is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Lower energy costs as a means to competitive pricing

Energy costs represents a huge chunk of a plastics company's overhead, which means energy reduction can pay off in many different ways. Minneapolis, MN-based Diversified Plastics Inc. has found that cutting energy use not only reduces its overhead but also allows the company to be more competitive. Jim Dow, president of Diversified Plastics, told PlasticsToday that the company's energy savings "translate into more competitive market pricing, which ultimately benefits the customer."

Energy costs represents a huge chunk of a plastics company's overhead, which means energy reduction can pay off in many different ways. Minneapolis, MN-based Diversified Plastics Inc. has found that cutting energy use not only reduces its overhead but also allows the company to be more competitive. Jim Dow, president of Diversified Plastics, told PlasticsToday that the company's energy savings "translate into more competitive market pricing, which ultimately benefits the customer."

Like many companies, Diversified Plastics took several steps to reduce it energy usage. In an interview, Dow noted that at a time when Diversified Plastics, like most molders, is struggling with resin costs that consume a significant portion of its sales, "the challenge it to try to absorb those costs by reducing overhead costs so we can stay competitive with our customers' pricing."

First, they worked with their local power company to identify potential energy savings. The power company conducted an audit, which resulted in a list of recommendations. After reviewing the recommendations, the company determined which actions would produce the best return on investment.

Diversified first began by replacing its metal halide shop lights with fluorescent lights. They also replaced the office fluorescent lighting with more energy-efficient models. As an incentive, it power company offered a program which subsidized the replacement cost of new, more efficient lighting.

"The cost savings from updating the lighting exceeded our expectations, and that success led us to look for other ways to reduce energy consumption," said Dow. "We knew these changes would be small improvements, but when put together with other energy-saving projects, they could really make a difference over time."

Another recommendation was the installation of set-back thermostats for better control of heating and air conditioning during off hours. Even office equipment is now plugged into power strips so that employees can ensure all their equipment is turned off with a single switch.

Diversified Plastics' employees also participated in the energy reduction program by suggesting ideas for saving energy. Suggestions included adding light switches to illuminate smaller warehouse zones rather than turning on banks of lights throughout the warehouse. These seemingly minor changes produced big results.

Energy use also plays a part in Diversified Plastics' equipment-buying decisions. Currently, Diversified Plastics operates 16 injection molding machines ranging from 55-550 tons in a 54,000-sq-ft facility, of which 44,000-sq-ft is occupied.

"When we purchased an electric press for specific, high-precision applications, energy and cost of operation were key considerations," Dow pointed out. "These machines use about one-third less energy than traditional hydraulic presses and require less overall maintenance."            

Diversified Plastics' energy-savings program is an ongoing effort. Their current project is focused on repairing leaks in the manufacturing plant's compressed-air system. The company uses a large amount of compressed air during production and if the system has any leaks, the compressor runs more often to maintain air pressure.

Dow added that Diversified Plastics' employees are very environmentally conscious and the company has developed a culture of conservation. "In addition to our recycling efforts, our people are astute enough to know that consumption of energy is a can also be a waste," he stated. "They realize that energy reduction translates into environmental protection."

Diversified Plastics

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish