Abstract
Operational Efficiencies occur with the right mixture of people, processes and technology coming together to increase productivity of the operations of a company. The company should come up with a framework of best practices and implement it to become operationally efficient. Companies need to realize that there is an optimal way for every process and it should be carried out in that optimal way to reduce costs. Yorkshire Water is one of the leading water supply and treatment utility companies in the United Kingdom. The Company has the vision of becoming ‘clearly the best water company in the United Kingdom’. Not so long ago, Yorkshire Water was experiencing problems in its Waste Water Asset Management (WWAM) function. The solution came in the form of Trinity Horne whom Yorkshire Water hired to review and resolve the operational inefficiencies.
Introduction:
Operational Efficiencies occur with the right mixture of people, processes and technology coming together to increase productivity of the operations of a company. The operating costs also go down and the outcome is that more can be attained with lesser resources. And the resources that are saved could be invested into other projects. Companies need to realize that there is an optimal way for every process and it should be carried out in that optimal way to reduce costs. People and their experience are very essential in making a company operationally efficient. Process management is also very important if we wish to reduce cost of activities that the company repeatedly performs. The company should come up with a framework of best practices and implement it to become operationally efficient. This essay pertains to Yorkshire Water, a company that was facing operational inefficiencies, but with the help of Trinity Horne, Yorkshire Water was able to transform and become operationally efficient (Ensynch, n.d.).
Background
Yorkshire Water is one of the leading water supply and treatment utility companies in the United Kingdom. Apart from North, West and South Yorkshire it also covers East Riding of Yorkshire, North Lincolnshire and some parts of Derbyshire. The company has the vision of becoming ‘clearly the best water company in the United Kingdom’. Yorkshire Water manages to supply as much as 1.24 billion liters of water every day. The work doesn’t end there; Yorkshire Water collects, treats and disposes 1 billion liters of water back in to the environment. To be able to carry such a daunting task, Yorkshire Water relies on its 120 reservoirs and around 700 water and sewage treatment works. This foundation is supported by their 40,000 miles worth of pipelines which they inspect, maintain and repair on regular basis.
Problem
Not so long ago, Yorkshire Water was experiencing problems in its Waste Water Asset Management (WWAM) function. The problems were caused by operational inefficiencies in the particular function. Yorkshire Water was quick to realize that improving operational efficiencies is of utmost importance if the company doesn’t want to face intolerable consequences. The solution came in the form of Trinity Horne whom Yorkshire Water hired to review and resolve the operational inefficiencies. Waste Water Asset Management (WWAM) is divided into 5 teams; 4 of them Regional Area teams and one is the Central Asset Management Team. Waste Water Asset Management (WWAM) inspects, assesses and resolves problems pertaining to Yorkshire Water’s physical assets.
Operational Inefficiencies
After a month’s inspection and analysis, Trinity Horne came up with several operational inefficiencies in the practices of Waste Water Asset Management (WWAM). Firstly, it was noticed that even though SAP had been put into practice through out Yorkshire Water, it did not include Waste Water Asset Management’s team. Hence, it was almost impossible to keep track of productivity and development. Inability to assess them resulted in several pending decisions and even some wrong ones. Secondly, there was no ‘standard procedure’ of doing things in the Waste Water Asset Management department. Each of the four regional teams followed their own procedures to get the jobs done. So as the work was done and delivered incoherently it was not possible to compare the performances of these teams. Thirdly, no team was clear as to what the other teams were doing. Many a times efforts were duplicated, for example a team investigating an issue unaware that another team had already investigated it or dealt with it.
Fourthly, the Waste Water Asset Management function’s managers were working blindly. There was on clarity or visibility of the workload; nobody cared what work was allocated to whom, why was it allocated and who allocated it. All this resulted in inability to measure the effectiveness of the work. Another issue was ambiguous roles of all the teams. The roles of the Central team, Area Teams and Catchment teams were overlapping. Sometimes, more than one team was found doing the same thing resulting in waste of time and other resources. Clear definitions and role clarifications were very important.
Also, lack of communication was a consistent theme of the department. Operational efficiency was seen as the job of the central team and lack of communication resulted in no one contributing to the best practices. There was no ‘across the border’ system of best practices. Lastly, throughout the department managers had demonstrated poor managerial skills. This was most true at the supervisor level. The managers were plainly incapable of making their teams work effectively. Meaningful information was few and far between; manager wasted their time with unnecessary information (Trinity Horne’s case study, n.d.).
Approach
With the help of Trinity Horne, Yorkshire Water was able to implement a change oriented program by the name of GAP (Great Assets and People). With this GAP project, Yorkshire Water hoped to eradicate all the operating inefficiencies and eliminate the poor practices that were causing Yorkshire Water a great deal of concern. The main themes revolving GAP were: standardizing work procedures, clarifying roles and responsibilities and managing operations more efficiently. The project also aimed to cut operating costs by £1.2m. Three tier-3 managers of Yorkshire Water, who had sufficient credibility and experience, worked with Trinity Horne by forming with them a virtual team. Furthermore, this team was supported by two tier-2 managers: Project Sponsor, Judy Anderson and Director of Waste Water Asset Management, Graham Dixon.
The program comprised of two phases. The focal point of the first phase was Process Mapping. Multiple workshops were carried out to determine everything there was to know about the processes of Waste Water Asset Management. All processes were first identified and then data was collected and documented for each process. After this was done, all the processes were standardized. A generic process known as Management Operating Framework (MOF) was established. This brought a more structured and meaningful approach to management. Now benchmarks were set and attained, managers were much more proactive rather than reactive, forecasts were made and planning and reporting was done on daily basis. The tier-3 managers were trained to use performance indicators. These indicators focused on performance, productivity and availability of resources.
The second phase of the project focused on efficiency and consistency. To achieve that, BPR (Business Process Redesign) was adapted. As many as 11 workshops were conducted to redesign the processes and to get a finalized version. After that new staff was recruited and necessary training was provided. Technology was also upgraded; examples include Universal tracker- to monitor processes from start to finish and GRS (GAP Reporting System) – to track team performance as well as individual performance.
How were the challenges overcome
Trinity Horne introduced many key factors that were involved in eliminating the operating inefficiencies of Yorkshire water. One such factor was the use of effective management tools to track processes, performance and work. A basic standard was set, and then close and continuous monitoring was done to make certain that the required performance was met and the benefits were delivered. Records and documents were made on daily and weekly basis so as to know the actions that need to be taken, hence making managers more proactive. Another key factor was risk management. Likelihood of all the risks was appraised, consequences were evaluated and priorities were established accordingly. For this a risk register was maintained. As previously mentioned the GRS system, which was made Trinity Horne and Yorkshire Water’s IT department, also helped in minimizing the risks. Another important factor was communication. Previously communication was absent throughout. Now even as the changes were made, they were communicated to everyone in the department. Transparency was appreciated; staff had open access to all project files. Meetings were held to discuss important issues. Company magazine and intranet were used to convey updates (Yorkshire Water, 2008).
Operational Efficiencies
All the project objectives were not only met but also exceeded. Operating cost reduced by £1.6 million in place of the planned cost reduction of £1.2 million. A new structure with new processes was established. Consistent reporting was now carried out throughout. Every one was aware of work allocated and responsibilities. Work could now be traced to teams and individuals. Effort duplication reduced by 25%. Risk was managed efficiently. Performance was a major criterion. Best practices were followed throughout the department. Communication improved by a considerable margin and all problems due to lack of communication were almost eliminated. Other benefits of the project include: more power with managers, clear objectives, feedback on performance, weekly meetings, performance related pay system, clarified roles and responsibilities, a feeling of motivation and a sense of team amongst employees.
Thus, Yorkshire Water together with Trinity Horne was able to transform the operational inefficiencies of its Waste Water Management Function to operational efficiencies.
References
Ensynch. (n.d.) Operational efficiency. Retrieved May 2, 2010 from http://www.ensynch.com/sp_operational_efficiency.aspx
Trinity Horne’s case study. (n.d.)Retrieved May 2, 2010 from http://www.trinityhorne.com/MCA%20Case%20Studies/Yorkshire%20Water%20-%20MCA%20Change%20Management%20in%20the%20private%20sector%20-%202005.pdf
Yorkshire Water. (2008) what we do. Retrieved, May 2, 2010 from http://www.yorkshirewater.com/about-us/what-we-do.aspx
