"But We've Always Done It This Way": Avoiding the Committment Trap in Utilities

Jon Wetzel

Matt Aguilar, Business Process Improvement Lead at Southern California Edison, joins Jon Wetzel from the Lean for Everyone blog to discuss Process Improvement implementation in the utilities sector.

Jon Wetzel: I wanted to ask you if you give us a quick overview of your background and experience?

M Aguilar: I’ve been at this for about 18 years now. I’m a former military guy and I stepped into the design business actually, mechanical design business in the Silicon Valley up in San Jose, Sunnyvale, California. So I started out in mechanical design and drafting and stayed along those lines, went into management in engineering design, and while I was at Motorola at the time, that was when I was introduced to digital Six Sigma as they called it and really did some wonderful things with Motorola before moving on to other companies and taking it further with Genentech, the biotech company in San Francisco, with PETCO down here in beautiful Santiago and then eventually with Southern California Edison. So working with companies that have designed and actually thought up the idea of changing the way they do business and operational excellence models and transforming the way they do things for whatever business reason they might have.

J Wetzel: Can you give us an insight into how process improvement fits into the structure and culture at Southern California Edison?

M Aguilar: Edison is a very unique company. It’s a large company. It’s based out of Rosemead up near Pasadena, California, and the nuclear generation facility down here in San Onofre,or actually San Clemente, California, operates on a different kind of scale than the corporate model which has more of the corporate requirements and the corporate operational requirements. But down here at the process level, at the nuclear plant, it’s more procedure driven - so you’re going to see a little bit of difference in the way they run the plant, the way they generate power as a production output, and the way that they actually perceive process improvement and continuous improvement. It’s just such a different model than the corporate model, ultimately going up to the same flag.

J Wetzel: How do you think utilities generally respond to process complexity and in what ways do you think this can be improved?

M Aguilar: What I’ve seen since my arrival at this utility facility is that they respond in two different ways. Sometimes they respond by using their programs that they have in place, whether it’s nuclear notifications and SAP, or the corrective action program, which is a regulatory piece, and that guides them down the path of what’s happened and how do you know?

And then you have the other side where it’s sometimes the action there is no response and it’s kind of unique because it doesn’t mean that they don’t want to respond, it doesn’t mean they don’t want to get better, but sometimes they really don’t know how to begin and that’s where you start bringing in people like Matt to come into the company and start talking to them about what that means - here’s how you begin, what happened and is that a problem, and how do you know that’s a problem – and starting that dialog that we’re all used to having with people that are experiencing business issues.

J Wetzel: I have a second question, a follow up to that. In regards to their process, do you think that they’re so close to their process that they need an outside person to come on in?

M Aguilar: That’s a very good question and I think that’s often the case, especially when you’re in a procedure driven environment. The nuclear facility is very procedure driven. Operational procedures are more along the lines of what they do, and those are the high level whats and who must do it, but they often don’t tell how. So what you tend to get are people that have been tenured for a while that might say, hey, when I came in all these years ago, this is the way I did it, this is the way I’ve always done it, and so that tendency to spread the way I’ve always done it tends to go on to different people and because of it, everybody has their own way of doing it and they’re so close to it that they can’t usually see an outsider’s perspective.

J Wetzel: I know exactly what you mean. What would be your number one tip for improvement for utility providers and why?

M Aguilar: I’d say give them a framework. The one thing that I’ve noticed is that it’s difficult to get your arms around how the plant generates power. Ultimately the mission of the plant is to generate power, the right amount of it and safely - more than anything else, safely – and within regulatory limits and requirements, but oftentimes people say, well, I work in design engineering, or well I run the control room and operations, and I actually don’t know how you guys designed the plant or maintain it; I just know it happens. Giving people that framework like that, operational process model where the top squarers generate power and all the other things like maintain the plant and design the plant and things like that gives people that big picture perspective of how the plant runs from day to day and where they sit within it. So starting with that piece is always the first thing that I would recommend for them coming on, because then you assign ownership and you start going down the line with the different process owners and saying, let’s talk about how this process works and so on and so forth.

J Wetzel: I’m assuming that in especially the area of nuclear energy, you can never have too much visual information?

M Aguilar: Absolutely. That’s often the case. Procedures sometimes can be as long as 150 pages to change a pump or something like that, and that’s often hard especially for somebody who’s coming right out of college, say, and has that engineering degree and they’re used to seeing flow maps, they’re used to seeing more visual perspectives of how they do what they do, and fewer words.

J Wetzel: You’re hosting a round table at the conference [BPE in Telecoms and Utilities] about maintaining cultural commitment to ongoing improvement. Why is this such a challenge in the utilities industry and how can you encourage greater support?

M Aguilar: I think a big piece of that has to do with what I was talking about before and that stigma or that cycle that people get into of, we’ve always done it this way. That makes it difficult when you start to incorporate things like SAP. Southern California has adopted and brought in SAP in 2008. Well, here we are in the middle of 2011 almost and we’re still having our difficulties because it’s so new and it takes away so many of those old business systems they used to use, and if there wasn’t a process mindset to begin with, it’s confusing and there’s a lot of lost and confused people who are try to figure out how to deal with the things they used to do before.

So trying to get to that point where people understand I need to understand how this happens every time regardless of what business system. That’s a cultural mindset and it’s going to be a shift that’s going to have to happen here and I really look forward to talking to folks about that at the conference.

J Wetzel: So how do you think you can encourage, though, the support of that cultural shift?

M Aguilar: It starts with the leadership and I’ve had my discussions with our Chief Nuclear Officer and his staff, and kind of bringing it in and kind of treading lightly into the room and discussing with them how we go about introducing this in such a way that your workers don’t vent in the plant. It’s understanding, hey, we have business issues, we have problems, let’s just pick one and let’s talk about how we would analyse it in a different way, looking at different things and using different kinds of tools, but starting with the leadership.

J Wetzel: I was going to say, that actually segues into my next question. Now we’ve talked about culture and leadership, now let’s talk a little bit about specifically tools. What Lean Six Sigma tools do you use most out of your toolbox for, let’s say, day to day work?

M Aguilar: I would start with the tools that help us get to measurement. Right now at the plant we analyse up to 300 metrics per month across the different functions in the plant, whether it’s engineering, ops, business support services, and as we all know from years at looking at KPIs and different types of measurements, that’s quite a bit. Trying to understand the things that are really meaningful, that’s what we want to get these folks to do, to say, why do I get to that, how do I get to those metrics that matter, starting with a simple tool that starts them down the path of thinking of inputs and outputs; SIPOC is a very simple yet powerful tool that they’ve never seen here before, but getting to those outputs from processes and getting to those requirements from those process outputs, and then who is the person that’s the customer for it? It’s all internal transactions and those things get lost in the haze of procedures.

Following it up with the simple use of summary map that shows those decision loop points, that’s where you’ll find the waste and that’s where we incorporate that waste elimination piece from Lean and then using that accountability matrix to understand who owns which steps. Those three tools alone have helped us get to all kinds of discoveries about who should be doing what, when and one condition, and if those conditions are met for internal customers, from their suppliers, then we have customer focussed metrics and we have ways for them to be able to say, hey, I know I should get this deliverable 72 hours after the request and if I don’t, that’s a metric hit. Kind of getting it to the point where they can measure how their performance is, is the reason I use those simple tools to get online. That, and as well on the plant side, starting to incorporate 5S has been something, with 6S with the addition of safety, but using 5S has been something that they’ve embraced in pockets and that they want to see more of.

J Wetzel: You’ve actually listed some of my favourites like SIPOC. Do you find that the usage of SIPOC and metrics which are really hard analytical tools, do those work best with these people in the utilities environment?

M Aguilar: I find that it does because really it’s so dependent on the facilitator to say, let’s walk through those five steps, those three to five steps, those third steps of activate, deliver, populate, close. Who’s delivering that, which deliverable, and what’s the inputs to that step? Now what’s the output, what are you really looking for on the outside, whether it’s a person, an activity, a document, and then what kind of conditions do you have? If you have all those people in the room, have it be more of a discussion and it takes away that feel of analytical and then it turns more into just a discussion. I’ve had managers and operators come up to me afterwards and say, I’ve never sat through a session like that. That’s great because I learn how to do this, and I’m absolutely, let’s talk about that! It segues right into that training piece and that’s where you get them to start to fish for themselves.

J Wetzel: You get them to that aha moment?

M Aguilar: They do and that’s the validation, so they come back and say, I really got a lot out of that.

J Wetzel: Finally, can you give us a quick vision of what you think the future process improvement will be at the Southern California Edison plant?

M Aguilar: It’s going to be involved in just those things that we talked about originally. We’re setting the framework right now, we’re setting something called a standard nuclear performance model, and that’s basically the overarching business process architecture for how you generate electricity. What we’re doing is the Chief Nuclear Officer owns that top level and then all of his chief staff own the different legs, the next level down, and then we start to establish ownership, and then we set a calendar and we start to go in with the process owners and the teams and through a long range plan start defining those processes and getting us the metrics and then watch in a couple of years. This is a journey and we’ll get to a place where we’re no longer looking at 300 metrics a month. We’re looking at a core piece of metrics to know just how well the plant is performing.

J Wetzel: Get back to your KPIs.

M Aguilar: Right back to KPIs! Meaningful and actionable, those are the ones we want.