Many of Thorn’s products pioneer the latest in LED efficient lighting technologies and being at the forefront of the lighting industry, it would be easy to assume that Thorn Lighting are operating their own premises to the utmost energy efficiency levels. This is not quite the case, however, as our brief history of the factory explains:
Thorn Lighting is the UK brand of ZG Lighting. Thorn Lighting is a major manufacturer of indoor and outdoor luminaires with integrated controls. Thorn’s office and production facility in Spennymoor was built in 2008 by GMI Construction. The 450,000 sq ft site incorporates laboratory testing and office accommodation and the ‘Academy of Light’. The new build was L2 Compliant and constructed to the latest building standards at the time. In recognition of the high levels of quality achieved in the new facility, Thorn was awarded Factory of the Year in 2009 for the Best Factory Awards. The judges commented, “The factory has been designed for fast material flow, which has brought immense savings in terms of time and money. The company also made good use of lean six sigma tools, which involved production workers in the development of improvements which significantly increased the factory’s productivity and delivery performance.”
The contract was a design and build with Thorn involved in the construction process throughout. The new building was 45% more energy efficient than the previous site and GMI Construction ensured that the right systems were in place to allow for expansion.
Fast forward to 2015 and naturally things have evolved. In the last year Thorn have seen a 100% increase in the volume of products handled on site and two new paint plants have been built.
Thorn are no longer using the space in the same way that they were 7 years ago; a reflection of their growing product development and expansion of the business. Even Thorn’s own lights installed in their factory do not match the efficiency levels of the products they now sell. Outside of the factory things have also changed. Carbon legislation has become increasingly stringent and the range of energy technologies and techniques has evolved considerably.
Thorn realised it was time to re-evaluate their on-site energy profile and called on GMI Energy to assist. As part of an ongoing partnership, GMI Energy recently delivered an Energy Kaizen to get to the nitty gritty detail of what is going on in the offices and on the factory floor. The Energy Kaizen has so far identified an impressive £200,000 worth of savings that could be made every year!
"The GMI guys provided extra insight we wouldn't have spotted otherwise." Steve Nixon, UK Operations Director, Thorn Lighting.
At present, Thorn are spending roughly £700,000 on electricity per year and £150,000 on gas. Unless they take action they anticipate that it will not be long before their annual energy bill reaches £1million.
What is an Energy Kaizen?
The Japanese word Kaizen simply means ‘change for better’ but the term has grown to become known as a Japanese philosophy for continuing improvement. Thus an Energy Kaizen refers to continuing improvement in energy. The methodology to achieve this includes making changes, monitoring the results and then making adjustments accordingly. Many are already familiar with the concept of plan-do-check-act from ISO standards, such as ISO 50001 for Energy Efficiency but an Energy Kaizen really seeks to take a more practical approach. This involves a range of stakeholders from across the business and the methodology is particularly suited to larger organisations and manufacturers.
Summary of Thorn’s Energy Kaizen
1. The Energy Kaizen at Thorn took place over 4 days and comprised of 4 GMI Energy representatives to act as team leaders and 12 employees of Thorn from a range of roles and departments.
2. The Kaizen kicked off with an analysis of data gathered on Thorn’s energy profile. The group divided into four teams, each lead by an energy expert and were asked to identify areas of interest or concern. Each of the teams then fed back to each other and suggested some explanations for the patterns identified that they might look for on the factory floor.
3. Armed with the data knowledge, the four teams each went into different areas of the building to complete a ‘gemba walk’. Gemba literally means ‘the real place’ and Japanese detectives call the crime scene gemba. In manufacturing gemba is the factory floor and the purpose of the gemba walk is to help the team identify specific problem areas. They were encouraged to take photos where possible and again each group reported on their findings.
4. With the help of the energy experts the groups were asked to create a list of priority focus areas. Locations were revisited on another gemba walk to identify potential solutions to the problem. The solutions were either classed as quick fix solutions called Just Do Its (JDIs) or longer-term projects where more investment was required.
5. The GMI experts took each of the priority areas and suggestions and calculated the potential cost and savings for implementing them. These were placed into a presentation created by each group and again reported back to each other.
6. The final task was to create a combined presentation that could be presented to key stakeholders within the organisation. The final results were presented to the Finance Director.
The end results were impressive. Over £200,000 of savings were identified for a capex of just over £400,000. This means the payback would be just 2 years and Thorn would benefit from continual savings. And this only accounts for current savings. It does not take into consideration the cost of doing nothing if energy prices continue to rise. This figure also does not take into account other risks that could incur further costs. For example, at present the site does not have any back up generators and if there were a power cut (a growing risk in the UK) then this would cost Thorn in the region of £450,000 per day.
Commenting on the Energy Kaizen, Steve Nixon, UK Operations Director, said "it was good to effectively train a set of people for us... The GMI guys were professional but open and friendly. It felt like they were part of our team."
"They identified £100,000 in just basic contractual pricing."
The Energy Kaizen has undoubtedly been a valuable exercise for Thorn who now have a clear plan for delivering major energy improvements. It is, however, just one aspect of energy management that GMI Energy have been assisting in; we have also helped Thorn to complete and file for ESOS (Energy Savings Opportunity) and apply for grant funding for improvements under the EDR (Electricity Demand Reduction) scheme to help fund some of the energy efficiency measures.