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Energy Management Interview: Honda of Canada Manufacturing

Honda of Canada Manufacturing has succeeded in energy management thanks to the knowledge that energy management is built on improvements in their day-to-day business operations.

360 Energy has helped support Honda of Canada Manufacturing in their energy management practices for over 10 years. Through this advisory work, 360 Energy has seen a glimpse of what has made Honda a leading example of energy management in, not just the automotive sector, but the broader industrial sector. The company understands the impact on energy at every level of operations, tracking usage to ensure that everyone is empowered to make informed energy management decisions on a daily basis. David Arkell asked Ian MacRae, Environmental Cross Functional Leader at Honda of Canada Manufacturing to tell their story.

David Arkell: How would you define energy management?

Ian MacRae: Energy management at Honda (HCM) could be defined as having a comprehensive and ongoing understanding of how much electricity and natural gas you are using on core and non-core times, what your current ideal consumption levels are, and putting themes and activities in place that will allow you to improve on those consumption levels over time.

David Arkell: How has Honda’s continuous improvement philosophy carried over into energy management at the Alliston plant?

Ian MacRae: Prior to each annual business cycle we spend time brainstorming ways and means of reducing our energy consumption. Well thought out equipment replacement is going to give us gains by default, and new buildings will be constructed with best practices as reasonably possible, but in these brainstorming sessions we are striving to build changes into our day to day business structure that will allow us to minimize energy use. We also have programs that encourage our Associate population to implement ideas for energy improvement, as they are our greatest resource.

David Arkell: In the last three years, what are some of the initiatives that Honda has taken to improve their energy usage in the plant?

Ian MacRae: As mentioned above we always look at better alternatives when replacing equipment, and with new installations or buildings improve on past practices. That said we recognize that will only give us so many gains and we have to have an energy mindset with everything that we do. An example of a new initiative we have taken in the past couple of years is with investment projects. When our project leaders are assigned a new project and are developing their plans they are now asked to consider opportunities for energy reduction within those plans. This is for all significant projects that may not have any energy focus at the onset. Perhaps there are opportunities in the project planning to build in measures or do something differently that will reduce the project energy footprint. Project leaders are then asked to bring these ideas to the project evaluation, even if it does not meet our standard payback criteria, and the evaluators can decide on the merit of the idea and whether to include it in the project scope. An example of this intiative was in our paint operation two years ago where we replace robots. The new robots were smaller and we took the opportunity to reduce the size of the paint booth which allowed us to optimize the total air flow in the booth and reduce our energy consumption.

David Arkell: Have any of these initiatives had any negative or positive impact on production?
Ian MacRae: The initiative mentioned above does put some addition focus on project planning, and consequently the project leaders time, but as they include this mindset over time it can become almost second nature in their work and hopefully has become part of an ongoing system. Another example would be our focus on turning lighting off when not required, often on timers. If nonstandard work is being performed, or unplanned overtime, someone may have to override a program, or manually turn a system on. Generally speaking though improvement initiatives usually do not impact production or may have some positive outputs.

David Arkell: Why is energy management a focus at Honda? (What drives Honda to manage energy?)

Ian MacRae: The Honda environmental management structure is a mix of top down direction, which can be from Honda Motor or Honda North America, and we are also able to choose more local environmental issues that we would like to focus on. Honda Motor some years ago recognized that global warming was a serious environmental threat that had to be met head on. Therefore the Corporate Environmental Planning Office asked that all Honda facilities focus on CO2 emissions reduction in their business plans, and that has been the case for some years now.

David Arkell: What are some of the benefits from focusing on energy management?

Ian MacRae: I Being able to improve on our energy performance year over year allows us to meet Honda Motor requests for target reductions, exhibit to our Associates that we take environmental protection quite seriously in our business, and reduces utility costs that allow us to stay competitive in the automotive sector.

David Arkell: Who is responsible for energy management at your plant? Is energy management activity carried out by just one or two people in the organization, or is it a team effort involving many people within the plant? How do you find that this gives you an advantage?

Ian MacRae: Energy management is one environmental aspect that we recognize can be affected, both positively and negatively, by each and every Associate in the organization. Therefore through ongoing training and communication we ask that everyone ensures they understand how they can impact energy use, and take measures to minimize that use. That can be anything as simple as turning lighting and equipment off when it is not required, to more complex areas of the operation such as asking equipment technicians to optimize equipment daily so it is running as efficiently as possible. So we do have Associates in each department that have energy conservation as more of a focus in their role, but with everyone having the proper mindset we have a significant collective advantage.

David Arkell: Do you have an estimate on how much money Honda saves on a yearly basis by being proactive in managing energy?

Ian MacRae: We track overall energy use by gigajoules and CO2, but not by cost. That said when projects are proposed that have an energy savings component the expected result is communicated to the evaluators in an energy metric (usually CO2 or GJ) as well as cost savings in dollars.

David Arkell: What are some of the key elements of Honda’s Energy Management strategy?

Ian MacRae: One key element of Honda’s management strategy is that we understand that we will consume a significant amount of energy on core time when we are producing cars, but on noncore times when there is no production, typically 3rd shift or weekends, these levels should decrease dramatically. Granted there is standing energy levels that will be required to keep paint materials agitated for example, or thermal oxidizers at a minimum operating temperature, but we have done extensive studies of building and equipment inventories to understand what absolutely has be running and what can be powered down during noncore time. We then ensure that equipment is then powered down on those noncore times.

David Arkell: Approximately how much time (person/hours) do you think Honda spends on energy management activities per month.

Ian MacRae: This number would be difficult to quantify but each business unit within HCM, typically Departments or Divisions, has energy conservation themes on their business plans that require time each month to drive progress as well as monitoring on an ongoing basis for improvement. Another example of a time requirement would be a group of key Associates that come in each Monday and using our energy management system review how much electricity was used in their department on that past weekend. They will measure results against a target and also look for trends, and if the trend is negative conduct an analysis to understand what happened and how it might be prevented in future weekends. Then there would be project leaders spending additional time in their planning looking for energy opportunities. Energy leadership has to report to the HCM Executive on progress toward improvement targets, and if schedules or objectives are not being met develop countermeasure activity. A more long term reflection is done every six months to understand if activity is effective and the progress on objectives and targets. And then annually time is spent developing possible new activity for the next business year. Therefore a monthly value for time spent on energy activities would be very difficult to ascertain as there are so many different levels of activity occurring in the organization on an ongoing basis.

David Arkell: Will Honda do anything differently to prepare for Ontario’s proposed Cap & Trade initiative.

Ian MacRae: HCM has been involved in consultation sessions on Ontario’s Cap and Trade proposal, and understands the basic principles, but at this time has decided to wait for the details of the initiative to come out before deciding on what we might do differently.

David Arkell: How does senior management at corporate and the site review and measure an energy performance? How often is this measured and how does this impact the site and site senior management?

Ian MacRae: Each month we have a Corporate Performance Meeting where energy performance is reviewed at a higher level along with other business metrics. Prior to this meeting a more detailed metric sheet is issued that breaks down energy performance, so not only CO2 and gigajoules, but also kilowatt hours of electricity and cubic meters of natural gas consumed. Then every three months an energy leader makes a presentation at this Corporate Performance Meeting that not only reflects on energy performance, but more importantly speaks to some of the key energy reduction activities on the business plan and how effective they have been at improving energy performance. We also report monthly to Honda North America on our energy performance through a SharePoint site, and they in turn report to Honda Corporate on regional targets. At any time during these reviews various levels of management can request more detailed analysis or other actions that may improve results.