Performance management begins with measurement and data collection. Without data to evaluate process efficiency and effectiveness, we are only overseeing a business unit - not managing it. If we do not know what it costs, how long it takes or how much we have produced, what can we say about the performance?
Figure 2.12 again illustrates that the foundation of energy and environmental performance is the production process which, for the sake of accountability, is broken down into energy costs centers (ECCs). Every ECC absorbs resources in order to produce services or products, thus affecting the company's business results. Performance of day-to-day operations can be discussed and evaluated only in hard data terms! Therefore, performance measurement systems should be overlaid on any business function or, unit or ECC, bearing in mind the need to avoid overlapping, i.e. multiple measurements of the same performance indicator.
Performance can be managed only when based on quantitative data on day-to-day operations. Energy and environmental performance measurement systems must be data rich, but not data-driven. We should be aware of the danger of 'data for data's sake' approach. There are basically three legitimate reasons for taking a measurement:
• to quantify what needs to be quantified;
• to monitor progress toward a target;
• to interpret the causes of good or bad performance.
The applied metrics must indicate the identifiable instances of non-standard performance and provide enough information to interpret what and why has happened. From that perspective, environmental performance indicators (EnPI) focus on monitoring compliance and compliance costs, while energy performance indicators (EPI) focus on operational effectiveness and direct cost savings through the more efficient use of resources or as sometimes referred to - through eco-efficiency! Both indicators, EPIs and EnPIs, enable the line personnel to assess and improve operating efficiency.
Was this article helpful?