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The case for_process_excellence_in_public_utilities

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The case for_process_excellence_in_public_utilities

  1. 1. The Case for ProcessExcellence in Public Utilities Robert Krall: Director for Continuous Business Excellence at Progress Energy, joins PEX Network to discuss developments in Business Process Excellence in the Utilities sector.Contributor: Helen Winsor: View her Linked In ProfilePosted: 04/28/2011 12:00:00 AM EDTPEX Network: First of all, could you tell me a little bit about your current role?R Krall: I’m the Director for, what we call here is Continuous Business Excellence atProgress Energy. I’m the Director for our generation business which is all of nuclear andfossil generation within Progress Energy. CBE is our application of Lean and Six Sigmatools to improve the processes in the generation business.PEX Network: Can you tell us a little about how Continuous Business Excellence fitsinto the culture and operations at Progress?R Krall: It is a corporate-wide initiative and each of our businesses are at different startpoints, but as far as my business in generation this is pretty much wrapped into our cultureof how we do our maintenance and our operations, and a lot of that has to do with trainingand, really, the other part has to do with how we incent people too, and other change effortsthat folks have gone through in some other companies, we’ve learned that the best way togo out there and touch people is to put it into their performance goals and it seems to stick alittle better.PEX Network: Yes, I can see that’s a really efficient way of doing it. You’re speakingat the conference about making business case for change. Why is process excellenceso important to you at Progress?R Krall: It’s important to us because I think in the past, we’re a regulated utility here in theUnited States, and there has been not a lot of pressure for us to be cost competitive likesome other folks that have used these tools, manufacturing, aerospace, but that’s changed.I’m here in Florida and we have State regulators that are starting to scrutinise fuel spending,operational spending, our capital projects, so there is now this influence from outside thatour regulators are pushing us to be better. Plus, if you think about the age of our fleet, thecondition of our equipment, these are just good process tools that we’ve seen other peoplelike the United States Air Force and the aerospace companies use and use to a goodamount of success.
  2. 2. PEX Network: Breaking it down then, what are the factors that make it so difficult tobuild a case for process excellence in a regulated utility?R Krall: In the past there wasn’t really a competitive pressure. In many cases people thinkof it as a monopoly even though it isn’t because we still can lose a community based on theway that they charter our businesses, but it’s been difficult in that they’ve never reallythought of themselves as somebody that has to look at their costs and manage theirbudgets well. If you look at most of our leaders they’re extremely technically competent.They know their equipment, they know how to maintain it, how to operate it, how to getthrough outages in the least amount of time, but they haven’t really been good at managingcost. Cost and time pretty much go together in the lean world and our set of tools hashelped them work with and be able to apply tools to improve themselves. PEX Network: And what do you think are the key factors to gaining effectivesponsorship? R Krall: One, there has to be a good corporate sponsor, someone pretty high up in yourexecutive staff has to be a sponsor. The CEO for our company is a sponsor but initially wehad to win him over and we won him over through results, focusing on quick wins, focusingon the energy that comes out of Kaizen type events and the engagement with theemployees and actually showing financial and operational improvements in a short amountof time.PEX Network: To give a bit of a case study for our audience, can you give someexamples of initiatives that have caused your success in embedding ProcessExcellence at Progress? R Krall: One of the things that this industry does on a regular basis is something calledoutages and anybody that’s in the utility businesses understands the concept. It’s where wego in and do major capital improvements on our equipment on a periodic basis to make surethat they can operate at the level of continuity that we expect out of it. We’ve used our toolsto help analyse and improve these outage processes in specific projects, specificoperations, and we’re able to guarantee fidelity through the use of things like standard work,pointer use tools success, pretty simple Lean tools that have been able to yield a lot ofpayback and really predictability out of being able to hit an outage time, hit it on budget, andthere’re a couple of outages we’ve used these tools in and had great success with in thepast year or so.PEX Network: Finally, what top tips can offer to utilities trying to avoid the commonpitfalls of Process Excellence? If you can maybe break it down into your top three ortop five tips.R Krall: Top tips: in order for us to be successful we really needed that, we already talkedabout it, that executive sponsorship was critical. The second was probably how we went out
  3. 3. and chose our Lean experts. We call them CB Leaders. We went out and tapped peoplethat were already credible leaders in the organisation, so of our first group of about eight CBLeaders in the generation business, three of them were plant managers, the balance ofthem were either operations or maintenance superintendents, so these were folks that werepretty high in the organisation that had instant credibility, and on top of that we had a prettygood, I would call, a pretty comprehensive training programme to get them up to speed withthe tools and facilitation requirements. That was, pick the right people and have a goodfundamental training programme to get them up to speed. The other part was a lot of goodcoaching, and the coaching isn’t just for your CB Leaders or your Lean or Six Sigmaexperts, it’s also coaching for the leadership; how do they use these tools, how do theysupport people in these Kaizen Events and what are the things they should say and whatshould they be looking for? So, the coaching goes both ways up and down the chain ofcommand, with your leaders, your staff of experts and also with your leadership on how theyshould use the tools. And I think, lastly, is you go for those quick wins, what you had askedearlier. If you can show that there’s value in this and that you can make an impacteverybody gets excited about it.PEX Network: Now, finally, what do you think is going to be the key themes anddiscussion points to come out of this year’s event?R Krall: What we just talked about. I’ll give you some specific examples. At least in my partof the session, I’ve got at least one example where we go into detail of how we’ve improvedone of our processes. In any coal-fired power plant there’s a thing called a polariser. I usethat as an example to highlight all the points we just talked about; quick wins, using the rightpeople, the right training. I think we wrap it all up and at least show where it works in one ofour plants and show some credibility in it.PEX Network: I look forward to hearing more at the event. It sounds like it’s going tobe an excellent presentation with a lot to think about. Thanks very much for yourtime today to talk to us. R Krall: Thank you very much for the opportunity.About Process Excellence NetworkProcess Excellence Network is a free to join online community, providing critical knowledgeon the development of Process Excellence including Business Process Management (BPM),Lean, Change Management, Operational Excellence, Six Sigma, Risk Management,Customer Experience and more. We provide the forum where key industry experts andorganizations share their experience, knowledge and tools, and your practitioner peersconnect with one another all over the world, both face-to-face and online. Membership isfree, the content is priceless.Join the Process Excellence Network Linked In Group today! LinkedIn Process ExcellenceNetwork (PEXN)

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