Waterfall analysis: a powerful data visualization method that assists in energy management

Submitted by Victor Vilaça on Fri, 04/12/2019 - 19:53
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Do you know how a waterfall analysis can help with energy management in your company? In this article we will discuss the four operational parameters that positively or negatively influence the revision of values.

 

When we talk about data, one of the first things that comes to mind is a tedious and confusing set of numbers. These data are often of little or no help in performing an analysis. But the goal of collecting data is to transform them into something more useful visually so that it is possible to extract what we call information. Only through this treatment is it possible to develop knowledge from data and, finally, perform analyses that will help us make future decisions.

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Source: https://www.ontotext.com/knowledgehub/fundamentals/dikw-pyramid/

Over time a variety of visual techniques have emerged and become prominent in the market. Some of the more traditional techniques work with any type of data, and other more specific techniques are best suited to certain types of business. In this article we will discuss waterfall analysis and how it is used to facilitate the transformation of data into knowledge. In addition, you will learn how the data analysis process using this type of visualization can help improve energy management.

Dynamics of waterfall analysis

The objective of waterfall analysis is to compare a final value with an original value, affected by operational parameters having positive or negative influences. It is possible to identify and monitor each gain or loss of values by analysing how these parameters are affecting the values originally collected.

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The example above shows a real use case of how waterfall analysis can help with energy management in a business. Quarterly consumption data was collected from a particular plant. To justify the difference between two quarters, four operational parameters were defined that influenced the original collected values:

  • Production level: The production level corresponds to how much consumption varied due to the quantity of product produced during that period. It is interesting to note that although the production level increased considerably between the 3rd and 4th quarter, the consumption level remained almost the same, even showing a slight drop. This shows that some action taken between the quarters had a positive effect for the company, since a greater quantity of product was produced with slightly lower consumption.
  • Mix: The mix is related to the set of products that was produced in that period. It is understood that different products require different amounts of energy. In this case the difference between the mix of products resulted in a small increase in consumption between quarters.
  • Inputs: The quality of inputs used can dramatically change the consumption level needed to produce the same product. It has therefore been decided to take this point into consideration in the analysis. In the analysis shown above, the quality of the inputs had a small effect that was nonetheless fundamental for explaining why consumption in the 4th quarter was lower than in the 3rd.
  • Process: The process is a powerful factor that dramatically affects Understand as a process any change made in the production of a product. Many actions can lead to changes in this parameter: the repair of a leak, a change in the way a machine is operated, or even a change in the way a product is produced can result in large changes in consumption. This factor is directly connected to energy efficiency improvements in the company. In the case of the analysis being considered, it can be seen that some change made in the production process contributed to consumption being even lower at the end of the 4th quarter than in the 3rd, even though the production level showed a noticeable increase.

Results applied to energy and utilities management

Generally speaking it can be concluded that a change made in the production of a certain product resulted in a considerable reduction in specific consumption. Even though the production level showed an increase, the improvements in the inputs and in energy efficiency (process) guarantee little variation in absolute consumption. In the final analysis it can be seen that in the 4th semester the company produced more of its product while consuming a little less.

This case of analyzed use shows that the use of an analytical tool allows the identification of performance improvements in production processes and consequently in saving resources. It can be seen how a well-made waterfall analysis, taking into account the factors that are considered relevant variables in the production process of a given product, can indicate shortcomings and opportunities for improvements in the production process and can even result in changes to production levels. The collection of this data, stratification, and visualization are the steps for obtaining information allowing management teams to understand why the consumption of a given machine is increasing or decreasing, allowing decisions to be made to correct the negative factors and maintain or increase the positive factors that influence the consumption of a specific machine.

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Software developer, Viridis

Victor is a software developer at Viridis, trained in Information Systems at UFMG. He has also studied in the US, where he took courses at Fontbonne university in Missouri and also participated in an internship program at the Illinois Institute of Technology in Chicago. Victor has extensive experience in web development with a focus on front end, and great interest in software engineering, particularly agile methodologies and their applications.

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