Unformatted text preview: s seeking to reduce operational costs should seriously consider implementing energy efficiency programs such as the one
currently under development at Raytheon. Appendix A General Barriers to Industrial
Energy Efficiency Programs
A recent McKinsey study cited barriers common to energy efficiency programs in general including:
" Low awareness and attention: Due to the relatively low operational cost of energy in non-energy intensive industries, senior managers are not as focused on discovering available
opportunities. Because savings in process energy are highly site and equipment specific, developing the necessary technical expertise to identify savings is often overlooked.
" Elevated hurdle rate: Manufacturing plants generally receive very tight operational budgets,
and plant managers are encouraged to maximize production while keeping short-term quarterly
costs low. Forty-three percent of energy mangers indicate that they use a payback period of
under 3 years, while in difficult economic conditions that period is lowered to 18 months or
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This document was uploaded on 03/03/2014 for the course ADMIN 1 at Universidad Nacional de Colombia.
- Spring '14