Utilities Expense as a Percentage of Plant Revenue

Utilities Expense as a Percentage of Plant Revenue

KPI Details

Utilities Expense as a Percentage of Plant Revenue measures the utilities-related expense (i.e., the cost of using electricity, water and heat) incurred in relation to the total dollar amount of revenue generated by the plant, or production facility, over the same period of time. A high value in this metric can be indicative of inefficient utility vendor contracts, sub-par energy efficiency program management, insufficient energy consumption measurement, inefficient manufacturing processes and scheduling (e.g., heating up an oven for 30 minutes for a 1 hour production run, inefficient control of machine uptime, etc.), and poor facility manager training and performance. While many companies seek to reduce the cost of utilities by switching vendors, constantly doing so is unmanageable as changing vendors brings with it its own costs and challenges, both of which don't solve the issue at hand. Instead, seek contract negotiations with current utility vendors and build energy efficiency decision-making into production processes to reduce utility expenses. For a manufacturer, the cost of the utilities used in the plant, or production facility, forms a part of manufacturing overhead.

KPI Definition

The utilities-related expense (i.e., cost of using electricity, water and heat) divided by the total dollar amount of revenue generated by the plant, or production facility, over the same period of time, as a percentage.

KPI Best Practices

• Avoid scheduling production activities with high cooling requirements during hottest hours of the day
• Perform regular maintenance on pumps, motors, compressed air, process heating etc. to ensure efficiency
• Set goals for energy use and savings based on industry standards

KPI Calculation Instructions Utilities Expense as a Percentage of Plant Revenue?

Two numbers are used to calculate this KPI: (1) the utilities-related expense incurred, and (2) the total dollar amount of revenue generated by the plant, or production facility, over the same period of time. In this calculation, utilities-related expenses include the cost of using electricity (e.g., for lighting, keeping computers powered up, etc.), water, sewage, and heat (i.e., typically through the use of gas). For a manufacturer, the cost of the utilities used in the plant, or production facility, forms a part of manufacturing overhead.

KPI Formula :

(Utilities Expense Incurred / Plant Revenue Generated) * 100