Companies need to look at their traditional ways of assessing individual asset efficiency. It is no longer good enough to look at the ordinary determinants, without integrating energy performance. An innovative approach to asset management has emerged which is known as “global asset sustainability.” We are now able to get a much clearer definition of efficiency if we adopt this system, driving improved financial metrics throughout the organization.

Driving a new approach toward global asset sustainability is the ever-growing price of energy and its associated security issues. Energy prices are on a relentless rise and availability is far from assured. Companies realize that this position is significantly affecting their profit margins and unless action is taken, will threaten their very business viability. Along with energy worries is a dual concern — the environmental impact of consuming energy and producing greenhouse gas emissions.

Every element of operation within the business must be leveraged and inefficiencies uncovered. Asset management may no longer be viewed from a point of conventional efficiency alone. The traditional approach would classify and justify asset performance just based on its productivity against specification. This did not take into account the amount of energy that the asset was using and this invisibility was causing a significant draw and reallocation of budgets from elsewhere.

Global asset sustainability takes a clear look at energy consumption, alongside the traditional metrics of availability, condition and performance. It’s not surprising, as the Department of Energy can tell us that the typical commercial or industrial company in the country now allocates over 80% of a non-labor operating and maintenance budget toward energy, alongside maintenance.

A new look at managing assets incorporates a four pronged approach. Global asset sustainability was not all-encompassing in this regard, before. As an example, we would determine asset availability as being acceptable if the equipment returned maximum uptime and generated revenues acceptably. We would also look at performance by considering the equipment specification and determining whether we were getting a good return on investment.

Performance is a base metric, of course and asset output quality is the indicator that determines how thin margins turn out. Quality control can often make the difference between dominance in the marketplace or playing catchup.

Traditionally, organizations did not counter in the most important factor in global asset sustainability — energy consumption. When a baseline position is established for each asset, running under prime conditions, each asset can subsequently be evaluated on an ongoing and almost instantaneous basis to reveal ultimate efficiency. Even a slight variation in efficiency can account for a huge operating loss across the distributed enterprise.

Equipment effectiveness readings have to be modified to incorporate energy into the mix. This new look at global asset sustainability understands that it is “all about” energy and companies must be able to monitor and micromanage this resource.

Daniel Stouffer has a lot of data about global asset sustainability and how a visit to www.verisae.com can aid you.

The green building movement is receiving a lot of interest from institutional investors and stockholders these days, as they understand the long-term value of investing in efficient buildings. Companies and investment trusts that own properties across the country are improving their portfolio of properties, by taking into account building efficiency and green credentials.

Real estate investment trusts are taking a leaf from the Leadership in Energy and Environmental Design program, as they bring a lot of the buildings under their control up to code. More than one third of buildings controlled by these investment trusts in the United States are classified by LEED.

It’s interesting to note that, despite the downturn, interest in green investments remains high. Investors were able to look into the long-term practicality of building efficiency investments, with an eye on sustainability. Energy efficiency is a hot topic conversation among building owners and occupiers alike.

Not to be overlooked is a significant trend among leaseholders, who are increasingly critical of building efficiency when it comes to establishing a place to operate. Tenants are insisting that the buildings they occupy are “green,” from a point of view of credibility and because, increasingly, employees demand it.

Tenants will pay more, over and above the asking rate, in order to occupy space that they consider to be green, or categorized according to LEED standards. Due to this trend, owners can see that they are likely to retain higher occupancy rates and longer leases, so they are more than willing to make the investments in building efficiency up front.

Investors have not overlooked the fact that upgraded and efficient buildings tend to exhibit lower operating costs and represent a much more efficient and manageable investment. When coupled with proactive, energy-efficiency-chasing tenants, the position can be classified as “win-win” all around.

While green buildings can cost as much as 5% more to actually construct and bring to the market, these costs are more than absorbed through operational efficiencies in the very early years. The real estate investment trust business has been actively involved in the pursuit of building efficiency since they introduced their Leader in the Light program, back in 2005.

Building efficiency standards will undoubtedly increase exponentially as society comes to demand an approach to energy efficiency and sustainability.

Daniel Stouffer has a lot of information about building efficiency and how a visit to www.verisae.com will be of use to you.