When electronics buyers measure the performance of suppliers, factors such as cost, quality, delivery, and responsiveness are often the criteria that are scorecarded. In the not-so-distant future, energy consumption and efficiency may be added to that list of performance metrics.

Many electronics OEMs are under pressure from end customers to produce highly energy-efficient equipment. The trend may have started with battery-operated equipment such as cell phones and personal digital assistants, which require energy efficiency for long run-times. However, high-end equipment such as servers used in data centers may have a greater need for energy efficiency because of the rising cost of power. Customer requirements for energy savings are cascading through the electronics supply chain, as buyers look for energy-efficient chips and other components.

Purchasing professionals at leading electronics companies such as Cisco Systems, IBM and Sun Microsystems are working to figure a way to measure the amount of energy that a product uses over time as well as the cost of energy it takes to manufacture a product and to ship it to its end destination.

One problem in coming up with a measurement methodology for energy is a lack of standards. OEMs are working with standards organizations and suppliers on that problem.

Edna Conway, senior director, advanced compliance and social responsibility, global supply chain management for Cisco in San Jose, Calif., says the networking equipment manufacturer is working with supplier partners and industry groups like the Electronics Industry Code of Conduct organization (EICC) to reduce energy use. "With these partners we are now in the process of defining a shared methodology for measuring energy consumption," she says.

Conway says rising energy costs are just one reason Cisco wants to measure energy use. "The primary driver is to ensure that all Cisco products can be sourced, manufactured and sold in a socially responsible manner," she says.

Rising energy costs are a big concern to companies that operate data centers or "server farms" filled with hundreds or thousands of power-consuming servers. If a company buys hundreds of energy-inefficient systems, it will cost the company millions of dollars in energy over the lifetime of the servers.

That means server manufacturers such as Sun Microsystems, IBM and others must design and manufacture the most power-efficient servers possible and find suppliers that can produce semiconductors and subsystems that consume less energy.

Electronics systems manufacturers are under pressure to build more energy-efficient equipment because the cost of electricity keeps rising.

"Power prices used to cost 2–3¢ per kilowatt hour. Now the cost is as much as 25–28¢ per kilowatt hour in certain parts of the world," says Bapat.

But the problem is compounded by two other factors, he says. "One is that data centers are deploying more and more servers in terms of sheer unit volumes. The number of servers per data center is growing at about 14% per year," he says.

Bapat says the second factor is servers are getting more and more powerful with each passing generation. "Each new server we build burns more power than the previous generation of servers simply because it has faster microprocessors, more memory and more disk-drive space," he says.

As a result, many data centers are "maxed" out of power. "We have many customers who say they have the space and the bandwidth that would allow them to add more servers in their data centers, but they can't do it because their utility cannot give them more power," says Bapat.

Bapat: “Each new server we build burns more power than the previous generation of servers simply because it has faster microprocessors, more memory and more disk-drive space.”

Fishbune: “If a supplier cannot offer a design solution to meet the efficiency requirement of the spec, it will affect the decision of which supplier gets awarded the business.”

Simpson: “There is a lot of complexity involved when you try to measure how well much energy is consumed to make a widget.”

Kurt Doelling, vice president of supplier management for Sun Microsystems in Palo Alto, Calif., says the push to more power-efficient systems means purchasing has to work very closely with suppliers on their product roadmaps to make sure power efficiency is a primary consideration in their future products.

Sun keeps a close eye on semiconductor companies' plans for die shrinks. Each time a semiconductor company does a die shrink, chips produced on the new process require less power to run because the line widths of the chip are smaller.

Doelling adds that the need for more power-efficient products is creating opportunities for some new suppliers and enhancing competition among older suppliers.

"Suppliers that have innovative solutions that relate to power management now have the opportunity to do business with us," he says."

He says there are opportunities for suppliers of power-management chips, power supplies and flash-memory ICs. For example, traditional servers have used disk drives for storage, but now some are using flash memory because flash is more energy efficient than hard-disk drives. That means buyers at server OEMs need to identify and qualify flash-memory suppliers.

While the need for power-efficient products will create opportunities for some suppliers, others may find that they lose business.

"For example, in the power-supply subsystem, more stringent efficiency targets are being specified for the power supply and DC to DC converters across its entire output current range," says Rick Fishbune, procurement engineer for IBM's Integrated Supply Chain operation in Armonk, N.Y. "If the supplier cannot offer a design solution to meet the efficiency requirement of the specification, this fact will affect the decision of which supplier gets awarded the business," he says.

Fishbune adds that, "Power consumption per function throughout the server product will become more scrutinized when making buying decisions." This has already begun to occur within the memory and processor subsystems, he adds.

"There is a lot of complexity involved when you try to measure how much energy is consumed to make a widget," says Jim Simpson, director of supply chain management and engineering services for electronics manufacturing services provider Celestica in Toronto. "Take a semiconductor for instance. A chip could be made at a fab in North America, and flown to Indonesia for test and packaging, and then flown back to the U.S. where it is used on a printed circuit board."

He says energy consumption within manufacturing is "on our radar screen, but it is hard at this point to get a good measurement of it."

Many OEMs are less concerned about the amount of energy suppliers use to make and build a product and more concerned with how much energy it consumes. That's because the amount of energy some products consume eclipses the amount of energy it took to build the unit. Energy consumption is not as big a deal with cell phones, laptops or desktops as it is with servers, says Bapat of Sun.

"A server operates 24 hours a day, seven days a week, 365 days a year for four or five years," says Bapat. "The average server burns about 500 watts to 1,000 watts. The energy used for operation dwarfs the energy used in manufacturing the unit."