How Alcoa Canned the Cost of Recycling

Alcoa is one of the world?s largest aluminium smelting and casting multinationals, and involves itself in everything from tin cans, to jet engines to single-forged hulls for combat vehicles. Energy costs represent 26% of the company?s total refining costs, while electricity contributes 27% of primary production outlays. Its Barberton Ohio plant shaved 30% off both energy use and energy cost, after a capital outlay of just $21 million, which for it, is a drop in the bucket.

Aluminium smelting is so expensive that some critics describe the product as ?solid electricity?. In simple terms, the method used is electrolysis whereby current passes through the raw material in order to decompose it into its component chemicals. The cryolite electrolyte heats up to 1,000 degrees C (1,832 degrees F) and converts the aluminium ions into molten metal. This sinks to the bottom of the vat and is collected through a drain. Then they cast it into crude billets plugs, which when cooled can be re-smelted and turned into useful products.

The Alcoa Barberton factory manufactures cast aluminium wheels across approximately 50,000 square feet (4,645 square meters) of plant. It had been sending its scrap to a sister company 800 miles away; who processed it into aluminium billets – before sending them back for Barberton to turn into even more wheels. By building its own recycling plant 60 miles away that was 30% more efficient, the plant halved its energy costs: 50% of this was through process engineering, while the balance came from transportation.

The transport saving followed naturally. The recycling savings came from a state-of-the-art plant that slashed energy costs and reduced greenhouse gas emissions. Interestingly enough, processing recycled aluminium uses just 5% of energy needed to process virgin bauxite ore. Finally, aluminium wheels are 45% lighter than steel, resulting in an energy saving for Alcoa Barberton?s customers too.

The changes helped raise employee awareness of the need to innovate in smaller things too, like scheduling production to increase energy efficiency and making sure to gather every ounce of scrap. The strategic change created 30 new positions and helped secure 350 existing jobs.

The direction that Barberton took in terms of scrap metal recycling was as simple as it was effective. The decision process was equally straightforward. First, measure your energy consumption at each part of the process, then define the alternatives, forecast the benefits, confirm and implement. Of course, you also need to be able to visualise what becomes possible when you break with tradition.

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Saving Energy Step 5 – Bringing it together

We hope you have been enjoying our series of short posts regarding saving energy, so what we use we can sustain. We have tried to make a dry subject interesting. After you read this post please comment, and tell us how it went. We are in the environment together. As the man who wrote ?No Man is an Island? said, ?if a clod be washed away somewhere by the sea, Europe is the less? and Europe was his entire world.

The 4 Steps we wrote about previously have a multiplier effect when we harness them together

  1. Having a management system diffuses office politics and pins accountability in a way that not even a worm could wriggle
  2. This defines the boundaries for senior managers and empowers them to implement practical improvements with confidence
  3. The results feed back into lower energy bills: this convinces the organisation that more is possible
  4. This dream filters through all levels of the organisation, as a natural team forms to make work and home a better place.

None of this would be possible without measuring energy consumption throughout the process, converting this into meaningful analytics, and playing ?what-if? scenarios against each other to determine where to start.

The 5th Step to Energy Saving that brings the other four together can double the individual benefits as innovative power flows between them. The monetary savings are impressive and provide capital to go even further. Why not allow us to help you manage what we measure together.

ecoVaro turns your numbers into meaningful analytics, makes suggestions, and stays with you so we can quantify your savings as you make them. We should talk about this soon.

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Introduction to Matrix Management

A leader is responsible to empower his people and get the best out of them. Yet an organisational structure can either help or hamper performance. Worst, it can make or break success.

Looking at the fast-changing world of the global economy, whatsoever slows up and obstructs decision-making is a challenge. Hierarchical management is rather unattractive and functional silos are unlikable. Instead, employees desire to create teams equipped with flexibility, cooperation and coordination.

Recognising that companies have both vertical and horizontal chains of command, the matrix model is created. The concept of this principle lies in the ability to manage the collaboration of people across various functions and achieve strategic objectives through key projects.

Consider this scenario:

Ian is a sales executive of a company. His role is to sell a new product under the supervision of a product manager. The manager is expert about the product and she is accountable to coordinate the people across the organisation, making sure the product is achieved.

Moreover, Ian also reports to the sales manager who oversees his overall performance, monitors his pay and benefits and guides his personal development.

Complicated it may seem but this set-up is common to companies that seek to maximise the effect of expert product managers, without compromising the function of the staffing overhead in control of the organisation. This is a successful approach to management known as Matrix Management.

Matrix Management Defined

Matrix management is a type of organisational management wherein employees of similar skills are shared for work assignments. Simply stated, it is a structure in which the workforce reports to multiple managers of different roles.

For example, a team of engineers work under the supervision of their department head, which is the engineering manager. However, the same people from the engineering department may be assigned to other projects where they report to the project manager. Thus, while working on a designated project, each engineer has to work under various managers to accomplish the job.

Historical Background

Although some critics say that matrix management was first adopted in the Second World War, its origins can be traced more reliably to the US space programme of the 1960’s when President Kennedy has drawn his vision of putting a man on the moon. In order to accomplish the objective, NASA revolutionised its approach on the project leading to the consequent birth of ?matrix organisation?. This strategic method facilitated the energy, creativity and decision-making to triumph the grand vision.

In the 1970’s, matrix organisation received huge attention as the only new form of organisation in the twentieth century. In fact it was applied by Digital Equipment, Xerox, and Citibank. Despite its initial success, the enthusiasm of corporations with regards to matrix organisation declined in the 1980’s, largely because it was complex.

Furthermore, the drive for motivating people to work creatively and flexibly has only strengthened. And by the 1990’s, the evolution of matrix management geared towards creation and empowerment of virtual teams that focused on customer service and speedy delivery.

Although all forms of matrix has loopholes and flaws, research says that until today, matrix management is still the leading approach used by companies to achieve organisational goals.

Be pound poor and become Penny rich

Energy management is and should be perceived as a long-term investment by organisations. Having said this, the need for all organisations to implement energy management strategies now cannot be overstated as these strategies will save their costs of running the business in future.

Many organisations may shy off from implementing energy efficiency measures in place opting to save the associated costs or to use the cash for other projects that may be perceived as high priority in the short run. This is most likely to occur when cost cutting is a priority. Long-term planning is however critical for energy efficiency programs. Taking steps to improve building management and energy efficiency will and does pay dividends in the near-term and may be a competitive tool in the long-term.

Be energy smart
All energy management projects begin with being energy smart which calls for the understanding of energy usage. Use of Smart Meters that give real time readings of energy usage, can dramatically help businesses understand the benefit which energy management brings to the organisation.

Smart meters also cut the amount of time businesses spend on administration by allowing them to pay accurate bills, based on accurate readings. Some suppliers also support businesses to identify areas of energy wastage/inefficiency and help setting targets for energy reduction that guide behavioural change with regard to energy in the organisation.

Use of technologies that record the energy usage at the water or electricity meters putting data into a system where the users can graph it has made it easy to compare energy consumption in various departments, sites or buildings. Appropriate measures can then be implemented to improve the efficiency.

Partnerships between businesses and energy suppliers
Since the long-term benefits of reduced energy consumption is beneficial to both suppliers and consumers; the responsibility of managing energy consumption is being taken by both. Businesses should work with the suppliers on cost reduction strategies through identifying areas where energy is being wasted and advising businesses on how to save energy. Of key importance when choosing an energy supplier therefore is their depth of understanding of a business’ energy management needs.

Capitalise on government incentives
Businesses should always explore varied financing mechanisms for their energy efficiency programs e.g. government schemes generating electricity and selling it to the grid.

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