© 2015 HDR, all rights reserved.

© 2015 HDR, all rights reserved.

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How the CORPUD is optimizing field operations and reinvesting savings in employees

NC AWWA WEA 2015 ANNUAL CONFERNCE

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Operational Optimization: It’s Not Just for Utility Plants

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01 Back in 2011…Strategic Planning at CORPUD

02 From Strategic Goals to Actions: Where to Start?

03 Optimizing in the Field: Useful Tools…Not Paperweights

04 Conclusion

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01

Back in 2011…Strategic Planning at CORPUD

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Challenges facing CORPUD

Budget deficits from decreased revenue

Aging infrastructure External pressures to improve

performance (EPA, Activist Groups)

Retiring workforce Rate increases

Strategic Planning Process To Date

~CORPUD Vision:

“We are a world-class leader in sustainable water and

wastewater service delivery.”

CORPUD Mission:

“To provide safe, sustainable water services for our customers while protecting public health and contributing to the economic, environmental and

social vitality of our communities.”

Public Utilities Vision and Mission

Customer Service:

To respond to and meet the needs of our customers in a timely and effective manner • Establish acceptable levels of customer

service• Provide staff the necessary resources to

meet/exceed customer needs and expectations

• Align staff performance goals to customer satisfaction goals

CORPUD Strategic Goals

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Employee & Leadership Development:

Recruit, develop, and retain a competent, motivated and agile workforce while retaining institutional knowledge • Align employee development with

organizational needs • Retain skilled and motivated workforce • Recruit a highly skilled workforce• Capture and retain institutional knowledge

CORPUD Strategic Goals

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Environmental Stewardship:

To protect and preserve natural resources by meeting or exceeding regulatory compliance goals, providing environmental education and implementing sustainable best practices • Achieve regulatory compliance• Minimize gaps between acceptable levels of

stewardship and performance• Evaluate sustainable practices

CORPUD Strategic Goals

CORPUD Strategic GoalsFinancial Viability:

Establish a financial structure that provides full cost recovery, truth in billing, and invests for the needs of future generations while meeting community expectations • Develop five year operating budget and

forecast• Establish and maintain an effective balance

between long-term debt, asset value, operations and maintenance expenditures, and operating revenues.

• Obtain and maintain “AAA” bond ratings

CORPUD Strategic GoalsReliability:

To develop a sustainable asset management program to provide continuous service and reduce system vulnerability • Prepare for catastrophic events• Strategically manage assets

CORPUD Strategic GoalsStakeholder Outreach:

To broaden public awareness and support of CORPUD’s stand on issues • Establish ongoing partnership with the City

Council • Effectively increase key stakeholder

partnerships with CORPUD on Public Utility issues and initiatives

• Improve internal communication with employees

Resource Management:

To conserve existing resources and develop additional ones in concert with ever-changing climate and growth needs • Recognize and evaluate growth patterns

and revisit planning assumptions• Ensure resource availability• Encourage prudent consumption of water

resources across all customer groups

CORPUD Strategic Goals

CORPUD Strategic GoalsOperational Optimization:

Provide cost effective and efficient services with minimum interruptions in a way that accommodates growth and changes in the industry • Assess critical business processes• Benchmark CORPUD against like utilities to

determine areas for improvement• Structure CORPUD for optimum efficiency• Extend an Environmental Management

System (EMS) framework to those departmental programs that are responsible for Public Health, Water Quality, Water Reclamation and future products

Range of Competitiveness Tools

Benchmarking Competitive Assessment Optimization

Managed Competition

• Compares your operational/financial metrics against others

• May not consider level of service or desired outcomes

• Compares your operational and financial metrics against established competitively performing peers

• May not identify a “road map” for achieving a competitive level of service

• Generally focuses on identifying “low hanging fruit” opportunities

• Provides basic optimization strategies to be more fully developed and implemented

• Typically does not address employee incentives

• Independent third party facilities the establishment of a competitive level of operation and MOU “contract” with organizational unit

• Savings shared through employee “gainsharing”

Privatization

Bid-to-Goal

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02

From Strategic Goals to Actions: Where to Start?

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Optimization…

Regulatory requirements

Data and reporting

Where do we start?

Customer Expectations

Limited funds

Training

Maintenance decision-making

Crew processes and procedures

Scheduling

Work order management

SWOC

Maturity Evaluation

Gap Analysis

Approach

Our goal: provide tools that can be used after we’re gone…

15-20 participants in most workshops Cross-section of staff

o Assistant Director to Level One Crew Supervisorso Multiple disciplines: corrective and preventative maintenance, condition assessment and repairs,

supporting staffo Multiple locations: City of Raleigh and merger communities

[Insert criteria for selecting staff to participate] [Photo from Raleigh of their staff, crews?]

People Make the Approach

SWOC Analysis

Strengths

Opportunities

Weaknesses

Challenges

Factors INTERNAL to the

Organization

Factors EXTERNAL to the

Organization

POSITIVE NEGATIVE

SWOC at the Operational Level

Planning and Strategy

Operations

People

Data and Technology

Identify areas to focus our gap analysis, benchmark, and review performance indicators

The Outcome of the SWOC Analysis

Weaknesses

Challenges

Strengths

Opportunities Assess opportunities and recommend actions on how to

capitalize

Capitalize on strengths in one area by replicating in another

Staff Workshops

Strategy and Planning

Operations and Maintenance

People

• Business Strategy and Planning

• Finance• Business

Information Systems

• Engineering• Operations• Maintenance• Condition

Monitoring• Asset Knowledge

• Employee Communication and Development

• Staffing

Maturity Evaluation

80-100 Optimizing Quantitative and qualitative measures are used for continual improvement and refinement of documented standards and procedures.

50-70 Managed Quantitative measurements are defined and used for setting quality standards. Adherence to processes is uniform for all users.

30-40 Formally Defined

Processes are well-defined and supported by policy with a repeatable approach that is documented and communicated within the organization.

20 Repeatable Though processes are not formally defined or documented, they are largely repeatable. Adherence to any standard is not rigorours.

10 Initial (Ad Hoc)

Processes are undocumented, uncontrolled, and subject to change at any time. Users operate in a reactive manner.

Best Practice Score Current Observation

Capability Maturity Modelo Carnegie Mellon Universityo Originally funded by government to assess contractor development processeso EPA Effective Utility Management Primer

Can be used for: o Benchmarking comparisono Evaluation of how well an organization can perform a desired contracted serviceo Improvement of existing processes and identification of gaps

The UBME rates current business elements, determines and prioritizes gaps based on target performance criticality

Gap Analysis – Background

Gap Analysis

Attribute

Sc

ore

Pre

ven

tive

Ma

inte

na

nce

Pre

dic

tive

Ma

inte

na

nce

Co

rre

ctiv

e M

ain

ten

an

ce

Ma

inte

na

nce

Co

sts

Fa

ilure

Co

de

s

GIS

Inte

rfa

ce

Fle

et

Ma

inte

na

nc

e

Fie

ld C

om

mu

nic

atio

ns

Re

sou

rce

Ma

na

ge

me

nt

Co

nd

itio

n M

on

itori

ng

Pro

gra

m P

olic

y

Co

nd

itio

n R

atin

g a

nd

Sco

rin

g

Co

nd

itio

n T

rack

ing

Ma

inte

na

nce

Str

ate

gy

Co

rre

ctiv

e A

ctio

ns

Fix

ed

As

se

t In

ve

nto

ry

As

se

t P

lan

s

Sh

or-

inte

rva

l Act

iviti

es

Lo

ng

-in

terv

al A

ctiv

itie

s

As

se

t D

eta

il

Ass

et C

ritic

alit

y

Ass

et C

ate

go

riza

tion

Ass

et C

lass

es

As

se

t H

iera

rch

y

Ass

et I

de

ntif

ica

tion

Re

liab

ility

An

aly

sis

Pla

nn

ing

an

d S

che

du

ling

Cre

w D

ep

th a

nd

Fie

ldin

g

CM

MS

Ba

cklo

g

70

60

50

40

30

Repeatable 20

Initial (Ad Hoc) 10

Target Practice Score1 60 40 60 50 60 40 60 60 60 60 60 60 60 60 40 60 60 40 60 40 40 40 40 50 60 60 70 70 60

Anticipated Future Score2 50 40 40 40 50 50 60 50 50 60 40 40

Current Score3 30 20 40 30 20 30 30 60 30 30 20 20 30 30 40 40 20 30 30 40 20 40 40 40 30 20 70 20 30

Gap 30 20 20 20 40 10 30 0 30 30 40 40 30 30 0 20 40 10 30 0 20 0 0 10 30 40 0 50 30

Condition Monitoring

StaffingAsset Knowledge

Formally Defined

Managed

Maintenance

CurrentFuture

AnticipatedGapTarget

Because you can’t change everything at once…

Current Score

Target Score - )( Criticality

WEIGHTED GAP

x

Prioritization:

≥ 150 1≥ 90, <150 2

<90 3

Identifies priorities Can be re-visited later for next

set of actions/initiatives Future gap analysis to compare

and show progress, re-visit target scores

Gap Analysis as a Tool

Two-Pronged Approach

Diagnostics

Comparison to Best Practices

Comparison to Industry Peers

SWOC Analysis

Gap Analysis

Benchmark Survey

Benchmarking Objectives

Track

Identify

Measure

Track Key Performance Indicators (KPIs), especially in areas of largest gaps

Measure CORPUD’s performance against benchmark utilities

Identify areas for improvement

General utility information – used to normalizeo Accountso FTEso System length

Broken down into areas consistent with Gap Analysis

Question types:o Empiricalo Yes/No/NAo Self-assessment (score 1 – 5)o Fill in the blanks (few)

Question sources:o Preliminary KPIs and metricso Functionalityo Workshop participants

Benchmarking Questionnaire

Sewer only

Water only

Both

CORPUD

High-level (operational) benchmarking: Goal: Establish means to track performance on basic indicators over time

What you learn…Process benchmarking: Goal: apply as appropriate to improve your processes

Functional benchmarking: Goal: improve performance of function

And what you don’t…

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Example: CCTV Performance

Helped identify performance indicators and metrics to begin tracking (now and in the future)o Operational (day-to-day) and strategic

(annual and over time to demonstrate improvement)

Further identified priorities for CORPUD to focus on

Identified peer utilities that may share best practices that could be implemented at CORPUD

Benchmarking Results as a Tool

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03

Optimizing in the Field: Useful Tools…Not Paperweights

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Process: SWOC Maturity Evaluation Gap Analysis Benchmark Recommendations

Project Re-CapDeliverables: Performance targets and gaps, prioritized and

weighted Preliminary list of performance indicators to

track over time List of peer utilities for follow-up Recommendations, sortable and “prioritize-

able”

Tools

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Recommendations Framework

Strategic Plan Tactical Plan

Effective Utility Management Attributes

Recommendations are:o Focused on highest priority gapso Identify low-hanging fruito Designed to be feasible and implementable in 3 to 5 yearso Provide a level of detail aligned with the scope of the gap

Closing the Gaps

Perform rolling-stock inventory after hours

Programmatic hotspot cleaning frequency evaluation

Develop activity based budget

Improve incident intake

Create Capital Program Team that includes O&M staff to formalize project review

Establish sewer cleaning QC program

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Conclusion

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Provided to CORPUD as a sortable tableo Type of Cost Savingso Prelim. ROI Estimate o Degree of Impact o Level of Effort

Recommendations as a Tool

Comprehensive sewer cleaning hotspot program PACP training / certifications QA/QC program for CCTV operations Best practice maintenance / easement

procedures Explore new technologies Triggers to submit work tasks to CIP

Optimization Priorities Continue Implementation of “Pay for

Certification” Ongoing development of Career Ladders

Benefits to Staff

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TJ Lynch, Assistant DirectorPublic Utilities Department, City of Raleigh(919) 996-2316tj.lynch@raleighnc.gov

David Saunders, Senior Utility Management ConsultantHDR (336) 416-3462david.saunders@hdrinc.com

© 2015 HDR, all rights reserved.