May 2016

Stantec LEAN Energy: A Proven Approach

Discussion

1. Lean Energy Decoded

2. Why Should I Care?

3. Thinking Differently

4. Moving Forward

Manufacturers are Facing New Challenges

Increase Profitability while Capex budgets go

down

International Competition

Climate Change Issues

Facing New Challenges

LEAN Energy

Terminology Decoded

Kaizen: Continuous Improvement tool used to identify and implement employee ideas for saving energy and reducing waste

Energy Management System (EMS): Set of interacting energy management practices and procedures to guide an organization toward achieving high standards and objectives in a continual improvement approach

LEAN Energy: Approach that aims to reducing GHG emissions and energy cost, while improving performance through Lean manufacturing activities

LEAN Energy Large Forest

Product Company – The Story

Development of Lean Energy program and associated tools

Kaizen approach in targeted mills

State of the art Energy Management System (EMS)

New Position — Director Energy with a mandate

Reduce company energy cost by 15%

($150M) in 2 years vs. 2008 baseline

No capex budget – All projects ROI below 6 months

2009 — Annual Energy Spending of $1B

LEAN Energy is

upstream of

Energy Efficiency

• Aims to optimize

existing equipment

and processes instead

of buying new ones

• Minimizes waste and

maximizes employee

participation

Why should you

care?

Image ©

Companies Using LEAN Energy

12 % Average energy

reduction

5% - 30% Range

Fortune 500 Companies* from

industry including:

• Aerospace

• Automotive

• Cement

• Chemical

• Consumer Products

• Food and Beverage

• Oil & Gas

• Pharmaceutical

*Company names not able to be disclosed for the purposes of this presentation.

Our Results

19

plants Implemented

15% average cost savings

18% GHG reduction

<1year all projects ROI

$95M Total demonstrated

recurrent savings per year

Kaïzen Energy: A closer look

0%

5%

10%

15%

20%

25%

30%

35%

40%

1 (US) 2 (Qc) 3 (US) 4 (Qc) 5 (US) 6

(Ont)

7

(Ont)

8 (Qc) 11

(Ont)

12

(US)

13

(Qc)

14

(Qc)

15

(Qc)

16

(PEI)

17

(Qc)

Total

% Cost Savings vs Reference Year Total

% Cost Savings

vs Reference

Year Total

Example: Pulp & Paper Client: Newsprint Manufacturer in Canada Completed: 2014

Kaïzen Results: September 2014

5

5

2

2

1

Mandate 10%

Number of projects

Return on Investment - Simple ROI (months)

% o

f ene

rgy

cost

savi

ngs

Target Areas for Investigation

in Cement Plants

• Crushing

• Milling

• Pyroprocessing

• Homogenizing and storage

• Pneumatic transport

• Load shedding/shifting

• Also non-production systems: HVAC

Lighting

Cooling water

What is the LEAN

Energy Approach? Thinking Differently

LEAN Energy is a 3D Approach

Kaïzen

1. Five day workshop used as a leading activity, including: • Data mining, benchmarking, RCA

• SMED, process mapping (optional)

2. Develop understanding of: • How is energy spent in the plant?

• How much energy does the process really need?

• What’s the most effective way to meet those needs?

• How to reduce & eliminate waste

3. Typically leads to development of 15-20 high potential projects ranked by priority

BENEFITS

10-20% savings

on energy cost

Employees gain

a better

understanding of

energy stakes –

break down silos

EMS

The Key to

Sustainability

Energy Management System (EMS) How do we best

integrate energyinto day-to-day operation ?

What are the

right platforms to discuss about energy

Coal (t) used in Pyro-processing

kCal / t of clinker

t/d fine coal produced

Raw meal chemistry / burning zone temp

Management Objective

Department Objective

Shift Focus

Also allow to cascade RCA

KPI Must Cascade Down

Operator level

(Example)

Measure cumulative effect at the highest level

Focus on High Value Activities:

80-20 Principle

Benefits of EMS: • Aligned with World Class Practices

• Each employee understands his role and

responsibilities with respect to energy

performance

• Clear Targets are established and progress

is tracked

• Training and communication in energy

matters are solid values

Moving

Forward

Kaïzen Workshop

Step 1 Preparation

Step 2 Diagnostic

First half of the Kaïzen Workshop

Step 3 Solutions

Second half of the Kaïzen

Workshop

Step 4 Implement Projects

Item 5 Sustain

Implementation

Road Map

Can LEAN Energy support your business objectives?