Background
The client is a gas transmission and service provider within one of the largest communal energy utilities in Europe. As the distribution network operator, the business is responsible for providing gas safely and efficiently to around 70% of all end users in the area. The business employs more than 1000 staff looking after several thousand kilometres of transmission pipe as well as local connecting pipework. In addition, the client also undertakes related maintenance activities as well as planning and installing new assets.
Despite its status as a state-owned enterprise, the organisation is fully committed to reducing costs and improving efficiencies in anticipation of upcoming EU requirements on, for instance, unbundling and competitive practices.
The client requested a complete evaluation of the entire value chain to encompass value-add as well as productivity. Specific emphasis was laid on the processes relating to the planning, execution and maintenance of new technical assets.
Scope
T.A. Cook started with detailed analyses of key processes relating to:
• Home connection
• Transmission and distribution
• Excavation works
Following on from this, work was undertaken to create a:
• New implementation plan for an operational KPI system
• Conceptual performance-based remuneration and reward system
The aim of this work was to optimise the processes, organisation and interfaces between departments. In order to implement these improvements it was necessary to determine constraints and develop appropriate measures to overcome these. As part of this scope, the T.A. Cook team was to lead the project set-up and management as well as the development of the route map for implementation. Having implemented the improvements, the final element of work was to evaluate the quantitative and qualitative magnitude of the real benefits achieved. In all, the exercise was to be completed in seven months.
Approach
As a first step, and to ensure full and effective communication of the purpose and nature of the exercise, the team discussed the scope, expectations and methodology with representative managers and senior staff throughout the organisation.
As part of the analysis phase, processes were mapped and systematically evaluated for improvement potential across the organisation. By involving staff at different levels and from numerous departments, the approach ensured a high level of buy-in. The use of detailed yet anonymous observations provided specific insight into the efficiency and effectiveness of processes; such that it was possible to use the well-established brown paper process to benchmark and identify specific issues, hence quantify concrete financial opportunities for improvement.
The process resulted in improvements and cost reductions valued at around 5.5m Euro.
This meant:
• An increase in the staff utilisation
• Insourcing of contractor activity such as pipe laying
• More efficient use of deep excavation resources
• Use of new technologies
• Reduction of specific material costs
Solution
In order to achieve the aforementioned benefits the following activities were defined:
• Restructuring of the organisation and reengineering of key processes in the construction and service areas
• Determination of true capacity in the service area
• Improvements to the interfaces between the planning and execution areas with assurance of capacity utilisation
• Development of ground rules for the implementation of an IT capacity planning tool
• A structure for a report on organisational efficiency
• Development of three options for performance-based remuneration based upon operational KPIs
• Specific suggestions for reduction in excavation costs through improved processes, use of new pipe laying techniques and technologies
Implementation
These actions are being implemented together with the client in a series of preplanned steps. The improved efficiency of the business will allow it to hold its own within an increasingly competitive European energy market. The effectiveness of the implementation plan will be determined by an audit programme which has already been agreed.
For more information contact:
Rupert Clark
Marketing Manager
Direct: +44 (0) 1183 260 229
Mobile: +44 (0) 7792 926 696
r.clark@tacook.com |
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