The Israelis are famous for making the desert bloom, and they’ve done it by optimizing scarce resources. Along with conserving water wherever possible, Israel reclaims about 80 percent of its wastewater for agriculture and other purposes—compared to less than 3 percent in the United States. Israel also creates new supplies of fresh water through its world-leading desalination program.
Simple efficiency or essential strategy?
What does Israel’s water problem have to do with your business? Plenty.
Every company, from the largest global corporation to the shop on the corner, faces the same challenge with its daily operations that Israel faces with its perpetual water shortage: ongoing pressure to optimize resources. Companies want to know how to enhance the value and utility they receive from resources that are increasingly scarce or underused, whether it’s because they are less available, more expensive or in greater demand.
The last few years have been hard for many businesses. Operating budgets have declined, focus on corporate citizenship and accountability has increased, and shareholders and directors have called for better management at all organizational levels. As a result, resource optimization has ceased to be primarily a tool to help companies take small steps toward greater efficiency and has become instead a core strategy—one that is critical to the future of business.
How are companies optimizing their resources?
New technologies are providing part of the answer. The Internet of Things (machine-to-machine communication) is making it possible for smart vending machines and refrigerators, and other smart devices, to provide status updates and other business intelligence, making them active participants in the supply chain rather than passive or dormant assets. Other smart devices can cut energy costs and consumption by turning off lights, heat and air conditioning when they’re not required, or irrigating as-needed rather than as-scheduled. Still others can use low-cost sensors to keep track of materials and equipment.
Companies are also looking across the societal landscape and finding inspiration. Businesses like AirBnB that allow individuals to put idle resources to work, and Zipcar that enable more people to share fewer resources and still get maximum value, are providing useful models for many companies.
The same is true of a phenomenon such as the Maker movement, which is disrupting big manufacturing by creating a global cottage industry. Millions of people are setting up workshops in garages, basements and other unused spaces, and then combining new technologies such as 3D printers and laser cutters with traditional skills such as sewing and woodworking to create and sell custom goods.
Looking at this groundswell movement, some businesses are seeing the potential for using technology to create a global network of small work spaces where products can be designed and manufactured to order, thereby reducing inventory costs and streamlining supply lines.
Defining the future of resource optimization
Resource optimization, like business itself, is dynamic. Nothing stays the same for long, so companies are constantly challenged to adapt to an ever-changing world. Yet to succeed, and to ensure the future of the business, it’s a challenge that every company must meet.
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