Step 4 - Feasibility analysis of options

Task 4b: Rank feasible options for implementation

Bengal Fine Ceramics Ltd (Ceramics, Bangladesh)

• Ceramic products go into the oven several times during production and as a result the temperatures inside the plant get very high, especially during summer when there is no cool air coming into the plant. Options to recover heat from the furnaces were given higher priority because in addition to energy savings the working conditions of staff could be drastically improved if the inside temperature would be reduced by several degrees. Even if the option would not be very attractive financially or environmentally, it would have received a high ranking.
  Lesson learnt: It is important to consider other benefits also, such as improved working conditions, because these can be very important to the company resulting in a higher rank.

Yuanping Municipal Chemical Industrial Co. Ltd (Chemicals, China)

• Because this plant produces oxalic acid, staff are exposed on a daily basis to chemicals. Because of this, health is now an important consideration in the ranking of options for implementation. Even if the financial and environmental benefits for certain options are not as good as for the other options, they should still receive a high ranking if they result in a reduced staff exposure to chemicals.
  Lesson learnt: Impacts on staff health and safety should be considered in ranking feasible options.

G-Steel (Iron and steel, Thailand)

• Steel manufacturing generates several types of wastes and emissions in large quantities. The company is also relatively close to residential areas. As a result, environmental permit requirements are quite strict. Because of this compliance with permit conditions, relationships with residents and local authorities were important criteria considered for the evaluation of options and ranking options for implementation. However, only the option that is relevant to the excess environmental permit issue is to be ranked as the top priority. Otherwise, option with the most financial benefit is always ranked top priority .
  Lesson learnt: External factors such as legislative requirements, relationships with government authorities and public image can be important criteria for selecting options for implementation.

Viet Tri Pulp and Paper (Pulp and paper, Vietnam)

• Only low and no cost options with less than a two-year payback time were implemented. The other options with larger investments will be considered for implementation pending funding approval by banks or credit institutions.
  Lesson learnt: Investment costs and payback time are important criteria for ranking options for implementation.

Ha Bac Fertilizer (Chemicals, Vietnam)

• The company’s Director indicated that the profitability of the options in terms of payback (less than 1 year) was the most important selection criterion, and that greenhouse gas emission reductions and technical feasibility were important other criteria. Therefore, the Team focused on getting this information as part of the option evaluation and use it as a basis to rank options for implementation.
  Lesson learnt: A clear understanding of the criteria that top management finds important will make it easier for the Team to rank options for implementation. The profitability and payback period of feasible options are two very important figures that top management will ask for

Other lessons learnt:

• Invite top management to take part of the meeting when you rank feasible options for implementation. Their input at the selection process will save you time in the step 4c and gives management a sense of ownership in the process
• If top management cannot attend a meeting to rank options, they could be consulted about the ranking criteria
• The economic aspect is for most companies the most important when selecting options for implementation: no/low costs, high savings, low payback period
• Government regulations (i.e. environmental, energy, safety, etc.) are also an important external factor that should be considered when ranking options
• Companies may invest if the option is needed to comply with government regulations or permit conditions
• Criteria to rank options will be different from company to company depending on numerous factors, e.g. availability of investment capital, management policies, projects already planned, etc.
• Options with large environmental benefits but with less favorable financial benefits were often ranked lower
• Most companies accept a two to three year payback period for options, provided that the investment costs are not too high