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Utilizing an ISO System to DriveSustainable Energy Management

Lincoln Electric Company of Canada

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HistoryLincoln Electric was founded in 1895 by John C. Lincoln, who was later joined by his brother James F. Lincoln.

• Began producing arc welders at the turn of the 20th Century• Behind many of the major advances in the industry• The Welding School has been training welders since 1917• #1 most studied business case at the Harvard School of Business• Pioneer in the development and advancement of digital welding

processes

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10,000+ employees across 45 manufacturing facilities in 19 countries. Distribution to 160+ countries.

Local Presence With an Extensive Global Footprint

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CONSUMABLES EQUIPMENT

ACCESSORIES & CUTTINGAUTOMATION & FUME CONTROL

Broad Portfolio of Leading SolutionsConsumables + Equipment + Services

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Lincoln Electric Company of Canada

102 Years of Lincoln Culture

1916 - 2018

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Machine & Consumable Divisions Automation & Sales

Lincoln Canada Headcount: 374• Total Years of Service: 3,300•Manufacturing footage: 339,000 sq. ft.

Lincoln Canada Manufacturing

Indalco

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• Manufacturing Plants in Canada must exhaust all options when to be competitive in the world market.

• Energy Management allows us to manage a part of the business that may be overlooked during cost containment and cost reduction activities.

– It also allows for us to fine tune our abilities to reduce our environmental impact while managing our consumption of resources.

Why ISO50001?

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Why ISO50001?

• Systematic Approach to Energy Management– Engineering Design, Procurement, PM

• Management Oversight/Direction/Support– Cost Containment/Control

• Employee Engagement/ Involvement– Piecework Program/Bonus Program at

Lincoln Electric• Tangible Benefits to Company/Employees• Support Network (Partners in Project Green)

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What Is ISO50001

“Individual organizations cannot control energy prices, government policies orthe global economy, but they can improve the way they manage energy in thehere and now. Improved energy performance can provide rapid benefits for anorganization by maximizing the use of its energy sources and energy-relatedassets, thus reducing both energy cost and consumption” www.ISO.org

• Similar to other ISO programs, a structured approach to energy management

• Systematic methodology to measure, track and improve energy efficiency

• Has the ability to “Pay for Itself”

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ISO 50001 Process for Implementation

Gain Commitment Select Team / Coordinator Define Scope Baseline Data Collection (Usage, Production and Management Practices)

Technical Energy Assessment(s) - as required Develop Energy Policy Develop Energy Metrics, Goals and Targets Technical and Procedural Training

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Management Review

• Changes in Energy Performance in the Organization

• Changes to the Energy Policy• Changes to the EnPI’s• Changes to Objectives, Targets, or other

elements of EnMS consistent with the organization’s commitment to Continual Improvement?

• Changes to Allocation of Resources?

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Awareness and Communication

• Employee Suggestion system.• Third party contractors can use the Suggestion Program• All employees and contractors must be aware of the

Energy Policy.• Special awareness must be communicated for persons

doing work pertaining to Significant Energy Users if their work could affect the equipment or process.

• External Communications

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Energy Policy

Highlights:• Ensuring adequate resources to be

provided for energy management programs

• Undertaking periodic reviews of the business to identify areas where energy reductions can be made

• Ensuring that controls are in place to effectively maintain equipment and sustain energy efficiency initiatives.

• Regularly reviewing this policy to maintain our commitment to continual improvement.

LINCOLN ELECTRIC COMPANY OF CANADA LP

ENERGY MANAGEMENT POLICY

Lincoln Electric Company of Canada recognizes that the uncontrolled consumption of energy can have a negative impact on the environment and business performance. We are therefore committed to ascertain that energy is continually managed to ensure efficiency, whilst employing cost effective measures, to ensure continual improvement in our energy performance.

To this end, Lincoln Electric Company of Canada will assess and place in order of priority all proposed energy saving schemes on the same basis of appraisal criteria used for other investment.

Energy saving goals will be set by Lincoln Electric Company of Canada and monitored annually. We will achieve our targets by:

• Ensuring that adequate resources and information will be provided for the completion of energy management programs.

• Undertaking periodic reviews of the business to identify areas where energy reductions can be made.

• Ensuring that capital equipment is selected with due regard to energy efficiency when the marginal cost is justified.

• Ensuring that purchase of energy-efficient products and services, and process / building design for energy performance improvement

• Ensuring that controls are in place to effectively maintain equipment and sustain energy efficiency initiatives.

• Setting up energy monitoring and reporting systems.

• Reviewing and auditing energy management systems against this policy and reporting our energy performance as a means to improve accountability and to drive the continual improvement of our operations and business effectiveness.

• Regularly reviewing this policy to maintain our commitments to continual improvement and to comply with applicable legal requirements and other requirements to which the organization subscribes related to energy use, consumption and efficiency.

• Ensuring the faults that waste energy will be identified and repaired as continual improvement of our systems and commitment to energy efficiency.

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Cross Functional Representation for Energy Management? Department Responsibility

Production/QA • Support for SEU Project Training/Operational Controls

• Continued support on energy savings ideas

Finance Support of energy management initiatives / SEU’s / Ensure LCAs

Purchasing/Procurement Energy Management oversight/control on procurement of new products

EHS Coordination with ISO14001 systems (Doc Tracking, CAR, Audit)

Engineering/Maintenance - Initiate, Track, and Progress on Improvement Projects

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Employee communication - HOW CAN YOU HELP? SPOT Areas of Improvement Identify Energy WASTE Opportunities Electricity Natural Gas (Heating)

Use the Continuous Improvement Suggestion form to share your ideas

• Inform Foreman and Maintenance– Spot the AIR LEAKS $$$$

• Report Air Leaks to your foreman/supervisor– Report OVERHEATING machinery

• Electrical Motors that are working harder than they should are a sign of imminent failure/excess energy

This Initiative is Crucial to the Environment and to the future of our business, we all need to take part in ensuring its success !

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Employee communication-Eliminate Energy Waste

• “Turn it off” – Lights, fans, pumps, conveyors– Compressed air / vacuum leaks– Steam traps

• Turn it down– Temperature, water & air flow (contact

supervisor)– Compressed air & steam pressure & flow

• Control it– Exhaust / make-up air balance– Light levels

PLEASE CONTACT SUPERVISOR BEFORE CHANGING ANY MACHINE SETTINGS

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Energy Performance Indicators (EnPIs)

Facility Wide Goals and EnPIs:Electricity• Reduce Electrical Consumption/Base DollarNatural Gas• Reduce Natural Gas Consumption/ Heating Degree

Day

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EnPi – Giga Joules per Hours Worked

Cleveland Target for YE 2020 13.6% Reduction

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Data Collection

Solution:

• Investment was made in Sub-metering equipment for SEUs

Electrical Data Division Wide (Toronto Hydro Interval Meter)

Challenge:

• Hard to separate Divisions, processes and equipment with this data collection method

Electrical Data Bake Oven Process (Acuvim Sub-meter)

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Procurement – MODIFIED PAR FORMPAR # 123 INT ORD #

DEPT # DEPT. NAME DATE ORIG

DATE OPEN

DEPT # DEPT. NAME PHONE AUC #

Internal Ord #

DEPT # DEPT. NAME PHONE LEAD WO #

DEPT # DEPT. NAME PHONE

DATE FINAL

NAME INITIALS DATE PLAN ACTUAL

COMPLETION (months after approval)

NET PERSONNEL CHANGE

A. Mir COSTS CAPITAL

EXPENSE

J. Sutcliffe LESS TRADE IN VALUE

J. Doria TOTAL APPROPRIATION

SAVINGS / ADDED NET PROFITS

ONE-TIME

ONGOING PER YEAR

REVIEW ENVIRONMENTAL IMPACT: Frank Conroy

PURPOSE Incremental Business

AUTHORIZED FINAL APPROVAL: OTHER BENEFITS (not listed above)

CFO: 10.50%20.00%

CEO: INTERNAL RATE OF RETURN (%) #NUM!ROIC #DIV/0!

NET PRESENT VALUE - TERM OF NPV (years) 10

Is an LCA (Lifecycle Cost Analysis) Required Y( ) N ( )

PROJECT ORIGINATOR

KEY PERSON RESPONSIBLE FOR PROJECT

EXECUTIVE SUMMARY / BRIEF DESCRIPTION OF PROBLEM, OPPORTUNITY and PLAN

PROJECT FOR DIVISION / BUSINESS UNIT

Cost Center to be Charged & Person Responsible

HURDLE RATE (%)

SUMMARY of DATA

PROJECTS OVER $10,000

SUPPORTING INTERNAL LABOR HOURS (that are NOT included in costs)

ITEMREVIEW and APPROVAL ROUTING

COST OF CAPITAL (%)

PROJECT APPROPRIATION REQUEST

PROJECT IDENTIFICATION DATA

TitlePROJECT TITLE ( 64 characters maximum )

Please spell check your document before submission.

OPTION 1 (Baseline) OPTION 2 OPTION 3

Equipment Life (years) Enter the option with the longest life as Option 1 (Baseline)

ACQUISITION COSTSTotal Installed CostTotal Interest paymentsLIFECYCLE SUBTOTAL $0 $0 $0 Rows shaded green are automatically computed. Do not enter data in green rows.

ANNUAL COSTSAnnual Energy CostAnnual Maintenance CostAnnual Consumables CostTOTAL ANNUAL COSTS $0 $0 $0 Rows shaded green are automatically computed. Do not enter data in green rows.LIFECYCLE SUBTOTAL $0 $0 $0 Rows shaded green are automatically computed. Do not enter data in green rows.

DISPOSAL COSTSScrap Value (if any)Disposal fee(s)LIFECYCLE SUBTOTAL $0 $0 $0 Rows shaded green are automatically computed. Do not enter data in green rows.

FRACTIONAL LIFE COSTS Fractional life costs takes into account that different equipment may have different life times.LIFECYCLE SUBTOTAL $0 #DIV/0! #DIV/0! Rows shaded green are automatically computed. Do not enter data in green rows.

LIFECYCLE TOTALS $0 #DIV/0! #DIV/0! Lowest lifecycle cost is the preferred option.

Lifecycle Cost Analysis

Modified PAR form to include Lifecycle Cost Analysis

Purpose: To mandate (as Per Energy Management Representative) the use of lifecycle costs in the procurement of new capital equipment/replacement parts.

In Effect Since March 11/2013

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Non SEU updates & 2018 Plan

• Lighting Retrofit (2016/2017)– Solid Wire– Machine Sub assembly bay – DC warehouse– Parking lot LED lighting

• Lighting Retrofit Plan 2018– Cored Wire Division

• Replace old T-5 Fluorescents lights with LED• Plan to roll out in HY2

• Comprehensive Energy Audit – Identified ECM’s(energy conservation measure)=4– Identified WCM (water)=1– Identified BCM’s (building envelope/HVAC/Power Quality)=7– Identified REM (renewable)=1

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Supply Chain Improvements

A large portion of our environmental footprint is directly related to the supply chain.

Added an "Environmental Section" to our supplier report cards. This new section highlights suppliers that share our environmental vision.

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