The bottom line is the final total of an account or balance sheet. In 1994, the bottom line concept was essentially transformed because of the entrepreneur and business writer John Elkington. The triple bottom line was coined. The three bottom lines (Profit, People, and Planet) harmonise seamlessly with ESG (Environmental, Social, and Governance) that the corporates are coping with nowadays.
If the corporates do not look into the triple bottom line, they will be noted as obsolete. They may fall into a reputational crisis when they do not act on it. The operational practice mirrors the actual value they hold. Profit is straightforward to quantify as it is numerical. What about the intangible people and planet that seem not initiatively be compatible in the accounting? The far-reaching environmental and social impacts ironically shorten the sight into the business resolutions. It matters to sustainability, and this is the total cost of doing business, after all.
It is tricky to measure and communicate solidly for something uncertain. Standards are established to guide sustainability performance with a KPI set. It highly concerns stakeholders the business would affect. The corporates should get the KPIs managed with authentic actions.
What move could the corporates take to demonstrate their authentic selves?
When involving people, preventive maintenance will significantly change the course, and the result can be observed in the accounting – Total recordable incident rate (TRIR) and fatality rate for direct employees and contract employees.
Preventive maintenance is the systematic approach the owners take to protect the stakeholders from catastrophic operation failures in a precautionary way. The process entails routine inspections, maintenance, and repairs on assets. Not at the time when it breaks, but before it reaches its expiry.
In the building aspect, asset deterioration means a shorter building life expectancy and an unfriendly environment for tenants. In a factory area, machinery failure causes operation discontinuity; and affects operability and profitability. If corporates can predict the breakdown and act on it before, they will avoid vital loss on the asset, people, and eventually businesses. When the failure happens on consumer commodities, the prevention measures become more evident because the potential casualty points to productivity, safety, and reputation issues.
The above vivid revelations turn the triple bottom line apparent and the need for inspection, detection, correction, and prevention. These proactive procedures diminish the asset depreciation rate and extend the life of the assets, which would be exposed in the monetary term—notably, the financial consequence resulting from legal proceedings associated with defect- and safety-related incidents.
Our prime case study of the predictive maintenance using the acoustic camera to detect the flaws conceivably provoking derailment has shown us that the manual cost is 1.3 times higher than the predictive-maintenance-with-IoT cost. It is over 95% of accuracy to pick up the defect wheel of Rolling Stock. In worldwide, McKinsey once estimated the global rail maintenance market to be about EUR 50 billion per year. Among which, 25% efficiency is lost due to inefficient, unreliable predictive condition-based maintenance. SMRT’s 2016 annual report unveiled the number of rail maintenance staff by almost a quarter since 2013. Nearly half of the rail revenue was spent on maintenance-related tasks, rising by $18.0 million or 14.8% to $139.9 million, associated mainly with the strict maintenance regime for the ageing network and more trains scheduled overhaul, maintenance work.
Put yourself into the shoes of other infrastructure industries; when the asset size grows with extended operation hours, the duration between each checking for the same asset set also doubles. The preventive maintenance practice identifies a potential problem without interrupting regular operation. The method can reduce the number of breakdowns, unplanned maintenance, and the required level of reserve asset capacity. Once any irregularities have been detected, the department in charge will receive an alert, and hence they can follow-up action and repair the assets immediately to minimize accidents. It helps enhance the company’s corporate image by promising stakeholders and employees safety and customer services. Since the preventive maintenance is non-intrusive, i.e., being monitored and analysed in real-time, interruption to the regular operation remains ultimately minimal.
Maintenance is one of the value chains to support the corporate’s market status and customer service commitment. The predictive maintenance on the railway has reached tangible benefits – enhance the passenger safety, the feasibility of maintenance schedule of rolling stock, and the accuracy of maintenance checking. The performance can be seen in corporate’s integrated reporting. It is time to consider the transformative predictive maintenance approach for your assets.
By: ANewR Consulting Limited, a digital environmental consultant headquartered in Hong Kong since 2008. Our expertise has grown into the context of air and water qualities, noise, green building, waste management, and remediation. With extensive know-how in environmental planning and assessment, feasibility study and policy review, ecological design, monitoring, and audit (EM&A), ANewR has matured to be a leading management consultancy. Standing in the digital transformation reign, ANewR has participated in various environmental digital projects – interactive 3D visualisation, immersive automation virtual environment, Virtual reality, automation system, and monitoring platforms.
(Website: https://anewr.com, LinkedIn: ANewR Consulting Group, Twitter: ANewR – Everyday Newer, YouTube: https://www.youtube.com/channel/UCnpvmxnR9hbNxytSfBdfV8Q/videos)