According to the U.S. Manufacturing Purchasing Managers’ Index, a measure developed by financial research firm Markit, manufacturing activity in the United States in September reached its highest point in more than 4 years. Factory employment, though still well below pre-2008 levels, reached its highest level since March 2012.
U.S. manufacturers are getting a boost from low energy costs, driven primarily by the bonanza of low-cost natural gas (and, to a lesser extent, by distributed renewables, often onsite at plants). But what’s going on inside U.S. plants is equally important. Increased energy efficiency, enabled by a revolution in process automation technology, is also helping U.S. manufacturers compete with manufacturers that enjoy low-cost labor in developing countries, particularly China.
Excess No Longer Success
Since peaking around 1999, the primary energy use in the U.S. manufacturing sector has declined steadily, according to the American Council for an Energy-Efficient Economy, from about 35 quadrillion BTUs annually to less than 31 quads. Energy intensity – the BTUs used per dollar value of shipments – has declined even more dramatically.
The shift is coming as a shock to old-line factory managers unused to calculating energy as a key metric of efficiency and productivity. “No one ever got fired for purchasing a pump or a machine that’s too big for the job,” said Fred Discenzo, manager of R&D at Rockwell Automation, at a recent energy management conference in Akron, Ohio. In manufacturing, “excess capacity has always been the safe option.”
Rockwell is among an emerging segment of technology vendors that is trying to change that, through what it calls “the connected enterprise.” What that means is connecting the factory floor to the C-suite with far greater visibility and immediacy than before. Another name for this change might be “extreme granularity.” In the near future, energy use will be measured not at the factory or line or machine level, but at the individual process level, per unit of production: how much energy did it take to make this widget or valve or bag of ice, and where in the process can that energy use be optimized?
The Next Revolution
Advances in factory floor networks, wireless sensors, virtualization, and monitoring equipment are enabling these improvements in manufacturing efficiency, energy conservation, and quality control. These twinned revolutions – cleaner, cheaper, more distributed energy coming into the plant and sophisticated automation technology reducing energy intensity inside the plant – will result in changes that have far-reaching implications for the manufacturing sector, and for the economy. “The new era of manufacturing will be marked by highly agile, networked enterprises that use information and analytics as skillfully as they employ talent and machinery to deliver products and services to diverse global markets,” concluded a 2012 McKinsey study entitled Manufacturing the Future.
At 32% of total energy consumption, industry uses more energy than any other sector of the U.S. economy. Manufacturers that adapt to the new realities of energy, by changing the ways in which they source and use electricity, will be more competitive on the global stage – and could help usher in the new economic upswing that politicians and analysts have been dreaming of for years.
Tags: Industrial Innovations, Building Systems, Energy Efficiency, Manufacturing & Supply, Smart Buildings Program
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