How to Reduce Business Costs by Solving the Right Problems - Dave Oakes

Phil: Dave, welcome to the What One Thing podcast. To start off with, just give us a little bit of background if you will do about yourself, please.

Dave Oakes: Well. Thanks very much, Phil. Thanks very much, Hayley. Lovely to see you. Delighted to be on here. So Dave Oakes, I'm the CEO of Power Technology, a Midlands based technology company. There's a bit of a clue in the name. And at its simplest, we make it easy and affordable for businesses to get useful data out of sensors and machines, move it securely, and turn that into better decisions. So what we're doing is bringing the real world and the digital world together. So bridging. OT with Piety. I was on a podcast recording a couple of weeks ago and they threw me a few curveball questions that I wasn't expecting and one was, please can you describe your business in four words? So, that's tough but I managed to stall for time and I managed to come up with connecting assets providing insight. that's it.

Phil: What led you towards your what one thing, Dave? What were the circumstances or what happened before that Eureka moment?

Dave Oakes: I'm sort of a my background is more technology and I've spent a good chunk of my working life being really really proud of the widgets and software and going who wants to buy this this shiny new thing and isn't it lovely and walking around with my head held high and it's taken me quite a long time to realize that talking about the technology doesn't Really? help you sell that many units, that people don't need the technology, they need the problem solving or that they've got a situation that they need to address. So it's been, I would say, 35 years with the ballooning and a bit of coaching from those outside to sort of change the way that I and our business talk about ourselves and think of things from our customers perspective rather than our perspective and what I would do with a box. a good day.

Phil: Beautiful. And so Dave, drum roll please, what is your what one thing?

Dave Oakes: My what one thing is. Start with the problem, not the technology.

Phil: think that that's phenomenal and also really tricky. So when you say start with the problem, start me off with how we identify a problem. What what are we looking for? What do we feel? What do we see to get to that problem? Because often as business owners we think everything's running smooth, otherwise we'd have fixed it.

Dave Oakes: I think we've all seen businesses buy technology and then look for a problem to apply to. We're all guilty of that and probably not just in business, we probably do it at home as well and let's have that new shiny thing and we're just taking it out. But the best projects start the other way around. looking for issues across that facility. We're talking very generally, there's all sorts of, that the audience are gonna have different situations, you ask questions to clients like, what don't you currently know about your operation? What decisions are you making that are based on assumptions rather than facts? What costs do you simply accept because you can't currently see them? And if you have better information tomorrow, a morning what decision would you make?

Hayley: From your experience, Dave, what's some of the biggest problems that you've come across in your time?

Dave Oakes: And one at the moment that's very prevalent is I don't know where my energy's going or really my energy bills are getting bigger and bigger and bigger. I don't know how to get the energy control. facing rising electricity bills, bills. if you're pumping water, collecting water, know, compressed air, et cetera, et cetera. Everybody's, most businesses have got sustainability targets to achieve. I'll put my teeth back in and try and say that again. And, you know, always there's a pressure to reduce your operating costs. know, the CFO wants to improve the margins. You've got your competitors, know, with race. on price and energy has been dominant for a long time but it's overwhelmingly dominant over the last 12 or 13 months.

Hayley: I do think it's only going one way despite what you may hear or may read but I think that's the reality with all of the targets that they're putting in. The infrastructure costs are just too big to not to help reduce it down for everybody else. I just don't think it's going to happen. Is that something, so obviously energy is very prevalent in the media and the world. People have been talking about rising cost of it for a long time, but how did you identify that in your business? you, is there a process that you go through to do that? Is it just suddenly they were jumping up? Are you very on top of your finances within the business? And it was just an obvious, an obvious increase in cost.

Dave Oakes: This is more about our clients because of the services we provide we can make that that we can give them visibility to where their energy is going. We can tell them which machines are consuming the most energy. We can see which assets are running the necessary. You know what's being left on overnight. which sites or which machines are least efficient. If you've got two identical machines and one's using more energy than the other, then why? There's a reason. Let's get to the bottom of that reason. other utilities, so water, gas, compressed air, do you know where the leaks are? You know, these are all questions that over time our customers have identified to us and said that these are the problems we're facing and you help us. You're undertaking an improvement project, but unless you've got a baseline, you don't know if you're actually delivering the savings. So how do you, if you don't measure it, if you don't monitor it, can't control it and you can't reduce consumption until you see where it's being consumed.

Hayley: Do think there are a lot of people out there that just the costs of energy are going up and they can see it through their P &L, but they actually don't know what to do about it. They don't know where to start with it. Do you think that's a big problem with businesses?

Dave Oakes: huge problem. We've engaged with a very, very large... 300 sites across the UK. They have electricity bills from the single side of the UK alongside the 10 million pounds. large facilities. We've got machines that have a motor or whatever, a compressor that's just brilliant 24x7 and they have no idea what's going on at what. But on top of that... They'll have three-phase motors where they're out of balance. They'll have dodgy neutrals. they're getting hit because the power factor. I never knew this, if you're a large user of electricity, your electricity supplier knows. If you're pulling the power factor down, you pay a premium for electric. you see it on electricity bill. How many people know to go look at electricity bill? that's possibly an extra whatever. Right. They're not acting like they're quick. And what we're seeing is because we've got the, you know, the reporting and sustainability goals for 2030, that people are starting to go, I must do something. And then they start to do something. Crikey. I think people do see that electric bills go down. In the first 12 months, 20-30 %

Phil: think this leads we had a podcast a few weeks ago with Mark McCard when we talked about chart of accounts and we talked about getting really granular with our costs and with our expenses. And I think this very much leads along those lines. So we know that we've got a big energy bill. So now I think almost the question you're saying is we ask ourselves how granular can we get with that energy bill? Because we know the factory costs X pounds to run per hour, but do we actually know which Part of the factory is is producing that cost. And then I suppose the next question is: should we know? And you can bring that out to everything. You know, the prost the cost of glue sticks, the cost of whatever it is, do we know where? Or do we just know that this is an overall cost? And for me, what the the scarecard, I suppose, is that we get a lot of people, especially with AI at the moment. Phil, we're gonna solve Phil forty percent of your problems. We're gonna give you forty percent more time with AI, and you're thinking, okay, I've got an upfront cost of ten K, twenty K, whatever it is, I don't know that that's gonna give me that forty percent saving. That's where my scare is. How can we do a bit of kind of pre work, or is there a way we can do that pre work to find out if this is gonna be a worthwhile project?

Dave Oakes: First of all look at situations in similar businesses. years and years of exposure to this kind of data. And we know what others can do and what others have achieved. But don't need to go in with both feet. You can start with a simple understanding, you know, a small investment. Don't just all of a sudden go, right, let's meter up every machine. Let's just start by going, right, let's break the factory down into four, six, eight blocks and just see where stuff is going and start. And then you go, okay. And then you can follow that consumption. and you can go, this is what I've learnt. It might be something as simple as teaching people to switch the lights on or having... the motor start and stop when the machine is actually running rather than it running 24 hours a day. see it in so many situations. You go past the conveyor belt that's just running or the inquiries, it's terrible how you see motors and machines just left churning away all day long with absolutely no throughput going on. for relatively small investment, you can start to get a lot of visibility on your assets. And once you get, get some momentum and start to realise that okay start small, build confidence, make sure the kit works, make sure you're to get benefits and then you can start to drill down into better granularity.

Phil: I really like that quarry example because I think that gives I'm very actionable. I think that gives a great actionable so one, we've got that chart of accounts and we can see our energy bills high, but we're not sure where that energy bill is going. And two, it's literally, well, let's have a quick walk round the factory. Let's see what's switched on, what's running, and are we using it? And it's just asking that question, isn't it? Not aggressively, not cut, you know, but just getting that understanding of this machine's turned on, why is it turned on? Well, we can't switch it off. Okay, question mark in my mind now, how much does this machine cost? Is there a start stop technology? Is that the way that you'd advise business owners to be going about this table, or is there a better

Dave Oakes: Absolutely, that's a very good way to be going about it. It's just walking around and looking for opportunities to save money. But there's no one golden rule, so it's everybody. Sometimes you can build an infrastructure that you want to be there. Sometimes it's data that's available and people just aren't getting visibility on it. You can just make it accessible to them on a lot of bases.

Hayley: I think sometimes it becomes overwhelming doesn't it? You can almost have too much data sometimes and if you don't have somebody helping you interpret that or focus on the bits that you actually need to focus on that are going to make a difference it just becomes too much almost.

Dave Oakes: I agree with that, that you can be overwhelmed with that. There's a situation I saw in the rail industry where they were fitting engines with 100 sensors to try and improve their efficiency and improve reliability. And someone's took a step back and said, correctly, this is costing us a lot to install and maintain. We're spending more time maintaining the 100 sensors than we're the engines. They did a bit of Pareto law thinking and went, do you know what, if we just take a few of these measurements, we've probably solved a huge chunk of our problems. And they found that just by the exhaust pipe measurement, that they could find out so much information and start getting huge benefits with that, that they'd have to pay back like 24 or 48 hours for this sort of thing. We saved millions and millions of pounds. So yeah. It can be an issue with too much data. Don't just start adding sensors for the sake of it. Think about the problem you're trying to solve and then get that visibility of the data to help solve that problem. You never know, might solve some problems you didn't really know about along the way. You don't know what you're doing there, do you?

Hayley: No, and that's a great, that's a great point really, because when you are leading a business, Obviously we've been specifically talking about energy, which is one area, one problem, but there will be lots, lots of problems that are, that are happening in and around the business day to day, week to week, month to month, year to year. Is there anything that you'd advise or share to help business leaders? spot and identify other types of problems and how they then decide which ones are the right ones to focus on first.

Dave Oakes: We go back to asking them questions about the problems that they've got. something we hear a lot of is, keep running out of stock. Or that I'm running low so they need to arrange an emergency delivery. or a character holding the stuff so that they end up with a production interruption or having to fire-fire or the other flip of it is that you're sitting on too much stuff and you've got too much cash tied up in there. If this was a liquid product, let's say it was a fuel. We're back to energy prices again, I'm afraid, but it does tend to dominate. But have you seen the price of recently? are you suffering from theft of product? Are there over spills that are to environmental damage? Are tanks leaking and what have you? So that sort of situation. not only improves the business in question, efficiency, but it also opens up this possibility of closing over their supply chain. We've all been there, know, our customer phones is what can be doing this today. You forever jump into their tune. It's not ideal to say the least, whereas we all love those customers who are nice and controlled and tell you in advance so you can schedule your own production and your own supply chain and everything just runs smoothly. So if the supply chain has access to where you could be. That's for example scheduling deliveries, means a chemical storage tank or a fuel or an animal feed or whatever it may be. Then everybody benefits. get potential reporting, you don't run out. You can protect links, can prevent overspills. What we've seen over the years is that better planning on this type of application can reduce logistics costs by around about 30%. So 30 % fewer miles to deliver the same amount of products that we produce just by using data. So less fuel, 30 % fewer CO2 emissions, 30 % less wear and tear on the food, plus the benefit of everything being scheduled beforehand. Thank

Hayley: Do you think there's like a culture problem as well? You see a lot of waste and not particularly in terms of energy, but I know one of my clients where they had like different sites, they'd have to go and. know be at site for six weeks or something like that and they're as simple as they just go and buy a set of cups The cops would then just all get left, then they'd go to the next site and buy another set of You multiply that over like 20 sites a month. Like it's just like an incredibly stupid cost on cups that if you just had a diff, like something really simple, but a different process, would, it's a lot of money to be saved. But the people didn't care, the site managers, they were just like, well, it's not my money yet. You know, whatever, whatever.

Dave Oakes: We've all got responsibility, both for the planet and for our employer. If our employer isn't making any money, we're not going to have a job. Simple. How do we do that?

Hayley: People don't see that, they?

Dave Oakes: I remember being a child when my mum gave me a clip around here, if I left the light on. She went in room and the light was on, and you get a cloud. Fair show. I get that. Don't fill the kettle up when you want to boil it. Just put enough in for a cup. Don't boil a full kettle of water. You these are things that we all take for, you you do it as an adult in your home. Well, let's just take that mentality into it. I think a lot to do with education in the past. People just not appreciating. This is just a magic place that I work.

Hayley: you

Dave Oakes: don't care what, you know, I can lose all the mugs, can leave all the lights and I just don't care. We've got to create a culture and business where people do.

Phil: That's the that's the trick with staff, isn't it? Because it is other people's money and it it's working at how do you enthuse them because if every time they turn off a light they've got a fiver, they're gonna do it, aren't they? So how do we incentivize that behaviour rather than coming down and saying, Look, guys, I hope you realise Mr. So and so has only had a Ferrari four class today. He wanted the five class, but he couldn't afford it. And the issue is because you're not turning the lights off. How do we bring that ethos to the team?

Dave Oakes: just simple signage around, know, let's carry on the analogy of the light switch. Just, you know, last one out, switch the lights off side.

Phil: I love this was I don't know if this is even true or not, but my friend when we joined Royal Bank of Scotland, he said to me, Right, I'm submitting an idea, fellas and he said, I'm gonna submit the idea that the dryers in the bath in the bathrooms turn themselves off automatically. This was back in the day a little bit. They're on a you know, 'cause he said my friend went into ASDA and he submitted this idea, they gave him fifteen grand because they turned all of the lights in the bathroom so that they, you know, sense of command come on. And I'm such a big fan of that. It's like have a latch on your door, don't tell your staff that they need to lock the door on the way out, because if it's a latch, it's gonna auto if if your lights are a problem being set, can we censor them? Can we change it so it's automatic, so we're not relying on somebody having to t go up and turn the light off.

Dave Oakes: But that, know, I'm using lighting as an analogy, as you know, because, you know, we go to a quality lighting probably the very bottom of their list of energy class.

Phil: I'm exactly but I'm thinking even with the quarry machine with everything, okay, can we automate it to either sound a really annoying alarm when it's being on and know it you know, let's just have a really annoying noise that someone has to press the button to turn off every time. And if they're stood at the quarrying machine, then that's not a problem, isn't it? But if they've walked off, now everybody's getting really irritated by this noise. Why is it not being switched off? I'm just I'm trying to think of how we prime a business to get as far as they can do before they engage with a a consultant or a company or whatever we want to call. So if somebody's there at the moment, they've got a plant let's say they've got twenty people and they've got three lines, say, going and they're thinking times are getting tighter, what can they do themselves before they step in? and engage with a a a third party.

Dave Oakes: I'm going to stand like a sub-record which hasn't solved those questions, I'm afraid.

Hayley: Hahaha

Dave Oakes: But one thing to do is to, as an example, our website has a load of face tags and you can see there what have others done. We're a solutions partner in Siemens and they've got... a vast wealth so you could go onto the Seamen website and start to drill in what is my industry? right I'm in logistics or I'm in construction and you can start to drill in, can start to get ideas about this is what this company has done, that resonates with me because then you know that there's a good chance of there being a benefit at the end of it and there's a good chance that there's technology available to achieve what we want to achieve. Look for inspiration.

Phil: I really like that actually. That's almost a what one thing in its own its own right, isn't it? Looking at case studies of your maybe not your competitors, but very similar in and saying what have they done and are we doing it? And I suppose to come back to your original question, have we got the information that we need to be able to look at this as a problem?

Dave Oakes: what we tend to see is that there's certain situations whereby the likely benefit is relatively small but the risk and the cost is high. And what you're looking for is where that's reversed. You're looking for situations where the benefits could be significant and ongoing and the risk of investment is small. And obviously that's where the door starts. rather than the technology.

Hayley: It's funny though because I live off grid so we have our own, we don't have grid connection for electricity, we've got our own wind turbine and solar panels so we have times when we have too much electricity because we do if it's windy and sunny and we don't have a way obviously we've got battery storage but once that's full it's just wasted and my husband hates wasting electricity he's like obsessed with not wasting it so at our house if it's windy every single light will be on every heater will be on even middle of the night and my mother-in-law goes around switching the lights off when she comes out of there you have to go around switching them all back on so that's bit of fun at our house that it's a total opposite mindset but you just have to watch because then if you've got days like today where it's not windy and not sunny we don't have a lot of electricity

Dave Oakes: It sounds like you're really taking part in this.

Hayley: We do need new batteries to be fair, we do. They're very old, but I don't know the reason, but Mr. Baxter does, so that's in his department and his will. So I'm sure one day we'll get new ones.

Dave Oakes: you

Phil: I suppose you could just do with a spare electric car, couldn't you? That you can just park up there and then once it's full you just go and buzz it round and then park it up again, but it only gets charged when you've got extra electric. That could be the date night car, Hailey. When the battery is full, Mr Baxter has to take Mrs. Baxter on a

Hayley: Yeah.

Phil: date night.

Dave Oakes: Ha ha ha ha.

Phil: So if somebody has listened to this podcast and enjoyed it, their aims tomorrow are to sit down at the boardroom and ask those questions. What information don't we know? Where are our biggest cost drivers? I think can we break down those cost drivers? Do we know what machines cost? Do we know what production lines cost? Do we know what individual elements of the business cost? And if they don't Okay, maybe it's time to look at getting some sensors, getting somebody in to help us out with that. If they've enjoyed listening to this though, who is your ideal client and how would you like them to get in touch with you?

Dave Oakes: So. Our ideal clients are involved in chemicals, fuels, food and beverage. It's usually a decent sized site or a multi-site facility. We need to be open to the use of technology, although we will do things securely and make sure that our systems aren't left vulnerable. Where best reach our website is www. powtechnology.com, sales at powtechnology.com, we're all over LinkedIn, that's a big place, so look me up, look Dave Oaks up and connect to me and you'll see, we're sharing case studies and bits of news out of that, and we welcome questions in that open forum because it generates debate and helps others learn as well.

Phil: Fantastic. Dave, thank you very much for the What One Thing podcast.

Dave Oakes: Thank you very much, nice to see you Phil, nice to see you Haley.

speaker-0: So Haley, I'm gonna get it first. What was your big takeaway from that what one thing?

speaker-2: that it always comes back to data and numbers and understanding really what's going on in your business and being on top of that. I think that, of course, that isn't the be all and end all of everything. But I do think that a lot of business issues can show up in numbers. And I do think that sometimes a lot of businesses are a bit behind the curve with realising that, accepting that and making that piece of the puzzle part of a monthly process for example. What was your big takeaway?

speaker-0: Very similar to yourself. I thought Dave's what one thing fit in so brilliantly with with all of the what one things because it was about let's have a look at the big big numbers at the start, let's make them more granular, and then let's see what we can't measure at the moment. okay, we've got this big number that we're paying out here, or maybe it's time, maybe it's not cash, maybe it's time. we're spending 50 hours here, or we've got five employees on this area, but actually we can't split that time down more granularly to see what those hours are being spent doing. Are they being spent topping stuff up or walking round the factory, measuring, looking for things? Are they fixing machines that are broken because we've let them run down? Because we haven't got sensors to measure. And it really comes down to that, that a great business owner has got that granularity where they can drill down if they want to or if they need to to have a look, and then we come to patterns, don't we, that the more sensors we've got, the more patterns we can start to detect. And on the flip side of that, if you've got too many sensors, then you're spending all your time looking at sensors rather than building the business.

speaker-2: We never actually asked Dave, but I was just thinking when you were talking then about how for some businesses, so for bigger businesses, it's going to be really useful to do that because you are going to get savings, you know, and you'll see it come through. But I suppose there must be like a balancing point or a cutoff point, a tipping point where the cost of doing the sourcing the information and investing the time and if you're working with a consultant or something to do that whether that actually outweighs the savings you can achieve even if your energy costs for example or whatever you're particularly looking at are growing and they are a big part of your cost base there must be a tipping point and I don't know just sat here right now how how you would know that as a business

speaker-0: I know what Dave would say, and he would say it all comes back down to those original questions. So what information if I knew it tomorrow morning? So if we're spending a thousand pounds a month on energy, then you would say even with the information of exactly granularity granularly down to almost the penny, I can't make a huge saving off this number. But if you're spending fifty thousand or let's say ten thousand pounds a month on energy. And you know what, I've got no granularity, I've no idea absolutely where that money's going whatsoever. I think that's the point where you say, if I had that information, and that's the point where you say, Okay, what sensors do we need? If I'm honest with you, and this is probably the same as most tight business owners, I think, well, I'm gonna come in on a Sunday morning or during downtime and I'm gonna watch my little smart meter and I'm gonna go, Bob, Bob, turn that machine on. freaking out, that's gone up more than I thought. Or that's And then we can probably start to break down. So I think that's the point where you get Dave involved is that that you've got an expense either in hours or in cash. And I suppose hours, if you can compare it against the rest of the industry and say, We've got twenty maintenance staff, you've got three maintenance staff. Okay, something must be going wrong here. That's the point that you bring Dave in to say, or you an expert in to say, what do we need to measure to make this more granular? And I think the point you alluded to there, at what point do we stop measuring because we're gonna get such small returns off it, it's not gonna be worthwhile.

speaker-2: do think though, energy costs that have been topical and high for several years now, I genuinely do think they're not going to come down. So I do think it's a problem that's only going to get bigger.

speaker-0: Again though, to be the elite or to do well in any industry, I think you need to have those costs down. Whether that helps you then to pump that money into research, whether it allows you to pump that money into staff training, it doesn't necessarily mean that you're gonna get more money on your bottom line, but it might mean that you can give employees better facilities, you can drive improvements, you can create a better product for your customers for the same price that other people are doing. And I think that's the point. Whether it's energy, whether it's the cost of running machinery, whether it's how much oil they use, whatever it is, if we can find out where our costs are going and then we can measure and we can improve, I think that helps every business.

speaker-2: Yeah, yeah, you're right. It's about making sure that you be an optimal in what you're spending and you're not over, you're not spending over the odds. That's what it's about really, isn't it? And understanding it.

speaker-0: Yeah, and getting that level of working on your business where you've got the granularity to say, Okay, we've got this large amount of money or this large amount of time going or large amount of employees, whatever it is, towards this, but I don't know how we measure it. And that's again, to reiterate Dave's point, that's where you say, if I had this measurement tomorrow, I'd be in a much happier place. And I think that's that's where the problem starts, isn't it? Or the solution starts.

speaker-2: Knowledge is power. You can then do something about it once you know. Knowledge is power.

speaker-0: is money.

speaker-2: Yes, well, yeah. We hope you have enjoyed listening to this episode of What One Thing.

speaker-0: And if you have, please like, subscribe and share with your friends.