Monday, 26 January 2015

Connecting the dots – The Internet of Things, and making sense of your ‘Things’: the Relevance of automating Asset Efficiency analysis

If you have been following the story of the Internet of Things (IoT), you might have heard this little anecdote where the chair in your home will soon be embedded with a chip that will tell you, remotely, when that chair is occupied, and also, by who.  The possibilities are endless.  But if you are a company with hundreds of such chairs, you might have wondered how this information will be of value to you.

The Deloitte TMT 2015 predictions is a list 11-items long. 
They include:

· Despite media focus on consumers, in 2015, over 60 percent of the one billion global wireless IoT devices will be bought, paid for and used by enterprises.

· In 2015, the pendulum of technology adoption will begin to swing back to the enterprise market, reversing a decade long trend that went the other way – when mass adoption of technologies like large screen smartphones and tablets started with consumer adoption first.

If you are an enterprise, your ‘Things’ are your equipment’s, machineries, furniture’s – your Assets.  The IoT is going to unleash an avalanche of information related to these Assets.  To make sense of this information, you will need a framework that is able to collate, analyse, and produce output that is useful for managerial decision-making.

At Climate Miles, we have been investigating the efficiencies of a variety of assets from all possible perspectives – our concerns are not only technical specifications, but also the human issues around the adoption of new technologies, processes and equipment’s.

Evaluating the efficiency of enterprise assets is complicated because they are such an eclectic lot:

-       While some assets use significant amounts of energy over their lifetime (e.g. all electrical appliances), others are associated with resource utilization primarily at their manufacturing and end-of-life stages (e.g. all furniture, building material).
-       They differ by what they consume as INPUT resources – electricity, coal, oil, gas etc.­­­
-       Not only do the different inputs have different costs, they are also costed differently – e.g. electricity tariffs are based on geography-specific slabs, whereas solar power costs derive for the high capital expenses.
-       They differ by what their useful WORK/ OUTPUT is – lighting, cooling, rotating, producing electricity.
-       In addition to their useful work/ output, assets might also produce by-products – which can either be useful – requiring further processing, or waste – requiring appropriate disposal.
-       Within each asset category, they differ by specifications, makes, brands and models.

 Despite all these differences, Assets have some basic similarities, which form the basis of developing a meaningful framework for analyzing them (we will limit the following discussion to those assets that use significant amounts of energy over their lifetime (e.g. all electrical appliances) 

-  Assets consume resources (INPUTS) and produce useful work (OUTPUT).  Both input and output can ultimately be converted into units of energy (Joules or calories)
-       As long as input costs are correctly accounted for, similar outputs from different kinds of assets can be compared in terms of input cost/ unit of output.
-       Similarly, similar outputs from different kinds of assets can be compared in terms of sustainability parameter/ unit of output (e.g. CO2 emissions/ unit of output or energy used/ unit of output)

To be truthful, this apparent simplicity hides many complexities.  That is why we have automated the Assets Efficiency Module as part of our Sustainability Software Usustain.   However, for a small enterprise starting the process of Asset/ Resource efficiency analysis, the above framework provides a starting point from where to begin the efficiency of their Assets.

Accounting for and analysing the efficiencies of the Assets in your enterprise will lead to rational and objective decision making and target setting in sustainability projects  - with or without the Internet of Things.

by Jaya Chakravarty, Co-Founder & Director of Operations at Climate Miles

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