Designing a Management Control System to Reduce Energy Footprint

Introduction

In the contemporary world, most companies rely on 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 for running machines, recording information, executing communication activities, and providing lighting within a company. Since energy is essential to planning, managing, and executing roles within an organization, it is important for companies to decide how to minimize their energy footprint during production. Doing so helps cut down the overall cost of production and enhance profit and revenue levels at the end of the financial year.

It is therefore critical for UTS to develop a Management Control System (MCS) with the aim of reducing its energy footprint in Building 3. This MCS would enable UTS to cut down the cost of production by adopting an effective and efficient energy management approach.

Objective

The main aim of this Management Control System (MCS) is to reduce the cost of the energy footprint of UTS in Building 3. The MCS would also allow the entity to adopt cost-effective energy practices in the execution of its roles and responsibilities in accordance with the demands of the market and the industry. The new MCS design would be environmentally friendly, thereby contributing to the conservation of scarce natural resources and supporting the sustainability of the planet for future generations.

It is important for the organization to adopt more affordable energy measures, thereby reducing the overall cost of production. In the long run, the entity would be able to maximize its profits and revenues, facilitating organizational growth and development. This management control system would also focus on educating UTS employees and close organizational partners on how to minimize energy consumption and the consequential benefits of doing so.

Establishing an Energy Baseline

UTS must first develop an energy baseline in order to determine what changes are needed in relation to future efficiency measures. The energy baseline of the entity reflects the current level of energy being consumed during the process of production (Australian Government, 2012). Developing an accurate energy baseline is critical to providing reliable comparisons when implementing energy-saving methods. Energy baselines draw from reliable and valid data that can undergo rigorous analysis. UTS can adopt Regression Analysis or modeling methodologies in the process of designing the energy baseline.

In this context, the company needs to develop the energy baseline for Building 3 in order to adopt an effective and efficient energy-saving approach. The development of the energy baseline would occur as part of an energy efficiency opportunities program. UTS should capture two full years of energy data for all energy sources relating to Building 3. The company needs to identify the processes that contribute to the baseline and their relative boundaries. UTS would use historical energy consumption data to determine the independent variables influencing its energy footprint (Kitamura et al., 2009).

This approach is appropriate for the application of regression analysis methodology in developing the energy baseline (Australian Government, 2012). In developing the energy baseline, UTS should include both variable and fixed factors that affect its composition. One such factor is ambient conditions, which reflect temperature during the course of production. Other crucial factors that might influence the energy baseline include energy consumption rates, raw materials, product mix, production rates, and occupancy. Identifying these factors for Building 3 would allow the entity to implement appropriate operational measures to improve efficiency while reducing costs.

One initial approach to reducing the cost of the energy footprint is to increase production levels. This would allow UTS to spread energy costs across a greater number of activities, thereby reducing the per-unit cost of production. The company also needs to distinguish between fixed and variable energy applications. For instance, the energy used for lighting classifies as a fixed cost or fixed energy usage (Kitamura et al., 2009). Energy consumed in running production and other operational activities within the building is variable energy usage.

Since energy use within the building depends on both fixed and variable factors, it is necessary to increase production levels in order to minimize both forms of consumption. Another operational approach that might help reduce the rate of energy footprint is the production of commodities using lower energy-intensity materials. The organization would need to encourage the market and industry to adopt products made from such materials. A third approach to minimizing energy footprint at the operational level is enhancing efficiency within the building itself.

The organization needs to make appropriate changes such as adopting more efficient operational approaches, reducing stoppages, improving insulation, and minimizing waste. Another way to improve energy efficiency in relation to the energy baseline is to reduce the fixed energy component within the organization. This would involve reducing the energy used in maintenance activities and ensuring adequate temperature management. Components should be placed in standby mode when not in use. The organization can also minimize fixed energy usage by replacing standard lighting with energy-efficient bulbs.

The building should also utilize daylight to the maximum extent possible. It is also important to reduce energy lost through unnecessary switching of equipment on and off during production. The organization needs to minimize the use of reject or scrap materials and facilities. Maintaining appropriate building temperatures is also essential to managing the rate of energy consumption during production. Developing the energy baseline is the essential first step toward managing energy footprint in any organization, and it is therefore highly significant to UTS's energy management efforts.