Ethanol: Innovation Through the Now, Near and Next

In these uncertain times, employing the “Now, Near and Next” approach can help companies prioritize investments in technology and innovation. Partnering with vendors and innovators to share in the investment and risk is critical.
By Jennifer Aurandt-Pilgrim | May 04, 2020

We are living in unprecedented times. In February, industry leaders convened at Growth Energy’s Executive Leadership Conference, coming together to share ideas on how we can innovate and drive the ethanol industry forward. Today, however, looks a little different because of the global pandemic: Our same colleagues are coming together virtually to share best practices and innovation in managing decreases in demand and infectious disease scenarios in their plants. It’s a trying time for all, but one thing I have learned from this experience is that no matter the hurdle, the ethanol industry adapts and pulls together to overcome.

Given the recent turn of events, we are all forced to ask ourselves: What choices can we make today to better prepare ourselves for the future, and how can we come out of this stronger than before? A proven approach to innovative solutions for our industry is the “Now, Near and Next” approach. It’s an understanding that innovation is not as simple as investing in a technology or choosing a vendor for a known need; rather, to truly innovate, companies must take into account both the larger industry market and the wealth of resources in our own facilities. Those resources include our feedstock, products and, importantly, our people. But the real value comes from knowing how to maximize them. That’s where the “Now, Near and Next” approach thrives—in understanding the mission and vision for our industry, we can design strategies that steer our plants to the right path.

First is recognizing the “Now” need: What can we do now to drive revenue? This does not always mean investing in new technologies. It can be revamping employee management. For example, supporting the workforce through changes in work-life balance scenarios can help retain critical team members. In the long-term, this drives revenue through avoiding lost production resulting from untrained staff. 
Identifying the “Near” involves planning how we manage our plants to overcome short-term margin loss with declining fuel demand. What decisions can be made in the near-term to decrease operational costs, maintaining safe and efficient operations?

The “Next” is, “What can we do now that will position us to be stronger when the crisis passes?” For example, can we focus on diversification of revenue streams through investing in technologies when margins get stronger? Can we look for other applications of our products in the market, thereby growing the market demand? Asking these questions now can help drive stability in the years ahead.

As an innovator, we follow a strategic system for identifying the best opportunities to commercialize new technologies, called the Technology Readiness Scale. For example, if technology has only been demonstrated in a lab, it’s a level one or two. If it has been demonstrated to be economically feasible and technologically sound at pilot scale, it’s moved to level four or five. If it has been installed at one plant and is running full-scale semi-continuously, we would rank that at a seven or eight. Once it is operational at multiple plants, there is clearly less risk with a commercialized technology.

In these uncertain times, employing the “Now, Near and Next” approach can help companies prioritize investments in technology and innovation. Diversifying revenue “Now” translates to investing in commercialized technology that can offer proven returns. Partnering with vendors and innovators in investment and risk in “Near” and “Next” technologies is critical to the long-term success of our industry.

Using these techniques to better plan for our future, the biofuels industry can not only get through this crisis together, but also continue to support our rural economies, producing a clean-burning fuel, and driving the renewable fuels industry forward.

 

Author: Jennifer Aurandt-Pilgrim
Director of Technology
Marquis Energy
jenniferaurandt@marquisenergy.com