Missing insulation, an example of an energy saving opportunity found during Merck
Treasure Hunts
Energy Savings
United States
2010–Present
Merck’s Center of Excellence in Energy
In late 2009, Merck established a new goal to reduce its greenhouse gas emissions by 10 percent by 2015, using its 2009 performance as a baseline. Because Merck’s greenhouse gas emissions are mainly from our use of energy, the goal would require Merck to improve its energy performance by 10 percent as well. It had already achieved significant energy reductions in the years before, had been recognized by the U.S. Environmental
Protection Agency (EPA) for its energy-efficient practices, and received recognition for its efforts in a number of other countries, including Ireland and Singapore. But to meet its new targets, the company would have to find new, innovative ways to identify and implement energy-saving opportunities.
Merck has made it a priority to reduce its demand for energy since the company established its corporate energy policy in
1994. Since that time, our approach has been rooted in the idea that the cleanest energy is the energy we don’t use.
Over the next 15 years, the company made significant progress.
In 2005, Merck adopted a corporate goal to reduce the intensity of its energy demand at its research, manufacturing and major office facilities by 25 percent per unit area (measured in millions of BTUs [MMBtu/ft 2 ]) by the end of 2008, from a baseline year of 2004. Merck not only achieved the goal but exceeded it, reducing its energy demand by 28 percent in that time frame and earning recognition from EPA Climate Leaders.
By 2009, it had been recognized by the EPA twice as Energy Star
Partner of the Year and twice with the program’s Sustained
Excellence Award for the company’s continued efforts to protect the environment through energy efficiency. Prior to the merger between Merck and Schering-Plough, Schering had also won EPA
Energy Star Partner of the Year and was on its way to achieving its internal energy goals as well. It was against this backdrop that, in late 2009, the company established its new greenhouse gas reduction goal and internal energy goal to support it.
Tom Pagliuco, Director of Merck’s Center of Excellence in
Energy (CoE), had a challenge on his hands if the new targets were to be met: Find new, innovative ways for the company to identify and implement energy-saving opportunities, either through increased efficiency or conservation efforts.
“There are different methods to reduce energy consumption and greenhouse gas emissions and to develop a strategic energy plan on a site-by-site basis,” said Pagliuco. “But I knew we needed a way to create high visibility and local buy-in and ownership. There would be a much greater chance that energysaving opportunities would be implemented locally if this happened, than if I came down from corporate headquarters with my own recommendations.”

Pagliuco had heard about a new approach pioneered by Toyota and leveraged by GE called a “Treasure Hunt.” It is based on
Lean and Kaizen principles, concepts Merck was already familiar with through its Six Sigma initiative. Through its ecomagination initiative, GE had made significant progress on its own energyreduction goals through the Treasure Hunt model, working with local staff to apply technology expertise and process improvement tools to identify, quantify and recommend enhancements to sources of energy waste – including electricity, natural gas, water, wastewater, compressed air and steam. During a Treasure Hunt, every aspect of a facility is fair game. “A Treasure Hunt is about getting out of the office and going to where the energy is being used – it is a very focused approach that can identify opportunities over a short time period,” said Michael Grossner, Senior Chemical Engineer from
GE Global Research.
As part of its commitment to the environment, GE was interested in sharing its experience with other companies and approached Merck, which was quick to accept the offer. Next
Pagliuco had to find a Merck site whose local leadership was willing to open themselves up to inspection and committed to implementing the resulting recommendations. He didn’t have to look far. Luis Bosques, a senior energy engineer from Merck’s
Las Piedras, Puerto Rico, site, stepped forward. In 2010,
Merck’s Las Piedras site was 23 years old, employed about 450 people, and produced a number of Merck products as well as investigational compounds used in clinical trials. The site included manufacturing and research facilities, warehouses and administrative offices covering 41 acres. The site’s annual energy use was 250,000 MMBtu, resulting in an annual energy spend in the range of nearly $7 million.
Tom Pagliuco, Director of Merck’s Center of Excellence in Energy
“This was something we had to do – it was important for our site,” said Bosques. “I also knew it would require resources and time to implement the findings. But we were committed.”
In August 2010 with GE’s support and involvement, Pagliuco led a Merck team on the first Treasure Hunt. The team included site personnel – engineering leaders and representatives from operations, quality and other functional areas – who brought process and site knowledge; members of Merck’s global Center of Excellence in Energy and the Global Safety and the
Environment teams who brought energy and other environmental expertise; and external suppliers from lighting, steam, water treatment and compressed air systems all familiar with the site’s operations who could “be another set of eyes.”
The goal was to reduce energy demand and spend at the site by
10 percent. Bosques and Pagliuco also wanted to instill energy savings as an everyday thought process among all employees and to generate a strategic energy plan out of the lessons learned.
Leaking steam trap, an example of an energy saving opportunity found during
Merck Treasure Hunts
Mary Buzby, Merck’s lead for water within the Global Safety and
Environment team, also saw the opportunity to reduce the company’s use of water. “There is a strong nexus between water and energy use. Although the main focus of a Treasure Hunt is to find energy savings, it’s also an opportunity to look for energy that is wasted through wasted water use. It’s really a win-win.”
The actual Treasure Hunt event took only two-and-a-half days, but pre-event planning took nearly six weeks, including determining how to break up the site into strategic focus areas and getting the right people on the right teams.
“Because one of the primary benefits of the Treasure Hunt is that it increases the site’s awareness and enthusiasm for energy efficiency improvement, it is important that the majority of the participants and the team leaders come from the site,” explains
Pagliuco. “The site has to own the event. The amount of people’s time required makes it critical that this is something the site really wants to do.”
Treasure Hunts typically begin mid-day on Sunday to allow participants to see the site in “sleep mode.” Las Piedras was no different. After a brief overview by Bosques and Pagliuco, participants broke up into their assigned teams and went off to see what they could find – for example, equipment and systems that were running when they shouldn’t be, lights on with no one in the building, etc. Their main Kaizen targets were: chilled water, HVAC systems, compressed air, steam and hot water, water, lighting and motors. Teams reconvened over dinner that night to share findings and then went back out to look for more waste until 8 pm.

“There was high-level energy....It was like playing a game, a real
‘treasure hunt,’” said Jenny Castano, part of the Lean Six Sigma
Team at the Las Piedras site.
Monday morning at 6 am, the team was back at the facility to see how the site started up – what equipment was turned on and how it was turned on – as well as how it operated during normal production and during breaks and shift changes. The teams continued their observations until the afternoon, when they started dollarizing the waste they had observed, developing solutions to fix problems, and determining costs to capture the savings. They had until mid-morning Tuesday, when results were presented to site management.
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lighting. And some, Bosques knew, had a low likelihood of being implemented – either they didn’t meet the economic hurdle rate or required a lengthy review and approval process.
“It’s about continuously challenging the status quo and making energy waste visible,” said Bosques. “The largest electricity loss was due to leaks – not use. It was really eye-opening.”
Two years later, the site has implemented more than 60 percent of the identified opportunities to decrease its energy use by
121,000 MMBtu and meet its initial cost-savings goal, despite increased energy rates. Another 10 ideas are being evaluated for future implementation; others are being further analyzed.
In all, the team identified 52 Kaizen opportunities for a reduction of 37,350 MM Btu and a possible $2.5 million in annual savings.
The initiatives represented a reduction of approximately 4,400 metric tons of CO
2
– the equivalent of eliminating 755 cars, or planting 1,193 tree seedlings. There were also opportunities identified to reduce the site’s use of water and nitrogen, as well as maintenance costs.
“It was interesting to see people from different departments and with different backgrounds stepping out of their offices to see where energy is being used,” said Castano. “We all started working for a common goal using a common language and realized that we can achieve real results. It’s through these types of activities that we have the opportunity to make a difference – not only at our site, but in our cities and in the world.”
Post-event work was critical. Bosques and his leadership team had to review and prioritize the recommendations to create the site’s ongoing strategic energy plan. They found many recommendations they could implement within days or weeks, such as simply turning off lights, which would save nearly
$40,000 a year; reducing compressed air supply pressure from
110 to 90 psi’s for a savings of $11,500 in only six months; and turning off un-used equipment and air conditioning in labs, warehouses and offices for $65,000 in savings. “That’s a lot of savings for just turning a switch off or down,” Bosques said.
Other recommendations took longer and required capital, such as removing non-required HEPA filters and re-designing outdoor
Copyright © 2012 Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. All rights reserved.
Today, Merck’s Energy CoE has adopted Treasure Hunts as a best practice assessment tool. Similar events have been held at
Merck sites in Barceloneta, Puerto Rico; Rahway, New Jersey; and Memphis, Tennessee. Results have been similar to those in
Las Piedras. All together, 520 energy-saving opportunities have been identified at these facilities that total an estimated energy savings of 400,000 MMBtu over 43,000 MT of greenhouse gas emissions and an estimated savings that is projected upwards of
$12 million annually.
Pagliuco is training two of his team members to conduct Treasure
Hunts as well, and hopes to roll out the tool in other countries. He is also looking for ways to replicate learnings across the company.
Jenny Castano, Merck Lean Six Sigma Team, Las Piedras, PR
In addition to cost savings, Pagliuco says Treasure Hunts are a great way to increase employee engagement in sustainability.
“They are a great tool to leverage the knowledge and ingenuity of employees and at the same time give employees a chance to have an impact that’s good for the environment and for Merck’s bottom line.”
To learn more about Merck’s environmental sustainability journey, click here.