Energy
| Sustainable and profitable - why 'greening' your asset management is good for business |
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| Written by Graham Done, Director, Infor EAM Solutions, 2008 | |
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Far from being a fad, minimising the carbon footprint of an organisation has become a fact of life. Infor goes beyond the hype to explain how today's technology can turn the issue into a manageable business proposition.
In managing facilities - their own or those of their clients - facilities managers aim for the optimum balance between service to the business and tight cost control. Escalating costsWhereas in the past, businesses could accept and budget for a gradual upward trend, spiralling utility prices (up to 25 per cent in the year to June 2008) have made energy the single biggest cost element in asset management. Added to this, growing supply concerns mean the issue is unlikely to go away any time soon. To stay competitive, businesses cannot pass the whole cost on to their customers. Instead, faced with a huge dent in profits, the 'energy agenda' is becoming a high corporate priority. Cost is not the only factor. Organisations who do not embrace energy efficiency of their own volition are facing tougher government targets and growing regulatory pressure around energy reduction. Furthermore, green credentials are becoming a significant focus for environmentally aware stakeholders. Companies that demonstrate a genuine commitment to minimising their environmental impact find this helps to differentiate their business in a crowded global marketplace. Energy inefficiency erodes profitsOver the long-term, the energy costs of an asset can far exceed its upfront purchase cost. As one example from the manufacturing sector shows: a 500hp fan in a spray booth was purchased at £30,000 and was found to cost over £600,000 in energy costs over five years. That's a huge variance. Even worse, energy efficiency tends to degrade over time. Just because a piece of equipment hasn't actually broken down, it doesn't mean it's not losing the business money. So, if the filters on the air conditioning unit become clogged, energy consumption soars, yet to the casual observer it is still cooling the building. There is no question that high energy costs are a drain on organisational budgets. Indeed, there often comes a point where it is more economical to replace 'gas-guzzling' assets altogether. There is potential for spectacular payback here. According to an article in the Wall Street Journal, European semiconductor maker STMicroelectronics spent $300m to make its factories more energy-efficient and saved $1bn in the years 1994-2006. This radical approach clearly pays dividends, but only if the organisation is equipped with information to pinpoint the optimal time for pensioning off wasteful assets. Beyond the hypeHow do companies set about the task of reducing their carbon footprint? Organisations adopting a strategic approach to energy efficiency are turning to technology for support. Reduced energy consumption is founded on a simple but powerful premise: if you can't measure your energy consumption, you can't manage it. In the past, effective asset management was difficult because of the large amounts of data that had to be collected, processed and managed. In contrast, today's technology means asset management can be optimised to yield both healthy financial results and green benefits. Beyond the hype, the reality is that going green is good for business. It's no wonder that, far from being a fad, minimising the carbon footprint of an organisation has become a fact of life. There are compelling reasons in addition to reducing operating costs. These include increased value from assets, reduced risk around compliance and improved standing in the marketplace. Fortunately, the tools are available to implement practices that promote both sustainability and profitability. Through the technology available today, organisations can capture the energy consumption of their individual assets and have ready answers to key questions:
Case study: How the AWE deploys technology to manage its assetsThree years ago, the Atomic Weapons Establishment plc (AWE) in Berkshire sought a solution to help it improve asset management in the tightly regulated nuclear environment. Conscious of its potential to affect the environment, AWE continuously strives to improve its environmental performance in all aspects of its operations and processes. Its progress is regularly assessed by external auditors. AWE implemented an enterprise asset management solution across two sites as part of an enterprise-wide initiative to improve efficiency, meet key regulatory requirements and drive down costs. The organisation was able to draw on advanced analytics to deliver a powerful platform for optimising enterprise asset performance. Tony Wright, Maintenance Manager of Professional Service for AWE plc, comments, "The solution provides the broad, mature functionality we require, including management of calibration, inspections and electronic records.” “We quickly identified many business process improvements that increased our efficiency. Today, it helps us to minimise waste and maximise productivity and safety. The solution is used by around 300 AWE people and enables us to develop new technologies to support our asset management processes." How green is your business?How does your company's sustainability efforts compare with those of other businesses? Find out by taking an interactive 'green assessment'. Visit www.infor.com/goinggreen You'll also find guidance on strategies for reducing your carbon footprint and increasing profitability, news of organisations that are reducing greenhouse gas emissions and a White Paper Going Green: Practices for a Profitable Future. Further informationInfor Tel: 0800 376 9633 Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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