Management Control System Designing Management Control System Essay

Excerpt from Essay :

Management Control System

Designing Management Control System (MCS)

In the contemporary world, most companies apply the use of energy to plan, manage, and execute their operations in accordance with the demands of the market and the industry. This makes energy the most vital aspect of production in business entities. Energy is crucial in running machines, recording of information, execution of communication activities, and provision of lighting within the context of the company. Since energy is essential to plan, managing, and execution of roles within the company, it is ideal for the company to decide on how to minimize consumption of energy footprint in the process of production. This is important because the company needs to cut down the overall cost of production to enhance the profit and revenue levels at the end of the financial year. This makes it critical for UTS to develop management control system with the aim of reducing its energy footprint in Building 3. This Management Control System (MCS) would enable UTS to cut down the cost of production by adopting effective and efficient application of energy system.


The main aim of this management control system (MCS) is to reduce the cost of energy footprint of UTS in Building 3. The Management Control System would also allow the entity to adopt cost-effective energy application in execution of roles and responsibilities in accordance with the demands of the market and the industry. The new design of MCS would be friendly to the environment thus conservation to the scarce natural resources. This represents development of a planet that would foster survival of the human race of the next generation. It is ideal for the company to adopt cheaper energy measures thus reducing the overall cost of production. In the long-run, the entity would be able to maximize its profits and revenues thus growth and development of the organization. This management control system would focus on educating employees of the UTS and other close partners of the organization on how to minimize consumption of energy and the consequential benefits.

Management Control System to enable UTS Reduce the Energy Footprint in Building 3

Establishing Energy Baseline

UTS must first develop the energy baseline in order to determine what to change in relation to future efficiency measure. The energy baseline of the entity reflects the current level of energy under consumption during the process of production (Australian Government, 2012). It is critical to develop the energy baseline of the company (UTS) in order to offer accurate comparison when implementing energy saving method. Energy baseline draws from reliable and valid data that can undergo critical analysis. UTS can adopt Regression Analysis or Modeling methodologies in the process of designing the energy baseline. In relation to this context, the company needs to develop energy baseline of building 3 in order to adopt effective and efficient energy saving approach. The development of energy baseline would occur in the form of energy efficiency opportunities program. UTS should capture all the two years of energy data for all the energy sources in relation to building 3. The company needs to identify processes that contribute to the baseline and their relative boundaries. UTS would use the historical data of energy consumption in order to determine independent variables influencing energy footprint (Kitamura et al., 2009).

This is appropriate for utilization of the regression analysis methodology of developing energy baseline (Australian Government, 2012). In the development of energy baseline, the entity (UTS) should include both variable and fixed factors affecting the development of energy baseline. One of the factors that affect development of energy baseline is the ambient conditions. This is the reflection of temperature in the course of production. The other crucial factors that might influence the composition of energy baseline include energy consumption rates, raw materials, product mix, production rates, and occupancy. Identification of factors affecting energy baseline at UTS in the building 3 would allow the entity to come up with appropriate measures at the operational level to improve efficiency while reducing the cost. The first attempt of reducing the cost of energy footprint is to increase production levels. This would allow UTS to spread the energy costs across numerous activities thus reducing the cost of production within this sector. The company needs to identify fixed and variable factors or energy applications. For instance, the energy that goes into lighting classifies as the fixed cost or fixed usage of energy (Kitamura et al., 2009).

Energy that goes into running of production and other activities within the building is variable energy usage. Since energy application within the building depends on fixed and variable factors, it is necessary to increase production levels in order to minimize both usage of energy. The other operational approach that might allow the company to reduce the rate of energy footprint is the production of commodities from lower energy intensity materials. The organization need to convince the market and industry to adopt the products from lower intensity energy materials. The third attempt to minimize energy footprint at the operational level is the development of efficiency within the building.

The organization needs to make appropriate changes such as adoption of efficient approaches within the building, reduction of stoppages, enhancement of insulation, and minimization of waste. The other way to improve the efficiency of energy footprint in relation to energy baseline is minimization of fixed energy component within the organization. This would involve the capacity of the organization to be able to reduce the energy in use or maintenance of adequate temperature. The organization should also ensure that these components must be in standby mode when they are not in use. The organization can minimize the use of fixed energy components by the use of efficiency bulbs for lighting.

The building should also utilize daylight to the optimum. It is also critical for the organization to reduce the footprint of energy in switching equipment on and off in the course of production. The organization also needs to minimize the use reject or scrap materials and facilities. The temperature of the building should be appropriate in order to manage the rate of energy consumption in the process of production. Development of energy baseline is the essential first step towards management of energy footprint in any organization hence significant in the attempts by UTS.

Completion of Energy Mass Balance

The main aim of this second step towards management of energy in UTS is to enable the organization to quantify energy flows within the building. This is crucial in illustration of comprehensive energy consumption. Energy Mass Balance represents an analysis of energy flows in accordance with mass flows within a business or a system (Australian Government, 2012). Development of effective and efficient EMB would allow the organization towards understanding the nature of essential services delivered within an area. This would enable the organization to determine the significance and amount of services in the given area. Development of EMB is also crucial towards facilitation of the innovation process (Kitamura et al., 2009). This is through analysis of the current situation and examining ways on how to improve. EMB is also significant towards capturing of the holistic costs and benefits of the energy footprint thus enabling the organization to decide whether to change the current system.

Extensive EMB has the capacity of opening processes thus promoting new ways of thinking and operating. EMB also allows the organization to measure energy savings in relation to the system, equipment, building, and key sectors of the plant. This is because EMB acts as the base for extensive analysis of energy footprint. This is an indication that for the organization to come up with most valuable energy efficiency opportunities, it is essential to conduct accurate EMB for the system or equipment. In order to complete an EMB, UTS would need to develop a plan. This represents the first step of extensive analysis of energy footprint.

The second step would involve determination of boundaries that can define the inflows and outflows in relation to building 3 in UTS. The organization would need to draft crucial processes in the form of a flow chart. The organization would then evaluate necessary sets of data to consider in the development of the draft. The fifth step requires the formal leadership of the organization to implement relevant strategies in order to capture necessary sets of data. This would allow the organization to estimate energy and mass flows. Calculation of energy and mass flows facilitates analysis of the results with the aim of adopting relevant efficiency measures. The last step of the plan involves documentation of EMB.

Estimation of Energy Saving Opportunities

The organization needs to develop essential strategies that can accurately estimate energy savings for the achievement of energy efficiency opportunities. This involves forecasting or estimating the future energy consumption of building 3 in relation to the energy baseline (Australian Government, 2012). The organization should evaluate three types of energy savings opportunities: people-based energy savings, process-based energy savings, and investment-based energy savings opportunities. People-based energy savings represent the…

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