Is it a simple economic fact that rising energy costs and rising raw material costs mean that consumer packaged goods businesses are either going to lose money (e.g. J.M. Smucker Co.) or pass on their increased costs in the form of increased prices for consumers (e.g. Proctor and Gamble)?  Conventional wisdom dictates that someone will be absorbing the effects of increased material costs.  But is it that simple?

If a company does not look for opportunities to change its operating cost structure, than yes, it is basically that simple.  However, if industry leaders are able to think critically about their operations and look for opportunities to make smart investments - both resource investment and capital investment - there are solutions to deal with these types of rising operating expenses.  Solutions that protect margins and maintain prices.  

In an interview with McKinsey & Co., Amory Lovins from the Rocky Mountain Institute discusses how it is the responsibility of senior management to encourage and participate in the process of finding innovative ways to use energy more efficiently.  In the United States, the industrial sector comprises 32% of total energy consumption.  Worldwide, this number is closer to 50%.  As the industrial sector is highly dependent on energy use, these industrial leaders must be the ones to find the solutions.  And solutions that go beyond lighting and HVAC to ones that target the very industrial processes themselves.  

Advanced process technologies, such as in-line low voltage electron beams, can be a solution to the challenges posed by rising energy and material costs for a wide range of industrial processes. Below are several examples we have written about in the past:

• Replace conventional thermal processes with energy efficient electron beam processes
• Find opportunities for pollution prevention - eliminate need for energy intensive cleanup activities (e.g. pollution abatement, chemical disposal)
• Enable lightweight packaging concepts by reducing process heat
• Enhance physical properties of packaging material in order to do more with less
• Reduce the facility footprint by adopting process technologies that save space
• Find process technologies that enable faster line speeds or reduce waste
• Look for process compression opportunities - reducing the number of process steps
• Bring outsourced tasks in house - reducing logistics and work in process inventory

Energy efficient process technologies, or process technologies that enable a more efficient product concept, can be important tools for helping organizations meet the challenges of rising energy and raw material costs.