Fortune magazine named Philips CEO Frans van Houten as one of the world’s top 25 ‘eco-innovators’. Here was why:

The Challenge

Amsterdam’s Schiphol Airport, like any other real estate manager, was interested in reducing its utility bill. With lights on 24-7 this could be a big thing. Going to LED lighting would not only substantially reduce the utility bill but would also reduce other costs such as maintenance and inventory of lighting products given the much longer life of LED lighting. But best of all, the savings would be perpetual! But there was significant Capex involved and there were myriad other demands for it.

The Input

Philips, a manufacturer of lighting and other electrical products, was interested in the LED business this would generate and Cofely, an energy services company, would love some demand side management (now called Demand Response) to optimize its load and capex forecast. Philips and Cofely offered Schiphol a deal – “Light as a Service” that Schiphol just could not refuse.

The Output

Philips and Cofely would be jointly responsible for the performance and durability of the system and this included installation, maintenance and ultimately end of life re-use and recycling. Schiphol would only pay for the lux it used and nothing else. Philips will retain ownership of all the equipment and lease it with full service to Schiphol over the life of the contract.

Outcome

By using energy-efficient LEDs, the airport expects to cut its energy consumption in half, compared to a conventional system. Philips also provided low maintenance and more efficient fixtures reducing material costs as well. Schiphol management were happy to bring to its Board, large Opex savings instead of a large Capex request! For Philips and Cofely, the payback was handsome and replicable elsewhere. The Metro in Washington has since also adopted this pay for lux model.

 Sources: Lux Review

Background

An Urban gas and electricity utility was being beset with complaints from their contractors and also home builders in the metropolitan area about the delays and lack of status information on requests for the installation of gas and electricity meters.

The Challenge

The meter installation approval process involved: (1) completing the request form on line; (2) submitting fees, building designs, and other documentation; and (3) waiting for approval – a wait that could take anywhere from four weeks to six months ! There was no easy way to track the progress of the request through the approval process.

The Input

The Utility hired Primitive Logic, a digital transformation consulting firm with experience in the utilities and other industries. Having worked with the Utility before, Primitive Logic was familiar with the Utilities legacy systems and would be able to hit the ground running to more seamlessly and cost effectively integrate any new portal they developed.

The Output

The contractors wanted an online system that would allow the tracking of the status of each request and more clarity on the reasons for and the predicted length of the delays to help them better plan their work schedule. Primitive Logic took time to clarify end-users’ needs and pain points, before designing the portal which included: (i) A Dashboard for all the requests and their status and flags for missing documentations etc.; (ii) A job detail page with the status of each phase ((initiation, planning/engineering, final design, pre-construction, and construction) of the process detailed; (iii) A responsive design across mobile, desktop and tablet since the end users were mostly on site or in transit and needed a mobile first approach. The visual design was consistent with the Utility’s public site to deliver the information users need quickly and efficiently.

The Outcome

In addition to a high level of user satisfaction, there were also significant savings for the contractors with the reduction of uncertainty and avoidable delays (such as due to lack of awareness of missing items and incomplete application information, etc.). Some of these savings are likely to also be reflected in the future bidding by the contractors and builders.

 Sources: 

The Company

United Energy United Energy (UE) is an Australian electricity distributor that owns, operates and maintains the distribution network in its service area and distributes electricity to more than 640,000 customers.

The Challenge

UE’s load profile was experiencing spikes that were costly and difficult to manage technically. Traditional Demand Side Management was not effective. UE needed more of an automated and more creative residential Demand Response solution that would provide the required peak-load shift to enable UE to avoid these costly energy spikes. But the solution needed also to be scalable and cost-effective to implement.

The Input

UE retained Bidgely, a silicon valley startup, focused on Personalize customer engagement and grid modernization for the utilities industry, to provide a solution. Bidgely provided its behavioral DR solution, which communicates personalized DR event messages via mobile push, SMS and email notifications.

The Output

The Bidgely DR solution leveraged elements of gamification to keep consumers engaged and motivated throughout each DR event. The activities included: individualized savings goals based on historic usage; motivational feedback during events; and creative incentives for each hour that the consumer met their usage goal.

The Outcome

Although UE was able to achieve an exceptional 30% peak load shift in Summer 2016, UE and Bidgely were able to further optimize the solution for the Melbourne market, and in 2017, a peak load shift of 40% was achieved.

Sources: Bidgely

Key facts

• Michelin¹ is a global player in mobility and one of the leading tyre manufacturers across the globe.
• Michelin has 107,000 employees and achieved revenues of €21 billion for period ending TTM 6/15 and an EBITDA of €3.4 billion; margins have increased from 13.8% in 2011 to 16.6% TTM 6/15.
• EFFIFUEL™ by Michelin Solutions was the first innovation in the market targeting increased efficiency in fleet fuel consumption.

Uniqueness

• Michelin Solutions makes a contractual agreement to meet pre-defined targets, or otherwise provides a refund in proportion to expenses incurred.
• EFFIFUEL™ is a comprehensive ecosystem that includes sophisticated telematics, training in eco-driving techniques and the EFFITIRES™ optimized tyre management system.
• EFFIFUEL™ provides a “satisfaction or your money back guarantee” by providing the fuel efficiency service risk-free to truckers.

Value

• EFFIFUEL™ encourages careful handling of the truck equipment, leading to extra savings for companies and a potential doubling of pervehicle profits.
• A reduction in fuel consumption of 2.5 litres per 100km represents annual savings of €3,200 for long-haul transport (at least 2.1% reduction in total cost of ownership and 8 tonnes in CO2 emissions).
• Business model shift from selling tyre as a product to a service guaranteeing performance, has helped Michelin achieve higher customer satisfaction, increased loyalty and raised EBITDA margins.

Approach

• Michelin initiated the digital transformation internally, but they soon realized that in some critical areas, such as big data analytics or infrastructure they needed to partner with external experts.
• Cultural change was another prerequisite to successfully manage the digital transformation journey.
• The risk of changing the business model was mitigated since Michelin Solutions was created as a standalone entity and the company decided to test the solution by launching several pilots.

 Sources: Michelin, WEF/Accenture Analysis