Good water management for profit and performance

Good water management for profit and performance

Water is a vital and scarce resource. Many businesses, particularly in sectors such as manufacturing, mining and agriculture, use water as part of their core output processes. Practically every business relies on water to help maintain them, from flushing toilets to boiling kettles to cleaning services. Water is an inextricable business cost.

Yet when it comes to the management of water, it’s often not treated in that way. To illustrate the point, explained Xylem Africa’s Managing Director, Vincent Chirouze, compare water to electricity:

“Everybody talks about the electricity crisis. The thing about electricity is it’s either there or not. It’s very easy to determine and quantify the amount of electricity you need, its quality and so forth. But water is very different. Everybody seems to be getting access to some type of water, but they often assume the quality and cost is the same, regardless.”

This attitude goes some way to explain why water management is a much lower priority than managing power, rent and other business costs. Nonetheless, companies are noting the importance of looking more closely at water, particularly from a holistic and strategic view.

Water’s new value

The primary reasons for this change include lower operating costs, securing water supplies and ensuring the quality of water. Contrary to how we view clear water as clean water, numerous quality variables impact water’s uses. Water contaminated with heavy metals are unfit for drinking, while saline water is not suitable for crops.

Water is under pressure by growing populations, urbanisation, climate shifts, and changing watersheds. Water is becoming scarcer and more expensive, so a once-abundant vital resource now requires much closer cost- and management scrutiny.

“We have to become smarter about water,” said Govender. “The pressures on water translate into pressures on companies. But this also means that good water management can improve business profit and performance.”

A new approach to water management

Yet many will object: they do manage water. They look at their consumption bills, and they ensure there aren’t leaks on their facility’s pipes. While such actions are commendable and proactive, they only scratch the surface. Effective water management runs a lot deeper.

“A big problem with water is, again, we think of it similar to electricity. The supply and quality are quite stable, so we only look at our consumption. But that approach ignores a lot of cost factors. You never see what we call the ‘true cost of water’.”

For example, you might be pumping water from a private source such as a borehole. But are you factoring in the power consumption or maintenance costs of the pumps? Are you adding in the sustainability of the water source and if you can save money by helping rehabilitate it? How much do you spend on treating that water? Could you save money by recycling water?

Answering such questions can lead to some creative solutions, such as the Thakadu Nickel Purification Plant in South Africa’s North West province. This site reuses crude wastewater from a nearby mine to extract nickel for batteries and other uses.

A full, detailed picture

Companies often treat water too broadly, but also too narrowly. Water costs are often determined at site-specific levels, only focusing on very water-scarce sites. But numerous studies, including work conducted by the US Department of Energy, show that this neglects multiple factors that contribute to water costs and, crucially, negates the need for a company-wide water management strategy. It is telling that most organisations don’t have a dedicated role for water management, even when water is a considerable part of their requirements.

“You should develop a business-wide water management strategy, then focus on site-specific issues. Water is a very integrated resource. You’d be surprised if we showed just how much and where your business uses water. So, you need a detailed picture, but the whole picture.”

Can’t technology help? In this age of digital excellence, won’t a few smart meters do the trick? Chirouze cautions against this kind of thinking. Yes, smart technology is very effective. But technology on its own won’t solve much sustainably. Equating this relationship to a pyramid, he explained:

“Smart technology is the top of the pyramid, and it will collapse if you don’t have all the other layers underneath. We have the technology. We don’t always have the social etiquette, in the sense that people don’t value water. Okay, I’ve got my water, what’s the problem? I don’t care where it’s going to. It’s only when my water stops, then it becomes a problem.”

Fortunately, as is typical with underestimated costs, once you focus on a water management strategy, there are near-term and long-term wins to be had. Major companies that have focused on water have comfortably realised cost reductions of 2 to 3 percent within a year, and even more as they tightened their strategies.

On the one hand, water management is a survival imperative as the resource grows scarcer and less predictable, and demand for it rises. On the other, water is a poorly managed resource that will pay dividends once it’s brought under clear and proactive control. However you look at it, good water management leads to greater profit and performance.