1. 22 February 2012
Cost Take Out for NASA’s
Infrastructure Portfolio
Controlling Costs of Inner Space to Increase Funds
Available for Outer Space
Bob St. Thomas
IBM Global Business Services © 2012 IBM Corporation

2. Building a Smarter Planet
Cost Reduction is a Complex Mission
Cost reduction is a mission with no shrink wrap solution.
It’s people, processes, technology, physics, and
analytics that require close attention to detail
continuously throughout the life of the cost reduction
mission to ensure success.
2

3. Building a Smarter Planet
At Home, Would You…
 Leave your car running all night in case you might need to run to
the store for milk/bread?
 Keep your oven at 350F night and day in case one of your kids
wanted to cook pizza?
 Run your air conditioner and heater at the same time all year?
 Operate 3 chillers when two are sufficient for your building?
 Tolerate an electrical load every night of 70% of your daytime
peak?
All too often, Companies and Agencies do these things either
deliberately or unconsciously. Either way, they waste money that
could be put to use in other mission areas.
3

4. Building a Smarter Planet
Possible Causes of Excess Infrastructure Costs
 Multiple contracts and or conflicting procurement terms
 Excess facility space due to mission changes
 Duplication of effort or lack of shared services between programs
 Managing facility operations and energy reductions
independently
 Maintaining a culture of consumption vs. one of conservation
 Lack of information from available data to drive change
 Addressing the problem tactically vs. strategically
4

5. Building a Smarter Planet
Proposed Mission: Reducing NASA’s Infrastructure Costs
Challenges Faced by Real Estate Executives
Step 1. Right Size Your Internal Space
Step 2. Energize Your Workforce
Step 3. Listen to Your Buildings
Step 4. Apply Analytics to Support Your Decision Processes
5

6. Building a Smarter Planet
Real Estate Executive Challenges
Key Responsibilities:
3. A Safe and Reliable Workplace
Manufacturing Offices Data Centers
1. Provided at the Lowest Possible Cost
Space Energy Facilities Operations
6

7. Building a Smarter Planet
Proposed Mission: Reducing NASA’s Infrastructure Costs
Challenges Faced by Real Estate Executives
Step 1. Right Size Your Internal Space
Step 2. Energize Your Workforce
Step 3. Listen to Your Buildings
Step 4. Apply Analytics to Support Your Decision Processes
7

8. Building a Smarter Planet
Typical Real Estate Portfolio Cost Profile
Space (Rent, Depreciation, Taxes and Insurance)
~55%
Energy and Fac. Ops covers 40% of total cost
~20% Facilities Operations (Grounds, Housekeeping, Equipment)
~20% Energy (Electricity, Natural Gas, Fuel Oil)
~5% Other
8

9. Building a Smarter Planet
Typical Real Estate Portfolio Cost Profile
Space (Rent, Depreciation, Taxes and Insurance)
~55%
However, 95% of cost is space-driven.
~20% Facilities Operations (Grounds, Housekeeping, Equipment)
~20% Energy (Electricity, Natural Gas, Fuel Oil)
~5% Other
The Most Efficient NASA Building is the One You No Longer Have
9

10. Building a Smarter Planet
First Challenge: Organizational Alignment
Chairman, President & CEO
Sr. VP, CFO
VP Controller
VP Global Real Estate Operations
U.S./Japan Europe/Research LA/Canada Asia Pacific Construction/
Engineering
Global Energy / IT Leasing Space Asset Workplace
Management Standards
 Can They Do:  Key Challenges:
 Space/Lease Management?  Changing Mission and Budgets
 Facilities Operations?  Legacy-Owned Assets
 Energy Management?  Rising Energy Rates
 Environmental Compliance?  Aggressive Environmental Agenda
 Design and Construction?  Enterprise Integration Across NASA
10

11. Building a Smarter Planet
Second Challenge: Disparate Data Sources
Security
Badge In Data
Population and Energy
Workplace Usage/
Indicators Cost
Centralized
 Visualize opportunities
Energy
Lease Data Global Anomaly
Data Warehouse Data
BMS
 Prioritize
Conservation
Equipment
Tracking
Performance
Track  Assign resources Orders
Work
Data Center
Reliability
Track
Construction
 Invest for best return
Facilities
Maintenance
Spend Cost
11

12. Building a Smarter Planet
Continuously Attack the Cost Problem in Two Dimensions
 Strategic Optimization – Global Portfolio Analysis
• Aggregation of Key Global Indicators:
•
Lease Information
•
Space Utilization
•
Energy Usage and Conservation
•
Work Order History
•
Supplier Performance
• Drives resource and investment prioritization: Higher efficiency and effectiveness
 Building Optimization – Individual Building Performance
• Focus on building efficiency through visibility to operating anomalies
• Software integrated with building systems to report:
• Ambient conditions
• Equipment malfunctions
• Set point deviations
• Real-time demand for water, HVAC and lighting
• Automated response to improve building efficiency, reduce Co2 emissions, and
improve reliability
12

13. Building a Smarter Planet
Tool Set for Rightsizing Space and Infrastructure
Many tools are available for spot improvements, but for reducing
Infrastructure costs, the following portfolio of specific capabilities is helpful
Infrastructure Cost Reduction Portfolio
Enterprise Integrated Workplace Real-Time
Asset Building
Management Management Systems
Commissioning
• Real time
• Preventive operations
maintenance and energy
Space and Energy and Real Estate monitoring
• Work mgmt Capital Project
Facilities Environment Portfolio • Real-time
Sustainability Management
• Inventory Management Management analytics
mgmt • Event
correlation
13

14. Building a Smarter Planet
Proposed Mission: Reducing NASA’s Infrastructure Costs
Challenges Faced by Real Estate Executives
Step 1. Right Size Your Internal Space
Step 2. Energize Your Workforce
Step 3. Listen to Your Buildings
Step 4. Apply Analytics to Support Your Decision Processes
14

15. Building a Smarter Planet
Sample Architecture Supporting Workforce Energy Management
Employee Continuous Level 5
Involvement Improvement Cultural
Awareness
Building Systems Level 4
Energy Efficiency Peak Power Intelligence
Optimization Models Program Performance
Management Analytics
Enterprise Statistical Dashboards
Asset Management Process
Control
Historian Server
Data System Integration and Data Aggregation System Level 3
Mining Information
Correlation
Power Paging
Monitoring Communication Networks
Server
Server
Alarms System Dashboards – SCADA – Nodes – – – Real-Time Monitoring Level 2
Data
Communication Drivers
Admin PLC
Server
Level
Management
PLC Controllers Server 1
Control
Sensors, Actuators, and Equipment Level 0
15
Physical

16. Building a Smarter Planet
Center of Excellence for Enterprise Operations
Energy Management Results
Quality: Conform to SEMI F47 Standard and strive for zero
impact due to Power Quality Issues to Manufacturing Process
Fuel Usage
Reliability: Zero manufacturing down time/Continuous Rates: +30% since 2001
Operations
Usage: -21% since 2001
Cost: Sustained 4% Reduction per year: Overall $10M Saved
Fuel Usage vs. Fuel Rates Electricity Usage vs. Electricity Rates Electricity Usage
1200 12 600 0.090
2010 Fuel Cost:
Rates: +19% since 2001
2010 Electricity Cost:
$5,000,000 $35,000,000
1100 10 Usage: -21% since 2001
550 0.080
KiloWatt-hour (x 1,000,000)
1000 8
Plant Capability
MMBTU (x 1,000)
$ / MMBTU
$ / kWh
500 0.070
900 6
Up >30% Since 2001
450 0.060
800 4
700 2 400 0.050
2001 2002 20032004 2005 2006 2007 20082009 2010 2001200220032004200520062007200820092010
Electricity Usage Electricity Rate
Fuel Usage Fuel Rate
16

17. Building a Smarter Planet
Enterprise and Site Energy Programs
 Leadership Commitment
• Agency Standards (Green House Gas and Energy)
• Site Commitment and Site Location Executive (SLE)
Expectation
• Site-to-Site sharing, Industry Communication
Leader Commitment
 Manufacturing Programs
• Lean Manufacturing
• Technology Advancements
Ma rogra
Aff atory
nuf
Employee Participation
P

airs
gul
act s
• Continuous Improvement Culture
Re
urin
m
• Brainstorm with everyone Comprehensive
g
• Continuous Communication Energy Program

‘Straight Talk’ About Energy Impacts
• Recognition and Fun
 Operational Improvements
• Continuous Review of How we work O
Im per e
pr at ye ion
• Manufacturing Process Changes ov ion
em al plo at
Regulatory Affairs en Em ticip

r
• Strong Communication Network
ts Pa
• Workshop Participation 17

18. Building a Smarter Planet
One Methodology Has Six Main Steps and Draws
Heavily from a Typical Six Sigma Methodology
Brainstorming Feasibility and
Consistent Process Solution Performance Reporting and
and Solution Economics
Process Initialization Deployment Monitoring Feedback
Ideation Review
Monitoring Process Leadership
Appropriate
Support
 Technology
 Automation
 Organization
 To capture the continuous stream of opportunities that can be accessed,
Agencies need a consistent, repeatable methodology
18

19. Building a Smarter Planet
Step 1: Establish and Deploy Goals
Share of Energy and Water Consumption
  Look at consumption of functions by share
 Assign targets based on share and historical ability to Initializing the process
meet goals by setting goals and a
 Usage and financial targets
budget is important:
• Goals set team
Investment Budget for Conservation objectives and should
  Assuming 12- to 18-month returns, how much money is
the enterprise allocating for conservation
be realistic with a
stretch
• Budgets assure
participants that good

Economic and Regulatory Review
ideas will get funded
 Review initiatives, special offers, and other incentives and executed – key to
from local utilities and regulators that may shape maintaining employee
decisions and ROI analyses
support
19

20. Building a Smarter Planet
Step 2: Idea Generation
Brainstorming runs across team …it is also very data-rich, with lots of materials
boundaries and include the most prepared in advance to help users focus on best
senior and junior staff… opportunity areas. Operating Costs By Tool Type
Facilities Annual
$4
Annual Operating Cost by Tool Type
NITROGEN DI WATER EXHAUST ELECTRIC
45
$3
Millions 92 Number of tools/type
$2
55
35
$1 15 34 56
10 45
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 A “library” of idea generation methods for energy continues to grow and is a key element of
the long-term success of an energy conservation program
20

21. Building a Smarter Planet
Step 3: Idea Evaluation and Prioritization
Ideas from brainstorming sessions and Review regulatory and utility programs for
users are logged in the productivity opportunities for subsidies or additional
system benefits
Productivity Opportunities System
     ‘
Review and validate the opportunity
Ideas that are viable are
reviewed together against the
Ideas are routed to appropriate SMEs for budget and prioritized
review and analysis
Idea prioritization and selection is based on “Big Picture” reviews.
This includes assessing business benefit, client value, risk, energy conservation and ROI.
21

22. Building a Smarter Planet
Step 4: Implement
Prior to deployment, benchmarks IBM has a core and extended team that manages
are taken of baseline state implementation of successful ideas
Core team Environment
Baseline energy Manager
consumption
Waste Energy Water
Treatment Management Management
Baseline water
consumption
High
Construction Extended Team
External to IBM, Voltage
Contracted as needed
Look at both the micro level (per
machine, for example) as well as HVAC Chemical Process and
the macro level – such as total Team Engineering Tooling
consumption in the building.
Can implement over 100 ideas a year; 75% cost very little to implement. 22

23. Building a Smarter Planet
Step 5: Monitor – Meters Matter!
Equipment Metering
• Look at equipment before and after, and check Smart Grid in Action
energy consumption and process performance
• Meters Matter!
Validate results
Building Metering with meter readings
• Look at total building consumption to make sure • Allows comparison
that decreases in one area are not being offset
by increases in another area of actual results to
analysis
calculations
Customer Feedback
• Validate that impact of changes does not disrupt
usability or output to an unacceptable level
23

24. Building a Smarter Planet
Step 6: Report Results and Provide Feedback to
Management
Building 963 CUP
 To assess success or
failure, track detailed
400,000 200%
2005 2006 2007 2007/2006
measurements and
300,000
compare year-on-year
150% performance across
Daily Electr ic Consum ption in KWH
major equipment,
Year To Year Change in %
200,000 buildings and other
high consumers
93% 95% 100%
100,000
88% 89%  Also look at
performance that is
seasonally adjusted
0 50%
and also compare
ne
r il
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ly
h
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r
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r
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times of peak demand
ry
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24

25. Building a Smarter Planet
Sample Workforce Feedback: B963/B971 Central Utility Plant
Average Daily Electricity Usage (Kwh)
350000
Electricity Consumption (kWh / day)
300000
Our efforts saved enough energy to
power 650 homes for one year!
250000
2009
200000
Winter Free-Cooling
Results
150000
100000
50000
Electricity: 4,866,440 kWh Savings: $390,000.00
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
October Savings: 550,300 kWh / $45,000.00 2009 2008
November Savings: 787,500 kWh / $63,000.00
December Savings: 1,373,300 kWh / $109,865.00 CONGRATULATIONS!
YOU MADE A DIFFERENCE! 25

26. Building a Smarter Planet
Proposed Mission: Reducing NASA’s Infrastructure Costs
Challenges Faced by Real Estate Executives
Step 1. Right Size Your Internal Space
Step 2. Energize Your Workforce
Step 3. Listen to Your Buildings
Step 4. Apply Analytics to Support Your Decision Processes
26

27. Building a Smarter Planet
Buildings That Recommission Themselves Continuously –
Real Time
Interconnected building management systems with
advanced analytic capabilities allow them to act
intelligently, and continuously report on their operating
conditions to building managers, Site and Agency
Directors.
Adding configurable dashboards and use of mash-up
technologies allow tailoring to specific missions and
building use cases, and enable maintenance and
tenant workers to take action and modify behaviors.
27

28. Building a Smarter Planet
A Navy View of Smarter Buildings
Smarter Buildings are well managed integrated physical and digital infrastructures that provide optimal Navy Feeder
occupancy services in a reliable, cost-effective, and energy-efficient manner Systems
• Weather from C2 Suite
Portfolio Water Energy Elevators • Metering with AMI
Estates Mgmt Smart Meters, Smart Meters, Maintenance,
Use/Flow Demand Performance Weather
• HVAC Control/
Sensing Response
Current
Monitoring from ICS
Asset Mgmt Fire Predictions • Fire Alarm Data from
Life Cycle Functionality NERMS
Checks, HVAC
Detector Service Fans, Variable
• Lighting Control from ICS
Energy Use Air Volume, Air • Local Utility Control with
Passive/Active
Emergency
Quality
Services SCADA
Alerts, Actions • Security System
Building
Analytics and Optimization
Services Interface with Enabler
and NERMS
External Integration
Maintenance
Utilities • Digital Video with VPMS
Occupancy Demand Mgmt,
Space Mgmt • Intrusion Detection with
Cost Control
PACs and VPMS
Tenant • Energy Information
Services Management with
Help Desk Lighting Community Circuits
Occupancy
Sensing Services • Work Management with
Waste Mgmt Access/Security Transportation,
Trash/Water/Recycle Badge in, Single Platform MAXIMO
Cameras, Traffic, Events • GIS Display/Control with
24/7 Monitoring Integration
Compliance Perimeter, Doors,
OGC and RSIMS
Condition Monitoring,
Environmental Reports
Parking Lot Utilization Floors, Occupancy Commercial • Mass Notification Ad Hoc
Potential
Industry Specific Voice/Video/Data Advertisement
Hospital, Hotel, etc.
Integrated Building and Communications Services
28 28

29. Building a Smarter Planet
Smarter Building Benefits: A “Well Managed” Savings
Profile*
Areas of Maintenance Savings
• Root Cause Identification
New Information • Fewer Total Customer Calls
Drives Energy • Reduced PMs
Savings and More
Work Orders
*At less tightly managed sites, Ops and Energy savings can exceed 30%
n 1 2 3 4 5 6 7 8 9
tio d d d d d d d d d
nt
a rio rio rio rio rio rio rio rio rio
e Pe Pe Pe Pe Pe Pe Pe Pe Pe
em
pl
Im
Baseline Energy Maint. Activity
29

30. Building a Smarter Planet
Key Data Required
 Assess data availability of maintenance costs. Can you measure:
• Labor/Materials/Subcontracted?
• Percentage of each element of the total?
 Does your Agency use a Work Order logistic system?
 Is a standardized Preventive Maintenance program in place?
 Do the maintenance techs record hours/cost against Work Orders?
 What level of data is tracked?
• How is it categorized?
• How much history is sufficient?
 Build credibility across your site using data from an initial pilot
30

31. Building a Smarter Planet
Where to Start? Typical Energy Drivers By Cluster
(Based on IBM Data)
Clusters
Data Office Labs and
Energy Drivers Manufacturing
Centers Spaces Research
Total Spend
HVAC 20 % 10 % 50 % 30 % 27 %
Data Center Equipment --- 65 % --- 25 % 22 %
Central Utility Plant (CUP) 25 % 20 % --- 20 % 16 %
Manufacturing Processes
45 % --- --- --- 14 %
and Tools
Lighting 10 % 5% 25 % 10 % 13 %
Plug Load --- --- 25 % 15 % 8%
Total Spend 30 % 28 % 28 % 13 % 100%
31

32. Building a Smarter Planet
Work Order Hours Analysis by Equipment Class
All Other Classes
Shop Equip
Plum bing
Fans
CRAC
Fire Prot. Alarm
Manual Door
Kitchen
Electric LV
Pum p
Determine Number of Hours
Com p. Air
Covered
Chiller
Condensate Rec.
Rest Room
Architectual
Lighting
AHU
WO Hours
Initial Analytic Opportunity
(IBM Relative Data)
32

33. Building a Smarter Planet
IBM Cost Reduction Results at One Site: 8% Energy Savings
Energy Consumption Exceeds Spec
Equipment Not on Automatic Schedule
2.5% Savings
2% Savings
KWH Usage
KWH Usage
00
00
00
00
00
:00
:00
:00
:00
:00
:00
:00
00
00
00
00
00
0
0
0
0
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:0
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:0
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:0
:0
1:
3:
5:
7:
9:
11
13
15
17
19
21
23
9:
1:
3:
5:
7:
17
19
21
11
13
15
23
Unit Performance Operational Schedule Unit Performance Operational Baseline
Steam Leak
Dual Energy Savings Opportunity
Identified by Analytics
Chilled Water and Steam
AHU Air Flow Temp. Delta
15
3.5% Savings
5
-5
-15
-25
-35
00
00
00
00
00
00
00
00
00
0
0
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9:
1:
6:
7:
11
12
13
14
17
18
19
20
23
10
15
16
21
22
Actual Normal Operation
33

34. Building a Smarter Planet
Sample Smarter Building Equipment Work Order Savings
Work Order # and Hours Average Hours Per WO
200%
- 34%
150%
100% Ave Hr/WO
50%
Baseline 0% - 16%
Pre IIBM Post IIBM
Prior Yr Qtrly Q410 Q111 Q211 Q311 Q411
ave
-50%
Compounding Productivity Impact
-100%
2) 16% Reduction in # of Work Orders
# of WO WO Hours
3) 34% Productivity in Remaining WO
34 34

35. Building a Smarter Planet
Other Areas of Opportunity to Consider
All Other Classes
Shop Equip
Plum bing
Fans
CRAC
Future Savings Opportunities
Fire Prot. Alarm
driven by:
Manual Door • New Rules
Kitchen • Wireless Sensors
Electric LV
Pum p
Com p. Air
Chiller
Condensate Rec.
Rest Room
Architectual
Lighting
AHU
WO Hours
Expanded Smart Building Analytic Opportunity / 30% of Total Work Order Hours
35

36. Building a Smarter Planet
Proposed Mission: Reducing NASA’s Infrastructure Costs
Challenges Faced by Real Estate Executives
Step 1. Right Size Your Internal Space
Step 2. Energize Your Workforce
Step 3. Listen to Your Buildings
Step 4. Apply Analytics to Support Your Decision Processes
36

37. Building a Smarter Planet
Analytics Landscape for Decision Support of Cost Take Out
Stochastic Optimization How can we achieve the best outcome
including the effects of variability?
Prescriptive
Optimization How can we achieve the best
outcome?
Predictive modeling What will happen next if?
Degree of Capability
Forecasting What if these trends continue?
Predictive
Simulation What could happen…?
Alerts What actions are needed?
Query/drill down What exactly is the problem?
Ad hoc reporting How many, how often, where?
Descriptive
Standard Reporting What happened?
Degree of Complexity
Based on: Competing on Analytics, Davenport and Harris, 2007
37

38. Building a Smarter Planet
Energy Program Idea Evolution – Crawl, Walk, Run!
Procedures Controls Technology Prototype
(change what you do) (control how you do it) (change the resource) (new generation)
Equipment On/Off Motion Sensors Belzona Pump Free Cooling
Schedule Coating System
Automated Lights On/
Utilize Inbound Water Off Ultrapure H20 High-Efficiency
Pressure Membrane Chiller
Vending-Misers
Tester Idle Program Solid-State Chillers
Variable Frequency
Exhaust Balancing Drives Upgrade Lights T12 to
Cost of Ideas
Reviews T8 to LED
RF Generator Controls
Load Reductions
Digital Control
Conversions
Idea Advancement 38

39. Building a Smarter Planet
Decision Trees for Proven Energy Initiatives
Demand Side Easier Supply Side
 Partnering with Internal Users  Supplier Relations
 Change Set Points  Risk Management
 Efficient Lighting
 Motion sensors, Lighting Controls
 Centralized Purchasing
 Outside Air Rebalance  Daily Market Analysis
 Compressed Air Leak Surveys  Financial Derivatives
 Controls Upgrades  Physical Collars
 DC Air Flow Management  Demand Response
 HVAC Recommissioning
 Variable Speed Drives
 Rate Case Interventions
 DC Server Virtualization  Utility Negotiations
 Schedule Changes  Comprehensive Purchasing Strategy
 Boiler Rebuilds  Renewable Energy
 Energy Efficient Motors  Regional Policy Issues
 Free Cooling
 Chiller Replacements
But how do these stack up
Harder in ROI for Base Ops?
39

40. Building a Smarter Planet
Manual Decision Support Matrix
Cost
RS5: Renewable Energy (ROI %)
last RD13: DC Air Flow Management (ROI %)
RD6: HVAC Re-commissioning (ROI %)
RS10: Financial Derivatives (ROI %) RD5: DC Server Virtualization (ROI %)
RD12: Energy Efficient Motors (ROI %)
RS4: Physical Collars (ROI %)
RD4: Boiler Rebuilds (ROI %)
Impact
RS6: Risk Management (ROI %) RD11: Motion sensors, Lighting Controls (ROI %)
RD10: Efficient Lighting (ROI %) RD3: Variable Speed Drives (ROI %)
RS7: Regional Policy Issues (ROI %) RD2: Controls Upgrades (ROI %)
RD9: Compressed Air Leak Surveys (ROI %) RS3: Comprehensive Purchasing Strategy (ROI %)
RD8: Outside Air Re-balance (ROI %)
RS8: Daily Market Analysis (ROI %) RS2: Centralized Purchasing (ROI %)
RS9: Rate Case Interventions (ROI %) RS1: Supplier Relations
RD1: Partnering with Internal Users (ROI %)
RD7: Change Set Points (ROI %)
Start
Supply Initiative
Demand Initiative (savings generated may be used to fund
other high ROI projects) 40