John Murphy examines the benefits of understanding your energy needs and balancing them with asset management.

Facilities managers are taking a new direction with enterprise asset management to not only improve operational efficiency, but deliver drastic reductions in energy costs and the utility bills that put a pit in your CFO’s stomach.

The high cost of facilities and the associated assets requires maintenance professionals, managers and operators to work together to ensure each asset’s usable life is extended as much as possible.  From a traditional view of asset management, the strategy is simple: perform regular maintenance to squeeze as much use for as long as possible. In many cases this practice is reactive in nature, where maintenance is performed based to solve a problem that has arisen.

Some companies take this a step further - especially those where facilities are approaching capacity and problems can cause significant waste, idling of expensive resources, or missed order delivery commitments.  Using software tools to analyse asset performance and usage to predict failure, predictive maintenance has greatly improved the reliability of assets, reduced the amount of inventory required and kept overall maintenance costs down.

Proactive maintenance measures, and more proactive processes such as predictive maintenance, do extend the life of assets. It is just like your car. Regular oil changes, wheel rotation and engine checks can have a drastic impact on the lifespan of the vehicle as well as overall maintenance costs. However, asset management is taking a new direction, one that will not only extend the life of assets but also drastically reduce energy consumption and therefore monthly utility bills.

As recently as a year ago, reducing energy usage was the talk of the town because everyone wanted their business to be as environmentally friendly as possible. However, there was a lot of trepidation to make the move due to a perception that going green also meant high costs. Towards the end of 2008 as energy costs skyrocketed, the pressure to reduce energy consumption became a top priority for companies but it was hard to justify ripping out older equipment and spending precious cash on new, more energy efficient alternatives.

Energy costs have leveled off (for now) but economic pressures have resumed the need to look at ways to reduce costs across the operation. This type of pressure can lead to short-sighted, quick impact decisions, especially in maintenance as companies try to stretch maintenance intervals as far as possible. The consequence of this is greater wear and tear on equipment, which leads to less efficiency and, in many cases, more energy used. The incremental savings of delayed maintenance often do not justify the increased operating costs over the life of that asset.

Innovative companies are turning asset management upside down by shaping maintenance strategies around a new best practice, Global Asset Sustainability (GAS). Global Asset Sustainability adds a new dimension to asset management—energy efficiency.  The aim of GAS is to help companies manage conflicting business conditions such as asset life and energy efficiency across the entire enterprise.

This key practice encompasses the four major factors to gauge an asset and an operation: availability, performance, quality, and energy consumption.  Though valuable for individual assets, Global Asset Sustainability goes further by providing a global, enterprise-wide view of the performance of all assets, both by traditional effectiveness measures and energy consumption, to ensure the best results for the company.   In addition, GAS drives a different set of decisions that deliver greater savings than those prescribed by traditional asset management. For example, GAS may prescribe changing a filter on an HVAC unit more often and with a more expensive filter to help a company cut energy and overall operating costs.      

Measuring an asset’s performance, including energy consumption, also provides a new dimension in predicting asset failure and maintenance scheduling.  All equipment has a baseline energy consumption rating provided by the manufacturer. You know how much energy that equipment should use. Over time, assets begin to require more energy to do the same amount of work. A pump’s motor could have a loose belt, worn bearing or threads, or an unnoticed oil leak causing the motor to work harder to maintain RPMs. Additionally, the HVAC system may be drawing too much power to cool the building due to a clogged filter, a hole in the duct work or a fan speed problem.  The result is higher operating costs.

For example, lets say air-con for a specific office, running continuously at 95 percent efficiency over a five-year period, costs about £50,000 in energy.  If the same unit consumes just 5 percent more energy due to sub-optimal operation, it will cost over £2,500 more just to operate.  

Through an asset management strategy that embraces GAS, real-time alerts can trigger when energy consumption or efficiency reaches a predetermined threshold for each asset and issue a work order for inspection. Traditionally, the asset would have kept performing while its energy usage gradually increased, costing the company thousands in undue and hidden expense.

Implementations of asset management that incorporate Global Asset Sustainability have shown a marked decrease in energy consumption by up to 12 percent. Even at an 8 percent reduction in energy, the savings in operation expenses are significant. However, as noted earlier, it is not just about the cost of energy; this method also allows for greater precision in predicting failure. Predicting failure is based on data collected from the asset. The more data you have, the more likely you will accurately identify when equipment needs servicing. You are also able to develop patterns for each asset and develop regular schedules to help determine inventory levels.

The consumer push to go green surfaces every few years; however, this time the incentive to go green has changed as we all realize the economic benefits with reducing our energy consumption. In asset management, energy is an excellent monitor of the health of many assets. Understanding your energy needs and comparing this with consumption can lead to startling insight into the effectiveness of the equipment throughout your company.

About the Author
John Murphy is director of solution marketing, Enterprise Asset Management, Infor. For further information on Infor EAM, please visit www.infor.co.uk/eam .