2013 lean and green factory atlanta

Topics: Manufacturing, Industry, Thermodynamics Pages: 4 (352 words) Published: September 24, 2013
LEAN & GREEN FACTORY

@ McKinsey Capability Center Atlanta

Turning resource productivity
and continuous operations into
competitive advantage

The efficiency imperative
Energy is already the single largest indirect
cost in many industries. And its price is
only going up. To deliver the next step
in energy and resource productivity,
companies will need to make broad and
deep changes across their operations.
Does your organization have the
capabilities to make that happen?

LEAN & GREEN FACTORY

1

The resource productivity
revolution is already overdue
Over the past 50 years, manufacturing companies
have transformed their labor productivity. The widespread
adoption of lean techniques, coupled with greater automation, means that today’s manufacturers produce more than three
times as much value per unit of labor input as their counterparts did in the 1960s. By contrast, gains in energy efficiency and material yields have been modest. That will have to change, as companies learn to operate in a world of rising, and increasingly volatile, energy and resource prices.

Historical productivity improvements
Factor input per unit of value added, indexed
400

Labor
productivity

350
300
250

Material
productivity

200

Energy
productivity

150
100
50
0
1960

1970

1980

1990

2000

2010

Source: U.S. Energy Information Administration; Federal Bureau for the Environment

2

LEAN & GREEN FACTORY

U.S. energy costs have
nearly doubled in the last
decade. Energy accounts
for around one-third
of all costs in energyintensive industries such
as aluminum, steel and
cement production. Even
in less intensive sectors,
such as food and beverage
manufacturing, energy can
be the largest non-cost
of goods sold expense, a
fact that frequently surprises
executives. Absolute energy
costs for the ten hungriest
industries are $1.8 trillion
per year, more than the
GDP of India.

Across industries,...
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