MANUFACTURING OUTLOOK
A chance to change for the better
A joined-up focus on sustainability will see companies survive – and
thrive – in these uncertain times Contributor: Inenco
This year has been an unprecedented
challenge for businesses. The pandemic and
Brexit uncertainty have combined to create
significant risks, which have put the brakes on
the high levels of growth and investment seen
at the start of 2020.
As a result, priorities for most manufacturers will
have changed drastically from long-term planning to
short-term tactics in just a matter of months. However,
it’s still important for environmental sustainability and
energy management to remain a core part of any plans
– no matter how short-term they may be.
Managing energy costs, in particular, will become
critical for many manufacturers as they look to save
every pound, they can. Factories are large, energyhungry
sites, meaning that energy is often in the top
two or three costs for manufacturers. Despite this, says
Lee Knott (pictured, top right), corporate sales director
at energy management and sustainability consultancy,
Inenco, too many manufacturers take a passive,
disjointed approach to their utility costs – meaning
they are missing out on significant savings. “Often,
manufacturers view energy in very isolated ways: the
health & safety department look after compliance;
finance looks after paying the bills; procurement
look after finding the right deal, and so on. Very few
organisations have a holistic view of all the ways energy
touches their organisation.”
This is important when considering schemes such
as the climate change levy (CCL), which help drive
carbon reduction on-site, continues Knott. “There’s a
financial element to implementing a climate change
agreement (CCA) as well,” he says. “However,
if the finance department doesn’t normally get
involved in carbon reduction, it’s easy to miss out
on cost-saving opportunities or the opportunity
to bolster green credentials. It’s therefore vital for
manufacturers to take a more holistic approach to
energy management in order to properly leverage
the broader benefits to the organisation.”
Mitigating risk
Manufacturers must also be aware of how energy
suppliers have reacted during the pandemic. “We’ve
never seen anything on this scale before,” warns
Sam Davidson (pictured, bottom right), Inenco’s
director of operations. “A lot of suppliers have
imposed charges for energy bought but not used
during the lockdown. This is an additional risk that
suppliers have had to take on. Debt levels are high,
meaning we’ll see suppliers taking tougher stances –
holding customers to account for any late payment
where before they’d have been more lenient.”
This means that manufacturers must become
smarter to mitigate those risks. Davidson suggests
three things that manufacturers can do:
1 Volume forecasting to give a better indication
of energy usage “Given all the risks of buy-back
and the various fines, it’s imperative to accurately
forecast volume,” says Davidson. “Manufacturers
must be constantly reviewing forecasted vs.
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