Key Performance Indicators

To improve energy reduction efforts, best practice is to develop a facility culture that manages energy usage to Key Performance Indicators (KPIs). Proper energy KPIs help a facility keep a continuous pulse on ‘what is most important’ for achieving desired performance.

While on the surface defining a set of energy KPIs seems rather simple, the process should not be taken lightly. Ineffective KPIs can result in missed insights, ill-informed decisions, and potentially dysfunctional behaviors. Furthermore, the reason they are called ‘key’ performance indicators is that these should be a relatively small sub-set of the broader indicators and metrics utilized across operations. Narrowing down and agreeing upon a small set of meaningful KPIs can be a challenge.

The key is to think about indicators that:

• Can be measured frequently (e.g., hourly, daily, weekly);
• Resonate with Plant Management and are connected to high-level strategic objectives for the facility and/or company;
• Are easily understood and able to be acted upon; and
• Associated accountabilities are team based.

Evaluate Data Availability

The first step in defining KPIs is to consolidate and evaluate the data available from the baseline, utility billing data, metering, and other data collection processes. Metered data, as previously described, is preferred as the input into KPIs given the higher data integrity and opportunity to move towards automated analysis. For each meter, the following information is valuable to consolidate:

• Name and type of meter (e.g., flow, kWh, pressure, etc…)
• Is the data electronically or manually retrieved
• What added value does the meter provide
• Can this data point be used for a KPI

Evaluating the above data will allow for short-listing potential data points that can be transitioned into KPIs. A common next step is to utilize this data to prepare a baseline energy pie diagram(s) for the facility which provides (and visualizes) energy consumption by area, process, and/or users. Energy consumption for no production and full production conditions should be a consideration.

Where it is found that insufficient data exists, temporary meters or (documented) estimations can be used to fill in data gaps.

Define Key Performance Indicators

After reviewing the consolidated data and energy pie diagrams or profiles, the next step is to define specific energy KPIs. The most important part of developing a KPI is determining its variables. The denominator is the variable that is intended to be reduced, while the numerator is expected to grow.

For energy management in beverage operations, the denominator is commonly kWh, MJ, MMBTU, SCFM, Tons, etc and the numerator is barrels, gallons, cases, liters, etc. produced. For example, a KPI of kWh per units produced could be used to demonstrate a company’s success at lowering its energy consumption while at the same time growing their business.

It is important to point out that KPIs might vary in granularity as ‘what is important’ could be at the macro/facility level all the way down to specific operations, processes or equipment. A common way to think about KPIs is to consider the following three tiers with the end result of defining one or more KPIs within each tier:

While there is a large range of potential KPIs that a facility or company can select from, the following provides a list of considerations and focus areas:

• Energy consumption: How much energy is consumed in a given period (e.g., x kWh)
• Energy efficiency: Ratio of useful work delivered to energy consumed to accomplish a certain task (e.g., x units of work/kWh or kWh per employee)
• Energy intensity index: Ratio of actual energy consumed to what would have been expected in the absence of efficiency measures (e.g., 0.92 representing 8% savings)
• Avoided energy use: Cumulative energy saved over a period (e.g., x kWh in a year)
• Peak energy demand: The maximum energy usage in a given time frame (e.g., x KW)
• Total energy cost
• Amount of renewable energy sources used
• Ability to meet energy performance forecasts
• Achievement of energy efficiency improvement opportunities
• Performance of significant energy uses or users

Upon defining a short-list of proposed KPIs, the next step is to frame the specifics for each indicator (e.g., Who, What, How, etc…) in the form of KPI protocols. The purpose of this is to clarify and document:

• Review criteria and how the KPI will be collected, tracked and reported (roles and responsibilities).
• Identifying and ‘mapping’ the requisite KPI metering data for the KPI.
• Defining how the KPI will add value to sustainable and efficient use of energy at the facility.
• Communicating to appropriate personnel as to how the KPI was established, the value of tracking the data and how to use the KPI to improve energy usage within the facility or enterprise.
• Processes and control points for regularly evaluating and interpreting the KPI, including defining specific set points, targets and alarm points for inventoried meters.
• Recommended corrective actions for “out of spec” conditions.

Monthly Energy KPIs Report