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"Our Goal is not to Spend a Penny More on Electricity in the Future."
As a supplier of die casting technologies, Oskar Frech GmbH + Co. KG operates in an energy-intensive environment. Thanks to efficiency improvements and sustainable planning, the hidden champion has been able to drastically reduce its energy consumption. In an interview, the management explains how the transformation succeeded and what role lean management plays in the green transformation.
In 2015, an initial energy audit was initiated at Oskar Frech, and a year later a lean project with Staufen was launched. Since then, sustainability and process optimization have been consistently linked. Is this also a financially successful combination?
It pays off in more ways than one. Just a few years ago, we were emitting around 2,800 tons of greenhouse gases every year with our three plants. Now our emissions are zero. At the same time, our electricity costs fell from around one million euros a year to 650,000 euros now, albeit at a significantly higher cost per kilowatt hour. Extrapolated to the current price level, our electricity bill today would be 2.5 million euros per year. Thanks to a combined heat and power plant, PV systems, energy-related renovations, optimized production, and smaller savings such as the switch to LED lighting fixtures, we have been able to significantly reduce the amount of electricity we purchase. In addition, we have been purchasing CO2-neutral electricity since 2020. This means that we are now already producing in a climate-neutral manner in Scope 1 and Scope 2, and by 2030 we want to achieve this mark in Scope 3 as well, i.e. including indirect emissions from the supply chain.
Many companies are planning far-reaching sustainability projects, but the Staufen study "Green Transformation in Mechanical and Plant Engineering" shows: Only one in three companies actually gets it right. How do you manage to implement it?
We started with an energy audit to find out where we stand and what we need to develop. On this basis, we then set up and expanded a small energy management team with managers, department heads and executives. The first step was to gather information and identify potential. To do this, we brought the apprentices on board as "energy scouts," for example. Among other things, they took compressed air measurements and pointed out where there were leaks. We then worked through the list piece by piece. These were only small beginnings, but it already saved us 100,000 euros a year. And a more recent, larger project is a combined heat and power plant that has already paid for itself within two years. At the same time, we bought two electric Smarts for trips between the plants.
How does the lean project you launched with Staufen in 2016 fit into the sustainability efforts?
We always operate with three thrusts: Lean, digitalization and sustainability. For example, if we notice that the cycle in the work process is not right in the production of a casting unit, we first try to increase efficiency via the lean track. In the next step, we use digital tools. And finally, we link design and development activities with the topic of sustainability. But for us as a company, not only our own production is relevant; the steps behind it are also important: from energy-efficient use to recycling. That's why we bought a company last year so that in the future, for example, we can feed aluminum rims produced on our machines back into the recycling loop.
Is recycling a new business model for Oskar Frech?
As far as our core products are concerned, recycling and refurbishing have always been an issue. In our plants, used machines are also overhauled and refurbished. This is worthwhile because the service life of our machines is very long. So if we can get hold of a Frech machine on the second-hand market, we are happy to take it and then offer it for sale again as a refurbished machine. Smaller customers in particular, for whom a new machine is still too expensive, can immediately put a high-quality production system into operation with a used machine.
How do you involve your suppliers in ESG matters?
As a company, we bear responsibility. That's why in 2018 we established a Code of Conduct (Corporate Social Responsibility) that applies to the entire Frech Group worldwide, covering the topics of people, profitability, environment and energy. We also communicate very clearly to our suppliers what our ideas are and where our journey is going, and we ask for corresponding self-disclosures. We started with the large suppliers, but now we have reached the smaller companies in the supply chain and have already received signed self-disclosures from 140 suppliers.
Are medium-sized companies generally the more sustainable companies because of their corporate and ownership structure?
Look, we are in die casting technology, an industry with a high energy load. Energy efficiency on the machine has therefore always played a major role for us. In addition, as a medium-sized and family-owned company, we also always think across generations - from Oskar Frech to Wolfgang Frech and now to his grandchildren. Family entrepreneurs want to leave behind the best possible living conditions and bring with them a regional anchoring. A high ecological awareness is anchored there in the corporate philosophy. What "green projects" do you want to implement next? We are currently planning a central warehouse, which should be ready by the end of 2023, with greening and a PV system. This is already to be built without fossil fuels (KfW 40) and will also heat the administration building sustainably. Our goal is not to spend a cent more on electricity in the future. That's a big goal, but we have to venture that far so that our customers can also see what's possible.
Source: staufen magazine 2022 | No. 5