Description of project requirement
Most manufacturing plants in Australia are automating their operations in an effort to attain operational efficiency. However, this move has led to an increment in the cost of operations due to electricity bills. Moreover, the high rate of automation has increased the emission of greenhouse gases. These aspects are hindering the manufacturing plants’ ability to achieve environmental and financial sustainability.
Atlas Automation intends to assist the manufacturing firms in reducing their greenhouse gas emissions and achieve operational efficiency by developing energy solution software that will be implemented in the already installed machines. The software will enable the firms to attain energy efficiency in their operations by minimizing energy wastage. Atlas Automation will experience a number of challenges in developing the new energy solution. First, the firm must ensure that the target clients understand and appreciate the new energy solution. One of the issues that Atlas Automation should ensure entails proving that the clients are wasting expensive energy. Furthermore, Atlas Automation must convince the clients to reduce their energy consumption. The rate of market acceptability will determine the extent to which potential clients implement the energy solution in their operational processes.
Initial target market
Prior to developing the energy solution, Atlas Solution will conduct comprehensive market research in order to identify potential clients. The firm will initially target institutional customers in Australia. The firm will specifically target a number of firms whose operations are energy-intensive. Some of the institutional customers that the firm will take into account include factories that have implemented refrigeration systems in their operations. The choice of this customer group arises from the realization of the view that the refrigeration systems are extremely reliant on power in order to be effective.
Atlas Automation will also target manufacturing companies that have implemented multiple conveyor systems in their operations. Additionally, the firm will target factories that are not reliant on time-critical processes such as food manufacturing companies. The food and beverage production firms are cited as some of the major motor intensive companies due to the need to ensure that the implemented Clean in Place [CIP] systems are effective in cleaning the various production machinery. Thus, the firms are in a position to enhance the quality of their products by preventing contamination of food and beverage products. The CIP systems are energy-intensive. Nevertheless, manufacturers have the capacity to determine when to run them. The firm will also target aluminum-manufacturing companies.
The value proposition for the target market
The high cost of energy in Australia may hinder the extent to which the manufacturing firms in the country achieve competitiveness. Therefore, implementing the proposed energy solution will benefit the energy-intensive companies extensively in a number of ways. First, the firms will be in a position to achieve sustainable business operations. For example, the energy-saving solutions will be designed specifically in such a way that they promote energy utilization in the various automation implemented by the target customers.
A computerized current transformer will be designed and integrated into the various machines. The transformer will aid in measuring the electricity consumption of the machines in order to determine the systems’ energy efficiency. Moreover, the software will record information on energy consumption, thus providing the firm with an opportunity to log on and analyze its energy consumption. Consequently, the target firms will be in a position to make effective decisions on their energy plan based on the data obtained from the software.
An analysis of the data obtained will aid in making recommendations on the most effective way of adjusting the production process. Some of the recommendations that the firms may consider to include changing the energy plan by undertaking the manufacturing process during the night and cleaning the machines during the day. Subsequently, implementing the new software will enhance the probability of achieving financial sustainability by reducing the cost of operations.
In addition to the above value propositions, the new energy-saving solution will enable the target customers to achieve environmental sustainability. The adjustments made on the target customers’ energy plans will lead to a significant reduction of greenhouse gases emitted from their operations. Thus, there is a high probability of the firms reducing their negative impact on the environment. For example, the reduction of greenhouse gases will lead to a reduction in the rate of global warming and hence climate change. Adhering to environmental sustainability will have a positive impact on the companies’ corporate reputation, as consumers will develop the perception that the firms’ operations are socially responsible.
In order to achieve the above benefits, it is imperative for the targeted clients to make the adequate budgetary allocation. However, the cost involved in implementing the software will depend on the nature of the changes required. Some companies will be required to undertake minimal software changes in order to achieve compatibility with the new energy solution. On the other hand, some firms, such as those that have implemented refrigeration systems, will be required to allocate a substantial amount in order to ensure the successful implementation of the software. It is estimated that the cost of implementing the software in such companies will exceed $50,000.
Potential adoption barriers
Perceived risks
Atlas Automation recognizes that the adoption of the energy solution by the target market may experience some barriers. One of the barriers that the firm has identified relates to the cost of implementing the software. Atlas Automation intends to design the software in accordance with the clients’ automation needs. Subsequently, the firm will be required to undertake a pilot test before implementing the software. The objective of pilot testing entails understanding whether the software will enhance the target customers’ energy-saving capability. Subsequently, Atlas Automation will be in a position to identify potential gaps and make the necessary adjustments.
According to Atlas Automation’s operation policy, the target customer should cover the cost of pilot testing. Moreover, customers are required to pay for the cost of pilot testing upfront. Therefore, the firm might experience hurdles in convincing potential clients to make a budgetary allocation of approximately $20,000 and $ 30,000 for pilot testing.
Another major barrier that might limit the adoption of the new system relates to the perceived risk of losing intellectual property rights by the clients. The process of implementing the energy solution may require Atlas Automation to access the target customers’ control systems. However, some clients may perceive such a requirement as a way of disclosing their trade secrets. Thus, they may be hesitant. Atlas Automation systems will maintain the ethical code of operation by ensuring that the clients’ information accessed remains confidential.
Market competition
In addition to the above issues, the firm has also identified the existence of market competition as a major barrier in the adoption of the energy solution. Currently, the market is characterized by the existence of numerous firms that provide consultancy services on how to achieve energy efficiency. Furthermore, the firm has not developed a better and more adequate market reputation as compared to the well-established energy-consulting firms in Australia. Subsequently, it will be difficult to prove that Atlas Automation will not depend on the services of consultants, who are known for charging exorbitant consultation fees [for example, $250 per hour].
Despite this aspect, Atlas Automation has developed sufficient higher competitiveness in its operation as compared to most of the consultancy firms established. Unlike its competitors, Atlas Automation provides a comprehensive consultancy package coupled with assisting its clients in implementing the energy-saving technology.
Expansion opportunities
Atlas Automation is focused on ensuring that the targeted customers successfully adopt the energy-saving solution. The adoption of the new technology will influence the extent to which the energy-saving solution attains market acceptance. After the first phase of implementing technology amongst energy-intensive companies such as the food processing firms, Atlas Automation will undertake extensive market research to identify potential market opportunities. One of the expansion areas that the firm will focus on includes the heating and cooling systems within manufacturing facilities. Moreover, the firm will also consider expanding the energy solution into the electric motors market. One of the markets that the firm will consider includes the hybrid vehicle industry in order to determine how the software can further enhance energy consumption. However, the expansion will be undertaken by undertaking comprehensive pilot testing in order to determine the most effective way of adjusting the software. Additionally, a comparison of the available energy plans in the market will be undertaken in order to determine the most effective way of enhancing energy savings amongst the clients. Subsequently, the firm will invest in intensive research and development in order to adjust the software accordingly.
Skills, knowledge, and experience relevant to the project
As a final student majoring in accounting, I have developed sufficient skills regarding various accounting issues. Subsequently, I will be in a position to provide the Atlas Automation consulting team with expertise on various issues, such as the determination of the cash flows that the firm might generate by developing the new technology. Moreover, I will be in a position to convince clients of the financial benefits of implementing the technology. This goal will be achieved by calculating the net present value of the project in order to determine the long-term cost-saving outcome of the new technology.