Improving electrical distribution reliability and costWritten by Jose Sanchez
Continued from page 1
Results Operations and maintenance expenditures in distribution area were reduced by 34% from 1992 through 1996 in terms of cost per kWh. Capital expenditures were reduced by 32% during same time frame. Overall reliability degraded slightly during this time frame. While reliability was slightly worse, overall customer satisfaction with reliability improved by 9%. This seems counterintuitive however, focus on eliminating extreme reliability problems actually shifted customer satisfaction. In terms of price per kWh company improved from one of high price energy producers in region to one of lowest.
Recommendations The approach this organization has taken to reduce operating expenses while improving reliability for most significant customers, is a real success story. It is not unique however and with commitment on part of any electric utility, is replicable. The following were some of recommendations to embark on this approach to improve reliability and competitive position: The initial step is to assess organizations relative position with its natural competitors, and develop a sound strategic plan to improve operations and reliability while reducing costs. Determine customer requirements for all segments and understand their reliability expectations using QFD techniques. Develop strategies to address significant reliability problems and focus improvement on most important customers. Benchmark with best in class companies to understand basis for their performance and analyze their processes for improvement ideas Be prepared to change management structure of business unit based on most effective way to achieve customer satisfaction and low cost. This will involve downsizing or elimination unproductive work processes, flattening management layers, and realigning functions to get closer to customer and provide seamless service delivery. Manage customer relationships based on a sincere commitment to meet their requirements. Develop sound statistical measures of customer satisfaction and initiate actions to reduce and eliminate dissatisfaction.
Managing Partner, Management Resources Inc.
Guide for Visionary Leaders and Business Decision-makers. Written by Bob Cannon
Continued from page 1
With rampant specialization taking place in all areas of our lives, information that is available to us has increased by a factor of 10,000. If we are to do best for our organizations, it is imperative that visionary leaders and business decision-makers expand their knowledge accordingly. They must increase data input capabilities and speed up decision-making process to keep pace. The question is, “Can we change that quickly?” History suggests that we have remained genetically unchanged through thousands of years and it takes a minimum of a million years to affect and change us. We can’t wait that long to address gap between exponential specialization and our human capabilities. If we agree that our future depends on our ability to learn faster than our competition and we recognize our own individual limitations, then only solution lies in increasing human talent available to our organizations. I am not talking about a specialist who is internally focused and going to generate more information further complicating our already overly complicated lives, but rather a generalist who is externally focused and capable of leading teams of specialists at all levels in organization. Someone with creative talent, a solid foundation in basics and a uniqueness of thought capable of taking a project from start to finish, thereby lessening load on you visionary leader and business decision-maker. Large, prosperous organizations may be able to add this type of talent to their staff, but there are potential problems in this approach. First, it is costly. Second, these people need to be constantly challenged. Third and possibly most important is that longer they stay with organization more they are likely to develop an internal perspective and thereby diminish their effectiveness to organization. Consequently, challenges for organizations large and small are same. Where do we find this kind of talent? How do we utilize this talent and have them maintain an external perspective? After much introspection and thought, I have decided solution lies in hiring talent on a project-by-project basis. The specifications for this talent include real world experience leading projects from inception to successful completion. The talent must have a track record of working with and through people as well as exhibiting creativity and potential for original thinking. Obviously this person needs to be a good communicator. If you have followed my logic this far, then what you need is a “Consultant.”
Copyright Bob Cannon/The Cannon Advantage, 2005. All rights reserved.
Byline Bob Cannon helps visionary leaders make decisions that gain a competitive advantage. Check out other interesting articles available in Taking Aim newsletter available at www.cannonadvantage.com . Bob can be reached at (216) 408-9495 or mailto: email@example.com
This article courtesy of http://www.cannonadvantage.com. You may freely reprint this article on your website or in your newsletter provided this courtesy notice and author name and URL remain intact.
Robert E. Cannon helps visionary leaders and business decision-makers who want to enhance the competitive advantage of their organizations.
He is also the author of “Taking Aim”, the free monthly ezine written for leaders that takes aim at current issues, mixes in real-world experience and provides the focus needed to gain a competitive advantage.