All the Governments in world-wide increasingly see energy efficiency as an important aspect of sustainability. It is difficult to imagine spending an entire day without using energy. Because of the limited amount of non-renewable energy sources on earth, it is important to conserve our current supply or to use renewable sources so that our natural resources will be available for future generations. Energy Audit attempts to balance the total energy inputs with its use. Energy audit is an effective tool in defining and pursuing comprehensive energy management program. The Strategy of adjusting and optimizing energy, using systems and procedures so as to reduce energy use, In any facility, the three top operating expenses are often found to be energy (both electrical and thermal), labour and materials. Energy management function constitutes a strategic area for cost reduction. The Diesel Engine Manufacturing industry is energy intensive. This study aimed to investigate and apply a proper Energy Management System (EMS) for the industry and identify potential savings by applying novel approaches. A number of improvement actions were identified, related cost savings were calculated and an action plan was developed for the implementation of those improvements. This paper describes energy management in Kirloskar Oil Engines, Pune with “energy-efficiency improvements” case studies. The implemented projects like, Use of Solar Water Heating System instead of electric heaters, Waste Heat Recovery from Compressors and waste heat recovery from exhaust of furnace which had highest cost savings.