5 Success Stories in Energy Management:
Merck & Co. Inc.

Feb. 20, 2007

Merck & Co. Inc. develops, manufactures, and markets vaccines and medicines globally. Because of the very nature of its business, medical breakthroughs are expected. Less publicized (but just as worthy of recognition) are the company’s energy-reduction accomplishments.

As the company underwent unprecedented growth, a significant capital investment to address increased energy requirements seemed inevitable. To avoid this, the Merck Energy Reduction Initiative Team (MERIT) structured a program to ensure that, from 2000 to 2005, a 25-percent reduction in energy was realizable. Rolled out in the company’s manufacturing division, the ambitious goal was accomplished an entire year before its deadline.

Currently, Merck has a 30 million-square-foot portfolio of owned (85 percent) and leased (15 percent) properties in 80 countries. Its commitment to energy management remains as strong today as it was at the program’s inception. A new goal - one that is just as ambitious as the first - has formed. “We set a new target, a very aggressive target, of a 25-percent energy reduction in terms of energy intensity - BTUs per square foot. From the 2004 baseline to the end of 2008, we’re looking to save another 25 percent,” says Robert Colucci, director, global energy and asset management, Merck & Co. Inc., Whitehouse Station, NJ.

Reducing 25 percent of the company’s energy consumption from 2000 to 2004 equaled a 21.3-percent cost savings in energy expenditures and at least 250,000 tons of avoided carbon emissions. The energy team set annual targets and asked plant managers and facility representatives to develop strategies that were aligned with the yearly corporate energy-reduction goal. The individual plans were submitted to Merck’s energy team and included goals and priorities, as well as recommendations for equipment upgrades or necessary capital projects. It was required that each plan address the following four points: 1) a strategic plan, 2) annual reports, 3) best practices, and 4) awareness.

Facilities professionals in manufacturing properties were then held accountable for reducing energy. During the annual review of a plant manager’s performance, his/her ability to achieve the energy goals is considered, a factor which could impact the payout of a yearly bonus. Assistance and information is available when and if needed. For example, the Merck Best Practices Team catalogs ideas, solutions, and procedures complete with checklists on the company’s intranet. “This best-practices evaluation tool is a questionnaire that takes energy/facility managers through 14 different areas of energy technology (heating, lighting, ventilation, air-conditioning, etc.),“ explains Colucci. When gaps in best practices are identified, energy/facility managers can take action.

In 2002, a fuel cell was installed at Merck's Rahway, NJ, facility. Four years later, a solar energy (photovoltaic) system was installed on the same building. PHOTO: Merck & Co. Inc.

Changing employee behavior, recommissioning, and installing systems like energy-efficient lighting and HVAC edged the company closer to its initial goal. The effort didn’t stop there, though. “We know that the best energy purchases are the ones we don’t make,” says Colucci. As part of Merck’s commitment to renewable energy, two solar systems have been installed at the company’s Rahway/Linden facility in New Jersey. The purchase of the equipment was made possible in part by incentives offered from the State of New Jersey. Between the two systems, almost enough electricity is generated to meet the building’s needs.

Communication is essential to the success of Merck’s energy-management program. As part of the Global Energy Team initiative, an all-employee video was produced and launched on the company’s intranet in early 2006. “It was a video of CEO Richard T. Clark and a couple of key executives (Manufacturing Division President Willie Deese and Research Division President Dr. Peter Kim). These gentlemen created a 5-minute video for all employees, expressing their support of the global energy initiative, [conveying] how important energy is to our company, and asking all employees to support the energy and Global Energy Team initiatives,” explains Colucci.

As of press time, Merck is on schedule to meet a new goal of another 25-percent reduction in energy consumption by the end of 2008.

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