With continued strain being put on national electricity grids in many African countries, load shedding practices have now evolved into rolling blackouts, which are having adverse effects on industries across the spectrum. How can your solution provider business benefit from rolling power outages by helping customers develop comprehensive business continuity strategies?
With continued strain being put on national electricity grids in Southern African nations, load shedding practices have now evolved into rolling blackouts which are having adverse effects on industries across the spectrum. Millions of dollars are being lost through lost production time and, left to continue, this could potentially cripple economies in this region.
However, before more power stations are constructed in these markets, there are alternative solutions that can be employed.
Stuart Scanlon, sales director at New Era Solutions, an authorised Epicor partner in South Africa, stated that power management solutions are crucial especially to manufacturers to keep their production on track and minimise their power usage during tough times.
Scanlon said with Africa’s power shortage seeming like it is here to stay, businesses are not only looking for ways to keep “the lights on”, they are investigating means to improve their energy efficiency without compromising on productivity.
He added that organisations in the manufacturing sector in particular now have to take a serious look at their consumption and may be facing the possibility of significant increases in the cost of power during peak periods if they can’t cut back on their usage.
“As some of the most prolific power consumers, manufacturers are often the first port of call when it comes to alleviating the pressure on national grids, but at the same time they can have perishable raw materials that won’t wait and customers that demand the same high levels of service,” Scanlon noted.
This has meant many manufacturers are implementing meters connected to their power connection to monitor their electricity usage with the hope of using the data that is gathered by the monitor to find ways to optimise power usage. However, according to Scanlon, this type of high level monitoring only scratches the surface and doesn’t give the detailed insight that is required to implement meaningful changes and this is where solution providers with power management and business continuity expertise should step in.
“If manufacturers could carefully monitor the machines on their shop floor to understand how their power usage is spread then they could optimise workflows,” said Scanlon. “Being able to do this would be invaluable to production planning as it would mean knowing exactly which machines are using what and how productive they are in comparison with each other. This would dramatically change the way businesses manage their shop floor processes.”
He added that by plugging in a small device, a manufacturer is able to monitor electricity usage compared to productivity using their enterprise resource planning (ERP) software. “This enables the manufacturer to drill down and understand the efficiency of each machine and plan their demand. This not only works to take the pressure off the national grid, it also saves money and makes the manufacturer more productive,” commented Scanlon. “Knowing the detailed statistics for each machine on the shop floor enables the manufacturer to work out the most efficient start-up and shut-down sequence. It also helps to identify problem machines that are consuming too much power per unit of production. In instances where manufacturers are running at capacity and exceeding their power quota, this could be the only way to monitor the usage and avoid serious financial penalties.”
Added to this, it enables companies to see how much power other areas use like administration, air-conditioning and production. Knowing this means they can start to implement power-saving solutions such as solar heating or more efficient cooling systems.
Scanlon suggested that what is needed are software systems that go well beyond a so-called “system of record” to produce meaningful information and analytics based on the underlying business data. Analytically-driven manufacturers know what it takes to turn data into information, information into insight, and insight into action.
Because the ERP system uses the actual electricity and fuel costs, and it knows the production plans for current and planned manufacturing volumes, it can easily calculate projected emissions and draw up a budget for the environmental costs. This means that manufacturers can also get a handle on carbon accounting to satisfy legal demands, public relations, and marketing demands, to improve the efficiency of their operation.
KPMG recently published the Industrial Manufacturing Megatrends Research, which highlighted international trends that impact manufacturers on a global scale. While these challenges may vary considerably from one region to the next, the common theme throughout is responsiveness. The efficiency of manufacturing processes is critical to competitiveness and factors that threaten this need to be addressed without delay.
According to the report, companies are actively researching, testing and implementing new energy sources, materials, processing technologies and logistics strategies to become more energy efficient, reduce their carbon footprint and offset the cost of materials. Rising demand and the radically increasing competition for energy and raw materials means the introduction of energy saving technologies, optimised processes and optimum use of resources should enable efficiency and sustainability at every stage of a product’s life cycle, from production to operation to recycling.
Increasing responsiveness can help a business improve operational performance and accelerate its productivity, through information being available at people’s fingertips and allowing more informed and rapid decision-making.
Michael Davies CEO of Continuity SA, stated that In order to put mitigation strategies in place to deal with load-shedding, companies first need to understand what the implications are, adding that one risk that has become very real for South African businesses is load-shedding. An unstable power supply with the potential of extended periods of power outages over the next several years creates a range of risks that have to be integrated into current business plans.
“We know that load-shedding is going to occur and, in order to put mitigation strategies in place, we first need to understand what the implications are,” said Davies. “What are the issues that businesses should be looking at? Now is a good time to update your business continuity plans in order to assess the impact of load-shedding on your business and weigh up what your risk appetite is.”
Davies noted that because electricity is now so integral to modern society, load-shedding creates a complex and interdependent set of risks over and above the task of just keeping the business’s lights on. These risks need to be understood within the context of each business’s strategic plan.
Impact on employees
Regular and extended outages will disturb family life in all sorts of ways, from spoiled food and appliances that don’t work to transport difficulties and the care of children and elderly relatives. Employers need to understand the impact and be empathetic towards the challenges employees may face during this time.
Impact on vital services: Extended power outages are likely to affect water supplies periodically and also telecommunications. Businesses can solve the water issue relatively easily by installing their own gravity-fed tanks that act as an emergency store replenished by the municipal water supply. More serious, however, extended power outages could be more than battery backups at some telecommunications sub-stations can cope with, leading to interruptions in communications. Davies cautioned that the impact of load-shedding on ICT disaster recovery should also not be ignored.
Impact on the supply chain: Power outages in other areas will not only affect employees’ ability to get to work, but also the operations of suppliers and clients. Today’s businesses generally employ just-in-time inventory order systems and, in addition, supply chains are both long and complex – companies must definitely understand the impact that load-shedding has on its suppliers’ ability to meet their commitments, and what any defaults will have on its operations.
“We would recommend that companies ensure they have visibility of suppliers’ business continuity plans,” Davies said. “Traffic congestion due to power outages will also affect deliveries and the productivity of mobile teams within the organisation and its suppliers.”
Impact on security: Most access control and building management systems rely on power to continue functioning, so alternative power plans must include security and access control to avoid the business becoming a soft target during load-shedding.
However, it’s simply not enough to complete the business impact analysis and then define the BCM strategy and then the plans to implement it. Whether those plans were created by the in-house business continuity management team or a consulting house or a channel partner, all too often they just sit gathering dust. In fact, all plans are just theory – or wishful thinking, if you’re feeling very cynical – until they have been tested and thus validated, said Tracey Linnell, general manager, Consulting at ContinuitySA.
All of this means the greatest care needs to be taken to putting the right testing programme in place. It’s also vital that the gaps that were identified in the BCM plans have been bridged.
Once these inter-connecting risks are well understood and integrated in the business continuity plan, companies can put the appropriate backup power plans in place.
UPSes
If these are an option for your organisation, make sure UPSes are correctly sized for the job they have to do and that they cater for potential extended power outages. Furthermore, consider what critical systems will get priority and what may be turned off without negatively impacting the business.
Generators
Most companies will rely to a great extent on generators. They need to be maintained and tested properly, something that is hard to control if they are owned by the landlord. Like UPSes, they need to be correctly specified – a cheap household generator is not going to cope with frequent and prolonged use. Diesel stocks also need to be managed. Diesel cannot be stored indefinitely, and the possibility that diesel will be hard to obtain during a prolonged blackout also has to be faced.
Alternative power sources: Businesses will start employing other methods of powering systems, such as solar power, to reduce the impact of load-shedding.
“We don’t have an option, we all have to understand what this power crisis means for our individual businesses and take the appropriate action,” said Davies. “Reviewing your business continuity plan is a good way to start.”
Essentially, the current power crisis in the Southern African region is causing enormous challenges, but it is an opportunity to re-evaluate company electricity usage to maximise productivity, reduce costs and maintain profitability to keep pace with the added pressure of global trends to ensure that businesses can “survive anything”.
