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Environmental Friendly Business Intelligence

by Stephen Slade, Senior Director, www.oracle.comThursday, April 21, 2011

Sustainability has become a top corporate priority as organizations report on their triple bottom line, the 3Ps -“Profits, People & Planets.”   Today, growing numbers of organizations voluntarily submit environmental metrics to the Carbon Disclosure Project, publish annual sustainability reports, or include sustainability metrics in their annual reports to stakeholders.  As these organizations of all sizes pursue the eco-friendly mantra “It’s just not business, it’s the right thing to do”, they have become increasingly focused on including sustainability as a corporate mandate.  To this end, companies need clear visibility into core sustainability initiatives or key performance indicators (KPIs) such as energy usage and carbon footprint. Expanded factors include scrap and waste, water and other resource consumptions, landfill volumes and recycling components plus others.  As organizations grapple with these more complex environmental and social responsibilities, they are looking for effective technologies to support source data capture, contextualization, and ways to deliver actionable information to users such as dashboards that offer sustainable business insights.  With this renewed emphasis, corporations are restructuring their sustainability approach accordingly to include multi-source information from numerous sites, plants, lines, groups and collection methods, according to a leading analyst firm. 

To successfully accomplish this complex challenge, sustainability initiatives require real time access to energy and other resource consumption measures throughout the extended enterprise. Over the last few decades, disparate equipment data collection, plant information systems and manufacturing business processes were implemented to track resource consumption, eliminate waste, scrap, and excess inventory. These historical Lean strategies have been initially successful - but have now matured, with their focus today shifting to monitoring and improving sustainability goals as part of ongoing continuous improvement (CI) efforts. This revised ambition creates a growing need for improved positioning, forecasting and reporting on sustainability initiatives.  Users today need to collect not just emission outputs, but also to create linkage to energy and other vital value chain resources and residuals such as fuel, waste and various plant and equipment efficiencies. Accurately delivering this critical reporting is extremely complex and requires   a comprehensive business intelligence framework to collect, conceptualize, aggregate and report appropriate sustainability performance data.

Defining the Right Key Performance Indicators

At the enterprise level, setting sustainability goals can be initially overwhelming.  Organizations need to define their key top-level metrics such as energy, carbon usage, waste, greenhouse gas (GHG) information and other resource expenditures that are not identified or monitored on an ongoing basis. In addition, measuring pertinent usage and associating them with specific end products, equipment and processes can yield the insights needed to report on and drive down consumption. 
In general, sustainability goals can include:

  • Minimizing the impact on global climate change
  • Reducing the consumption of natural resources
  • Promoting environmentally and socially sound supply chains

These primary goals translate to core sustainability information collection areas such as:

  1. Pollution prevention – spillage , scrap, waste, recycling
  2. Sustainable use of resources – efficient operations, Lean and continuous improvement plans
  3. Alleviate climate change – by-products, effluents and emissions of numerous varieties
  4. Protect the natural environment – restoration, conservation
  5. Socially driven innovation – sensitive to shifting local community concerns

There is an ongoing increase in the number of stakeholders and internal factors driving the need for more accurate accounting of emissions produced in the upstream supply chain.  Driven by demands of retailers, new  and pending compliance regulations such as the Wax­man-Markey Bill (H.R 2454, see Ref 1) in addition to the social pressures of responsible operations, companies are going to require better collection,  processing mechanisms and enabling applications to capture and process  key information. Currently, many companies are capturing their direct Scope 1 & Scope 2 (see ref 5) emissions along with other basic plant energy consumptions.  By analyzing and better understanding this myriad of data, they can have better visibility into efficiency savings potential and transparency delivered through the supply chain. 

A Framework for Sustainability BI: Three Key Capabilities:

  • Eco-efficiency - comparisons of actual energy usage to target goals and previous periods and highlighting underperforming facilities, areas and assets for corrective action
  • Eco-innovation - correlation of energy consumption to operating conditions and production output to understand not only your GHG emissions, but also your "return on carbon"
  • Eco-transparency - directly integrates with smart meters, environmental management systems, and building automation systems and collects energy consumption and emissions data, which is presented via energy monitoring dashboards

Environmentally Friendly Business Intelligence

Sustainability Business Intelligence (SBI) requires organizational capacity to continuously and effectively identify, capture, analyze, and share information and knowledge relevant to improving operational, environmental, social and financial performance over time.  The best business intelligence (BI) tools deliver a wide range of combined operational analytics and sustainability intelligence on a single, integrated technology foundation. The metadata for source systems, business logic and presentation access should be centrally maintained in a common business intelligence model.  Driven by growing regulatory pressures, customer concerns and media attention, organizations are searching for the optimal sustainability business intelligence tool sets. Factories need information portals like an operations hub, to address the growing demand for improved sustainability. From a corporate social responsibility perspective, firms need to expand their sustainability initiatives by identifying new opportunities to drive improvements in multiple dimensions across the organization, facility or equipment consumption hierarchy.

Sustainability data can be stored within a single enterprise data warehouse, together with the overall operational and financial management information. Effective sustainability business intelligence (SBI) allows organizations to analyze correlations, results, variances and improvement opportunities, and create a more effective sustainable decision-making process for executive management.

Broadly SBI can be categorized as Strategic, Tactical and Operational BI to meet the needs at various levels of the enterprise for collection, aggregation, and reporting of environmental, social and economic information both internally and externally.

Business Intelligence Chart
Figure 1.  Sustainability Business Intelligence needs to be
considered on 3 different levels for effective results

Strategic Sustainability BI

At the highest levels, the enterprise needs the consolidation tools to provide the proper visibility to set goals and perform at the highest levels of efficient sustainable operations. These display technologies provide the top level views upon which to manage the supply and value-creation chain. Applications  such as: Strategic Network Optimization (SNO) enables firms to design a more efficient and agile supply network. The process considers all of the complex factors, costs and constraints that drive distribution network design and enables organizations to optimize supply networks. Within a sustainable business intelligence profile, firms can model nodes of the extended network and include key factors such as transportation, operating, sourcing, storage and labor in the equation. With this, firms  can simulate the impact of various demand scenarios, integration of new business opportunities, new sourcing decisions and decide which facility to ramp-up or to shutdown including evaluation of currency impacts.  Sustainable business intelligence results in organizations reducing inefficient transportation, identifying better distribution locations and establishing a more efficient order response mechanism contributing to their sustainable supply chain.

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