Our Industrial Energy Management (IEM) survey collects benchmark data on a variety of people, processes, technology, and metrics-related questions. In little over a month, this survey has been taken by over 100 executives and leaders in charge of making energy- and sustainability-related decisions in their organization. In just this short amount of time interesting trends surrounding strategic objectives and challenges have begun to surface.
Sustainable Operations Benchmark Data
“Sustainability” can be considered an umbrella term for a number of industrial focus areas, including operational risk management, product stewardship, environment, health, and safety (EH&S), sustainability reporting, and industrial energy management. The initial portion of the survey focuses on this sustainability, drilling down into IEM-specific questions in the later sections.
One of the first questions of the survey was, “What is your company’s top strategic objective for sustainability in operations?” Although there was a diverse set of potential answers, focus seemed to be on two key areas: Reducing the total cost of operations (41%) and reducing energy consumption (25%). With pressures to improve the bottom line in virtually all large operations, the financial focus on these two top responses comes with little surprise.
Responses were considerably more diversified in the follow-up question, “What are your company’s top challenges in achieving this sustainable operations objective?” The top was that sustainability metrics are not effectively measured (38%) and the second most chosen response involved disparate systems and data sources (33%).
Energy Management Benchmark Data
In order to find any differences between sustainability and energy management objectives, questions concerning both were asked separately, “What is your company’s top strategic objective for energy management operations?” Similar to the sustainability-related question, the top answer was reducing the total cost of operations (48%). The second most chosen answer was aligning energy and operations with corporate sustainability objectives (21%).
The corresponding challenges in achieving this question were also similar to the sustainability-related results in that they were more diversified as well as focused on energy metrics (39%) and disparate systems and data sources (31%).
What Can We Gather from the Early IEM Research Findings?
The early findings generate several good talking points around people, processes, technology, and metrics for sustainability- and energy-focused organizations. First, it is interesting that in both sections the challenges were focused primarily on the inability to effectively measure metrics and disparate systems and data sources. In many respects, these two challenges correspond to one another and are quite technical in nature.
People- and process-oriented issues such as continuous improvement programs and executive support, while still relevant, seemed to take a backseat to the more technical aspects of energy management and sustainability. Because there has been significant progress in this space with energy management systems such as ISO 50001, SEP, and ENERGY STAR, many organizations have followed these guidelines to develop robust supporting cultures, energy and sustainability processes, and leadership capabilities.
As it is difficult to make true progress toward any initiative without actually measuring it, these programs have also heavily supported the use of metrics in operations. Many organizations seem to have a strong cultural and process-oriented foundation, but this data highlights a disconnect in technology capabilities. With many technology implementation decisions being made departmentally rather than globally, the resulting disparate systems that surface over time result in a lack of enterprise visibility.
From data, as well as from discussions with top industry executives, a major source of this technological disconnect seems to materialize between plant floor and procurement solutions. Companies are not getting the end-to-end visibility needed to properly analyze energy as it flows through processes. Following a framework that focuses on aligning and then optimizing people, processes, and technology to make measurable improvements toward strategic energy and sustainability objectives can help with this. Realizing success with this framework is largely dependent on the effective use of technology.
As shown in the IEM Software Model below, technology implementation decisions should consider how energy will flow through the entire organization, not simply just a department or division. Energy procurement has to be connected to use, as well as reporting. Only when these different information sources are seamlessly connected can metrics data be consumable enough to make impactful production decisions.
Matt Littlefield is president and principal analyst of LNS Research. For a deep dive into the IEM Framework and the critical connection points across people, processes, technology, and metrics, read LNS Research’s Industrial Energy Management Best Practices Guide. The guide provides executives with a comprehensive overview of IEM strategies and technologies.