Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; in conjunction with the Leaders for Global Operations Program at MIT, 2012.Cataloged from PDF version of thesis.Includes bibliographical references (p. 46-48).Company X uses large amounts of electricity in its manufacturing operations. Electricity prices at selected plants in the company's Region 1 territory rose by over 350% between 2000 and 2011, in part due to increasing reliance on high-cost fossil fuels. A focus on reducing these costs has identified numerous energy-saving projects in recent years, but with mixed implementation and performance results between the different plants in the region. Consequently, there is both a need to reduce exposure to high electricity prices and an opportunity to better share best-use practices between plants. This paper has two focuses: identifying and quantifying energy cost-reduction opportunities, and mapping the value-streams for the decision-making and implementation process for energy savings projects. From this Value Stream Map, recommendations are made for a new process that can be standardized and rolled out to other sites in the region. During the first phase of the project, data gathered from utility bills, power meters, and production records are used to identify the best opportunities for energy reduction within the plants. Using this technique, 7 GWh/year of potential energy cost savings are identified via reduced downtime, lighting motion detectors, high-efficiency lighting, and negotiable changes to energy contracts. For the benchmarking phase, the historical record of identified energy projects is compared with the number of projects actually implemented. An observational study of the local LEAN team from one plant is combined with interviews of engineers, managers, and financial analysts to build a process map of both the current and former processes for energy project identification, evaluation, and implementation. The results show a reduction in process steps and a step-change increase in the number of energy projects implemented. A key feature of the new approach is the creation of a dedicated energy team within the existing LEAN program. It is believed that emulating this integration of energy and LEAN at other sites will yield cost reductions as well. To follow up this work, a pilot study modeling this program at another site is recommended before further expansion to the rest of the region.by Steven J. Stoddard.S.M.M.B.A
