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APPLICATION OF BENCHMARKING FOR URBAN

WATER SUPPLY SYSTEM: CASE OF HUE CITY, VIETNAM

Student : Nguyen Thi Chau HuyenCommittee : Dr. Vilas Nitivattananon (Chairperson)

Dr. Edsel E. Sajor Dr. Do Ba Khang

May, 2008

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Contents

Literature Review2

Process of Benchmarking4

Benchmarking findings6

Recommendations for improvement7

Conclusions and Recommendations8

Introduction1

3 MethodologyMethodology

Data collection5

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1. Introduction

- Hue was changed from - Hue was changed from City Category II to Category ICity Category II to Category I => More population, => More population, more development and water demand increasemore development and water demand increase

- The city suffers The city suffers disaster disaster seriously every year => impact to water systemseriously every year => impact to water system

- The city lacks The city lacks infrastructure and integrated management systeminfrastructure and integrated management system => affect => affect water mainwater main

- The The water system is developed separatelywater system is developed separately, lacking of continuous , lacking of continuous improvement => low efficiency and lacking of sustainabilityimprovement => low efficiency and lacking of sustainability

- Application of Application of Process BenchmarkingProcess Benchmarking, developed in 1980s, is , developed in 1980s, is limitedlimited in in public sector => gap in knowledgepublic sector => gap in knowledge

- Vietnam have not applied benchmarkingVietnam have not applied benchmarking => gap in knowledge in the => gap in knowledge in the countrycountry

=> Process Benchmarking is applied for Hue city to close the gaps and => Process Benchmarking is applied for Hue city to close the gaps and improve existing situations.improve existing situations.

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Objectives of the study

Sub-objectives: - To understand performance measurements used in water supply in Hue city- To develop process benchmarking, considering disaster +gender issues’ influences, encouraging local government and residents participation- To compare existing indicators of the utility’s operation process to other benchmarking partners’ seeking for the best process that the utility can apply- To develop recommendations by adopting best process from benchmarking partners and adjusting the process to be suitable with Hue context

To develop environmental process benchmarking for

water supply in Hue city => to close the gaps + ensure sustainable development

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Scope of study

Hue city

Evaluate efficiency of facility operation and management

Give recommendations for improvement rather than develop plan for improvement.

Water supply

DisasterSolid

Waste

Gender Gender issuesissues

Air Air PollutionPollution

Waste Waste waterwater

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2. Literature review

-“Benchmarking is a continuous, systematic process for comparing your own efficiency in terms of productivity, quality and practices with those companies and organizations that represent excellent. Benchmarking is also a systematic process which aims at seeking excellence in the world around us in order to learn and adopt its operative content and processes so that we can raise our own organizations to championship class.” (Karlof and Ostbom, 1993)

Performance Benchmarking: comparison indicators related to a business as a whole or to the group of critical activities or process.

Process benchmarking is selected to apply for Hue.

Process benchmarking: comparison of process with a set of sequential activities, explicit comparison of both performance measures and work practices leading to the redesign of a new process.

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3. Methodology

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3. Methodology (cons.)

Environment

Water qualityService

Operation process

Finance and Efficiency

Performance

Benchmarking areasBenchmarking areas (Modified from Larsson et al., 2002)

Areas of process benchmarking

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4. Process of benchmarking

The process of benchmarking in the study includes 5 steps:

Step 1: Decide what to benchmark, covering four areas: Operation process, Environment, Services, Finance and efficiency

Step 2: Identify benchmarking partners: Singapore, Phnom Penh, Vientiane, Ho Chi Minh, Dalat

Step 3: Data collection

Step 4: Data analysis: almost the utility do not include gender issues in their activities

Step 5: Recommendations for improvement

The methods of benchmarking are used including: Performance indicators Comparison with the Standards Technology used Management guidelines Waste minimization Professional judgment(Modified from The International Benchmarking Network for Water and Sanitary Utilities)

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4. Process of benchmarking

First meeting to decide what to benchmark

Women in suburban areas get more burden because of no water tap

Women are impacted directly from polluted rivers

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4. Process of benchmarking

Second meeting with stakeholders to discuss about

recommendations

Women and gender expert participation in the meeting

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5. Data analysis- operation process

Ho Chi Minh and Ho Chi Minh and Singapore are selected Singapore are selected to benchmark operation to benchmark operation process for Hue. process for Hue.

% of test pass the standard of Ho Chi Minh and Singapore are better than Hue, especially in their process.

Singapore has good awareness activities

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5. Data analysis- environment

- Wastewater and sludge are discharged directly into the Wastewater and sludge are discharged directly into the environment.environment.

- Hazardous waste and solid waste are stored and disposed Hazardous waste and solid waste are stored and disposed together. Urban environmental utility is responsible for collection.together. Urban environmental utility is responsible for collection.

- Ho Chi Minh is selected to benchmark wastewater and Ho Chi Minh is selected to benchmark wastewater and sludge treatment method for Hue city. sludge treatment method for Hue city.

- Professional judgment is used to benchmark hazardous - Professional judgment is used to benchmark hazardous and solid waste management.and solid waste management.

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5. Data analysis- services

- Customer complaint is 3, - Customer complaint is 3, but it decrease rapidly from but it decrease rapidly from 54 last year to 3 in 200854 last year to 3 in 2008

- New customer rate in Hue - New customer rate in Hue is lower than other utilities.is lower than other utilities.

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5. Data analysis- services

Professional judgmentProfessional judgment is used to is used to benchmark PR activities for public benchmark PR activities for public

awareness improvement and customer awareness improvement and customer satisfaction because there is no specific satisfaction because there is no specific

process from benchmarking partnersprocess from benchmarking partners

-Hue has good performance in public awareness and women involvement

- PR activities have not focus on all residents and women

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5. Data analysis- Finance and efficiency

Finance and efficiency comparison

0

0.1

0.2

0.3

0.4

0.5

0.6

city

spec

ific

exp

ense

/to

tal e

xpen

se r

ate

Chemicals and materialsexpense/total expense

Labour cost/total expense

Electricity cost/total expense

0

0.1

0.2

0.3

0.40.5

0.6

0.7

0.8

0.9

Hue HCMC Dalat Vientiane Phnom penh Singapore

City

Cos

t/rev

enue

rat

io

Ho Chi Minh and Singapore Utilities have the best performance

Ho Chi Minh and Singapore are selected to benchmark.

Cost/revenue ratio of Hue is higher than Ho Chi Minh and Singapore

Chemicals cost and labour cost of Hue is higher than HCM and Singapore

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5. Data analysis-Process indicators

Comparison of process indicators

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6. Benchmarking Findings

Strengths

-Hue has the lowest water loss in Vietnam

-The water main system is stable in pressure with eleven water factories located in different points of the city

-Water treatment system is improved and automated

-The utility got ISO 9001:2000 for water quality and ISO/IEC 17025: 2005 for laboratory in 2006.

-The utility develops plan to cope with disaster with clear responsibilities for leaders, staff and workers.

- Ensure women rights in Vietnamese Labour Law

-Involve women in planning process

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6. Benchmarking Findings

Weaknesses

- No water supply in suburban areas => impact to women

- The utility gets raw water from Huong river which has no water source reserve evaluation plan

- Raw water pipe system is controlled together with water supply pipe system

- Gender issues are not considered appropriately

- The process of setting tariffs is conducted by some selected officers

- Separately management in catchments management, sewerage system, drainage system and human health.

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7. Recommendations for improvement

Recommendation to the utility:

1. Operation process:

- Construct storage tank to decrease impact of disaster and balance water source

- Separately control raw water pipe and supply main system

- Adopt water treatment method of HCM, include chlorine and fluoride in the last step of storage tank

- Encouragement public participation via campaign and surveying

- Supply water to suburban areas, ensure access of women and the poor

- Highlight women role in water saving, involve women in decision making

- Widen relationship with experts in universities

- Cooperate with city government in infrastructure construction

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7. Recommendations for improvement

2. Environment

- Use sedimentation method for wastewater

- Apply compressing machine for sludge treatment, reuse the sludge

- Separate hazardous waste with solid waste, inform the collector about them

- Educate staff in waste minimization.

3. Services

- Conduct customer expectation survey in suburban areas

- Develop other bill collection systems: collecting via bank transfer, collecting each two months or six months, collecting at the same time with meter reading

- Widen public awareness campaign to all residents, especially women

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7. Recommendations for improvement

4. Finance and efficiency:

- Attract private participation in some activities for more capacity

- Improve supply capacity in order to satisfy human demand in suburban areas => unit water cost will decrease

- Develop more tariffs, subsidize for the poor, women and suburban areas

- Reform the utility from State owned to privatization for more efficiency.

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7. Recommendations for improvement

Recommendations to city government:

- Widen foreign relationship, having project with other city to exchange experience in environmental management.

- Improve drainage, sewerage and wastewater treatment system.

- Increase efficiency in planning process, change into bottom-up planning.

- Highlight disaster management: drainage dredging, construct dam and reservoir, planting trees, management the areas along the river, etc.

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8. Conclusions – Contribution of the study

From studying existing situation of the utility, the study has achieved:

- Process benchmarking is applied with five steps without recommendations implementation => No model and evaluation

- Recommendations for improvement are developed for the utility and city government

- Gaps in knowledge and gaps of performance benchmarking are filled

- The study raise women role, inform the managers about other factors’ influences to the sustainability of the water system and city development

- The study has combined specific areas and sub-processes and adjusted the process according to public sector and existing context of Hue city

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8. Recommendations

Utilization of study result:

- City government commitment is necessary in include recommendations in the planning process

- Different department should coordinate together in integrated infrastructure planning and implementation

- The utility can consider and apply recommendations in the operation activities for improvement

- Process benchmarking can be applied for other cities, Hue is a benchmarking partner.

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8. Recommendations

Further studies:

- Developing detail plan for improvement for the utility

- Develop benchmarking model pilot test, model modification and finalization

- Study on application process benchmarking for other cities

- Study on application process benchmarking for wastewater, solid waste, etc.

- Study on application of integrated benchmarking and governance in public sector.

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Pictures of site visit

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Pictures of site visit

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Specific Methodology

Data collection

- Indicators about operation process, environment, service, finance and efficiency, and gender issues are developed

- Quantitative data is used to compare utility’s efficiency

- Process data is used to benchmark for Hue utility

- Data collection always involve women in meetings, workshop, face-to-face interview in appropriate time

-Data analysis

- All factors of data related to financial management, water quality, system operation, service quality, system management, gender issues… will be analyzed together with system efficiency

- Gender analysis focus on main issues: Women vulnerability, women and men needs, accessibility to the water supply and services, ability to make change, etc. etc.

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Decide benchmarking partners

Table 5.2 Analysis of criteria meeting

Singapore, Phnom Penh, Vientiane, Ho Chi Minh and Dalat Utilities are selected