All organizations use energy, and it isn’t surprising that energy consumption is often responsible for a large portion of a company’s operating expenses and environmental footprint. What is surprising is that many companies, even energy-intensive manufacturers, lack enterprise-wide programs to effectively manage energy use and its impacts.
But things are changing. Rising, volatile energy costs, expanding regulations, and increasing stakeholder expectations for companies to report and reduce consumption and emissions are all turning up the pressure for organizations to understand and manage energy as a strategic resource. Unfortunately, organizational commitment is only a start, and many businesses find that their current systems are not adequate for collecting, disseminating, and analyzing the data needed to support true enterprise energy management.
Achieve Energy Management Success
A common way for many companies to “manage energy” is to aggregate information from monthly utility bills. These bills can indicate energy usage and costs accumulated in a given month, but they offer few other insights. Also, considering how labor-intensive this bill-based approach can be for even a single site, it is unlikely to be scalable across an entire enterprise.
Many industrial companies have shop-floor and machine-level devices that collect real-time energy data, but they have a limited ability to aggregate these individual sources into a single system of record for energy that employees across the company can use. Often, personnel manually compile information from these various sources, diminishing the ability to act on the data in real time. While many feel the pressure to do more with the data they’re collecting, companies usually lack the budget to build custom integrations for existing systems or to replace hardware.
Building an enterprise energy management program doesn’t happen overnight, but it’s possible to see benefits almost immediately after implementing one. An essential first step is to gain visibility into how much and what kinds of energy you’re using, where you’re using it, how much it costs, and how energy consumption relates to other key operations and financial data. To make this information actionable by your staff — a key factor in improving resource use — it needs to be delivered across the company in real time.
One of the ways SAP is helping our customers with this crucial first step is with a new energy analysis solution, developed with our partner RTS Consulting for the SAP Manufacturing Integration and Intelligence (SAP MII) application.1 SAP MII features prebuilt, standards-compliant connectors between the shop floor and enterprise systems to leverage companies’ existing IT and device landscapes, speeding up implementation and lowering TCO.
The solution combines the data with other key operational, production, and financial information into a single enterprise-wide system of record for energy. Role-based dashboards and analytics serve the information to users in an easy-to-digest format (see Figure 1).
||The new energy analysis solution delivers information to users in an easily consumable format
Energy Analysis: Benefits Beyond Cost Savings
According to a recent Aberdeen Group survey, 68% of companies said that cost reduction was the primary driver for their energy management program.2 But the benefits of empowering staff with real-time energy information can extend far beyond lowering the utility bill.
As mentioned earlier, many companies rely on labor-intensive processes to compile energy use and related data, making internal and external reporting difficult. SAP MII provides reliable, up-to-date data to the employees who need it, resulting in a significantly streamlined reporting process. This includes reporting the impact of greenhouse gases as well as other pollutant emissions.
Having real-time visibility into energy data also facilitates a move to exception management. With the SAP MII energy analysis solution, customers can set energy-relevant targets and be automatically alerted when parameters move beyond a preset point. So, rather than constantly monitoring every input into the system or reviewing a monthly report, managers can focus on problem areas as they arise and improve the efficiency of their operations.
Real-time visibility also allows you to perform condition-based maintenance (CBM), the practice of using key indicators to determine when a machine needs service. Fluctuations, particularly increases, in energy use can be a sign of machine malfunction. Without real-time insight into that asset’s energy performance, the machine could run inefficiently for weeks, creating unnecessary costs. Worse, it could unexpectedly fail and shut down production. The SAP MII energy analysis solution supports CBM programs by giving maintenance staff visibility into machine energy use and alerting them when a machine is operating outside of expected conditions.
Understanding energy use can also be turned into competitive advantage. Companies can start to view their energy value chain from procurement to consumption and identify potential improvement areas beyond operations energy efficiency. Energy can start to become a core part of business processes such as production planning and energy sourcing. Manufacturers can also leverage these insights when responding to customer and other stakeholder demands to disclose their energy and environmental footprint in RFP responses or in sustainability and other external reporting.
Getting Up and Running
The SAP MII solution for energy analysis is available now. This package includes the SAP MII license and implementation services, plus a predefined set of energy analysis templates. The rapid deployment version, which is sold at a fixed price and scope of services, can get you up and running in as few as 12 to 14 weeks. Visit www.sap.com/sustainability/industrial-energy-management to learn more.
Lori Duvall (firstname.lastname@example.org) is a Director of Sustainability at SAP, focusing on energy and environmental resource management. Before joining SAP in 2010, she was Senior Manager of Corporate Sustainability at Sun Microsystems. Lori is a graduate of the University of Colorado.
1 The new energy analysis solution is suitable for large as well as small and midsize manufacturing and other industrial companies. [back]
2 Aberdeen Group, “Carbon and Energy Management in Manufacturing Operations” (August 2010). [back]