An Inside Look at General Motors' Energy Strategy
Consider the challenges that General Motors must face with its industrial energy management strategy. In the process of building approximately 10 million vehicles every year, the company spends an estimated $1 billion in energy across its facilities located worldwide and needs to show progress toward its public commitments to reduce carbon emissions, according to a new report from the research firm Verdantix that sheds some light on the company’s practices.
Industrial and manufacturing businesses looking to get more strategic about how they manage energy could take some valuable lessons from reading the entire report. One clear takeaway, however, is that the key to GM’s energy strategy is how they use the data available on how their facilities use energy. Here’s a look at how GM leverages its energy data to improve visibility, communication, and decision-making that impacts the entire organization.
Establishing Global Visibility and Maintaining Data Quality
Through its partnership with EnerNOC, GM uses a utility bill management solution to process and centralize access to energy data from more than 1,700 electricity, natural gas, and other utility bills from facilities located across 30 countries, according to the report. This is important for two reasons.
First, this single source of data enabled GM to develop a standard data capture language that helps the company make use of data from across its entire portfolio, the report says. This enables facility-level staff to access data that is specific to their region while also providing high-level decision makers with an enterprise-wide view of their global footprint for both internal and external reporting. GM has also begun deploying energy intelligence software to monitor operations at its plants in North America, which will provide even deeper visibility into its operational trends and help identify the root causes of energy waste in its facilities.
Additionally, GM’s utility bill management solution applies a nearly 70-point audit process to identify inaccuracies. This not only prevents the company for paying for mistaken charges on their utility bills, but it also gives them confidence that the data they’re using for analysis and reporting is accurate and up to date.
These efforts form the backbone of GM’s energy management strategy, enabling the company to turn its raw energy data into actionable information for executing its enterprise-wide strategy.
Communicating Data to Drive Progress on Energy Efficiency Measures
This level of visibility is critical to GM’s ability to make an impact on their facilities’ energy performance. Using regular reports showing how energy usage and costs are trending, facility managers can set targets for improvement in energy efficiency and track their teams progress toward goals, according to the report. This has led the company to shift from a reactive approach to energy management that addressed issues only after they have driven up costs to a proactive strategy based on visibility into energy trends.
Over the long-term, this information also helps GM develop more accurate operational budgets for its facilities, according to Verdantix. Insight into the amount of energy required to run each facility at a given time gives the company a better understanding of how to best allocate budget.
Validating the Business Case and Investments in Energy Management
The investment decisions that drive GM’s global energy strategy rely heavily on data showing energy performance and trends at its facilities, according to the report.
The facilities and energy management teams share the impact of their efforts with the finance teams involved in investment decisions, who use this information to determine whether investments might be justified or to identify areas that may be in need of additional investment. For an organization with such massive energy needs, the ability to track return on investment in energy management is essential to providing the right tools and resources for their teams.
GM has saved $237 million in energy costs since 2010, including $49 million in reduced utility costs and 14% reduction in energy intensity, according to Verdantix. For large industrial and manufacturing businesses, GM’s story is evidence that it’s not simply having access energy data that makes a difference, but what your organization does with it.