With business recovery among many SMEs remaining fairly fragile, monitoring and controlling costs remains a key requirement. Despite this, many smaller businesses struggle to find the time and enthusiasm for putting in place the practical measures associated with understanding and controlling energy use across their operations.
Until a few years ago we were guilty of the same charge. As a successful and busy electronics manufacturing business with 150 staff involved in a diverse product range and with an increasing emphasis on overseas sales, managers simply did not have the time or ability to constantly keep all areas of the operation under close scrutiny.
In particular, with the company’s production processes not being exceptionally energy intensive, improvements in other business areas were invariably regarded as a greater priority.
However this attitude changed with the simple introduction of a new business KPI that linked overall sales performance with energy use across all areas of the business operation.
Now, every month, our energy use is monitored across all business activities. These measurements are then converted into equivalent CO2 emissions and a ratio developed with total sales over the same period.
The aim is to have all areas of the business performing to their capability and use energy resources optimally.
In this respect the energy utilisation KPI is used alongside more standard business metrics such as sales per employee, advance order book size and gross profit percentage to provide an overview of business performance that all staff can understand.
The Seaward Energy CO2 Measure ratio therefore provides a practical mechanism to control costs and at the same time encourage behavioural change among staff, bringing clarity and new meaning to the drive for energy efficiency.
For example, the constant monitoring of energy use has enabled a range of simple housekeeping measures to be implemented.
These have included the use of timers on electrical switches and appliances, the introduction of new energy efficiency lighting equipment, the installation of suspended ceilings in some factory areas to reduce space heating costs and changes to company car policies in favour of vehicles with lower emissions.
So far the new measures are having considerable impact with the latest annual assessment confirming that we have reduced carbon emissions by over 3%, whilst increasing output by over 6% and increasing staff numbers over the same period.
In addition, it is also helping to overcome the barriers that typically mean only larger companies with specialist teams have the ability to deliver cross-business energy management programmes.
As bills continue to rise, energy costs should be a key concern for all SMEs. At Seaward the ability to highlight the benefits of improved energy efficiency in a practical and meaningful way is proving to be of benefit both to the long term finances of the company and to the environment.
Mark Marsh is finance director of the Seaward Group. The County Durham manufacturer is a market leading manufacturer of electrical safety testing instrumentation for a wide range of applications in the electrical, solar PV, electronics manufacturing, electromedical and utility sectors.
More details at www.seaward.co.uk