rethink excellence: a systems approach
TRANSCRIPT
RETHINK EXCELLENCE: A SYSTEMS APPROACH
Vern Campbell, EIR - University of Manitoba, Principal -Process Management
Howard Matthews, Vice President of Power Production, SaskPower
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INTRODUCTIONDid you know that…
Only 10% of the Fortune 500 Companies from 1955 remained in 2020.
Greater than 95% of Lean/OpEx initiatives “fail”?
Operational Excellence Sustainability:20% Tools/Techniques80% Leadership/management & a systems approach
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SESSION, PURPOSE & AGENDA
Our Purpose: To provide a systems approach to Operational Excellence.
Agenda:1. Operational Excellence Overview
a) Definitionb) Overview of Systemc) General Approach
2. SaskPower Power Production Operational Excellence Journey
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DEFINITION OF A SYSTEM
A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. A system must be managed, it cannot manage itself.
Dr. W. Edwards Deming, The New Economics
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OPERATIONAL EXCELLENCE SYSTEM AIM
A comprehensive leadership system designed to systematically improve the performance of the enterprise for all stakeholders through the collective talent and efforts of focused & engaged people.
The Goal:
Improve Safety, Improve Quality, Reduce Cost, Improve Delivery, Sustainable Environment & Improve Morale
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THE CHALLENGE
Technical Project based approach Build capability
Process Management based approach Strategic Results
Systems based cultural approach Sustainability
Perf
orm
ance
Impr
ovem
ent
Time
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Intrinsic Technology (Industry) & Motivation
General Education, etc.
Concepts:- Customer- Process- Fact/Data
PDCA- Quality- Flow- Respect for
humanity- Deming, Etc.
Techniques:- QJ Story- 7 QC Tools- 7 Mgmt &
Planning Tools
- Advanced Stat Tools
- IE, VE, etc.
System Components:- Leadership- Strategy Management- C.F. Management- Daily Management- SGA/QI
Safest Workplace, Highest Quality, Lowest Cost, Best Delivery, Highest Morale, Sustainable
Environment
Adapted from “TQM House” - TQM Guide for Service Industries– Noriaki Kano
HOUSE OF EXCELLENCE
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Intrinsic Technology (Industry) & Motivation
General Education, etc.
Concepts:- Customer- Process- Fact/Data
PDCA- Quality- Flow- Respect for
humanity- Deming, Etc.
Techniques:- QJ Story- 7 QC Tools- 7 Mgmt &
Planning Tools
- Advanced Stat Tools
- IE, VE, etc.
System Components:- Leadership- Strategy Management- C.F. Management- Daily Management- SGA/QI
Safest Workplace, Highest Quality, Lowest Cost, Best Delivery, Highest Morale,
Sustainable Environment
Adapted from “TQM House” - TQM Guide for Service Industries– Noriaki Kano
HOUSE OF EXCELLENCE
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GENERAL SYSTEM APPROACH• Develop Leaders at all levels (Starting with senior leadership team going to
front line supervisors)– Develop OpEx System knowledge & capabilities– Set direction, Focus Action, Get Results, Build the team– See & solve problems using facts, data & PDCA– Why? – The implementation must be led by the leadership team: it cannot
be delegated!• Develop and implement Daily Management Systems (“Linchpin”)
– Develop and deploy Daily Management Systems (Operating system).– Develop everyone’s capability to surface and solve problems systematically,
scientifically and continuously every day.– Why? To sustain and continually improve performance.
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GENERAL APPROACH CONTINUED
• Develop and deploy cross functional management systems– Identify and systematically improve and innovate cross functional processes
critical to the enterprise aim or mission.– Why? Cross functional processes deliver step change in performance, critical
to both the results and the development of people.• Develop and implement Strategy Management Systems (Hoshin Kanri).
– To set and deploy direction, focus Strategic Process Improvement and Innovation efforts to achieve continuous and breakthrough results.
– Why? Align and focus everyone in the organization.
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GENERAL APPROACH CONTINUED• Align all support systems.
– Review and align support systems i.e. Leadership development (all levels), HR systems, Finance/Accounting systems, etc.
– Why? All support systems need to align with the philosophies, principles and goals of the Operational Excellence system, or the system will not be sustainable.
• Develop an Enterprise Excellence Structure– Structure the organization to sustain Operational Excellence.– Why? Structure is critical to institutional knowledge, learning, and focused, custom
execution.• Benchmark Progress
– Benchmark progress every 6 months (L-WC Model).– Benchmark score/targets are strategic KPIs– Why? Reflection, learning, focused actions to strengthen the system
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BENCHMARK PROGRESS – LEARNER TO WORLDCLASS 1. Score – 1-10 (Learner)
1. No formal systems in place and no recognized need for formal systems.2. Score – 11 – 20 (Developer)
1. Recognized need for formal systems. Formal Systems are developing.3. Score – 21 – 30 (Performer)
1. Formal systems are in place although gaps may exist.2. KPIs in place and showing improvement.
4. Score – 31 – 40 (Contender)1. Formal systems entrenched throughout organization.2. KPIs in place demonstrating sustained positive trends aligned to strategic
targets.5. Score – 41 – 50 (World Class)
1. Formal systems entrenched throughout organization. 2. Industry/beyond performance benchmark.
POWER PRODUCTION’S JOURNEY THROUGH OPERATIONAL EXCELLENCE
AND QUALITY MANAGEMENT SYSTEMS
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AGENDA
• SaskPower• The Challenge• The Strategy• The Results
“Show me a low-quality plant, and I will show you a high-cost plant”
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SASKPOWER FACILITIES
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540,727 CUSTOMERS
4,993 MW CAPACITY
157,000 KM OF POWER
LINES
3,792 MW PEAK LOAD
(2017)
SASKATCHEWAN’S PRIMARY ELECTRICITY SUPPLIER
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Business Environment
• Declining Equivalent Availability
Factor (EAF) (Reliability)
• Flat budgets
• Aging equipment run harder &
longer
• Flight Risk (customer) 10/50%
• Regulatory requirements (CO2...)
WHY OP EX
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0
50,000,000
100,000,000
150,000,000
200,000,000
2010YTD
Actual
2011YTD
Actual
2012YTD
Actual
2013YTD
Actual
2014YTD
Actual
2015YTD
budget
2016YTD
Budget
2017YTD
Budget
PPBU Actual Base 2010 - 2017
Actual Base
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
2008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
EAF
Perc
ent
All Steam EAF Forecast vs. Actual (Including Scheduled Overhauls)
AllowableVarianceForecast EAF
Higher numbe
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With ZERO new money $$$$
• Increase reliability (EAF), decrease
spending, improve safety, improve
environmental performance
• Increased Productivity.
• Fewer Breakdowns.
• Less OT, Less Contractors
• Eliminate Lost Time Injuries
• Operations, Maintenance, Engineering
THE GOAL
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Can OpEx be applied to:• Power plant vs Manufacturing:
• Maintenance
• Operations
• Engineering
• Office environment
• Engineering
• Purchasing
• Human Resources (HR)
THE CHALLENGE
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Build leadership team
• Purpose, roles, responsibilities
• Problem Solving Capability
• Visual Management team meetings
• Who? Senior Management (VP, Plant
Managers)
• Yellow Belt, Green Belt (Quality
Journal, Advanced Quality Journal)
STARTING POINT - PILOT
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4321
24
22
20
18
16
14
12
10
Benchmark Number
Lead
ersh
ip S
core
Individual standard deviations are used to calculate the intervals.
Leadership Assessment ScoresAverage of All Assessments (Spring 2017 - Fall 2018)
4321
24
22
20
18
16
14
12
10
Benchmark Number
Daily
Man
agem
ent S
core
s
95% CI for the Mean
Individual standard deviations are used to calculate the intervals.
Daily Management Assessment Scores
4321
24
22
20
18
16
14
12
10
Benchmark Number
Qui
ck Im
prov
emen
t Sco
res
Individual standard deviations are used to calculate the intervals.
Quick Improvement Assessment ScoresAverage of all Assessments
4321
24
22
20
18
16
14
12
10
Benchmark Number
Proc
ess I
mpr
ovem
ent S
core
s
Interval Plot of Process Improvements95% CI for the Mean
Individual standard deviations are used to calculate the intervals.
EXTEND TO ALL PLANTSBuild Leadership Team
• Daily Management
• Process Improvements
• Quick Improvements
• Regular evaluations
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Fiscal 2017 Fiscal 2018
•Reduce Unscheduled Work
QEPS Pilot
•Quality Notification•Reduce Rework•Notification Prioritization•Meeting Optimization•Improve Monthly Reporting
YB Class 1•Return to Service•Completion of Operator PM’s•Supervisor Training Manual•Utilization/Creation of EMR’s•Scheduling of Mandatory Training•Standardize SPOAD data•Timing of Engineering Scope Definition
YB Class 2
•Procurement Daily Management
•Forward OH Planning
GB Class 1
LEARNING JOURNEY
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Fiscal 2019
• Material Disposal• Time Entry Error
Reduction• Athabasca
Operator Training• Utilization of the Ice
Road• Reliability Metric
Improvement• Project Employees
Evaluation
YB Class 3
• Planning Accuracy
GB Class 2
LEARNING JOURNEY
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TREMENDOUS EFFORT = BIG BENEFITS
YB Level Problem Solving• 57 Yellow Belts• 28 Projects
GB Level Problem Solving• 13 Green Belt
Attendees• 4 Projects
OpEx Systems• Leaders Go & See• Visible Leadership • Daily Management• Unwavering discipline
to Methodology & Analytics
Quality Overhauls•Forward Planning Team
•Quality Work Packages
•Cross Division Decision Making
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Results Matter - Stunning improvement
Cost reduced $20Million, ongoing
$5M per year next three years
$35M reduction – 15%
Equivalent Availability Factor increased to
target
Safety - stunning
Environment – stunning
Culture – Yes !
KEY PERFORMANCE INDICATORS
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75
80
85
90
95
2000CY
2002CY
2004CY
2006CY
2008CY
2010CY
2012CY
2014CY
2016CY
2019FY
2021FY
2023FY
2025FY
EAF
(%)
Target Actual
ALL STEAM EAF BUDGET vs ACTUAL
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Like real estate…..
• Management, Management,
Management
• Leadership Commitment !
• Roundtable 2.0 – Communications,
Engagement
• Culture change
INSIGHTS
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• Hope is not a strategySafety
• We have stopped making excusesAccountability
• Our Directors and others are actively involved in site assessments.
Collaboration• See something, say something
Openness
CULTURE CHANGE
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•Roundtable Discussions
• Stand-up Meetings
• Listening to feedback from the shop floor
WE NEED TO TAKE IT TO THE NEXT LEVEL – HOW?
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DAILY MANAGEMENT WORKS!
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EPILOGUE
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REJECTED PERMIT APPLICATIONS SINCE PP VP DIRECTIVE
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Permit Switch Plan Error Rate Since PP VP Directive
36
QUESTIONS ?
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Speaker Contact Information:• Vern Campbell,Process Management, (204) 793-9829
• Howard Matthews, Vice President of Power Production, SaskPower, [email protected]