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What do sensors say about your corporate efficiency?

By | June 22, 2010, 5:25 AM PDT

Before I get to the main point of this post, did you know that UPS people internally call those brown UPS delivery vehicles that bring you fun things “package cars”? I didn’t either. I promise there’s a point to that observation, which I’ll get to in a moment. But the main focus of this post is about how UPS is using an emerging practices called “Energy Informatics” to address employee habits and business processes that could help the company continue to reduce its carbon footprint.

The Society for Information Management, an association of IT professionals, is promoting this idea big-time within its Advanced Practices Council as a way of using technology more effectively to cut energy consumption. The theory is pretty simple:

Energy + Information < Energy

Or, to translate: energy plus information adds up to less energy consumption. That’s the main gist of energy informatics.

Richard Watson, the chair for Internet Strategy at the University of Georgia, says that many individuals within the IT function at companies have overlooked the role that properly applied telematics can play in helping them predict usage of resources — in this case energy. “If we want to change people’s behavior, we first have to tell them what they are doing,” Watson says.

By showing managers these “signposts,” companies can help develop more efficient processes. Those that use a lot of energy right now, such as manufacturers or freight management companies, can reach above the low-hanging fruit to cut energy usage in ways that are more systemic, he notes. When it comes to agricultural uses, energy informatics could help a farm deliver only the water that is precise required to keep crops healthy as opposed to overwatering a whole field.

Watson and his team has shopped the concept around to a number of cities, since often the concept is regionally dependent. One example of the theory in practices is the Electronic Road Pricing (ERP) system that exists in Singapore. ERP is a congestion pricing system that charges drivers more when they are contributing to peak traffic congestion. Tolls are automatically deducted from a refillable debit card; what’s more, ERP has been 95 percent accurate in predicting traffic problems, providing information that can be used to adjust traffic lights to improve traffic flow. In San Francisco, the city plans to equip approximately 6,000 of the 24,000 parking meters with wireless sensors to keep tabs on traffic patterns. In addition, the meters will be able to tell you if they are empty! No more driving around the block a gazillion times trying to find a spot, impeding the flow of traffic in the process.

So, back to that UPS truck. Turns out that UPS is embracing an energy informatics solution for all of its vehicles. Chuck Holland, vice president of industrial engineering for the company, says approximately 63 sensors are being added to each package car; that data is combined with the information being collected by that little handheld that UPS drivers carry to keep tabs on packages. There are about 55,000 vehicles in the UPS fleet in the domestic United States, approximately 22,000 will be outfitted by these sensors before the end of 2010. (With another 10,000 trucks on schedule to be outfitted in 2011.)

Holland says the sensors are collecting all sorts of information, such as the time a vehicle spends idling when the driver has left. There are sensors on the door and on the seat belts to tell you when someone has unbelted and left the vehicle. It will tell you when someone backs up, which is a practice discouraged by UPS for safety reasons.

In a way, these sensors are not unlike those monitors you have taped onto your body to help keep tabs on functions that aren’t immediately visible.

Holland says one immediate result of adding sensors was tightened policies around idling, which has been reduced by an average of 15 minutes per driver, or 25 gallons of fuel per driver per year. (Drivers are supposed to turn off their trucks when they walk up to your door.) The sensors have also helped UPS improve its seat belt usage rate to 99.8 percent. Moving forward, the sensors will be used to help drivers optimize delivery routes. Information from the handheld containing delivery orders will be married up with traffic information to help drivers navigate the most efficient way to get from location to location.

Holland won’t disclose how much it costs to add the sensors to a vehicle (in many cases they can be moved if a vehicle is being decommissioned) but he says the company is confident of the return on this investment.

This comment sort of says it all: “We have had this data all along, we just haven’t used it.”

The more efficient that UPS can get about its shipments, the more efficient it can help its customers get, says Holland. Here are some case studies related to how UPS has helped use its ever-evolving shipping technology to help other businesses become more efficient.

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Heather Clancy

About Heather Clancy

Heather Clancy is a contributing editor for SmartPlanet.

Heather Clancy

Heather Clancy

Contributing Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey.

Follow her on Twitter.

Heather Clancy

Heather Clancy

I am fascinated about how businesses of all sizes can transform their operations through technology -- not just to make themselves more efficient, but to rise above their competitors. That's the theme for my two ZDNet blogs, Small Business Matters and Next-Gen Partner. For SmartPlanet, I'm focused on profiling inspirational and controversial business leaders who have great leadership lessons to share. I also write regularly and passionately about corporate social responsibility and sustainability issues for GreenBiz.com.

Occasionally, I will pop up at an industry conference in some sort of speaking capacity. In cases where an engagement involves a sponsor that may be covered in this blog, that fact will be disclosed in coverage as appropriate.

My corporate writing work usually consists of crafting research white papers about some aspect of technology or moderating Webcasts. In the event that my commentary (in written, audio or video form) mentions a company for which I have provided consulting advice, I will disclose that fact. However, there is no connection between these projects and topics that I cover in my blogs.

She writes for SmartPlanet and is not an employee of CBS.

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RE: What do sensors say about your corporate efficiency?
Reduced idling time translates into each vehicle being started more.
Starting an engine contributes to approximately 90 percent of the
wear and tear on an engine. i wonder if they have calculated the
increased vehicle repair and downtime into their equation? i
suggest those costs will outweigh the 25 gallons per driver per year
saved.
Posted by ScrLk
22nd Jun 2010
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RE: What do sensors say about your corporate efficiency?
Like powering off a PC at night to save electricty cost vs leaving it on. When is a PC most likely to fail - when powered on. a PC failure often means at least $100 lost while a person waits around to get another PC in a few horus, and in some places DAYS while all the backend security is reapplied to the replacement PC. So a few thousand dollars being paid to a person who cannot do a job vs. $147 saved a year in electric costs of running a PC. (150 watts an hour for 12 hours x 365 days a year 27c KwH). Sorry, the resulting cost is not worth the possible savings.
Posted by TAPhilo
22nd Jun 2010
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RE: What do sensors say about your corporate efficiency?
TAPhilo is correct in taking a holistic view to costs vs. savings, but I think he is being too generous in estimating the costs...
a) Not everyone has to pat $0.27/kw - I am 35% below that.
b) My 1994 386-DX desktop did not draw 150w when sitting idle. Standby modes on PCs and monitors can drop idle currents to under 35w.

We can feel really good about 'doing something for the environment' when we shut electronics off, but too often, the only significant change is our 'do-gooder' attitude.

There are so many other areas where smaller changes can produce much greater results.

TAPhilo, thanks for the common-sense perspective!
Posted by waytoolate
29th Jun 2010
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