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Five ways to cut supply chain energy costs

Five ways to cut supply chain energy costs

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By HWhittaker | Supplychain Management

As growth returns, businesses we work with up and down the UK are justifiably turning their attentions once again to expansion. But just as the economy warms up, the cold sets in, and with energy supply accounting for up to 20 per cent of overheads during the winter months, keeping costs under control is a key priority for firms across the country.

While obtaining and transporting energy is becoming increasingly expensive, bills do not have to rise as a result. A Cheshire-based manufacturer we work with recently demonstrated this, saving £1,500 from their annual energy bill though simple efficiency measures.

Here are five ways to keep the energy costs of your supply chain down this winter:

  1. Heating and insulation

Despite the energy-intensive industrial processes associated with warehouses, in fact, heating the buildings themselves uses up to 12 per cent of energy consumed by businesses during the winter months. Ensure good control of heating systems by using timer switches and thermostatic radiator valves. Always check thermostats are unaffected by draughts, sunlight, radiators and fireplaces. Regular checks for damage to insulation on hot and cold pipework are crucial. Other maintenance measures like simply tuning your boiler regularly could also save over £800 per year.

  1. Lighting

With less hours of daylight, lighting costs can soar in winter, but a Costcutter store we worked with in Southport saved £930 a year by updating outdated fittings. Compact fluorescent and LED products use 80 per cent less energy than conventional lamps. As an added bonus, lights like these that generate less heat minimise the strain put on air conditioning or cooling systems.

  1. Motors

Motorisation within distribution and supply centres can eat up significant energy costs, but reducing motor speeds by just 20 per cent with the installation of variable-speed drives can cut as much as 50 per cent from costs. High efficiency motors may even qualify for tax relief through the Enhances Capital Allowance scheme.

  1. Refrigeration

Faulty refrigeration unit seals can raise energy consumption by more than 10 per cent, as can using too much refrigerant charge. Regularly cleaning condensers may also take up to 25 per cent off energy costs.

  1. Behaviour change

While investment in energy efficient technology will help reduce costs, it is also important to raise awareness among staff. As winter begins, set company energy reduction targets and reward success. Some companies empower staff by creating mini internal ‘green teams’ dedicated to efficiency reductions. Simple steps like turning lights off when they aren’t in use and making the best of natural light can have a real impact on bills.

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