Pareto principal - get your ducks in a row

ducks in a row
ducks in a row (Photo credit: Wikipedia)
This post makes sense to any entrepreneur or manager needing to gauge how to allocate resources efficiently to get a best return.

As ever, we will illustrate using energy management (or the lack of it) because we are kWIQly, and also because the ideas are familiar to everyone.

Problems, energy waste or if you insist "energy savings opportunities" (why can't we call it what it is - a disaster - are we so afraid of the truth ?")  can be characterised. 
Suicide Is Painless
Suicide Is Painless (Photo credit: Wikipedia)

It is this grouping or triage of priority as we mentioned in "kWIQly - Don't Panic" that allows a low cost rational application of resources.

It should not be complex, but crystal clear (it needs to work on the battlefield when under pressure). 

Triage should not fly in the face of common sense, because the managers (nurses, energy managers, generals) need to trust it without thought, so it also needs to be "light-weight", convenient and agile (and well-considered).

If you had queued in a hospital for two hours bleeding to death this would be obvious to you - common sense rapid assessment saves lives!  - Are you old enough to remember M.A.S.H - triage exemplified ;)

Equally, the response shown by someone lacking triage is the "headless chicken" where a manager is flustered, cannot justify decisions and is simply not effective.

Panic - When visceral dominates rational is a brief post about how this indecision applies to our society as a whole confronting climate-change - but today I want to focus on us - individuals...

Anyone who cannot tell priorities apart is not an energy manager (or perhaps does not have the right tool for the job).

English: Studio photo of peas in their pods.
English: Studio photo of peas in their pods. (Photo credit: Wikipedia)
Lets consider just a few characteristics that can make all the difference.

We know what the Pareto principal says. It was initially conceived by Joseph M. Juran a 20th Century leading light in Quality Management when he noticed that 20% of the pea pods in his garden yielded 80% of his peas.

 It basically says that things are not normally evenly distributed (buses and taxis come in clumps), blackberries on a bush are biggest in clusters, and in general that life is not "fair".

This has profound implications...

Blackberry (Photo credit: Lastaii)
It means if you have so much time to pick berries you better start in the most fruitful area.

If you are selling anything location counts.

And so on.

However in some fields, Pareto analysis is multi-faceted (even assuming you have the necessary data to begin with).

So back to our archetypal energy manager (I must remember to do a post about our archetypes), but lets call her Sally for now.
English: Oak Moss and Truffle Toast.
English: Oak Moss and Truffle Toast. (Photo credit: Wikipedia)

She manages energy for 100 truffle outlets (the things pigs dig up not the gooey chocolate filling).

These are distributed some in the US, one in Brienz (just down the road from me) and a handful elsewhere maybe say Singapore where air conditioning is a challenge.

She is a finite resource (not corporally) and though imposing she can only be in one place at a time.

So she needs to prioritize!  

We asked her to make a list of the things she needs to know ( take note because there will be a question about these facets later ! ) - this is what she comes up with.

Overview - The context is always "Where" because it represents her limited resource  - visits to manage energy cost time!
(We assume for this exercise she can just go there and wave a wand - many energy managers are guilty of believing in this method - maybe subject for another post soon ! )

Immediate priority - Blitz Action
"Where ?"  - kWIQly - Geographic Triage 
Where do I find the 20 stores that are wasting (wasting not using!!!) 80% of my energy right now ?

Substantial performance - Annual Returns
Where do I find the 5 stores that wasted most energy last year ?

Least Performant - The current "basket cases"
Where do I find the stores  who have exceeded ideal consumption by the greatest proportion (this month) ?

Most Chronic Problem - Weed out malingerers
Where is the single store that has been under-performing for the longest time ?(measured against a threshold or in absolute terms)

Most dissolute - The "drip-drip-drip" losses
Where has the cost of continual losses mounted up most ?
(a world site ranking - as a rolling average over a range of time periods)

This is obviously not all Sally needs to know - once she has selected a "patient" to treat, she will for example need tools to diagnose the causes more thoroughly .

But given that she has all this on her desktop in browser on a day-plus-one basis, we can probably agree - Sally knows what she needs to "get her ducks in a row".

Now I promised you a question about facets of your job - (it applies to anyone but particularly energy managers)..

Of these things Sally needs to know - "How many can you do without ?"

Bonus questions -  "How many do you have ?"

Obviously each of the above addresses a different facet of the problem (recency, severity, term, significance, attitude and intractability) and a manager must manage - ie decide how to allocate resources, but we argue that without the data the decisions are hypotheses or perhaps just guesses - 

"And that ain't energy management !"

Note given smart-meter data and the location of the sites (and opening hours if any) - we can answer the above questions for less than the price of a cup of coffee and a donut each week - Can you ?

Reach Out to us if you need help or if you think we have this all wrong - please comment below - we would love the feedback !

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