since we have all of the energy usage data collected by factory, we believe this will be an ideal opportunity to make use of our efforts to date. Your mention of the link between energy conservation and crisis management was also extremely helpful. Thank you for your time today.
After the Dialog
With its workplace improvements and the involvement of management, it is clear that Mitsubishi Electric has established an exemplary set of initiatives
Through this dialog, it is clear to me that Mitsubishi Electric is engaged in leading-edge initiatives which can serve as a model for other companies. You are identifying waste and promoting improvements by using measuring equipment to closely measure energy use, which is fundamental to energy conservation. It is also great that, company-wide, your factories share information about their respective strengths and weaknesses and deploy that information horizontally. I was also very impressed with the emphasis you place on developing personnel and nurturing successors in the workplace.
First and foremost, I appreciate the fact that you have leaders in place who understand these issues. Second, you are working to change production methods and develop manufacturing methods that use less energy, and to accomplish that are providing feedback to your design departments. I also think it's excellent that you are expanding your vision beyond the factory to your design departments and beginning to work on initiatives farther upstream, while also moving ahead with data-based improvements in your testing facilities, previously considered off-limits. I very much hope that other companies will use these examples as a model for their own energy conservation efforts.
After the Dialog
I believe that a scenario for further incorporating energy conservation into management will be necessary
Through Professor Takamura's review of our energy conservation activities, we were able to confirm that our activities to date have been on target. I believe that the energy conservation results we have achieved stem from having applied our expertise and knowledge to the task and engaged in energy conservation as a management priority, investing 0.1% of sales in energy conservation and implementing measures as part of a group-wide environmental plan. Despite this success, I am concerned that we may be unable to continue achieving such results as things currently stand.
Now that we have taken energy conservation to the limit, we must increase the amount of investment to achieve further advances. I believe that to move beyond this limit, it may be necessary to develop a scenario for further incorporating energy conservation into management. We are putting into practice the initiatives we highlighted in our environmental statement, Eco Changes – for a greener tomorrow, right now, but we need to carry these measures out as part of our main business activities, not simply for energy conservation. I feel that doing so would enable us to make more progress in areas where we cannot actually visualize what the problems are. Accordingly, we need new management indicators allowing us to tighten the relationship between our energy conservation activities and our mainstay business.
We have been simultaneously pursuing strengthening of our corporate constitution involving production with less energy and fewer resources, and contributing to society through business activities and environmental mindset. After the dialog, I strongly felt that we have reached the stage where it has become necessary to integrate efforts to strengthen our corporate constitution and our social contribution.