Introduction
Management of energy in any organization is a very important factor that all organizations should put into consideration. Nowadays, it has become important for organizations to put up measures that are aimed at ensuring minimal wastage of energy (Couder & Verbruggen 2003). One of such measures is the adoption of an energy monitoring program to monitor and control the use of energy in an organization (Schneider & Somers 2006).
Such a program is very important since it lays out the necessary procedures that an organization can follow to eliminate energy wastages and improve the concerned organization’s management of energy (Diedrich, Cook & Lindo 2004). This report focuses on Motkamills, an organization in the wood industry. The report seeks to provide an overview of some of the recommendations that organizations can implement for purposes of reducing energy consumption and improving its management, with Motkamills as the case study.
Company Background
The Motkamills Organization is in the wood industry, specializing in paper lamination, sawn products, as well as matt-coated bulky paper. Some of the Motkamills’ products include trisorbex, tolaris, Imprex®, and general sawn products from wood. Even though Motkamills has been successful over the past years, the company suffers from numerous challenges following the need to expand into the global economy realm (Drucker 2011).
Challenges in implementing energy consumption recommendations
Motkamills faces several challenges especially in the implementation of energy consumption program that aligns with the global economy realm. The first challenge is associated with the company’s need to introduce several changes into its design. Secondly, Motkamills needs to make several essential choices; particularly, the opportunities concerning taking the course of sustainable development, communication-based evolution and redesigning its management to align with the needs of corporate leadership (Norton 2012).
Prioritization process for selecting the particular solution based on current industry standards
The solutions that Motkamills adopts should be depended on the current industry standards. For instance, as the company decides on energy consumption, it is important to incorporate a program that aligns with the industry specifications (Schneider & Somers 2006). In this case, the program should be able to save the consumption of energy while reducing its wastage. In addition, it is important for the company to evaluate its decisions, decision criterion and analyze the uncertainties involved in its expansion into the global market (Gunasekaran & Putnik 2006). For this reason, Motkamills should reconsider important strategies for information transfer, as well as the management of key operations to ensure that they are in line with the needs of the global market.
Synthesis of decision (based on knowledge and a reflection from previous recommendations)
It was observed that an energy monitoring program is necessary for organizations to monitor and minimize energy wastage. This was instigated by the fact that green economy and sustainable use of resources have become so important in the energy management of different organizations. In addition, an energy monitoring program can be very important in creating a link between the organization and its target customers and other partners, as well as improve the organization’s efficiency in resource management.
There is a need for Motkamills to change its management approaches. A leadership style that is more flexible is suitable for organizations expanding to global economic realms (Haber-Curran & Tillapaugh 2013). This is attributed to the fact that a more adaptive management strategy would help the organization adopt any necessary changes for it to achieve its organizational and business objectives. Koenig (2011) noted that the transformational leadership is a suitable choice in such a case.
Energy Monitoring programme
Energy monitoring is a technique used in management that utilizes information on energy as a foundation for eliminating wastage of energy in industries, as well as improvement of the procedures used in operations (Shimokawa & Tezuka 2014). Energy monitoring works hand in hand with energy targeting, which aims at identifying the level of energy consumption since an organization cannot manage energy before measuring it (He & Kua 2013). As a result, the monitoring and targeting of energy are management techniques that deal with all building and plant utilities that include steam, fuel, water, electricity, and effluent. It may be almost similar to other techniques used in the management of raw materials, produced goods, occupancy of building, capital, and human resources.
The program to be used by Motkamills Company in monitoring energy consumption aims at helping the organization in the determination of actual consumption of energy in its facilities. The energy consumption in the buildings is thus tracked to help them in the efficient and effective management to ensure sufficient profitability in the organizations (Shimokawa & Tezuka 2014). As a result, the organizations can be assisted in heat control, air conditioning, and ventilation as well as more efficient use of the lighting systems. In addition, the programs may help with the provision of any data that may be required to proactively maintain equipments that use small amounts of energy (Rainey 2000). The organization may thus have several facilities that are further sub-divided into Energy Cost Centers.
Close monitoring of utilities in the centers is carried out by specialists (Joye 2005). Once there is guaranteed availability of information, targets are set. Measures are then taken to implement remedial actions in order to achieve the targets based on the interpreted variances. Due to such intensive work, it may make the use of recording, analysis, comparison, target setting, monitoring, reporting and controlling the energy consumption in the organization. In addition, Motkamills Company can use accuracy checking system, allocate costs, determine efficiency, record the use, and highlight any challenges faced in performance within the system.
Benchmarking of energy conserving measures in the wood industry that might be relevant to Motkamills
There is over dominance in the industrial energy use among the developing countries as well as the transitioning economies. According to trends, such dominance is perceived to increase in the future (Rainey 2000). The production of commodities that are energy intensive play a significant role in the total energy use in a given industry. In the case of Motkamills, the company is in the wood industry. As such, there are several factors that impact the energy intensity, consumption and efficiency in given companies.
In the case of Motkamills, its expansion and energy consumption can be affected by factors such as limited access to resources, high prices of energy, its small size relative to the global economic realm, as well as capital cost considering that equipment for efficient are very expensive (Gwynne, Klak & Shaw 2001). Therefore, Motkamills can benefit from benchmark data in that it provides the necessary insights on the available options for energy conservation, as well as energy monitoring and evaluation programmes to help in management of the company’s energy.
Research and analysis on energy benchmarking has showed that business decisions in sectors that are energy intensive tend to be affected by the total energy costs (Gunasekaran & Putnik 2006). The implication is that low and high energy costs dictate decisions related to business expansion. As such, in the case of Motkamills supposed expansion, the company ought to consider the energy consumption with respect to the global economy. In cases of high energy costs, the company should consider avoiding such regions. On the other hand, it is expected that areas that are low in terms of energy consumption are likely to have little investment incentives (Panday & Bansal 2014).
Thus, benchmarking on energy conservation in the wood industry can be a suitable approach for Motkamills to ascertain the cost of energy in the regions to which the company plans to expand.
Evaluation Methods
Due to the competitiveness of the wood industry, there is a need to rapidly adapt to the constant changes in the world of business. As a result, there is the need of restructuring and reorganizing the organization’s leadership so that the changes expected can lead to the growth and development of the company (Panday & Bansal 2014). Motkamills can thus focus on the expansion of its existing products and simultaneously making investments on energy while putting efforts to reduce pollution. The company would thus ensure dynamic and strong management team that will strictly adhere to the set strategies, as well as help it in improving productivity and reducing expenditure (Yap 2014).
Motkamills can make the use of Discounted Cash Flows as the valuation approach to give a description of the time worth of money. This method puts its major emphasis on the discounted rate of long-term projects by foretelling the investment cost and the returns the company expects from the investment chosen. During the calculations, the cost of debt and equity financing are taken at a single rate. This method further puts its consideration on depreciation, taxes to be paid, cash flows, and working capital of the organization. If well implemented, the approach can be very beneficial to the organization as it forecast all the expected expenditures and revenues of the organization.
Motkamills may also use sensitivity analysis which focuses on the changes individuals undergo to independent model variables as well as the impacts they have on the dependent variables. The approach is thus used as a probability technique as it works with the characterization of the risks in the output of the model. Therefore, the method can help by giving an estimate of the value that an input may give and give the probability of their occurrence.
It is thus recommended that Motkamills can use the payback period approach which gives an estimate of the time the company expects to take before recovering its initial cost of investment. The approach gives clear information on the compared information on expected returns from the cost of the investment. At Motkamills Company, the main aim of sensitivity analysis would be input variables and their corresponding variables on output. For instance, lower input variable sensitivity would lead to lower input variables that give out small alterations on the output variables.
Motkamills may further use the Monte Carlo stimulation approach which randomly generates inputs in models that facilitate the impact analysis of differing inputs and outputs. It can create many models at the same time as it allows desktops to have various spreadsheets. It also helps in solving the problem of the independent deterministic models. As a result, computerized mathematics approach can be used by Motkamills as it allows for the accounting any expected risks in making decisions and in quantitative analysis. The best option is the approach that helps in solving the challenges of discounted cash flows (Shimokawa & Tezuka 2014).
It is considered the best because it helps in the examination of how flexible the management is and does not only have the option of investment as a valuation of investment. The best options are thus significant in both investments related to energy and those related to capital.
Conclusion and recommendations
From the discussion above, it is evident that the cost of energy consumption plays a significant role in the success of any organization that uses energy frequently. As such, companies are likely to be attracted to areas that have average to little cost of energy as opposed to regions of high cost of energy. In the case of Motkamills, its expansion to global economic realms faces several challenges.
Usually, when a company engages in any expansion, it has to update a number of fields to align with the needs of the expansion (Joye 2005). As such, Motkamills has an obligation to change its leadership style to feature an adaptive leadership that allows for the adoption of any necessary expansion changes. In addition, the company should acquire a design and organizational structure with respect to the needs and demands of the global economic realm. One of the imminent changes is to adopt an energy monitoring and evaluation programme that will help Motkamills manage its energy for purposes of reducing consumption and increase its management.
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