- Total Quality Information Management

Chris FWrraLi is an Environmental Applicatiions consultant with Software 2O00, Inc.. advising indushy on the selection and imprsnentation of environmental sojiware andteaching environmental i@mation management.

QUANTIFYING TQEM AT FLORIDA POWER & LIGHT

IT IS A COMMONPLACE that quantitative orparameter-based quality programs are well-suited to engineering processes, but are difficult or impractical to implement in the delivery of services. The corporate or division-level environmental manager has a wide range of internal and external customers, and the “product” he or she delivers is a “service product”: management of the environmental processes and procedures followed in the corporation. What information is needed to measure the quality of this management?

Even within quality-driven companies there is usually a discontinuity between quality engineering procedures at the plant level and corporate quality policy directives. This discontinuity parallels a classic environmental dilemma, in which “corporate” decrees improvements in environmental performance, but does not fund or provide tools to the plants to achieve the improvements.

In the last issue of TQEM we pointed out that environmental information be- comes increasingly generalized and qualitative as it moves up the corporate ladder from Source Management to Risk Management. Whereas the operations of one water treatment plant may generate thousands of data points to the third decimal place each month, the company’s Environmental Director may rely on written quarterly reports from dozens of environmental managers to evaluate billions of dollars of potential environmental risk.

Perhaps the key difficulty in quantifying the quality of services is the problem of establishing consistent, quantifiable, and commonly understood measures for the quality of services delivered. Florida Power & Light tackled that challenge with a consistent approach to quality improvement that provided the same measurement, improvement, and reporting techniques to line crews and division managers. In the process the company has succeeded in integrating environmental quality improve- ment as a mainstream production activity rather than a postproduction cost item.

Quarry IMPROVEMENT AT FLORIDA POWER & LIGHT Florida Power & Light (FP&L) is the fastest growing utility in the United States,

with 3 million customer accounts and an annual growth rate of almost 4 percent in the 1980s. In 1989 FP&L became the first American company to win the Deming Prize, the culmination of an exhaustive ten-year corporate retooling that involved virtually all of its 15,000 employees.

FP&L’s commitment to quality programs originated with its highly successful quality assurance programs used for construction of the St. Lucie nuclear power plant in the 1970s. St. Lucie was built in six years, a remarkably fast schedule that saved the company an estimated $600 million in building and financing costs. In 1988 Nuclear Week magazine rated St. Lucie as the best performing nuclear unit in the U.S. (and, tellingly. the eleventh best unit in the world).

TUTU Q v ~ ENVIRONMENTAL MANAGEM~IWINTER 1991192 181

CHRIS FIIZGERALD

d Management soon realized that Q I teams alone would not achieve the results needed to change the company.

Efforts to extend this approach corporatewide were disappointing:

Quality efforts began in 1981 with a limited and narrow approach called Quality Improvement teams, similar to Japan’s QC Circles. Management soon realized that QI teams alone would not achieve the results needed to change the company.

In 1985, FP&L chainan of the board and chief executive officer, John J. Hudiburg, announced that the company would fully implement its Quality hnprovementhgram (QIF’). Mr. Hudiburg told FT&L employees that after thoroughly investigating TQC methods, he was convinced that TQC was the best management system ever conceived. He also told them that the QIP philosophy and system would be deployed throughout FP&L and that QIP would be the method used to accomplish the corporate vision.’

The QIP program maintained and expanded the use of Quality Improvement Teams, but added two other key components:

Policy Deployment-The cornerstone of Fp&L’s Management System replaced Management By Objectives (MBO) as the principal method for achieving company objectives. Policy Deployment provides a systematic process for ensuring that objectives are met and is regarded as a more

FIGURE 1. RELATIONSHIP B~WEEN POLICY DEPLOYMENT, QUALITY IN DAILY WORK, AND QUALITY IMPROVEMENT TEAMS

I Corporate Vlsion 1

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182 TOTAL QUW ENVIRONMEMAL MANAGEMEMIWINIER 1991192

d In order to meet the demanding standards imposed by the QIP process, it was essential to provide tools for consistent and quantitative measurement and reporting of q u a w processes at every level of the corporation

customer-based system than MBO, which focuses exclusively on the company’s point of view.

Qualify in Daily (Repetitive) Work (QIDWfiA decentralized method aimed at assuring that routine activities are performed correctly and that the gains achieved through improvement activities are maintained.

Figure 1 illustrates the relationship between the three key QIP components. Figure 2 summarizes the early Policy Deployment programs at FPBL.

TOTAL Q U m INFORhiAnON MANAGEMENT

T ~ A L Q u m ENWRONME~~AL MANAGWENTIWIMEQ 1991192 183

CONSISTENCY TOOLS: QI STORIES AND THE USE OF COMPUTERS In order to meet the demanding standards imposed by the QIP process, it was

essential to provide tools for consistent and quantitative measurement and reporting of quality processes at every level of the corporation. Hitoshi Kume’s Statistical Methods for Quality Improvement became a widely embraced bible for methodol- ogy. Each major unit developed and published an internal Description of Quality Improvement Program, and a thirty-page Terminology Glossary was published companywide to assure consistent use of terminology, codes, and formulas. But the key tool for assuring consistency has been the QI Story, a highly structured reporting format for quality improvements involving seven key steps:

1. Reason for Improvement 2. Current Situation 3. Analysis 4. Countermeasures 5. Results 6. Standardization 7. Future Plans

Figure 3 depicts the QI Story format, and Figure 4 outlines the tools that may be employed to document it. QI Stones have become an integral tool for involving every level of FP&L employees in quality improvement, from repair crews to corporate program managers. By 1988 more than 1,100 QI Stones had been completed and evaluated.

QIP also required the increased judicious use of automated systems to measure and evaluate quality improvement requirements. especially in QIDW activities. The QIP guidelines call for computer systems to support QIDW implementation to:

1. Tailor services to meet individual customer needs 2. Have quick access to data for problem solving at FP&L’s many remote sites 3. Stratify, analyze, and graphically print data 4. Replicate processes and standards across multiple work sites 5. Collect, store, retrieve, and analyze data consistently throughout the company 6. Provide training for repetitive activities 7. Maximize economic operation of the power supply system’

ENVIRONMENTAL Quarry MANAGEMENT For Environmental Affairs, the overall initial theme within the QIP was to

reduce environmental violations and nonconformance. In the first five years of QIP. Environmental Affairs focused on the priority objectives and implementation

YEAR FOCUS RESOURCES ON CORPORATE OBJECTNES

EFFECTS

REMAINING PROBLEMS

FOCUS RESOURCES FOCUS RESOURCES ON SELECTED TO ACHIEVE WALIM ISSUES CUSTOMER FOR IMPRWEMENT SATISFACTION

FIGURE 2. POLICY DEPLOYMENT A n r v r m AT FLORIDA POWER AND LIGHT

I I I

ESTABLISHED POLICY DEPLOYMENT GUIDELINES

83-85

LINKED PROJECT TARGETS DIRECTLY TO SHORT-TERM P W S

86

CONDUCTED ANNUAL PLANNING R M M

CONDUCTED INFORMAL PERIODIC P W N I N G R E V I N

CONDUCTED ANNUAL END- OF-YEAR R M E W

87

INITIATED EXECUTM ASSIGNED STRENGTHENED ROLE OF COORDINATING EXECUTIVE VlSlT PROCESS COORDINATING

EXECUTM REVIEWED POLICY AT SPRING SITCON FORMALIZED CROSS-

REOUIRED 01 STORIES FUNCTIONAL MANAGEMEN1 FOR PROJECTS OF PROBLEMS

88

IN P O L L 3 DEPLOYMENT AND BEGAN TO FOCUS ON COMPAW PROELEMS

TOO W Y OELJECTMS WERE ESTABLISHED

DEVELOPED 588 PROJECTS AT THE DEPARTMENT L M L

WERE NOT FOCUSED LINKED WITH POLICY IMPROVEMENT ACTMTIES IMPROMMENT ACTMTIES

ACHIEVE BETTER COORDINATION OF

POLICY

CORPORATE OWEC~MS WERE COST RELATED

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ESTABLISH POLICIES FOCUSED ON ACHIEVING CUSTOMER SATISFACTION

APPRDPRLATELY TO A C H I M CUSTOMER %TISFACTION

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PHASED OUT MAMGEMENT

ESTABLISHED VISION ALIGNED GOALS

INTRODUCED POLICY

6f OBJECTNES

ACROSS CORPORATION

DEPLOYMENT

c ESTABLISHED GENERAL

ALIGNED DEPARTMENTS OBJECTNES

WITH CORPORATE VISION AND FUNDAMENTAL O W E C T M S

D M L O P E D PROJECTS TO SUPPORT DEPARTMENT OEJECTMES

RECOMMENDED DEPARTMENT TARG€TS AND OWECTNES

ESTABLISHED POLICY DEPLOYMENT COMMTTEE

ALIGNED CORPORATE O W E C T M S WITH CUSTOMER S U W M

D M L O P E D MIDTERM AND SHORT-TERM PLANS

IMPLEMENTED POLICY DEPLOYMENT

W E D DEPARTMENT GOALS ON CORPORATE OWECTNES

REFINED UNDERSTANDING OF CUSTOMER VOICE BY USE OF TABLE OF TABLES

PILOTED DEPARTMENTAL OUALIM SYSTEMS

LINKED SHORT-TERM PLAN. DEPARTMENTAL OEJECTNES AND PROJECTS

DEVELOP CONSISTENT POLICIES AND TARGETS

REOUIRED O6JECTMS AND TARGETS ESTABLISHED DEPARTMENT TARGETS FOR CORPORATE OEJECTMS

ALIGNED INDICATORS AND T*RG€TS TO PRIORR AREAS

INTRODUCED CORPORATE OUAUM/DELMRY SYSTEM

INTRODUCED DEPARTMENT OUALIM SYSTEMS

CONFIRMED ALIGNMENT OF SHORT-TERM PLANS WITH CUSTOMER NEEDS

8 INITIATED CORPORATE ENHANCED LONG-RANGE

USED TARGETS FOR

0 VALIDATED SHORT-TERM MANAGED'' ----I-- PLAN TARGETS

SYSTEM OF INDICATORS PUNNING PROCESS

PROJECTS TO REFLECT "BEST * SET MIDTERM TARGnS

* ALIGNED CORPORATE AND DEPARTMENTAL ACTMTIES THROUGH MINI-SITCONS

INTEGRATED POLICY DEPLOYMENT WITH EUDGf3 SYSTEM

I

STRENGTHEN REVIEW OF IMPLEMENTATION ACTIVITIES

PROWDED STATUS UPDATES BEGAN PRESIDENTLAL HELD PRESIDENTUL IMPLEMENTED MANAGEMEM R M N ON OWECTNES 1 R M N R E v l M MONTHLY

TFANED 603 MANAGEMENT- UNDERSTOOD MAJOR IMPROVED THE L M L EMPLOYEES I PROBLEMS E m E R 1 WGNMENT OF VECTORS

WERE NOT ADEQUATELY INTEGRATED

LINKED EACH OF THE EIGHT SHORT-TERM W S TO THE CUSTOMER THROUGH THE QUALITY ELEMENTS

THE OUALIM/DELMRY WSTEM STI<L NEEDS BETTER INTEGRATION

184 TUTU Q u m ENVIRONMENTAL MANAGEMENTIWINTER 1991192

d QZP also required the increased judicious use of automated systems to measure and evaluate quality improvement requirements. . .

TOTAL Q U W INFORhMlON MA NAG EM^

T ~ A L QVU ENVIRONMEMAL MANAGEMENTIWI~~ 1991192 185

actions listed in Table 1. Very early in implementation of QIP, Environmental Affairs realized that better

information was needed to support QIP’s analytical demands. In 1986 FP&L initiated implementation of the Environmental Management Information System (EMIS) to serve quality programs in the Environmental Affairs Department. The EMIS acronym is intentionally different from the more commonly used EIMS (Environmental Information Management System), according to Joe Sicbaldi, who was system administrator for implementation of ENFLEX. a commercial software application selected to support EMIS.

“Most people look at information systems from the perspective that they have large quantities of data they need to manage,” Sicbaldi says. “Oyr point is that we don’t want to manage the data so much as to manage with that data. The data system is there to serve management objectives, not vice versa.”

The key role of the EMIS was to support corporate priority setting in addressing needs for environmental improvement. Violations were reported to Environmental Affairs through a variety of verbal and written reporting procedures, making it difficult to establish patterns and prioritize responses.

The ENFLEX Environmental Events module was selected for implementation on the FP&L mainframe, which gave every FP&L facility access to the reporting system. The Events DBMS became the formal reporting mechanism, providing a consistent and replicable structure for recording all violations and other nonconfor- mance identified through audits and other procedures.

In reporting each event, the user categorizes the event according to Event Type (Air, Permit Expired, Spill, Manifest Outstanding, Water Noncompliance, Citizen Complaint, and so on), Violation Type (Administrative Order, Notice of Violation, and the like), and relative priority. The report also tracks the material involved, cause of the problem, corrective action taken, agency involved, costs of fines, and so on. The vendor, ERM Computer Services, also worked with FP&L to customize the module to add other data items required by QIP to analyze root causes of the event and evaluate countermeasures.

The most significant contribution the EMIS made to QIP initially was to uncover the “iceberg” of environmental nonconformance. “Prior to 1986 we had a pretty good handle on violations because we had to respond to them,” Sicbaldi says. “But QIPmakes you lookbehind phenomena to identify root causes, and nonconformance is the root cause of violations. We call it the ‘Environmental Compliance Iceberg’; you can’t see 90 percent of the problem if you just look at the violations you have to report to agencies.”

The Environmental Events components of EMIS have served both as a guidance tool and “corporate memory” for FP&L Environmental Affairs. Because all events are defined using common terms and categories, the panems through QIP analysis of the Events database have steered the year-to-year evolution of environmental quality efforts. From 1985 to 1988 all violations were reduced from thirty-two to ten, and to zero in the first half of 1989. Hazardous waste violations, the initial focus of the program, were reduced from twenty-eight in 1985 to seven in 1986 and zero in 1988. Asbestos violations became a focus in 1987, and were reduced from seven in that year to zero in 1988.

The larger part of the icekrg-nonconformanceswere also reduced dramati- cally. Before implementation of the Events module in 1986 there was no data because there was no mechanism for reporting noncunfonnances that were not technical violations. In 1987 there were 318 non conformances in nine major

CHRIS FnzGwuD

FIGURE 3. INTRODUCTION TO THE QUALITY IMPROVEMENT STORY

A. WHATISIT?

The QI Story is a standard way of communicating team progress. The QI Story form is a structure to help illustrate the steps to be taken by a team in the improvement process.

WHY DO WE USE IT?

0 For the teams to organize, collect and analyze information and to monitor how-they are doing.

0 To obtain understanding and input from non-team members.

WHAT DOES IT LOOK LIKE?

B.

C.

QUALITY IMPROVEMENT STORY - Project Planning W..xktheet

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186 TOTAL Qlrm ENVIRONMENTAL MANAGEMENJ'IWIHTER 1991192

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categories. In 1988 nonconfomances were reduced by 455, to 144, and the major category ofnonconformance (late asbestosnotifications) was reduced by 50percent. Cumntly many of the major categories have three or fewer nonconfomances annually, and the reporting system is being retined to track QIDW procedures in areas such as permit application and processing.

1985 Objective Improve FP&L's ability to comply with environ- mental regulatory requirements

Activities Analyzed violations to identify am most in need of improvement

1986 Objective Improve communication of hazardous waste regu- latory requirements to operating department

Activities Implemented hazardous waste training for operat- ing department personnel

Developed system to collect nonconformance data

1987 Objective Identify other areas with compliance problems

Activities Analyzed nonconformance data and identified asbestos notifications as area in most need of improvement

1988 Objective Implement actionable countermeasures and as- sess results

Activities Continued countermeasures for hazardous waste violations and asbestos nonconformance

Instituted countermeasures for late air and water reports

1989 Objective Address other areas with compliance problems

Activities Addressed air and water operations' nonconfor- mance

Identified tank leaks and oil spills as areas in need of improvement

188 TOTAL Q u m EWIRONWAL MANAGEMENTIWNER 1991192

Tc?TAL Q U M INFORhUnON MANAGEMEKT

KEYS TO Succ~ssnn IMPLEMENTATION Florida Power & Light has succeeded in developing a meaningful quantitative

tool forthe difficult task of setting corporate environmental improvement priorities. Its success seems attributable to the following:

“We call it the ‘Environmental Compliance Ice berg’; you can’t see 90 percent of the problem ifyou just look at the violcztions you have to report to agencies.”

1. The quality program is comprehensive, companywide, and quantitative. 2. Although mandated from the top down, training, tools, and the power to

resolve problems are provided at every level of responsibility. 3. The Deming application process provided a midrange goal and rigorous self-

evaluation process to assure that gains were real and measurable. 4. The information system was driven by the quality process and did not become

an end in itself. 5. EMIS provided consistent and quantifiable reporting tools for the identifi-

cation and analysis of environmental problems and of the success of countermeasures taken.

6. EMIS has continued to evolve as the success of QIP has resulted in ever more ambitious goals for environmental quality.

The author welcomes comments on this column and ideas for future columns on environmental information management systems. He can be reached through this journal or via MCI Mail box CSF. A number of readers have eqressed interest in learning ha0 to access the EPA TRIS database on-line; this will be covered in the next issue of TQEM.

NOTES

1. Florida Power and Light Company, 1988: Description of Qualify Improvement Program: Corporare. p. 10.

2. Id., p. 22.