How Manufacturers Can Reduce The Impact Of Higher Energy Costs

Posted by Andrea Wilson on Oct 10, 2022 10:45:45 AM


In manufacturing, efficiency is key to unlocking success and profitability. Businesses can strive to improve their efficiency in many areas of their operations but, where energy efficiency is concerned, external influences play a significant role in determining how much of your annual budget will be spent on electricity and gas.

Rising energy prices, which have continued unabated this year, have occurred because of increasing global demand, weaknesses in supply, and geopolitical problems, such as the war in Eastern Europe. But according to Government research, manufacturers in the UK could reduce their energy use, on average, by one-fifth by implementing some simple measures.


Adapt Your Business Practices

The most effective energy saving practices involve everyone within the business, so it’s important that your entire team is on-board and actively engaged in cutting costs. Sometimes, the most minor of changes to business practices can generate significant savings, so instigate these measures to start reducing your energy bills immediately:

  • Reduce the temperature of the workplace by one degree.
  • Keep windows and doors shut to retain heat.
  • Reduce demand for artificial lighting by installing sensors in less populated areas of the premises.
  • Switch off machinery and equipment when not in use.
  • Turn off motors when not required or between job changes.
  • Ensure equipment is maintained regularly to ensure it runs at optimum performance level.

Negotiate Energy Tariffs

Whilst the Government have introduced a temporary cap, we don’t know if it will continue after March. An energy fixed tariff offers considerable certainty about how much you will pay for your electricity and gas consumption over the term of the deal. When global prices are highly volatile, it makes sense to fix your energy costs so you can budget more effectively from month to month and insulate your business against rising costs in the future. Discuss your options with your current energy supplier but don’t be afraid to shop around to see whether more preferential rates are available elsewhere.

Factor Rising Costs Into Your Product Prices

When you are operating to tight product margins, even slight increases to your energy bills will impact on how much profit you can derive from each sale. While nobody wants to increase the retail price of their products and dissuade customers from purchasing, it’s vital that your manufacturing business remains profitable and viable. Offsetting the increase in energy prices against other costs, for example by negotiating more competitive raw materials, can also limit how much you need to raise product prices. Currently, businesses and consumers tend to be more understanding, as for once, we are all in the same situation.

Inject Capital From Other Areas Of The Business

If your organisation has available capital that isn’t tied up in other areas of the business, you can re balance your budget by diverting money into your energy fund. For example, this might include outsourcing specialist machining to an expert third-party supplier to reduce costs, or changing the way your organisation operates, such as switching to digital marketing, to slim down your spending and release funds for your energy costs.

Implement Energy-Saving Technologies

A range of energy-saving technologies can be incorporated into modern manufacturing plants to reduce demand and reliance on fossil fuels, thereby cutting expenditure. While an initial outlay will be required, the long-term savings for your business can be attractive – plus, you’ll be able to promote your brand as one that is committed to eco-friendly practices. Common energy-saving technologies include:

  • Solar panels
  • Power factor correction capacitors
  • Voltage optimisation units
  • LED lighting
  • Equipment timers

Contact Hone-All For Expert Outsourced Machining

We all like to keep as much in house as possible, but if you need an alternative solution, by outsourcing your CNC honing, deep hole boring, and drilling to Hone-All, we can help you save time, money and reduce your demand for energy during these challenging times.

To request a free, no-obligation quotation, please call us on 01525 370666 or send us a message.

New Call-to-action

Topics: manufacturing, UK Manufacturing, #ukmanufacturing

Leave a comment

Subscribe To Our Blog!

New Call-to-action

Recent Posts

Hone-All- What Makes Us Unique V2
New Call-to-action