Buying a car once required customers and salesmen to sign loads of paperwork—reams of it. The mountains of documents that dealers needed to print out to get a deal approved could bog down even the easiest sale.

That has changed. Today’s improved technology has streamlined the entire
car-buying process. Loan applications, credit verification, and payment schedules are all automated thanks to sophisticated electronic data centers. Dealerships can now move cars off their lots in record time, something that helps dealers boost their profits and reduce their expenses.

Unless, of course, a power outage hits. If that happens, all operations controlled through these sensitive high-tech data centers come to screeching halts, and business stops. It’s clear during such outages that keeping the back office up and running is as important to the profits of auto manufacturers and dealers as is stocking their lots with new cars.

One major auto manufacturer (that did not want its name used in this story) wanted to make sure that these changes didn’t negatively impact the rest of its energy usage—it wouldn’t make sense to improve a data center’s performance and reliability only to have the new equipment overwhelm older power-generating pieces not equipped to handle a more powerful upgrade—so it turned to the PowerChain Management solutions provided by Moon Township, PA–based Eaton Electrical.

Eaton late last year began promoting its PowerChain Management program as a way to solve a problem that has long vexed hospitals, manufacturing centers, military bases, universities, and any facilities that rely on electricity: A facility’s power-generation needs, whether the power comes from a municipal grid or from some means of onsite generation, are usually handled piecemeal. As a business, factory, or health care center grows, and as new, more sensitive electrical equipment is placed on one’s floors, one’s energy needs change. But when it comes time to upgrade electrical services, most companies and organizations simply add a new piece, without considering how this equipment relates to other pieces of their power chain.

This often leads to inefficient energy systems—systems that can cost more or, even worse, prove unreliable.

Eaton aims to change this. Modeled after supply chain management, PowerChain Management, according to Eaton officials, is a system-wide way of looking at a company’s or facility’s energy needs. Basically, Eaton hopes to save companies, universities, health care providers, and others significant amounts of money, and eliminate reliability problems, by helping them consider their entire power systems before making any changes to them.

To have this happen, Eaton officials meet with managers to discuss in-depth how each change may affect the overall system. And these changes aren’t merely considered now, but with an eye toward the future. For instance, a manufacturer may be considering two pieces of equipment. One may have a higher price tag. Most managers would select the least expensive model. But under a PowerChain Management view, that may not prove to be the best choice. After all, a piece of equipment may cost more today, but may have a longer life span or may operate more efficiently. It may also place less strain on an existing electrical system. The more expensive piece of equipment, then, may ultimately prove less costly. Faced with this new evidence, managers are more likely to choose the piece of equipment with the higher up-front price so that their employers may enjoy the greater cost savings down the line.

PowerChain Management, Eaton officials say, is a process that is more important today than it ever has been. The reason? Manufacturers and corporations are relying on highly sensitive electrical equipment. This equipment is a boon to the bottom line. But it is also more sensitive not only to power outages, but to power surges or sags, too.

“Say someone puts in a sensitive MRI machine in a hospital,” said Mike Longman, vice president of performance power solutions with Eaton. “They may see that it, for some reason, has a much shorter life span than expected. Something is wrong here. Power problems are wearing out the transistors. The recognition of these problems tends to increase when people put in equipment that is highly dependent on reliable power coming in. Power is one of the last un-managed areas of the profit-and-loss statement. PowerChain Management can help people gain more control over that.”

Saving Big Bucks for Car Makers
The work Eaton performed for an automaker is a good example of how the company’s PowerChain Management counseling works.

The automaker needed to update the aging equipment in its electronic data center. In most cases, engineers would have recommended either that the manufacturer install two large static switches on the load side of the system bypass cabinet to feed all the power-distribution units, or that it place static switches at each of the 50 power-distribution units. Both options are costly.

Engineers with Eaton, though, recommended two multi-module automatic hot-tie systems, each with four uninterruptible power system modules and a system bypass cabinet. The system was designed to withstand the failures of one uninterruptible power module and a module from the other system while the remaining three modules supported the power load.

This was a case when Eaton’s PowerChain Management program resulted in direct savings for a company. In hardware costs alone, the automaker saved $600,000 by going with Eaton’s suggestion.

The system’s design also called for ducts instead of more traditional conduits or cables. This enhanced the system’s existing switch gear and also offered improved protection from outages or surges while gobbling up less physical space. The easier-to-work-with ducts also reduced installation costs.

These are important savings. But Eaton officials say the greatest benefit came because one service provider—in this case, Eaton—managed all aspects of the upgrade, everything from engineering and design to scheduling and installation.

Longman says that companies benefit from this long-range view, with their electrical systems running more efficiently and at a lower cost.

“By having one company handle all the electrical system upgrades and installation, companies can experience a whole family of benefits centered on prognosticating possible problems and solutions for them,” Longman says. “When you put in certain electric systems you’ll find that in the third 10 years of their life span you begin to see a breakdown of the insulation around the wires, around things that tend to be underground. If you put them in and don’t have that in mind to start with, you’ll be surprised when, after 20 years of no problems, you suddenly have all these problems.

“And these can be serious problems,” Longman adds. “They may even shut your system down. Your insulation is going out and you may be getting some severe shorts. You don’t know what’s happened until you dig under the floor. That’s highly inefficient. But we have a specific product to handle this problem, and under PowerChain Management, it’s a product that facility managers would hear about and would consider. It’s a monitoring system that picks up the early warning signals of insulation damage. You can then use this monitoring system to pinpoint where the problems are likely to be happening and you can work at solving it before it gets to the catastrophic point of taking the system down. If you don’t approach upgrading or installing your electrical system with a wider view, though, you won’t think to have such a product.”

Meeting a Need
The Electrical Power Research Institute estimates that the US economy loses up to $188 billion each year because of power outages and poor power quality. Unfortunately, many of these power outages, surges, and blips are caused not by outside factors such as storms and high winds but by mistakes made inside the corporations, plants, and other facilities that rely on reliable power to make money or serve the community.

Eaton officials studied this statistic before announcing in November 2005 that they were to begin offering PowerChain Management solutions.

“Electricity is no longer a commodity,” says Randy Carson, Eaton senior vice president and president of the company’s electrical group, in a written statement. “Once it enters a business, it morphs into a tangible entity and, moreover, an important physical component of the enterprise. Electrical power management will be to the 21st century what supply chain management was to the 20th century in that the sum of an electrical system is much more powerful than its individual parts.”

That last statement is the key to Power-Chain Management. Eaton officials consider all the components of a facility’s electrical system as its PowerChain. That includes wiring, switches, generators, monitoring systems, communications equipment, and power-protection systems. These components must all work together efficiently to protect companies from both power outages and small surges and sags, all of which can take big bites of profits and productivity.

So far, companies, some quite major, are responding.

For instance, in November of last year, Eaton began sharing its PowerChain Management ideas with computer giant Hewlett-Packard (HP). That company will use this information to provide its customers with a single power and cooling solution for its critical data centers.

“Innovative approaches to power protection and power distribution are essential to the adoption of intelligent IT infrastructures,” said Paul Perez, vice president of storage, networking, and infrastructure, industry standard servers, with HP. “By working with Eaton we can bring the optimal power solution to the customer using leading capabilities at the room, row, or rack level and combine it with HP’s proven expertise in IT management and cooling.”

How It Works
It’s little surprise that Eaton is promoting a more holistic approach to managing energy. With new technology, the boom of the Internet, and the increased reliance on more sensitive electrical equipment, along with the rise of onsite power generation, reliable and affordable power is more important than ever to the US economy. Consider this statistic: In 1970, electricity accounted for 25% of all the energy used by US residents and businesses, according to the Energy Information Administration of the US Department of Energy.

Today, the department says, that figure is now approaching 40%.

The increasing reliance on electricity means that corporations across the country are spending a significant amount of money each year on power. The Electric Power Research Institute, for example, estimates that a large petrochemical facility may spend from $12 million to $36 million every year on electricity. A retailer with 2,800 store locations, according to the institute, may spend about $35 million each year on utilities.

Given these numbers, it makes sense for companies to search for a better way to manage their electrical systems. Eaton officials say PowerChain Management is this better way. PowerChain Management, they say, can help companies reduce their power problems, and this, in turn, can help them provide better service and keep more of their profits.

“Power problems cause so many problems in manufacturing and other companies. Even a slight interruption can cause serious problems,” Longman says. “They can shorten the life of equipment. They can increase the amount of capital companies have to put into their equipment.”

These are serious issues. Also serious, but not as often considered, are the operational problems power failures cause companies. For instance, power problems at a health care facility may cause X-ray machine images to develop without the proper clarity doctors need. Staffers will then have to reschedule X-ray appointments with all the patients whose images came out blurry or indistinct. This scheduling problem quickly ripples and magnifies, bogging down business for days.

Here’s the surprising stat: While people love to complain about the job public utilities do, a study by Alliant Energy Corp. found that 80% of power disturbances occur within business facilities themselves. Businesses, then, are causing their own power problems because of outdated equipment, materials that are improperly installed, lax monitoring procedures, and a lack of maintenance. These internal failures can prove costly: The Electric Power Research Institute found that a one-second power interruption at a manufacturing plant results in nine full minutes of equipment downtime.

“In more dynamic kind of environments, say a hospital building new wings or a college building new buildings, people are sticking new equipment and electrical service into existing systems. This often ends up creating self-induced problems,” Longman says. “In an attempt to fix one problem, you’ve created a new one. Our whole mantra is that approaching power systems incrementally, by adding pieces here and there without thought to how it impacts the entire system, is really not the right way to go. It’s the way companies have done it historically, but we don’t think it’s the most efficient or effective way to go.”

PowerChain Management is a relatively new idea. Eaton officials, then, will have to work hard to promote it and gain the acceptance of skeptical plant managers and company decision makers. This might prove especially challenging when a Power-Chain Management review recommends that a manufacturer, say, purchase a more expensive piece of equipment that will generate savings down the road. To many managers, and to their higher-ups, this may run counter to their usual insistence that the least-expensive piece of equipment is the best choice.

“There are so many different decision makers and intermediaries in our industry. That’s the real challenge in gaining acceptance for our practices,” Longman says. “It’s a fairly easy sell to the ultimate operator of the power equipment. We can show him directly how our solutions will save money over time. It’s not necessarily as easy to convince a contractor who is working at it up front. It’s not as easy to convince the purchasing agent. The big challenge is to make sure we work together with the people who actually see the benefit to make sure their voices are fully reflected in the construction purchasing decisions.”

The biggest selling point Eaton has are the cost savings PowerChain Management can provide. And reducing the up-front costs of a system installation or upgrade is just the beginning. Well-designed systems cost less to operate and to maintain. And Eaton can provide additional savings through the monitoring services it offers through its PowerChain program.

Eaton officials can set up onsite monitoring services at the companies for which they work. This allows plant managers to keep track on their own of how efficiently their electrical systems are working. It also allows them to spot any potential problems and order fixes for them before they become worse.

Eaton also offers remote monitoring services. In this option, Eaton employees remotely monitor the performance of client power systems.

The monitoring is important not only because it reduces failures and catastrophic problems, but also because it makes repair a quicker process. Say a company’s server shuts down. By monitoring the system, Eaton officials may discover that the reason for the shutdown was that the heat rose too high, shorting out the server.

“The company needs to call in the cooling guy, then, not the server guy,” Longman says. “A huge part of the value today of monitoring lies in quick problem diagnosis, dispatching the right people with the right know-how, and shrinking the time of repair.”

Longman says that as Eaton provides such examples to companies, more will recognize the value of PowerChain Management.

“As more and more people put in more sensitive equipment, they will turn more and more to these kinds of solutions,” he says. “Too often people solve problems by layering solutions upon solutions atop an existing base system. This is like a sedimentary buildup over time. You’d never design the system the way it ends up looking. You’re solving problems only once at a time. You’re not holistically looking at the whole thing.”

Making Retailing More Efficient
Those not convinced yet of the need for PowerChain Management may want to consider the work Eaton recently did with a large retailer.

There’s little question that retailers rely on power to help produce profits. The damage outages can cause to perishable goods alone can prove significant. Retailers, then, who operate without a well-designed and -managed emergency backup power plan do risk major losses.

A large North American retail chain, which did not want to be identified in this story, turned to Eaton to help reduce its risk of power loss. Part of the challenge? Any solutions Eaton’s PowerChain Management team came up with had to be compact enough to fit tight space allocations. A total of 1.5 megawatts of power was required to accommodate the client’s critical loads of refrigeration, emergency lighting, and point-of-sale systems.

Eaton proposed a turnkey system that used a combination of rental and fixed assets. This was important because the retailer wanted Eaton to manage all aspects of the project, freeing the retailer to focus on its core business.

In this case, Eaton developed an Integrated Facility System that brought together the retailer’s switchboards and customer-specific equipment into one
integrated unit. Because all the parts of this unit were pre-wired and pre-tested in the factory, it will run more efficiently and is designed to have a longer life cycle. The pre-assembled system reduced installation time and costs, while its compact size allowed Eaton to install roll-up generators.

Eaton called for mobile generators from one of its strategic partners, Caterpillar. These had a big advantage: They could be deployed quickly to reach the customer’s store locations within hours.

The final element of the new system was Eaton’s Quick Connect interface. When the power goes out, this device makes hookups to backup generators quickly, saving valuable time. This is important, too, because rental generators often take far too long to connect to a facility’s electrical system during power outages.

DAN RAFTER is a technical writer based in Chesterton, IN.

DE - May/June 2006