I recently had the privilege to e-file my federal taxes, just like I’ve done faithfully for a number of years. But this year, the IRS rejected my filing. It seems someone else had already used my name and Social Security number in an earlier filing. Because I’m in an ”older demographic,” the thought increasingly occurs to me that my Social Security account could be important.
In the first part of this three-part blog post, I described some disruptive demographic factors (including an aging workforce) that are creating the need for utilities to “do more with less” and “work smarter, not harder.”
As is true with any business and organization, there are strategies utilities can use to deal with a shrinking workforce. Improving process efficiency by eliminating waste is an effective way utilities can use to improve operations. When properly implemented, they can capture significant savings without spending a lot of capital.
The classic example is the Toyota Lean Production system that revolutionized the auto industry. It is a classic example of how to “do more with less.”
“Lean production is ‘lean” because it used less of everything compared with mass production – half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects, and produces a greater and ever growing variety of products.”
- “The Machine that Changed the World” by Womack, Jones and Roos
Allow me to illustrate by describing the seven types of waste and showing how utilities can apply lean techniques to “do more with less.”
Making errors and mistakes.
- If you connect a transmission line to a substation with incorrect phasing it can cost time and money, and cause possible equipment damage. This can be avoided by making sure the phasing is correct before connecting.
Making more of something than required, or using a higher cost resource than necessary to get the job done.
- Many projects require a bill of materials for construction. Do you use a senior staff to compile this, or can you use clerical or entry-level staff? Match staff and associated costs to the job requirements.
Moving material or people between locations.
- When staff travel, is it more cost-effective to reimburse them for personal use of their vehicles or have them rent from a contracted rental car company? If renting is the best option, how many miles in a trip provides the break-even point?
Doing nothing while waiting for the next step in a process to occur.
- A natural gas combined-cycle generating plant is dispatched as a peaking unit. Depending on the plant operator, start-up time can vary from two hours to four hours. Both can be done safely. Standardize the process to ensure two-hour start-ups and each plant start will use two hours less natural gas before the utility gets paid for the generated power.
- Your utility provides natural gas to customers. Up to five different methods are available to fuse gas pipe, each requiring unique tools, fittings, training and operators. If you can determine how many methods can safely perform all of the connections, you can eliminate a sizable amount of training, inventory and tool costs.
Moving material or people without providing value.
- Your coal-fired generating plant relies on regularly-scheduled deliveries of coal by standard unit trains. Because of the rail and unloading layout, each train must be broken into smaller sections for unloading, requiring moving sections back and forth numerous times to accomplish the unloading. Once unloaded, the unit train needs to reassemble before departure. Less moving equals more savings.
Taking some sort of action in a process.
- A material list for a new distribution transformer pole has to be purchased, inventoried and delivered to the project site. How many pieces of paper and approvals are required to make this happen? How many staff must be involved (engineering, supply chain, accounting, project management, operations)? The fewer people and steps in the process, the less it costs.
My hope is that these examples illustrate how utilities can capture savings and efficiencies without spending large amounts of capital.
In Part 3 of this blog post, I will illustrate a way to lean out the workforce without compromising safety, quality, cost or delivery.
Now I have to log on to the Social Security website to check my account. I really don’t want to “do more with less” in retirement than necessary because of identity theft.