DIRECT – Dynamic Industry Resource - Efficiency Calculation Tool

This page is part of the DIRECT Process series of pages. Use the menu below to navigate through the series.

The DIRECT Process

The  DIRECT ( Dynamic Industry Resource Efficiency Calculation Tool ) process is about mapping resources, namely the flow of materials (ingredients packaging and products), water, and energy into and out of a company.

The results of using DIRECT will enable baseline material, water, and energy efficiency to be calculated, and in turn the identification of major losses, wastes, and potential gains that are or could be made across the business. These gains may be made by avoiding losses (such as waste streams), reducing material and energy use and saving the associated business costs (storage, processing, etc.). Innovation by developing and using new processes and technologies will support this resource and energy flow optimisation. This could result in more competitive businesses that innovate to ensure the efficient use of purchased materials, more time for plant and equipment utilisation, more effective use of business capital, less waste, and more efficient delivery of services.

Using the DIRECT Process

The DIRECT Process is separated into a number of steps that in which data is collected and results are analysed. The process is supported by the DIRECT Calculation Module.  Download the module by visiting the Calculation Module page.

The steps in the DIRECT process are:

1. Data collection

Data collection is a three stage process supported by the Calculation Module:
  • Stage 1: Material and energy inputs: The material and energy inputs refer to all the matter and energy flows that are involved with the production of finished goods and services for the company. In Stage 1, inputs are defined and categoried.
  • Stage 2: Material and energy outputs: The material and energy outputs refer to all the matter and energy flows that leave a company facility as a result of the production of finished goods and services. In Stage 2, these outputs are defined and categoried.
  • Stage 3: Business costs: Incuding labour, overheads, facilities related expenses (rent, etc.), energy (gas, electricity, other stationary fuel, etc.), storage (includes freezing), waste collection, and transport. Business costs differ across different companies.

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2. Results and Report

The results provided by Calculation Module have to be interpreted carefully as the accuracy is very dependant to the quality of the weight and cost inventory that has been entered. Results comprise financial, cost-based metrics, as follows:
  • True cost of waste ($)
  • Annual waste removal cost ($)
  • Energy spend as % of operating costs (%, $/$)
  • Material spend as % of annual operating cost (%, $/$)
  • Purchase to disposal ratio (%, $/$)
  • Purchase to estimated true cost of waste ratio (%, $/$)

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3. Hot spot analysis

Once an analysis has been completed using the Calculation Module, the following questions could be used to help identify and prioritise activities to improve resource efficiency:
  • Where are the hot spots, where is the higher potential of improvement, and in which time frame (short, medium, or long term)?
  • At which stage of the process does this change apply: supply chain, production lines, packing line, dispatch activities, etc.?
  • What knowledge or expertise are required to make these changes: technical, business, retail, management, etc.?
  • Who needs to be involved in this change?
  • Who can manage proposed projects, personnel and collaborations to implement required changes within the time frame proposed?

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Next Steps: Review, Benchmark, Improve

Define your strategy to reduce losses and optimise material and energy flows in your business.

After several months, you can start another assessment and observe the changes that occurred due to your strategy and compare your results to previous assessment, then analyse your trends.

After this previous assessments can be revisited to determine your trends, compare the precision and accuracy of your inventory, track the evolution of your resource efficiency score, and follow-up on your strategic plan!