Creating value through management: a case for energy management systems

Submitted by Thiago Turchetti Maia on Fri, 02/10/2017 - 14:14
Creating value through management: a case for energy management systems

How energy management systems can keep your commitment to support, or even lead, new functions that create value beyond the reduction of consumption.

Companies under pressure frequently look at their operations and squeeze managers for more performance. The quest for operational efficiency is everlasting, and it certainly is no different with those managing energy and utilities. The issue of reducing consumption of whatever input - energy, utilities, or any other - is always on the agenda.

New process technologies sometimes become available and do their part, but they only raise the efficiency bar once. A myriad of management methods have been created and are constantly being evolved to give efficiency a constant push. Continuous improvement methodologies and industry standards to enforce them (check out our post on the ISO 50001 family) complement the picture and fill up the energy manager's toolbox. Companies have followed this route at their own pace, some faster, some not as much. Still, finding a manager whose responsibilities do not include some or all of the above nowadays is most likely harder than finding a leak in their own facility.

System of energy and utilities management for multiple company efficiency initiatives 

In that context, energy management systems have been largely associated with support functions for those directly involved in driving energy efficiency. Yet we may argue that there is a large pool of untapped value in different functions other than operational efficiency. How may energy management systems go beyond the hype and support, or even drive, new functions that create value in addition to reducing consumption?

To answer that question, we must first look at the disciplines and functions that may benefit from further investment in management resources. As with most novelties brought by new information systems, it is more a case of enhancing existing functions than proposing entirely new ones. There is, of course, the expectation of more productivity, which is usually the case, especially considering the usual lack of dedicated tools. It is not uncommon to find management teams with routines based on piles of manual work, which in the energy management world is analogous to saying their day revolves around a disturbing number of spreadsheets, each with equally-disturbing complexity.

Beyond doing more of the same at a faster rate, some disciplines may be considerably improved by an integrated energy management system:

  • Consumption forecasts may be simulated over a range of criteria, instead of multiplying constants by the output expected for a given period.
  • Complex relationships between processes may be considered instead of simply ignored, particularly those related to cogeneration of energy and byproducts.
  • Intricate commercial terms in supply contracts may be taken into account during fine scheduling, as opposed to the usual fixed-fee approach.
  • Input costing may be direct instead of indirect, increasing cost visibility and accountability.
  • Budgeting may leverage company-wide synergies in optimized scenarios, instead of building from the inefficiencies of previous fiscal periods.

The possibilities are many, and each function deserves a deeper look. Over the next weeks, we will cover these topics in a series of specific articles, first looking at them from a management perspective, and then assessing what could be realistically expected from a modern energy management system. Stay tuned!

Viridis provides an integrated energy management system that leverages several management practices in addition to energy efficiency functions. Dedicated modules include costing, forecasting, simulation, budgeting, contract management, among others. Learn more about Viridis’s products by following this link.

CEO, Viridis

Viridis founding partner with 20 years of experience in leading high-technology companies focused on international markets. Career includes innovation and technology projects in the United States, Europe, and Latin America. He holds a PhD and an MSc in Electrical Engineering from UFMG, a BSc in Computer Science, and an MBA in Finance. He has conducted research projects and academic collaboration in applications of artificial intelligence to industrial problems. He currently serves as chairman at Fumsoft – Minas Gerais Software Society, of which he is a former president.

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