LEAN ENERGYDr Johan Wollin

20th June 2018

Volvo Construction Equipment

Part of Volvo Group

14000 employees

6.7 B Euro company

Three construction brands in the Volvo Group

Joint venture

Terex Trucks

Manufacturer of

rigid and articulated

trucks

Volvo

Leading premium brand offering a wide

range of construction equipment

SDLG

Leading Chinese

construction brand

Industrial footprint consisting of 14 plants

TO BECOME THE WORLD LEADER IN SUSTAINABLE TRANSPORT SOLUTIONS

We are committed to be a climate leader within the global construction equipment industry

1. Increased

machine fuel

efficiency

5. Host the

Construction

Climate Challenge

3. Industry

standardization

leadership

6. Production site

energy efficiency

2. Advanced

technology

development

7. Supply chain

energy efficiency

4. Eco Operator

training & Customer

site optimization

Starting at the base… Step 1 – Energy conservation (never ends…)

Renewable energy

Energy Efficiency

Energy Conservation

What does that mean?

Energy

conservationEnergy efficiency

Renewable

energy

• Turn off non-essencial

equipment

• Turn on non-essencial

equipment later and turn it

off earlier

• Use existing equipment in a

smarter way

• Use right sized equipment

• Invest in energy recovery

• Invest in more energy

efficient equipment

• Buy green electricity

• Switch energy

sources away from

CO2 emitting ones

• Investigate own

energy production

A culture building strategy

Low cost

2013-2015

Idle electricity

2016+

Production energy

Renewable

energy

Self funded

Culture and behavior

Why start with idle electricity?

Reduce cost for future improvements

Project management using ”Idle electricity A3”

How to measure success?

Target: Reduce relative idle electricity to less than 15% before end of 2015

Production electricity (kWh’s during 10 production hours)

Idle electricity (kWh’s during 10 idle hours)Relative idle

electricity % =

Clear KPI with stretched target

Able to compare plants

Re-calculate back to kWh

Need a measurement system (internal or external)

Pareto thinking to prioritize and focusEnergy intensity of 0.54%

Energy cost per unit reduced 24%

Idle electricity use reduced by > 50%

Waste elimination without investment using Lean tools

• Waste hunts

– Night walks with management

– Reinforced end of shift routines

– Energy treasure hunts (2-3 days workshops)

• Timers, motion sensors and twilight sensors

• Building control system for light and ventilation

• Etc. etc.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

kW

h

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

kW

hResults – Before vs. After

June w26 2015 (before)

November w48 2015 (after)

Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday

Step 2 – Energy efficiency

Renewable energy

Energy Efficiency

Energy Conservation

We have saved 41 GWh’s of energy

Target of 40 GWh’s 2014 to 2020 is equivalent to 2% annual reduction

Third party audit by Ecofys / Navigant

WWF A3

41 GWh

Step 3 – Renewable energy

Renewable energy

Energy Efficiency

Energy Conservation

Road map examples and result

Non-energy benefits (NEB)

MOTIVATION

COSTQUALITY

PRODUCTIVITY / RELIABILITY

SAFETY

Less working

on height with

LED lights due

to their longer

life expectancy

Optimized

machining to

reduce time

and same time

improve

surface quality

Detailed

understanding

of the

production

process enable

optimization of

cycle times

Running oil

separator only

when

machining

increase filter

chance

frequency

Celebrating

achievements

together and

motivate for

continuous

improvements

in other areas

Non-energy benefits (NEB)

NEB = 2.5 x Energy cost reduction

Hall et. al. 2003

Summary

• Total electricity use reduced by > 20 %

• Idle electricity use reduced by > 50 %

• 5 M Euro cost avoidance 2017 compared to 2014

• Total energy savings of 41 GWh

• Many “Non-Energy Benefits” (NEB’s)

• Energy cost per unit reduced by 24%

Learning

• Just do it!

• Push responsibility out on the shop floor and harness ideas

• Communicate in an easy to understand format (A3)

• Get sense of urgency by external driver (WWF)

• Don’t invest until low cost improvements have been attempted

• Share success stories and best practice widely

Questions?

johan.wollin@volvo.com