The Case for Process Excellence in Public Utilities

Rob Krall, Director for Continuous Business Excellence at Progress Energy, joins PEX Network to discuss developments in Business Process Excellence in the Utilities sector.

PEX 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 at Progress Energy. I’m the Director for our generation business which is all of nuclear and fossil generation within Progress Energy. CBE is our application of Lean and Six Sigma tools to improve the processes in the generation business.

PEX Network Can you tell us a little about how Continuous Business Excellence fits into the culture and operations at Progress?

R Krall It is a corporate-wide initiative and each of our businesses are at different start points, but as far as my business in generation this is pretty much wrapped into our culture of how we do our maintenance and our operations, and a lot of that has to do with training and, really, the other part has to do with how we incent people too, and other change efforts that folks have gone through in some other companies, we’ve learned that the best way to go out there and touch people is to put it into their performance goals and it seems to stick a little better.

PEX Network Yes, I can see that’s a really efficient way of doing it. You’re speaking at the conference about making business case for change. Why is process excellence so 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 the United States, and there has been not a lot of pressure for us to be cost competitive like some 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 that our regulators are pushing us to be better. Plus, if you think about the age of our fleet, the condition of our equipment, these are just good process tools that we’ve seen other people like the United States Air Force and the aerospace companies use and use to a good amount of success.

PEX Network Breaking it down then, what are the factors that make it so difficult to build 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 think of it as a monopoly even though it isn’t because we still can lose a community based on the way that they charter our businesses, but it’s been difficult in that they’ve never really thought of themselves as somebody that has to look at their costs and manage their budgets 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 get through outages in the least amount of time, but they haven’t really been good at managing cost. Cost and time pretty much go together in the lean world and our set of tools has helped 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 effective sponsorship?

R Krall One, there has to be a good corporate sponsor, someone pretty high up in your executive staff has to be a sponsor. The CEO for our company is a sponsor but initially we had to win him over and we won him over through results, focusing on quick wins, focusing on the energy that comes out of Kaizen type events and the engagement with the employees and actually showing financial and operational improvements in a short amount of time.

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PEX Network To give a bit of a case study for our audience, can you give some examples of initiatives that have caused your success in embedding Process Excellence at Progress?

R Krall One of the things that this industry does on a regular basis is something called outages and anybody that’s in the utility businesses understands the concept. It’s where we go in and do major capital improvements on our equipment on a periodic basis to make sure that they can operate at the level of continuity that we expect out of it. We’ve used our tools to help analyse and improve these outage processes in specific projects, specific operations, 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 of payback and really predictability out of being able to hit an outage time, hit it on budget, and there’re a couple of outages we’ve used these tools in and had great success with in the past year or so.

PEX Network Finally, what top tips can offer to utilities trying to avoid the common pitfalls of Process Excellence? If you can maybe break it down into your top three or top five tips.

R Krall Top tips in order for us to be successful we really needed that, we already talked about it, that executive sponsorship was critical. The second was probably how we went out and chose our Lean experts. We call them CB Leaders. We went out and tapped people that were already credible leaders in the organisation, so of our first group of about eight CB Leaders in the generation business, three of them were plant managers, the balance of them were either operations or maintenance superintendents, so these were folks that were pretty high in the organisation that had instant credibility, and on top of that we had a pretty good, I would call, a pretty comprehensive training programme to get them up to speed with the tools and facilitation requirements. That was, pick the right people and have a good fundamental training programme to get them up to speed. The other part was a lot of good coaching, and the coaching isn’t just for your CB Leaders or your Lean or Six Sigma experts, it’s also coaching for the leadership; how do they use these tools, how do they support people in these Kaizen Events and what are the things they should say and what should they be looking for? So, the coaching goes both ways up and down the chain of command, with your leaders, your staff of experts and also with your leadership on how they should use the tools. And I think, lastly, is you go for those quick wins, what you had asked earlier. If you can show that there’s value in this and that you can make an impact everybody gets excited about it.

PEX Network Now, finally, what do you think is going to be the key themes and discussion 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 part of the session, I’ve got at least one example where we go into detail of how we’ve improved one of our processes. In any coal-fired power plant there’s a thing called a polariser. I use that as an example to highlight all the points we just talked about; quick wins, using the right people, the right training. I think we wrap it all up and at least show where it works in one of our plants and show some credibility in it.

PEX Network I look forward to hearing more at the event. It sounds like it’s going to be an excellent presentation with a lot to think about. Thanks very much for your time today to talk to us.

R Krall Thank you very much for the opportunity.