1、Reduce Electric Power Cost Project #16,005 Final Report,PAG Import, Inc. Reduce Electricity Consumption Project Team,Team Members,Project ChampionMr. M. Fukui (AS/ Quality Development)Project MembersMs. K. Uemura (Process Owner HR/ Administration)Ms. Akiyama (AS/Quality Development)Mr. I. Takayama (
2、FIN/ Information Technology)Mr. S. Ohno (FIN/Finance, Business Plan)Mr. N. Adachi (BB AS/ Quality Development),Problem Statement,Much electric power is consumed at the PAGI/FJL office. The electric power cost is significantly influencing the profitability of the company. The electric power cost of t
3、he Kamiyacho office (Headquarter) was $218,700 in 2002. This corresponds to $50 per employee per month.,Purpose of the Project,Reduction of Electricity Cost,Project Scope,Activities of the project will be limited to the whole Kamiyacho office (7/8/10/11F). Air-conditioning cost of the business hours
4、 (8:00-18:00/ weekdays) is included in the office rental cost (fixed). As we cannot reduce or control this cost, we do not include this in the scope of the project. The scope should be normal electric power cost and the air-conditioning cost of overtime hours.,Basic Strategy of the Project,The activ
5、ities of the project should be coordinated with the activities for Volvo ISO14001. The project should be linked with the activities to protect environment and should not be perceived as mere cost reduction. The negative influence on the business environment of employees must be minimized.,Measuremen
6、t,Electricity Cost (Yen) / Electric Power Consumption (kwh) and Air-conditioning Cost for Extra HoursMonthly consumption of electric power is notified through the monthly bill from the Shuwa Building office. Electric power consumption and its cost are in a linear relationship. Air-conditioning cost
7、for extra hours is determined based on the length of operation (hours) and areas (# of blocks).,Target,Reduce the electricity cost of the Kamiyacho office by 20% from $218,700 to $162,100. Reduce A/C cost for extra hours by 20% also.,VOC - How to Promote Employees Efforts in Saving Electricity Consu
8、mption Points to be considered when taking measures,Always remind people of saving/ Avoid being forgotten. Failure of saving could cause some disadvantage on each employee. Make everything simple/ Avoid complicated processes. Saving could bring convenience/ improved efficiency (No inconvenience/ no
9、problems in efficiency). Saving activity looks cool / trendy. Give the impression that everyone participates. Efforts of each person is essential for the total success. Saving is along with the corporate policy. Each person can contribute a lot/ Problems could occur if I do not save. Saving effects
10、can be confirmed clearly / We can feel the effects. Business achievements are evaluated by the saving effect. Not a temporary project. Activities should be continued.,The Process of Using (Wasting) Electricity,C&E Diagram,C&E Matrix,Lowering wattage (without influencing on the business environment)
11、is important in this project. Each process input (areas of electricity consumption and appliances, such as lighting of office and PCs) should be evaluated according to this. Points mentioned in the VOC can be basically fulfilled equally by all the process inputs. A rough estimate of power consumptio
12、n shows that lighting of office and PCs are two major process inputs in lowering wattage. As the most important process inputs are clear, we did not develop a C&E matrix for this project.,MSA - Converting the Monthly Data (1),Monthly power consumption data is reported by the maintenance company of t
13、he building after reading the wattmeters. It has turned out that there are some problems for this data as mentioned below. We must adjust the data to compare the consumption of power of each month correctly. Tenants cannot check the meters by themselves at this building.The days of checking meters d
14、iffer from month to month. The data of the dates of checking can be followed to the past. The numbers of business days differ much from month to month. The majority of appliances are not used on weekends though some are used just like main frame computers. Therefore, consumption of power significant
15、ly differs between business days and holidays.,Converting the Monthly Data (2),We applied the multiple regression analysis on monthly power consumption (Y), the number of business days (X1) and the number of holidays (X2) in the past data. We estimated the relationship between power consumption and
16、Xs the number of business days and holidays. We converted the consumption data by using this relationship to make correct comparison between months with different number of business days and holidays. It has turned out that the power consumption was fairly stable between October 2002 and the start o
17、f the project by the analysis of the converted past data.,Regression Analysis： KWH versus Work days, Holidays,The regression equation is KWH = 14486 + 2929 Work days + 1627 HolidaysPredictor Coef SE Coef T P Constant 14486 12417 1.17 0.259 Work day 2928.8 484.0 6.05 0.000 Holidays 1627.1 362.8 4.48
18、0.000 S = 3649 R-Sq = 69.0% R-Sq(adj) = 65.4%Analysis of VarianceSource DF SS MS F P Regression 2 503844693 251922347 18.92 0.000 Residual Error 17 226339999 13314118 Total 19 730184693Source DF Seq SS Work day 1 236055862 Holidays 1 267788831Unusual Observations Obs Work day KWH Fit SE Fit Residual
19、 St Resid5 17.0 95248 88682 1692 6566 2.03R 7 22.0 102631 95191 1134 7440 2.15R,Power Consumption (Before Starting the Project),The power consumption of the four floors (Number of days adjusted) combined is shown below.,Comparison with the previous year(%)Left column,Consumption(kwh)Right column,Bas
20、ic Concept of Z Value/ DPMO ,Defects for PC usages are defined as that PCs are ON after their users left office. Some PCs, which are kept ON to have data transmission with abroad are excluded from defects. Defects for spaces with independent light switches are defined as that lights of spaces are ON
21、 while no one is using.,Z Value/DPMO (Before Taking Measures),Z values and DPMOs were measured for spaces with independent light switches and PCs.,The investigation were made for the spaces with independent switches on August 22 and 26 (average). That for PCs was made on September 19.,Conclusion Fro
22、m the Results of the Investigation The Reasons of High DPMO,Generally speaking, employees do not think they should turn off switches of PC monitors. Many employees do not know that PC monitors have switches. Some are not conscious that lights of spaces with independent switches such as meeting rooms
23、 should be turned off. Also, light switches are generally so small that many do not notice their existence.,FMEA,Measures Taken (1),Checked ON-OFF of PCs before business hours and gave warning to users of PCs kept ON. Checked ON-OFF of lights of spaces with independent light switches. Announced the
24、results and asked employees to improve. Developed and installed labels that highlight switches of spaces with independent light switches. Attached maps of the areas covered by each switch to the switch board. Conducted a “Save Energy Idea Contest” and implemented some excellent ideas applied for it
25、(47 ideas applied from 19 employees). Informed all employees light switches that cover their offices and persons that are with the same switches (to ease turning off lights). Lowered the temperature of the hot-water supply (95-40C/ 203-104F). Stopped supply during weekends. Installed labels that sho
26、w the power consumption of areas controlled by each switch (In money/ weight of CO2/ areas of forests required for absorbing CO2). Installed caution labels to PCs, which call attention for turning off when users leave office.,Measures Taken (2),Developed action guidelines for saving power cost. Deli
27、vered them to employees by an E-mail and uploaded them in the PAGI web-site. Asked and enlightened employees to save power through various kinds of E-mails. The rule of extending the air-conditioning hours that the requests must go through the Administration department is strongly enforced. Shortene
28、d the length of air-conditioning hours during summer compared with the previous years (until 20:00-19:00). Developed and posted posters that call for saving electric power. Developed and announced the rule of turning on/ off the lights of the reception of 8th floor (consumes high wattage). Installed
29、 electric bulbs with lower wattage for the reception of 8th floor (85W-65W). Removed some of fluorescent lights near windows.,Measures Taken (3),Outsourced checking and turning off switches of lights, printers and copy machines on every Saturday morning (Started on November 15). Replacing PCs with e
30、nergy-saving models (300 units). Adjusted existing PCs to energy saving mode (63 units). Highlighted door knob and light switches of the smoking room with noctilucent tapes.The smoking room does not have windows. The room becomes dark if the lights are turned off. As the door and the light switch ar
31、e far apart, it was difficult to find the door after turning off the light switch.,Cost of The Measures Taken,Outsourcing cost to check and turn off light switches on Saturday costs $50 every month. However, the effect of the first trial is estimated more than $90. The cost of taking the measures of
32、 the project is only around $20 including those for labels and noctilucent tapes.,DPMO,The Z value and DPMO for leaving PCs and lights ON have been greatly improved.,The investigation was made on November 20.,FMEA After the Measures Were Taken,Minitab Analysis Statistic Meaning of the Improvement (1
33、),The ratio of PCs left ON dramatically decreased after the measures were taken. The improvement is statistically significant.Test and CI for Two Proportions Sample X(OK-OFF) N(Total) Sample p 1(Before) 139 367 0.378747 2(After) 298 366 0.814208Estimate for p(1) - p(2): -0.435461 95% CI for p(1) - p
34、(2): (-0.499106, -0.371816) Test for p(1) - p(2) = 0 (vs not = 0): Z = -13.41 P-Value = 0.000,Minitab Analysis Statistic Meaning of the Improvement (2),The mix of the spaces with independent light switches left ON also has been dramatically diminished. The improvement is statistically significant.Te
35、st and CI for Two Proportions Sample X OK-OFF) N(Total) Sample p 1(Before) 75 104 0.721154 2(After) 58 68 0.852941Estimate for p(1) - p(2): -0.131787 95% CI for p(1) - p(2): (-0.252260, -0.0113147) Test for p(1) - p(2) = 0 (vs not = 0): Z = -2.14 P-Value = 0.032,Power Consumption (Adjusted) All Floo
36、rs Combined,The start of the project,YOY (%)Left column,Consumption (KWH) right columns,Cost of Extending Air-conditioning Hours,The cost of extending air-conditioning hours has been dramatically lowered.,YOY (%) Right column,Consumption (kwh)Left column,Estimate of the Profitability Improvement,Pow
37、er consumption has been lowered by 9.4% from the 02 data (03 August October average). Extension cost of air-conditioning hours has been reduced by 50.9% (03 August October average). Applying these reduction ratio to the full year cost of 02, we would get the following cost improvement. Power cost： $
38、16,970（Excluding fixed charge/ 02 total: $180,600） Extension cost of air-conditioning：$67,890（02 total: $133,400） Total：$84,860 （27.0% of the 02 total: $314,000）,+),Control - I-MR Chart （02 Jan.03 Oct.）,The process will be controlled with I-MR charts for power consumption (# of days adjusted) and th
39、e YOY % of air-conditioning cost for extra hours.,Power Consumption I-MR Chart,YOY % of Extra Air-conditioning Cost I-MR Chart,Control Plan,Control Process Control in the Future,The follow-up meeting will be held six months after the project is closed (around 04 July). Whether the improvement is con
40、tinued without problems and whether there is any potential problems in the process will be discussed. Whether the process is in control or not will be judged every month. If there are any problems, causes will be immediately investigated and remedies will be taken.,Long Term MSA,Adjusting the number
41、 of days in each month will be done using the conversion method developed in the Measure phase. However, the change in the relationship in the weight of weekdays and weekends could change because of the measures taken in this project (e.g. promoting turning off lights on weekdays could raise the wei
42、ght of weekends). Checking based on the new data after the measures were taken will also be done.,Conclusions,The project has significantly reduced electric power consumption; however, the reduction is as far as around 10%. However, as the reduction in the extension cost of air-conditioning hours is
43、 so huge that the combined reduction of power consumption and extension cost of air-conditioning hours well surpassed 20%. Many of the measures taken will fully contribute after November (data not known yet). More saving effects by the project is foreseen. This would be confirmed in the follow-up meeting.The project has brought excellent outcomes.,Replicating the Project,All the methods taken in this project can be taken also in other facilities in Japan and other markets (countries).,
