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August 19, 2021

Cutting costs while reducing carbon? Global industrial leader ITW is getting it done

By Elana Knopp, Senior Content Writer

Edison Energy’s Visionary Voices: Perspectives in Energy Series features conversations with leading experts from across the industry. These thought leaders are driving innovation in energy markets and available solutions for commercial, industrial and institutional energy buyers. Their diverse perspectives and experience offer a real-time view into the transformation happening in the market today.

Mike Colwell is the Director, NA Indirect Materials & Services and Global Energy for Illinois Tool Works in Glenview, Ill., focused on cost reductions and risk management through energy supply and demand reduction opportunities in North America, Europe, and Australia.

 


 

It all started in 1910, when Chicago financier Byron L. Smith placed an ad in The Economist seeking to invest in a manufacturing business. The ad drew a small group of tool inventors, and Illinois Tool Works (ITW) was born.

Today, the global industrial company comprises seven market segments across automotive OEM, construction products, food equipment, polymers & fluids, specialty products, test & measurement and electronics, and welding. ITW currently operates in 53 countries and employs 43,000 workers worldwide.

“I always like to say that at Illinois Tool Works, we’re more than Illinois and we’re more than tools,” said Mike Colwell, ITW’s Director of Strategic Sourcing.

“It was founded in 1912 as a tool and die company in Chicago, so that’s where the name came from. But over the years it grew by acquisition. We’re a diversified manufacturing company, and a lot of what we do is business-to-business. We mostly sell to other companies to make their products better.”

As part of its company-wide goal to address operating costs and reduce its carbon footprint, ITW contacted Edison Energy’s Energy Optimization team in 2020 to perform a detailed compressed air leak survey and repair projects at two of their Illinois business sites–an appliance component manufacturer located in Des Plaines, and packaging manufacturing company Hi-Cone in Itasca.

“ITW is a very decentralized company, so it’s my businesses that are the ones responsible for these energy reductions and for the P&L reduction that’s going to come from it,” said Colwell. “I’m just an enabler. I am an internal resource, and one of my resources is Edison.”

In 2019, ITW instituted a GHG intensity reduction target, or the amount of GHG emissions a business emits divided by its revenue, with the goal of growing revenue without growing carbon emissions.

Earlier this year, ITW increased its current GHG emissions intensity reduction target, aiming to reduce combined Scope 1 and Scope 2 GHG emissions per U.S. dollar of operating revenue by 40 percent below 2017 levels by 2030.

Strategies to meet this goal include reducing energy consumption and improving operational efficiency at the company’s manufacturing and ITW-owned facilities, as well as expanding its purchase of renewable energy, including wind and solar, across its global footprint.

As of 2020, ITW’s ESG risk ratings placed in the top two percent of companies in the Industrial Machinery Subindustry assessed by Sustainalytics, was given an “A” ESG rating by MSCI in the Industrial Machinery Group, and was ranked in the top 20 percent of companies in the machinery sector by ISS ESG.

Cutting costs

ITW was able to get project costs covered through a Commonwealth Edison energy efficiency incentive program, which helps customers implement low-cost measures in their industrial systems to improve efficiency and reduce energy costs without adversely affecting facility or system operations.

“Edison Energy is an expert in various pieces of machinery and systems within the factory, so they went in and looked at the compressed air piece of it, which was identifying leaks and improving the efficiency of the system,” Colwell said. “Edison also looked at the utility incentives that would help pay for some or all of those services and repairs. When you’re leaking less air, you’re using more of it and you’re actually being more efficient and not spending as much on electricity. Edison came in to do the utility incentives, which then got all the repairs done. They did all the paperwork–it was a one-stop-shop. And the business just gets the benefits from it, which is an improved system and they’re now using less electricity for that system.”

The work conducted by the Edison Energy team helped ITW achieve an annual cost savings of $13,400.

“Work with Edison Energy and everything else is hands off,” Colwell said. “Edison will go and find the root cause of the problem and work with the facility personnel. The problem could be leaking air, broken equipment, something that’s not working efficiently or properly. They bring it to the business and say, ‘here’s the cost of what it’s going to take to fix it and here’s the benefit,’ and then implement it for the site. My facility personnel can do as much or as little as they want. Edison works within that framework.”

Colwell says companies who are ready to take the plunge on cost-saving and sustainability projects should find a trustworthy advisor to help navigate the journey.

“The fortunate thing for me is I’ve worked with individuals at Edison for years, so for me it was easy to trust them, and I knew they would do good by me and my business,” he said. “Regardless of whether it’s Edison or not, you have to find a reputable partner that you trust that will do the right thing for you, which is the right thing for them as well.”


Learn more about Edison Energy’s work with ITW in the latest edition of our Energy Optimization Newsletter and click here to explore our previous conversations with industry thought leaders.

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