It may be late for New Year’s resolutions, but as Corporate America looks ahead to 2012 annual results, many businesses have vowed to cut back on water consumption. They’re not just motivated by concern for the environment; nor is it a basic matter of lowering expenses; in many cases, it’s a question of survival.
By most accounts, the golden age of water is over. Businesses can no longer operate as if there were an infinite supply of clean, usable water. As the global population booms and water demand surges, the supply remains constant, and the cost (and ability) to get it where it needs to be, when it needs to be there, grows increasingly higher (and more complex).
The problem is exacerbated by the fact that water is required to produce electricity, so in many cases, water is not only used as a key ingredient in a product, it’s also used to generate the electricity, which, in turn, is used to make a product.
Small wonder then that manufacturers that spend millions of dollars on water and electricity are rethinking how they use water. And if they’re not thinking about it now, they may be forced to think about it later. Case in point: J.M. Smucker, parent company of Folgers coffee and Dunkin Donuts, faces intense investor scrutiny for failing to come up with a sustainability plan for its coffee business. A couple key shareholders have requested that the outlining how it will address the risks (including water shortages) to its coffee crop.
This isn’t a new concern. Ford Motor Co., for example, cut water use by 62 percent between 2000 and 2010; now the company hopes by another 30 percent over the next three years. Ford may have had remarkable success, but it’s not an easy goal for every company to achieve. Honda Motor Co. tried to cut water usage last year but it didn’t get very far. Instead, the company consumed 17 percent more water in the 2011 fiscal year than it had in the prior year, due to hotter. (Because of the higher temperatures, the company had to use more water to keep its manufacturing facilities air-conditioned.)
While corporate water usage is under increasing scrutiny by the public — in France, there is even talk about requiring the environmental impact of manufacturing specific products — many businesses are still reluctant to dramatically change how they make their goods, in part because it’s difficult to know just where to begin to make these changes, and how to go about making them. Admittedly, it’s an enormous undertaking – but the best place to begin is, generally, by gathering information about your company’s water use, creating metrics to measure water use, and then find ways to begin reducing the use. Even seemingly small incremental changes can have a dramatic effect over the long term.
IBM, for example, treats and converts millions of gallons of water in our Burlington, Vermont, semiconductor plant. As one might expect, making semiconductors is an expensive and power-intensive process. Still, between 2000 and 2009 we cut water usage by 29 percent, saving $3.6 million per year, by redesigning the plant to take advantage of naturally occurring weather and water flow patterns. Now, instead of using electricity to cool water, we rely on outside air during the winter months; and we capture energy from the water as it naturally flows into the facility, thereby reducing our power consumption. At the same time, we nearly doubled water productivity — one thousand gallons of water made 80 percent more chips in 2009 than it did in 2000.
Large corporations that are serious about water conservation need to rethink entire processes. Using data collected from a massive network of sensors, companies can analyze a facility’s physical conditions (such as the outdoor temperatures as well as the interior temperatures of different parts of a plant) and determine how best to optimize various processes to take advantage of local conditions.
The technology has proven remarkably effective. Sun World, a Bakersfield, Calif.-based fruit grower, used data analytics to get a better idea of how it could lower its expenses while increasing productivity. The company redesigned some crops so that they were more easily picked, thereby cutting labor costs by 10 percent. The fruit grower also redesigned its irrigation system and lowered fuel use by 20 percent and water consumption by nearly 9 percent.
Although this isn’t an overnight fix, for many companies the long-term benefits data analytics are indisputable. Businesses can lower costs, reduce their environmental impact; and potentially avoid public relations headaches. And, of course, the alternative could be far more dire: Power and water costs that surge past the point of profitability or sustainability.
Michael Sullivan is global program director of IBM Smarter Water.