1. Introduction: Energy Challenges for SMB Manufacturers
Manufacturing is inherently energy-intensive. For small and medium-sized manufacturers (SMMs), energy management has historically been an underdeveloped capability — often because they needed to prioritize keeping production running with limited staff and resources.
Many SMBs treat energy as a fixed overhead: one big monthly bill from the utility company, with little visibility into which machines or processes are driving costs. This lack of granularity means wasted energy often goes undetected.
In both the United States and Europe, external pressures are increasing:
- Energy price volatility — In 2024, European industrial electricity averaged €0.199/kWh, about 2.5× higher than U.S. industrial rates ($0.075/kWh) .
- Sustainability demands — Larger OEMs are requiring suppliers to provide carbon footprint and efficiency data.
- Regulatory compliance — EU’s Energy Efficiency Directive and similar policies encourage (or require) better energy tracking.
Route-level energy tracking addresses these challenges by breaking down energy consumption to individual machines, lines, or product routes — turning energy into a controllable variable rather than a hidden overhead.
2. Understanding Route-Specific Energy Tracking
In manufacturing, a route is the sequence of processes a product undergoes from start to finish — for example, cutting → milling → heat treatment → finishing.
Route-specific energy tracking captures the energy used at each stage, enabling calculation of:
- Total kWh per product
- Energy cost per batch or order
- Carbon emissions tied to each production route
How It Works
- Sensors — Non-intrusive clamp-on current transformers (CTs) are installed on machine power lines to measure electricity draw in real time.
- Gateways — These collect sensor data and transmit it to the cloud via Wi-Fi, Ethernet, or LoRaWAN.
- Cloud Platforms — Software aggregates, stores, and visualizes the data, often with analytics to identify anomalies or trends.
- Integration — Energy data can be linked to production counts from MES/ERP systems to calculate energy per unit produced.
3. Technology Landscape
All-in-One IoT Energy Platforms
Vendors in this category supply the sensors, gateways, and cloud platform as a turnkey service. Examples include solutions that:
- Use self-powered clamp sensors (no batteries or wiring)
- Offer per-sensor subscription pricing
- Provide dashboards, reporting, and alert features
Pros: Simple deployment, minimal in-house IT required.
Cons: Ongoing subscription costs, limited customization.
Standalone Hardware + Custom Integration
Some SMBs buy wireless energy sensors (e.g., Pressac, Monnit) and integrate them with open-source or in-house analytics platforms (like ThingsBoard, Node-RED).
Pros: Lower long-term cost, high flexibility.
Cons: Requires technical skill, more maintenance responsibility.
Energy Management Software (EMS)
Platforms such as Wattics or EnergyCAP aggregate energy data from various sources. Typically software-led, they can work with existing meters or IoT devices.
Pros: Strong analytics, can cover multi-site operations.
Cons: Often requires existing metering hardware.
Machine-Embedded Monitoring
Some OEMs build energy monitoring into machines. This can be used where applicable but is rarely consistent across mixed fleets.
4. Pros and Cons
Advantages
- Granular Visibility — Machine-level data shows exactly where energy is used .
- Cost Savings — Case studies report 5–15% energy reduction after implementing continuous monitoring .
- Predictive Maintenance — Abnormal power draw patterns can signal mechanical issues .
- Accurate Product Costing — Assigning real energy costs to each product enables better pricing decisions.
- Sustainability Reporting — Facilitates ISO 50001 compliance and ESG reporting.
- Behavioral Change — Real-time dashboards encourage operators to eliminate waste.
Challenges
- Upfront Cost — Even affordable systems require investment.
- Technical Complexity — SMBs may lack internal IT/OT expertise.
- Data Overload — Without goals, large data sets can overwhelm.
- Integration Hurdles — Linking with MES/ERP may require custom work.
- Accuracy — Lower-cost sensors can drift; periodic calibration may be needed.
- Workforce Adoption — Must avoid perceptions of “monitoring people” rather than processes.
5. Real-World Case Studies
Of course, your plant is unique. Your challenges and possible benefits will differ from those of anyone else. But it’s still helpful to see that energy tracking truly translates into savings and better OEE across many industry sectors and geographies. If energy matters to your business, then monitoring it benefits your business too.
When it comes to specific savings, it’s smart to be skeptical of self-reported figures. Luckily, neutral outside researchers confirm the hard benefits of energy monitoring too. For example:
Monitoring lets you fight the hidden cost of idle energy
Idle equipment can consume 60%+ of a facility’s total energy load (e.g., one study found idle energy to consume 38 – 63% of total energy use). That’s power burned without producing anything—an enormous opportunity for factories to reclaim wasted capacity. But it takes monitoring to find it. For example, the study referenced above monitored for energy savings potential at four levels: Systems, process, equipment, and facility levels.
Real-time usage monitoring Unlocks Additional Improvements
Other research from the Automotive sector highlights the benefits of collecting and analyzing data in real time. That plant achieved a roughly 8% boost in annual energy efficiency, using analyzers and SCADA-integrated monitoring. With visibility into real-time usage, management could spot waste and implement smarter energy policies that stuck.
Both raw cost savings and return on investment are attractive
Of course, energy savings are only useful if the investment needed to achieve the savings is reasonable. Luckily, you can achieve good ROI with energy monitoring.
For example, one factory that researchers studied not only cut 10% from their total annual energy costs via energy monitoring and action but also achieved a 14-month investment payback period, all on a meaningful scale, with roughly 192,000 kWh saved over six months.
Industry expertise matters more than data science sophistication
These savings would be out of reach for smaller manufacturers if one always needed dedicated data scientists to produce results. Hiring data scientists can be near-impossible, especially for smaller and mid-sized companies, since demand for them far outstrips supply. This has driven up wages and made even the available data scientists unrealistically expensive to hire.
But luckily, results don’t depend on advanced statistics and data handling techniques. Researchers found that practical, real-world experience in and understanding of plants turns out to be the “key performance improver over state-of-the-art deep learning techniques.” In their study a chiller plant’s team used their domain knowledge to achieve 7% daily power savings. With energy monitoring data in hand, this team created simple models that captured the actual mechanism at work in the equipment. They accurately captured the plant’s running status and optimized it in real time, achieving savings without relying on advanced theory.
6. Regional Comparison: U.S. vs. Europe
| Factor | United States | Europe |
| Electricity Cost | Avg. $0.075/kWh | Avg. €0.199/kWh |
| Regulatory Pressure | Patchwork; mostly voluntary | Strong EU directives, national programs |
| Adoption Drivers | Cost savings, IoT trend | Cost savings, compliance, sustainability |
| Incentives | DOE Industrial Assessment Centers, utility rebates | EU & national grants, tax breaks for ISO 50001 |
| Vendor Landscape | MachineQ, Monnit, EMS platforms | Sensorfact, Dexma/Wattics, Pressac, ABB |
European SMBs often adopt faster due to higher energy costs and regulatory mandates, while U.S. SMBs are catching up as IoT affordability improves.
7. Implementation Guidelines
- Baseline Review: Gather utility data, identify major loads.
- Set Goals: Examples: reduce idle energy by 20%, track energy cost per product.
- Pilot Project: Start with 2–3 major energy consumers.
- Select Technology: Match budget, scalability, and integration needs.
- Install & Verify: Ensure sensors are accurate; cross-check with main meter.
- Analyze Patterns: Look for peaks, idle loads, and outliers.
- Act: Adjust schedules, fix leaks, upgrade inefficient equipment.
- Scale Up: Extend monitoring plant-wide; integrate with ERP/MES.
- Train Staff: Build energy awareness into daily operations.
- Improve Continuously: Review monthly, update targets, and maintain sensors.
8. Conclusion
Route costing and energy tracking is no longer reserved for large enterprises. Affordable IoT technology, combined with rising energy costs and sustainability expectations, makes it an essential tool for SMB manufacturers.
By breaking energy down to the machine or product level, manufacturers can:
- Reduce costs
- Improve operational reliability
- Accurately cost and price products
- Meet compliance and sustainability demands
Real-world case studies show that 5–15% savings is common, often with payback in under two years. The key is to start small, stay goal-focused, and build a culture where energy is managed as carefully as any other production input.