Critical Behaviors for Top-performing Companies

by Scott Sidney, PA Consulting

Utilities are under constant pressure to improve performance.

This often requires them to look outside their organizations for new ideas and an understanding of best practice.

Best practice analysis can provide helpful insights, but implementation is often difficult because of differences in state regulation, environmental considerations, labor factors, geography and weather, to name just a few.

During the past 20 years, PA has been collecting asset management best practices and correlating them with company performance through the Polaris T&D benchmarking program.

The goal is to define what top performance looks like and provide benchmarking participants with specific feedback on how these practices can be applied across their organizations.

We found that a one-size-fits-all approach in best practice implementation does not work for all companies for the reasons listed above.

Instead of focusing on the mechanics of best practice implementation, PA focuses on the behaviors that define a top performer.

This led to the development of top performer profiles that can provide guidance to many companies under various operating conditions.

These profiles follow general asset management processes. For example: A top performer in Life Cycle Strategy (managing asset ownership from cradle to grave) shows the following characteristics. They:

â–  Aggressively pursue new technologies based on quantifiable cost-benefit analysis and system reliability impacts.

â–  Use near real—time, condition-based diagnostic strategies coupled with historic operating performance to optimize maintenance practices and asset replacement strategies.

â–  Embrace a rigorous data capture platform for asset physical, operating and maintenance information and incorporate that data into asset decision-making.

â–  Base decisions on asset repair/replace/upgrade/retire/run to fail options on desired reliability performance and quantifiable cost-benefit criteria, including risk identification and mitigation.

â–  Focus on the optimal balance among asset utilization, losses and capacity in looking at long-term system operating and performance objectives.

A top performer in Investment Management (making smart financial and risk-based decisions on capital and O&M spending) shows the following characteristics. They:

â–  Have a formal and documented business case process in place to justify all potential capital and operations and maintenance (O&M) projects in cost, benefit, risk and resources.

â–  Include ongoing O&M expenses with new capital investments to evaluate total life cycle costs.

â–  Can quantify benefits in financial, nonfinancial and risk terms.

â–  Have a dynamic process to evaluate budget adherence with the ability to alter spending scenarios based on changing business conditions.

A top performer in Reliability (managing outage frequency and duration and emergency outage restoration) shows the following characteristics. They:

â–  Have a senior management mandate and culture that clearly has articulated the focus on reliability and supports it through a proactive reward system.

â–  Focus on discrete System Average Interruption Frequency Index (SAIFI) and Customer Average Interruption Duration Index (CAIDI) improvement opportunities by feeder, substation, geography, asset group or the combination thereof.

â–  Have data owners (people) who are responsible for outage data accuracy, timeliness and completeness.

â–  Adopt a clear mandate to restore first and fix later (make safe, isolate, restore, repair).

â–  Make rigorous use of outage management system data, analyzing outages by root cause and sustained impact by time, cause and geography to understand outage profiles and staffing requirements.

Using this behavior-based approach allows for the development of similar profiles for any business process by analyzing individual best practices and converting them from mechanical implementation to behaviors.

This allows companies that want to improve performance to focus on changing how they do business from a people, culture and process perspective with a significantly better chance of success.

Author

Scott Sidney is a principal consultant in PA Consulting Group’s global energy practice. With more than 34 years of experience in the utilities industry, he is an expert in strategic asset management theory, methodology, process, assessment and implementation. Reach him at scott.sidney@paconsulting.com.

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