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Energy Management: Strategic Change at Samuel, Son & Co.

Once Samuel, Son & Co realized that energy is controllable, it turned to 360 Energy to take energy management beyond just energy procurement.

Founded in 1855, Samuel, Son & Co., Limited is the largest family-owned metals processor and distributor in North America. Samuel offers end-to-end solutions in the distribution, transportation, processing and manufacturing of metals and industrial products to over 100 steel service centers and manufacturing facilities in Canada, US, Mexico, China, and Australia. “The customers we serve vary in size from leading automotive manufacturers to specialized product designers. Yet each one is treated with the same superior customer service that you would expect from a 5th generation, family run business,” says Mike Cadesky, Corporate Procurement Specialist for Samuel, Son & Co.

Samuel recently had a change in awareness about energy. They began to think of energy and water like other inputs. “We thought, why don’t we approach energy in the same way we manage steel in all our processes?” says Cadesky. Before this change in thinking, they viewed energy as an uncontrollable expense. “Once we decided to treat energy as controllable, then it became manageable. That was the key step to begin the journey of strategic energy management.”

The discoveries for Samuel were eye opening. They learned that more was spent on energy than on IT services and equipment. “We don’t know in all instances our total, company-wide energy spend or whether we are getting the best utility rates in the marketplace. At this point, we can only make estimates,” says Cadesky. Energy rates in some jurisdictions have deregulated markets while others are regulated. A custom procurement program is needed to take advantage of cost savings in each market.

Samuel encountered problems interpreting utility bills. These bills go to separate sites for approval and/or payment. As well, each utility has their unique format for presenting information. This makes tracking and interpreting the data extremely difficult. To consolidate costs and usage information from a multitude of utility bills takes a lot of manual effort. It is a big barrier that Samuel has not confronted before now.

Samuel also needed to know how much energy has been consumed in their operations and to be able to share this with their staff. “The users of the energy never get to see the bills. This means they lack the critical data they need to make changes,” explains Cadesky. “Without that knowledge, no one is responsible or motivated to manage their energy use differently.”
Samuel has defined energy management as integrating supply management with energy efficiency. They are working to reduce the silo thinking between departments. “Our company is certainly cost conscious. To remain competitive, we have to reduce costs company-wide, including our energy costs,” explained Cadesky. “Integration will be key to our success.” The company’s Indirect Purchasing department is leading the charge on integrating energy management into its corporate culture by setting up a process to capture all the utility bills and pay for them from a central location. This will allow them to collect relevant usage data for analysis and reporting.

Samuel’s goal is to have reliable, comprehensive data that will help to:

  • Confirm total annual energy consumption and costs.
  • Establish a baseline for energy and CO2 by site, region, division, and country.
  • Benchmark energy use between similar buildings or production processes.
  • Develop Key Performance Indicators relating to energy for production or by heating.
  • Segment billing into commodity, transmission and distribution components to optimize each of these sectors in regulated or deregulated markets.
  • Build business cases for actions and help set priorities for energy management.

“It’s not enough to just have a data system. You also have to understand what the data means and how to use it. Once you know your energy story, you can control its outcome.”

Once the energy information system is fully operational, two key strategies can be implemented.
First, is the integration of procurement to align with Samuel’s demand for energy. Secondly, with pertinent information reported to the sites, the company can start engaging the plant managers. “We believe the plant managers and their staff need to be engaged to drive energy management excellence in our organization,” says Cadesky.

This information will allow Samuel to implement a number activities to achieve their energy goals:

  • Provide each site with baseline information;
  • Offer monthly feedback to sites on their use compared to their budget;
  • Identify errors on utility bills and any other issues that need to be addressed with utility providers;
  • Deploy demand response programs in the company;
  • Make informed decisions about local generation and co-generation at sites.

All of these benefits will depend on a knowledgeable and engaged staff. Data will be very important in developing an understanding amongst staff of the value in these energy management actions.

In summary, Mike Cadesky explains, “I would say the breakthroughs for us came in a few critical areas. We needed to understand that energy was a controllable cost. That opened the door for us to do energy management. We couldn’t make headway on reducing costs and pursuing energy efficiency until we accepted that basic principle.” Data on energy use was essential, both the amounts they were using and the costs to use it. “Another critical lesson was having this integrated data in one place so we could make multiple uses of it,” continues Cadesky, “Having good data and integrating it, helps us make informed choices around procurement, energy efficiency, and cost savings.”

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