I recently had the pleasure of co-presenting a webinar for Chain Store Age with Bob Valair, Director of Energy for Staples. We presented a four-step process for saving resources while increasing your bottom line. This blog series will provide an overview of the process to help companies create a foundation for managing their resources. The first post in the series will focus on the importance of analyzing your data.
So you’ve got data—whether it’s historical utility bill data or up-to-the minute usage data from an Energy Management System (EMS), looking at it ALL can be overwhelming. You need to bite it off in pieces. A good step in this process is benchmarking; after all, you can’t manage what you don’t measure.
Energy benchmarking in this context means comparing the energy usage at each of your portfolio sites against usage at your other sites, and then going to the next level and comparing your average usage against the average usage of your competitors or peers―to benchmark within your industry.
SO HOW DO YOU GET STARTED BENCHMARKING?
1. CONSISTENT DATA SOURCE
One of the most critical components of benchmarking is having a consistent data source. There are many questions you need to ask―for example, can you get consumption and expense information from a reliable source? Is there a resource at the site level and how often do you need to access the data? Do you want to benchmark on a monthly or a quarterly basis, and how critical is it to have access to the data on a real-time basis? Utility bills are one consistent source. An EMS would be another terrific source for data on energy usage at your facilities.
2. UNDERSTAND FACILITY CHARACTERISTICS
The next step is to understand your facility information―what do you know about your facilities? One of the most common characteristics of facilities is square footage. Other characteristics relate to configuration: are your facilities in stand-alone or in-line buildings, do they have drive-thru windows, how tall are they―are they three stories or ten stories? When you’re looking at benchmarking you want to understand the characteristics of your facilities so you can put them into the correct group of peers. The more you know about your facilities, the more accurate your benchmarking will be.
3. UNDERSTAND FACILITY OPERATIONS
Operations are also a big factor driving usage and any changes in consumption. Understanding the operations within your facilities is vital to accurate benchmarking. Do you know the hours the facilities are open? Are they open 80 hours a week or 40 hours a week? Are there variations in occupancy, production units or sales volumes that could potentially drive usage? Before you “reinvent the wheel,” you should first find out if there is someone within the organization who already tracks this information and has it easily accessible.
4. NORMALIZE DATA
Once you have all of your data, facility characteristics, and operations information, the next step is understanding what you need to “normalize.” Many companies like to normalize for weather, calendar month or square footage.
Utility bills can be for 34 for days or 31 days, so one of the most common normalization techniques is calendar normalizing. For example, you may want to make sure that May had 31 days of usage for every facility, so you can take away any irregularities that may otherwise be caused by the length of service period.
You should also think about normalizing for weather. If you have a widely dispersed portfolio of facilities, you want to be able to benchmark them accurately. Weather changes often lead to variations in consumption. Some other opportunities to normalize could be created by operating hours, design, and sales/transactions. The goal is to understand every variable that makes sites different from each other and then normalize away that variability to get down to the root consumption.
So why do you want to normalize the data? Normalizing gives you a more accurate comparison between sites. This really helps eliminate excuses and allows you to hold people accountable for elements within their control. If you are going to normalize your data for these types of items, you will need good data―that gives you the ability to look at the variables and the correlation between changes in occupancy, sales transactions, etc. to changes in energy usage.
Benchmarking is looking at sites and comparing them to each other. You may either want to look at a one month benchmark, or a more common three-month benchmark, which rationalizes out any kind of variation in utility billing. Benchmarking will help you determine where to focus your energy savings efforts for the highest return.
You can view the webinar recording here (registration required). For a deeper dive into each of the steps in the process, check back for the next post in this blog series, which will focus on identifying site outliers.