Many of us have heard pundits claiming, “water is the new gold.” If that were the case, my home state, Washington, would be emerging as the next global super power-without the support of Bill or Boeing. While it may not be the next gold, water’s emergence as a focal point for business should not come as a surprise. It should also not come as a surprise that SAP is well positioned to help you manage this critical resource regardless of whether you sell it in a bottle or just flush it in a toilet.
Typically businesses think about water for three primary reasons: quality, quantity, and location. Increasingly, a fourth driver is emerging: efficiency. Just as businesses have used carbon and energy as bellwethers to identify inefficiencies in business processes, so too can certain industries use water as a similar type of efficiency barometer.
Water quality surfaces in two areas of a business’s operations-with very different degrees of importance depending on your industry-either as an input or an output. Water used during the manufacturing process is very important to companies like Intel whose water purity requirements make bottled drinking water look like something siphoned out of a mud puddle. Chip manufacturers, such as Intel, use vast amounts of extremely pure water during very controlled, sterile, and precise chip manufacturing processes. These requirements on purity take a considerable amount of energy, and cost, to achieve-making water quality a paramount issue to these types of companies. Intel and their competitors are certainly not the only ones with water quality concerns. Take Disney as another example. Consider the millions of small children exposed to various water sources during visits to Disney theme parks-from Splash Mountain to drinking fountains. Pretty serious stuff.
On the other hand, are the industries that care more about water quality when it leaves the plant. Chemical manufacturers and pulp mills are two great examples of industries that have strict requirements placed on the water quality as a discharge, whether to a sewage treatment plant or body of water.
Water quantity sometimes surfaces in unexpected places. Clothing companies like Patagonia have an extremely high water footprint when one considers the amount of water used to grow the organic cotton and produce the leather used to manufacturer Patagonia apparel. Clothing manufacturers’ extended water footprint found in their supply chain dwarfs the amount of water used elsewhere in their business operations.
Where water is located really makes an impact on the viability of certain businesses. Consider solar power generation that uses concentrating solar power technologies. These technologies require a not insignificant amount of water during their operations, but are often located in some of the most water scarce locations-deserts.
While your particular industry may not have been mentioned above, chances are that if you are a manufacturer (or not as we saw with Disney) you have water in your production process. An emerging area of water management treats water as an indicator of waste (read inefficient). Taking this lens to your operations can result in significant cost savings identification.
So, how can a company go about managing their specific water-related concerns? A lot of it depends on where you find yourself within the water supply chain. Working at a company like SAP means that I have a unique vantage point to view water across our different Line of Business and Industry segmentations. We literally help customers along every step of the process. We help customers manage the infrastructure of water delivery while working with Utilities who use our Enterprise Asset Management solution. Our footprint in the Utility space means that we not only help with delivering that water but also profitably managing that distribution process. From gate to gate, we also provide our customers with visibility and insight into how they use water in their own operations via solutions like Carbon Impact-which can also help companies evaluate the financial return of different abatement projects across your entire company. Once it has run its course (pun!), water leaves a business as wastewater discharge and we help our customers there too through our Environmental Compliance solution. Overlying all of this is the general risk associated with water quality, quantity, and location requirements. We as SAP have many different risk management tools that help our customers proactively manage all types of risks.
While water may not be the new gold (at current prices, a gallon of water would cost north of $165k), it is certainly a resource to be managed carefully.