Merck & Co., Inc.:

In Practice

Partner Profile

Merck & Co., Inc., as a partner of ENERGY STAR, is committed to enhancing its environmental and energy performance in all of its domestic facilities. Merck & Co., Inc. is a leading research-driven pharmaceutical products company. The company discovers, develops, manufactures, and markets a broad range of innovative products to improve human and animal health directly and through its joint ventures.

Industrial Partner Since 1995

Awards & Recognition

  • Partner of the Year 2007,2006

Contact Information:
 Merck & Co., Inc.
1 Merck Drive
Whitehouse Station, NJ 08889
908-423-1000

In Practice

4: Create Action Plan

See this Guideline Step



 

4.2: Determine Roles and Resources

Integrating Procurement in the Energy Team

Prior to "re-engineering" its energy program, Merck's energy program had a procurement representative, but no aggressive measures to optimize pricing based on usage. With the creation of a "Global Energy Team," Merck's demand management and energy supply-side entities now work more closely together to find ways to optimize elements of each other's areas to uncover greater energy savings. For example, the energy supply-side worked with the demand-side energy team members to facilitate a new "sourcing management process" that leveraged that team's efforts to improve demand metering and monitoring as well as implement internal and external benchmarking.

One significant result of this process:  the energy supply-side now uses data provided by the demand side (delete team) to develop new options and recommendations for energy supply options.  The two areas have also collaborated to create an energy "dashboard", which tracks and evaluates energy performance worldwide and can be seen by all employees on the energy website.

5: Implement Action Plan

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5.3: Build Capacity

Senior Executives Communicate the Commitment

In 2005, Merck and Company "upgraded" its energy management program by forming a Global Energy Team (GET) with greater authority and senior management support.  To make sure that all employees understood that energy management was now a high corporate priority for Merck, the GET created a video featuring the CEO, the President of the Manufacturing Division and the President of Merck's Research Labs delivering an energy call to action.  This video was shown on Merck's networks and links were sent to all Merck employees encouraging them to watch it.  As a result of the video, Merck's GET estimated that traffic to the site's intranet site increased from 2005 to 2006 by 50% and the number of distinct users accessing the site increased by 123%.

5.4: Motivate

Rewarding Employee Energy Awareness

To encourage and ensure each employee's positive impact on energy efficiency, Merck's facility energy managers employees that volunteer do spot checks of individual work stations and issue "tickets" and "reward" stubs for personal energy use.  For example, a workstation with a computer left on overnight would be issued a "ticket."  "Reward" stubs, given to those who are found to be fully compliant, are used as an entry for prize drawings, such as payment of a home energy bill.  The cumulative efforts of individuals at Merck totaled an 8.6% improvement in energy efficiency in 2005.

6: Evaluate Progress

See this Guideline Step
 

6.1: Measure Results

Discovering Hidden Benefits of Energy Management

Gathering data on the progress and value of their global energy program identified unexpected results for Merck's Energy Team.  Regularly reviewing data on energy demand allowed Merck's Energy Reduction Initiative Team (MERIT) to see how efforts to reduce energy usage indirectly lowered demand on heating & cooling infrastructure.

The corresponding result of the reduction in energy demand was the elimination or postponement of large scale additional capital investment that would have otherwise been needed for higher-capacity equipment.  Merck's total capital avoidance from the date of their program's inception totaled in excess of $26 million.  Together with their Corporate Finance department, the Team was able to demonstrate the resulting cost savings to senior management and make the case that improvements in facility energy use need to be made on a continuing basis.

Because of these benchmarking results, the Team was able to secure two special financial allocations from management for energy-related projects.  These allocations, totaling over $12 million, were rewarded for projects in 2004 and 2005, and have a payback period of less than 3 years.  Not having to compete with other core business projects enabled more energy projects to go forward - a best practice the Merck Energy Team hopes to continue.

6.2: Review Action Plan

Re-assessing Strategies for Greater Impact

Energy management at Merck and Company has continued to evolve to better serve the needs of program personnel and the company.  In 2000, facility-based staff created the Merck Energy Reduction Initiative Team (MERIT) to increase information sharing and leveraging of resources beyond what could be done at the individual facility level.  Senior executives took notice of the substantial results of MERIT and in 2005 decided to increase their support of the program with the formation of Merck's new Global Energy Team (GET).

As part of this transition, three senior managers sponsored the new GET program to lead a new corporate energy management process by strategically aligning supply and demand operations and re-engineering energy management.  The newly formed GET was assigned four main goals:  to take a good energy program and make it even better; to gain higher management support; to account for rising energy costs; and to integrate their team with energy supply side management.  This has taken energy from an initiative to a higher level where energy is integrated into the strategic goals of the corporation.

The GET program built upon the MERIT program by providing greater visibility of the team's efforts.  In doing so employee awareness was increased and the supply side was empowered to initiate a global  invoice management system that allowed for better tracking of energy usage and spending.  This has provided the ability to align what is being used with what is being purchased.