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EAM Software Providers Tout Environmental Benefits
Environmental concerns are beginning to have an impact in board rooms and factories across the United States. More and more companies have initiated sustainability programs to make their products more environmentally friendly, and to reduce the environmental impact of their business operations in an effort to improve both their regulatory compliance and customer relations.
In December, two enterprise asset management (EAM) software vendors reminded their customer base that one of the best ways to reduce their carbon footprint, and save money in the process, was to improve asset performance and utilization.
At Oracle's recent OpenWorld user conference, the company held a session on Green Asset Lifecycle Management, outlining how EAM can reduce energy use and improve asset performance through reliability-centered maintenance (RCM).
Infor, meanwhile, announced its new Going Green initiative to help customers implement sustainability programs through the use of EAM, supply chain management and product lifecycle management software.
Yet another company, Manhattan Software, has introduced a Web-based dashboard to help facility and property managers monitor energy consumption and other data from the broader enterprise.
Manufacturers have initiated "green" programs for a variety of reasons, from complying with government regulations to reducing energy costs, and meeting consumer demand for products created and distributed in more environmentally friendly ways.
"The common thread for organizations that are going green is the need to meet sustainability objectives and drive a return-on-investment," said Melissa Puls, senior director of solutions marketing for Infor. "These objectives aren't mutually exclusive."
EAM programs can support environmental goals by reducing energy use and improving equipment performance, which can eliminate waste and excess spare parts inventories.
"The biggest payback is through energy savings," says Houghton LeRoy, senior analyst with ARC Advisory Group. "Companies can also improve the use of resources other than energy. If you can extend the lifecycle of plant equipment, for example, you can reduce waste. The nice thing about this approach is that you actually do have a return on investment. If you decrease your energy usage, you spend less money. If you don't have as much maintenance inventory, you are eliminating the cost of buying unnecessary spare parts."
According to Oracle, maintenance strategies must evolve to factor environmental impacts, consequences and costs into the development of the right maintenance strategy for key assets.
A solid approach to [reliability centered maintenance] recognizes that all equipment in a facility is not of equal importance, so preventive schedules could possibly be reduced (saving both labor and material resources)," says Thomas Sichko, product strategy director at Oracle. "Asset optimization and real-time asset management provide the basis for optimally maintaining equipment by moving maintenance from an interval-based approach (calendar, meters) to a condition-based approach (equipment alerts, condition analysis, trend analysis)."
One Oracle customer, cement producer Buzzi Unicem, relies on an Oracle EAM product implemented by Signum Group to advance its sustainability initiatives by improving production equipment performance and increasing energy efficiency.
The "Sustainability Edition" of the Infor product can track energy consumption of individual assets to identify underperforming equipment, and take corrective action that results in cost-savings and energy conservation. "Most EAM systems address the availability, capacity, quality or lifecycle of assets," says Rod Ellsworth, vice president of business solutions at Infor. "Although those are critical, we're coupling that functionality with a reduction in energy cost. We do that by integrating energy consumption back into the asset management applications. We then manage based on that consumption data, as well as operating metrics."
According to Ellsworth, improved asset management and preventive maintenance programs can save 10% or more in energy consumption, which directly impacts both carbon emissions and profitability.
In addition to improved asset performance, Infor also provides what it calls equivalency evaluations to determine if there is more efficient equipment available to replace legacy assets. "We might promote the replacement of assets if they are more efficient when you look at repair-versus-replacement costs," Ellsworth says.
IT Asset Management
One operational area getting increased attention is the data center, which in most companies represents an enormous opportunity to reduce energy bills. According to the U.S Environmental Protection Agency (EPA), data centers in the U.S. could potentially save up to $4 billion in annual electricity costs through more energy efficient equipment operations and implementation of best management practices.
"Green initiatives within IT asset management will probably receive the greatest attention within the upcoming year -- especially as energy consumption is a key factor in defining asset performance," says Sichko.
"Data centers are a huge opportunity," LeRoy adds. "There are new technologies that require much less energy. Another area is IT waste disposal. It can be expensive to dispose of certain electronic components because of their hazardous material content. If you can set up a re-use or recycling program, it can eliminate the cost of disposal and save money by redeploying assets within an organization."
New Technology Improves Performance
Many companies aren't aware how energy consumption affects the total cost of ownerships of most assets. "The paradigm needs to shift in asset management to take into account the operating cost of equipment," Ellsworth says. "Most people are amazed at the operational expense of a piece of equipment versus the cost to buy it. If you can have a 6% to 11% impact on those numbers, you can clearly understand the economic benefit."
This type of software functionality is going to be increasingly important to users as companies search for ways to improve their environmental performance. "Software applications that can monitor and act on real-time asset performance data will have a significant role to play with most energy conservation opportunities stemming from the better use of smarter, more energy efficient assets," says AMR Research analyst Alison Smith, writing about OSIsoft's Executive Summit last year. OSIsoft provides performance management software for manufacturing and utility companies.
While in the past, deploying a monitoring system to keep track of the performance of legacy equipment was daunting, new wireless technologies and sensors could potentially make this process easier and much less costly. Facility management automation vendors like Rockwell Automation and Honeywell are also taking the lead on these efficiency initiatives.
EAM application providers will have a role to play, but "only if they can provide operational metrics and financial insights that help users make informed decisions about the operation and maintenance of their assets," Smith says. Moving to demand-based performance management approaches from meter-based maintenance will require software providers to partner with other vendors that can provide access to real-time information about energy consumption and asset status.
Oracle, for one, is "exploring data mining tools in conjunction with predictive analytics to gain a broader understanding of equipment usage and to determine equipment usage/breakdown/efficiency patterns that may not be readily apparent through standard reporting," according to Sichko. The company is also investigating the use of wireless sensors to measure emissions in areas that are otherwise difficult to access.
"While there's no magic software that will solve the energy management issue, companies are surrounded by countless opportunities to improve their energy consumption profiles by simply better monitoring and managing assets," Smith says.
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