Tuesday, August 14, 2007

Energy Management: Do the Right Thing!

Why does our facility have energy cost problems—again? We’ve been doing episodic energy projects for 35 years, but energy costs are still gobbling up our operating margins. Procurement and hedging schemes counteract energy price volatility, but they don’t lower the price we pay. We need to cut the waste... and stop frittering away money on energy we don’t need to buy.

Here’s the problem: we are so focused on “doing things right” that we fail to do the right things.

Our traditional approach is to “do things right.” It goes something like this:
• Like most companies, we are lean. People wear many hats. Fire drills can dominate our days, so we seek relief by establishing as much routine as possible.
• Like every company, we foster internal competition for resources, especially at budget time. Like it or not, we make decisions to optimize departmental performance, not business-wide performance. We avoid spending dimes today that would actually save dollars tomorrow.
• To survive professionally in a lean environment, do things right: don’t make waves. Stay “inside the box” that (we hope) gives us some routine. Need to solve a problem? Do it on your departmental turf with your own resources.
• Like everything else, energy is an issue to be delegated—usually to a technical person or department. Not only do we expect technical people to develop energy solutions, we expect them to do it inside THEIR box. This means capital projects.
• When delegating, you get what you pay for. The lower we delegate a task in the organization, the more localized and temporary will be the solution.

What will allow us to effectively control energy? Or in other words, how can we “do the right things?”
• First, understand that technical projects alone cannot solve problems rooted in management systems and culture. Management procedures, systems, and behavioral habits also determine energy performance.
• Second, re-read the first point. Accept it, but take heart because the total solution still involves technology.
• Delegation should not be the first step in solving energy problems. Instead, map the energy decision-process to identify the decisions, roles, and performance metrics that link energy inputs with performance targets. Tune up the system. Then develop accountabilities to keep performance on track.

In other words: learn to do the right thing. Then do it.



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