Inspiring success through pioneering, process-based solutions An Insight into applying Lean Thinking...

Inspiring success through pioneering, process-based solutions

An Insight into applying Lean Thinking within a more Office based (non

manufacturing) environment

March 31st, 2010

© S A Partners 2010

Who we are

Jeff Williams Partner, S A Partners LLP Director, S A Partners Lean Consulting Ltd

Kate Jones Transformation Lead, CIO Process and Investment Delivery, United

Utilities PLC Group


Introducing S A Partners

2009 Winner of Shingo Prize


S A Partners Facts and figures

Founded 1993 by Prof Peter Hines – we are the longest established Lean Thinking consultancy practice in Europe.

Our Chairman is Professor Peter Hines – Peter also jointly founded and currently leads the Lean Enterprise Research Centre at Cardiff University

We currently have approx 40 full time employees and partners

We have formal academic links with several Universities around the world


How we see holistic Lean Thinking Implementation…

Research conducted by Professor Peter Hines and the Lean Enterprise research centre identified 5 key elements of success:- Focus on customer value through

policy deployment Deploying through cross functional

processes Value stream management aligned to

business goals Lean tools and techniques aligned to

need Application in the extended

enterprise

S A Partners has learned, adapted, recognised a blind spot about people and created:

The Lean Business Model



Illustrating our Lean Business model a slightly different way

Source: P. Hines, P. Found, G. Griffiths & R. Harrison, Staying Lean, 2007

Lean Management2009 Winner of Shingo Prize


Some of our Clients


An Introduction to United Utilities Water (UUW)

UUW own, operate and maintain Water and Wastewater assets throughout the North West of England

UUW are a FTSE 100 company with approx 5,000 employees. UUW have been 10th out of 10 in the OFWAT League Table – with an

objective of becoming Number 1 by 2014!!!

7 million customers 42,000 kilometres of water pipes, (from Cumbria down to Cheshire) 43,419 kilometres of sewers 138 impounding reservoirs across the region 582 wastewater treatment works


• PR09, data integrity & regulatory reporting

• Efficiency frontier – 15% away: becoming lean and mean

• Establishing a customer-led organisation

• Operational performance against the OPA measures

• Create an ‘One Company first, function second’ approach

• Process-driven alignment across the value chain

• Delivering benefits from change programmes

Our Challenges – Need to change?The objective is to establish UU’s ‘standard operating framework’ based on our core processes, and through these:

• deliver targeted efficiencies,• improve performance aligned to the UU measures, • optimise ‘risk’ and ensure compliance, • streamline activities and ensure consistency of

application (ie. remove duplication), • optimise ways of working,• identify ‘gaps’ in performance and improve capabilities, • ensure transferability of resources & expertise across

UU through standardisation & consistency,• underpinned with the IS/IT system roadmap,

……… thus, delivering ‘performance with integrity’

Core Processes - Objective

Standard Operating Framework

Our Process Gap

Core Processes – Adopting a Process Driven Organisation

Our 14 Sub-Processes ‘Demonstrating Rigor and Thinking’

UU Operating FrameworkUU Operating Framework - Level 2 – ‘UU on a page’

5. Contract Delivery A) Plan

Setting serviceability & operational requirements

D) ReviewB) Manage

Optimising service delivery

C) Execute

Delivering service & performance

Data capture & Performance Management

5.4 Customer Service

Customer service plan

5.4.1

Manage customer service

5.4.2

Customer data

Customer contact

5.4.4

Bill & collecting revenue

5.4.5

Asset perform

ance d

ata

People

& C

ontracto

r perform

ance d

ata

5.2 Capital Programme Delivery

Capital programme investment & delivery

planning

5.2.1

Capital delivery

data

Asset solution, creation & handover

5.2.4

1.1 Set

business direction

2. Strategic Direction1. Business Direction

2.2. Growth Strategy

Id e n tif ic a tio n o f n e w

o p p o r tu n it ie s & m a rk e ts

2.2.1

M a rk e t e n try s tr a te g y

2.2.2

M ark e t s ha p in g

2.2.3

S e t P e o p le

d i re c tio n

1.1.1

S e t C u s to m e r

d i re c tio n

1.1.2

S e t S e r v ic e

d i re c tio n

1.1.3

S e t F in a n c in g

d i re c tio n

1.1.4

2.1 Asset & Regulatory Policy

Client retention &

growth planning

5.5.1

New business growth

planning

5.5.2

Marketing, sales & bid management

5.5.3

Sales & bid

activity

5.5.4

Contract transition

5.5.5

B u s in e s s

d e v e lo p m e n t

d a ta

5.5 Sales & Marketing

Asset Optimisation

5.3.1

Work programming &

planning

5.3.2

Work execution

5.3.4

O&M data & compliance

5.4.8

5.2.7

5.5.8

5.3.75.3 Effective Operations & Maintenance

3.2 Manage

Customers

3.1 Manage

Stakeholders

S e t d e l iv e r y m o d e l

2.1.4

S u b m it re g u la to r y

b u s in e s s p la n s

2.1.3

P ro d u c e o p tim is e d

lo n g te rm a s s e t p la n s

2.1.2

S e t s t ra te g ic d ire c tio n

2.1.1

Manage delivery partners

5.2.3

5.3.3

5.4.3

4. Contract

Plan

3.3 Manage People

2.3. Business strategies

H e a lth & s a fe ty s tra te g y

2.3.1

P e o p le & o rg a n is a tio n

s tra te g y

2.3.2

S u s ta in a b il it y & c a rb o n

s tra te g y

2.3.3

C o m m e rc ia l & s u p p ly c h a in

s tra te g y

2.3.4

IS s tra te g y

2.3.5

5.1 Asset Management

5.2.2

Asset planning

5.1.1

Asset requirements definition

5.1.45.1.2

Asset data

5.1.75.1.5 5.1.6

5.6 Business Services

Managing people5.6.1

Managing finance5.6.2

Managing health & safety5.6.3

Managing legal & property5.6.6

Managing communications5.6.7

Managing procurement & supply chain5.6.5

M a n a g e c h a n g e s

to th e c u rre n t

c o n tra c t

4.3

D e fin e

e x p e n d itu re &

s e rv ic e a b ilit y

o u tp u ts

4.1


to th e n e x t

c o n tra c t p e r io d

4.2

A s s e s s c o n tra c t

p e rfo rm a n c e

4.4

S ta k e h o ld e r

m a n a g e m e n t

3.1.1

P r ic in g s tr a te g y

3.2.2

C u s to m e r s e rv ic e

s tra te g y

3.2.1

C lie n t s tra te g y

3.2.3

R e w a rd s tra te g y

3.3.2

O D s tra te g y

3.3.1

E m p lo y e e

R e la tio n s s tra te g y

3.3.3

S k ills & c a p a b i lit y

s tra te g y

3.3.4

Managing change & transformation5.6.8

5.1.3

Managing IS & IT5.6.4

UU Operating Framework - Level 2 – ‘UU on a page’5. Contract Delivery A) Plan


D) ReviewB) Manage


C) Execute





5.4.1


5.4.2

Customer data

Customer contact

5.4.4


5.4.5

Asset perform

ance d

ata

People

& C

ontracto

r perform

ance d

ata



planning

5.2.1

Capital delivery

data


5.2.4

1.1 Set

business direction





2.2.1Id e n tif ic a tio n o f n e w


2.2.1


2.2.2


2.2.2


2.2.3


2.2.3

S e t P e o p le

d i re c tio n

1.1.1


d i re c tio n

1.1.2

S e t S e r v ic e

d i re c tio n

1.1.3


d i re c tio n

1.1.4


Client retention &

growth planning

5.5.1

New business growth

planning

5.5.2


5.5.3

Sales & bid

activity

5.5.4

Contract transition

5.5.5

B u s in e s s


d a ta


Asset Optimisation

5.3.1

Work programming &

planning

5.3.2

Work execution

5.3.4


5.4.8

5.2.7

5.5.8


3.2 Manage

Customers

3.1 Manage

Stakeholders


2.1.4



2.1.3



2.1.2


2.1.1


5.2.3

5.3.3

5.4.3

4. Contract

Plan

3.3 Manage People



2.3.1


2.3.1


s tra te g y

2.3.2P e o p le & o rg a n is a tio n

s tra te g y

2.3.2


s tra te g y

2.3.3


s tra te g y

2.3.3


s tra te g y

2.3.4


s tra te g y

2.3.4

IS s tra te g y

2.3.5

IS s tra te g y

2.3.5


5.2.2

Asset planning

5.1.1


5.1.45.1.2

Asset data

5.1.75.1.5 5.1.6








Managing legal & property5.6.6 Managing legal & property5.6.6

Managing communications5.6.7 Managing communications5.6.7

Managing procurement & supply chain5.6.5 Managing procurement & supply chain5.6.5


to th e c u rre n t

c o n tra c t

4.3

D e fin e



o u tp u ts

4.1


to th e n e x t


4.2


p e rfo rm a n c e

4.4

S ta k e h o ld e r

m a n a g e m e n t

3.1.1


3.2.2


s tra te g y

3.2.1


3.2.3


3.3.2

O D s tra te g y

3.3.1

E m p lo y e e


3.3.3


s tra te g y

3.3.4

Managing change & transformation5.6.8 Managing change & transformation5.6.8

5.1.3



Our 6 Core Processes ‘What we do’

These define the business we are

These govern the business we are

Our 6 Core Process Chains ‘What we do’

Our Process Framework Supporting Measurement & Incentives

Our Process Framework Defining Our Core Competencies

Level 1

Level 2

UU Core Processes

Collect customer usage

Bill customer Process customer payments

Handle customer requests

Manage collection & bad debt

Receive cashAcquire/Retain customer

1) Customer Lifecycle (customer to cash)

2) Asset Lifecycle (cradle to grave)

Produce LTAP’s Define expenditure & outputs

Create assets Operate & maintain assets

Dispose assetsSet asset policy & strategy

Deploy resources

Develop resources

Manage performance

Reward resources

Exit resourcesAttract resources

4) People Lifecycle (hire to retire)

Set financial direction

Set financial controls

Produce business plan

Set budgets Report performance

Issue paymentsAttract investment

5) Finance Lifecycle (invest to report)

Set strategic direction

Manage price review

Receive price review award

Submit regulatory business plans

Report on regulatory contact

Interpret regulatory & licence req’ts

3) Regulation Lifecycle (licence to compliance)

6) Supply Chain Lifecycle (procure to pay)

Manage strategic sourcing

Supply/demand planning

Manage supplier relationships

Manage procurement

Manage logistics Issue paymentsSet commercial strategy

UU Core Processes






Acquire/Retain customer




Create assetsCreate assets Operate & maintain assets

Operate & maintain assets

Dispose assetsDispose assetsSet asset policy & strategy

Set asset policy & strategy

Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement

Manage logisticsManage logistics Issue paymentsIssue paymentsSet commercial strategy

Set commercial strategy

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



Delivery of Performance Scorecard

• People

• Customers

• Service

• Shareholders


• People

• Customers

• Service

• Shareholders

2 major elements will underpin the model: 1) Measurement 2) Incentives

Performance Management –all employees tied into different tiers of the process and its performance outputs across the end to end

Need to establish the right incentives to encourage One Company-first’ behaviours – long term benefits over short term gain

Managing Knowledge

Core Competencies

Managing Programmes & Projects

Managing Change

Managing Information

Managing Processes

Managing Health & Safety

Managing KnowledgeManaging

Knowledge

Core Competencies



Managing Change

Managing Change

Managing InformationManaging

InformationManaging ProcessesManaging Processes



UU Core Processes


1) Customer Lifecycle (customer to cash)Customer Revenue Lifecycle (meter/bill to cash)

New Business Lifecycle (attract to contract)

2) Asset Lifecycle (cradle to grave)Work Requests Lifecycle (request to resolve)

Investment Programmes and Projects Lifecycle (invest to harvest)

New Services Lifecycle (connect to operate)

Attract Resources Lifecycle (target to recruit)

Develop Resources Lifecycle (induct to perform)

Exit Resources Lifecycle (fire to retire)


5) Finance Lifecycle (invest to report)Investment Lifecycle (invest to growth)

Financial Revenue Lifecycle (budget to report)

3) Regulation Lifecycle (licence to compliance) Licence Management Lifecycle (award to report )

Price Review Lifecycle (submit to award)

Strategic Sourcing Lifecycle (requisition to order)

Transactional Compliance Lifecycle (order to pay)

UU Core Processes



New Business Lifecycle (attract to contract)New Business Lifecycle (attract to contract)

2) Asset Lifecycle (cradle to grave)Work Requests Lifecycle (request to resolve)Work Requests Lifecycle (request to resolve)

Investment Programmes and Projects Lifecycle (invest to harvest)Investment Programmes and Projects Lifecycle (invest to harvest)

New Services Lifecycle (connect to operate)New Services Lifecycle (connect to operate)

Attract Resources Lifecycle (target to recruit)Attract Resources Lifecycle (target to recruit)

Develop Resources Lifecycle (induct to perform)Develop Resources Lifecycle (induct to perform)

Exit Resources Lifecycle (fire to retire)Exit Resources Lifecycle (fire to retire)



Financial Revenue Lifecycle (budget to report)Financial Revenue Lifecycle (budget to report)


Price Review Lifecycle (submit to award)Price Review Lifecycle (submit to award)


Transactional Compliance Lifecycle (order to pay)Transactional Compliance Lifecycle (order to pay)

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



Managing Knowledge

‘Operating Principles/Rules’–Standard Operating Frameworks (how we manage our risk)


Managing Change


Managing Processes


Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Core people capabilities, skills & knowledge

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



Managing Knowledge



Managing Change


Managing Processes


Managing KnowledgeManaging Knowledge




Managing Change

Managing Change





Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Core people capabilities, skills & knowledgeCore people capabilities, skills & knowledge

12 business areas currently delivering ‘target’ operating

models. There are ‘processes’ –but the majority are not visible or show any linkage across UU

UU wide model - GAP

Level 1 Business

Processes

Level 2 Business Processes‘Functional’

Level 3 Business Processes

Standard Operating Procedures

Swim-lanes

Level 1 Business

Processes




Swim-lanesSwim-lanes

‘to set the operating framework across UU’



UU wide model - GAP

Level 1 Business

Processes




Swim-lanes

Level 1 Business

Processes






People Lifecycle (hire to retire)

Finance Lifecycle (invest to report)

Supply Chain Lifecycle (procure to pay)

Customer Lifecycle (customer to cash)

Asset Lifecycle (cradle to grave)

Regulation Lifecycle (licence to compliance)

Governing Processes -

Primary Processes -

People Lifecycle (hire to retire)People Lifecycle (hire to retire)

Finance Lifecycle (invest to report)Finance Lifecycle (invest to report)

Supply Chain Lifecycle (procure to pay)Supply Chain Lifecycle (procure to pay)

Customer Lifecycle (customer to cash)Customer Lifecycle (customer to cash)

Asset Lifecycle (cradle to grave)Asset Lifecycle (cradle to grave)

Regulation Lifecycle (licence to compliance)Regulation Lifecycle (licence to compliance)


Primary Processes -

UU Core Processes







2) Asset Lifecycle (cradle to grave)Produce LTAP’s Define expenditure

& outputsCreate assets Operate &

maintain assetsDispose assetsSet asset policy

& strategy

Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review






6) Supply Chain Lifecycle (procure to pay)Manage strategic

sourcingSupply/demand

planningManage supplier

relationshipsManage

procurementManage logistics Issue paymentsSet commercial

strategy

UU Core Processes









& outputsCreate assetsCreate assets Operate &

maintain assetsOperate &

maintain assetsDispose assetsDispose assetsSet asset policy

& strategySet asset policy

& strategy

Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources








5) Finance Lifecycle (invest to report)Set financial

directionSet financial


controlsProduce

business planSet budgets Report

performanceIssue paymentsAttract

investment



Manage price review





3) Regulation Lifecycle (licence to compliance) Set strategic

directionSet strategic

directionManage price

reviewReceive price review award








relationshipsManage


strategyManage strategic

sourcingManage strategic


planningSupply/demand


relationshipsManage supplier

relationshipsManage

procurementManage

procurementManage logisticsManage logistics Issue paymentsIssue paymentsSet commercial

strategySet commercial

strategy

These 6 areas need to be our

core competencies as these will

define the culture we need

to create AND

will generate a competitive advantage

Managing Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Change


Managing Processes


UU Core Processes










& strategy

Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review









relationshipsManage


strategy

UU Core Processes













& strategy

Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources











controlsProduce



investment



Manage price review
















relationshipsManage








relationshipsManage

procurementManage



strategy




to create AND


Managing Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Change


Managing Processes



Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Programmes

& Projects

Managing Change

Managing Change





• PR09, data integrity & regulatory reporting







Our Challenges – Need to change?Our Challenges – Need to change?The objective is to establish UU’s ‘standard operating framework’ based on our core processes, and through these:

• deliver targeted efficiencies,• improve performance aligned to the UU measures, • optimise ‘risk’ and ensure compliance, • streamline activities and ensure consistency of

application (ie. remove duplication), • optimise ways of working,• identify ‘gaps’ in performance and improve capabilities, • ensure transferability of resources & expertise across

UU through standardisation & consistency,• underpinned with the IS/IT system roadmap,


Core Processes - ObjectiveCore Processes - Objective

Standard Operating Framework

Our Process Gap

Core Processes – Adopting a Process Driven Organisation

Our 14 Sub-Processes ‘Demonstrating Rigor and Thinking’

UU Operating FrameworkUU Operating Framework - Level 2 – ‘UU on a page’

5. Contract Delivery A) Plan


D) ReviewB) Manage


C) Execute





5.4.1


5.4.2

Customer data

Customer contact

5.4.4


5.4.5

Asset perform

ance d

ata

People

& C

ontracto

r perform

ance d

ata



planning

5.2.1

Capital delivery

data


5.2.4

1.1 Set

business direction





2.2.1


2.2.2


2.2.3

S e t P e o p le

d i re c tio n

1.1.1


d i re c tio n

1.1.2

S e t S e r v ic e

d i re c tio n

1.1.3


d i re c tio n

1.1.4


Client retention &

growth planning

5.5.1

New business growth

planning

5.5.2


5.5.3

Sales & bid

activity

5.5.4

Contract transition

5.5.5

B u s in e s s


d a ta


Asset Optimisation

5.3.1

Work programming &

planning

5.3.2

Work execution

5.3.4


5.4.8

5.2.7

5.5.8


3.2 Manage

Customers

3.1 Manage

Stakeholders


2.1.4



2.1.3



2.1.2


2.1.1


5.2.3

5.3.3

5.4.3

4. Contract

Plan

3.3 Manage People



2.3.1


s tra te g y

2.3.2


s tra te g y

2.3.3


s tra te g y

2.3.4

IS s tra te g y

2.3.5


5.2.2

Asset planning

5.1.1


5.1.45.1.2

Asset data

5.1.75.1.5 5.1.6





Managing legal & property5.6.6

Managing communications5.6.7

Managing procurement & supply chain5.6.5


to th e c u rre n t

c o n tra c t

4.3

D e fin e



o u tp u ts

4.1


to th e n e x t


4.2


p e rfo rm a n c e

4.4

S ta k e h o ld e r

m a n a g e m e n t

3.1.1


3.2.2


s tra te g y

3.2.1


3.2.3


3.3.2

O D s tra te g y

3.3.1

E m p lo y e e


3.3.3


s tra te g y

3.3.4

Managing change & transformation5.6.8

5.1.3


UU Operating Framework - Level 2 – ‘UU on a page’5. Contract Delivery A) Plan


D) ReviewB) Manage


C) Execute





5.4.1


5.4.2

Customer data

Customer contact

5.4.4


5.4.5

Asset perform

ance d

ata

People

& C

ontracto

r perform

ance d

ata



planning

5.2.1

Capital delivery

data


5.2.4

1.1 Set

business direction





2.2.1Id e n tif ic a tio n o f n e w


2.2.1


2.2.2


2.2.2


2.2.3


2.2.3

S e t P e o p le

d i re c tio n

1.1.1


d i re c tio n

1.1.2

S e t S e r v ic e

d i re c tio n

1.1.3


d i re c tio n

1.1.4


Client retention &

growth planning

5.5.1

New business growth

planning

5.5.2


5.5.3

Sales & bid

activity

5.5.4

Contract transition

5.5.5

B u s in e s s


d a ta


Asset Optimisation

5.3.1

Work programming &

planning

5.3.2

Work execution

5.3.4


5.4.8

5.2.7

5.5.8


3.2 Manage

Customers

3.1 Manage

Stakeholders


2.1.4



2.1.3



2.1.2


2.1.1


5.2.3

5.3.3

5.4.3

4. Contract

Plan

3.3 Manage People



2.3.1


2.3.1


s tra te g y

2.3.2P e o p le & o rg a n is a tio n

s tra te g y

2.3.2


s tra te g y

2.3.3


s tra te g y

2.3.3


s tra te g y

2.3.4


s tra te g y

2.3.4

IS s tra te g y

2.3.5

IS s tra te g y

2.3.5


5.2.2

Asset planning

5.1.1


5.1.45.1.2

Asset data

5.1.75.1.5 5.1.6








Managing legal & property5.6.6 Managing legal & property5.6.6

Managing communications5.6.7 Managing communications5.6.7

Managing procurement & supply chain5.6.5 Managing procurement & supply chain5.6.5


to th e c u rre n t

c o n tra c t

4.3

D e fin e



o u tp u ts

4.1


to th e n e x t


4.2


p e rfo rm a n c e

4.4

S ta k e h o ld e r

m a n a g e m e n t

3.1.1


3.2.2


s tra te g y

3.2.1


3.2.3


3.3.2

O D s tra te g y

3.3.1

E m p lo y e e


3.3.3


s tra te g y

3.3.4

Managing change & transformation5.6.8 Managing change & transformation5.6.8

5.1.3



Our 6 Core Processes ‘What we do’

These define the business we are

These govern the business we are

Our 6 Core Process Chains ‘What we do’

Our Process Framework Supporting Measurement & Incentives

Our Process Framework Defining Our Core Competencies

Level 1

Level 2

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement




• People

• Customers

• Service

• Shareholders


• People

• Customers

• Service

• Shareholders

2 major elements will underpin the model: 1) Measurement 2) Incentives

Performance Management –all employees tied into different tiers of the process and its performance outputs across the end to end

Need to establish the right incentives to encourage One Company-first’ behaviours – long term benefits over short term gain

Managing Knowledge

Core Competencies


Managing Change


Managing Processes



Knowledge

Core Competencies



Managing Change

Managing Change





UU Core Processes



New Business Lifecycle (attract to contract)

2) Asset Lifecycle (cradle to grave)Work Requests Lifecycle (request to resolve)

Investment Programmes and Projects Lifecycle (invest to harvest)

New Services Lifecycle (connect to operate)

Attract Resources Lifecycle (target to recruit)

Develop Resources Lifecycle (induct to perform)

Exit Resources Lifecycle (fire to retire)



Financial Revenue Lifecycle (budget to report)


Price Review Lifecycle (submit to award)


Transactional Compliance Lifecycle (order to pay)

UU Core Processes



New Business Lifecycle (attract to contract)New Business Lifecycle (attract to contract)

2) Asset Lifecycle (cradle to grave)Work Requests Lifecycle (request to resolve)Work Requests Lifecycle (request to resolve)

Investment Programmes and Projects Lifecycle (invest to harvest)Investment Programmes and Projects Lifecycle (invest to harvest)

New Services Lifecycle (connect to operate)New Services Lifecycle (connect to operate)

Attract Resources Lifecycle (target to recruit)Attract Resources Lifecycle (target to recruit)

Develop Resources Lifecycle (induct to perform)Develop Resources Lifecycle (induct to perform)

Exit Resources Lifecycle (fire to retire)Exit Resources Lifecycle (fire to retire)



Financial Revenue Lifecycle (budget to report)Financial Revenue Lifecycle (budget to report)


Price Review Lifecycle (submit to award)Price Review Lifecycle (submit to award)


Transactional Compliance Lifecycle (order to pay)Transactional Compliance Lifecycle (order to pay)

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



Managing Knowledge



Managing Change


Managing Processes


Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Core people capabilities, skills & knowledge

UU Core Processes











Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review










Manage procurement


UU Core Processes














Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources

















Manage price review








Manage price review










Manage procurement








Manage procurement

Manage procurement



Managing Knowledge



Managing Change


Managing Processes


Managing KnowledgeManaging Knowledge




Managing Change

Managing Change





Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Strate

gic

syste

m p

latform

sSAP –busin

ess m

anagem

ent to

ol

ARIS

–pro

cess m

anagem

ent to

ol

IS/IT s

trate

gy b

ased o

n c

ore

pro

cesses

Core people capabilities, skills & knowledgeCore people capabilities, skills & knowledge



UU wide model - GAP

Level 1 Business

Processes




Swim-lanes

Level 1 Business

Processes








UU wide model - GAP

Level 1 Business

Processes




Swim-lanes

Level 1 Business

Processes






People Lifecycle (hire to retire)

Finance Lifecycle (invest to report)

Supply Chain Lifecycle (procure to pay)

Customer Lifecycle (customer to cash)

Asset Lifecycle (cradle to grave)

Regulation Lifecycle (licence to compliance)


Primary Processes -

People Lifecycle (hire to retire)People Lifecycle (hire to retire)

Finance Lifecycle (invest to report)Finance Lifecycle (invest to report)

Supply Chain Lifecycle (procure to pay)Supply Chain Lifecycle (procure to pay)

Customer Lifecycle (customer to cash)Customer Lifecycle (customer to cash)

Asset Lifecycle (cradle to grave)Asset Lifecycle (cradle to grave)

Regulation Lifecycle (licence to compliance)Regulation Lifecycle (licence to compliance)


Primary Processes -

UU Core Processes










& strategy

Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review









relationshipsManage


strategy

UU Core Processes













& strategy

Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources











controlsProduce



investment



Manage price review
















relationshipsManage








relationshipsManage

procurementManage



strategy




to create AND


Managing Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Change


Managing Processes


UU Core Processes










& strategy

Deploy resources

Develop resources

Manage performance

Reward resources










Manage price review









relationshipsManage


strategy

UU Core Processes













& strategy

Deploy resources

Develop resources

Manage performance

Reward resources



Deploy resources

Develop resources

Manage performance

Reward resources











controlsProduce



investment



Manage price review
















relationshipsManage








relationshipsManage

procurementManage



strategy




to create AND


Managing Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Change


Managing Processes



Knowledge

Core Competencies

Managing Programmes

& Projects

Managing Programmes

& Projects

Managing Change

Managing Change





• PR09 data integrity & regulatory reporting







Our Challenges – Need to change?

The objective is to establish UU’s ‘standard operating framework’ based on our core processes, and through these:

• deliver targeted efficiencies,• improve performance aligned to the UU measures, • optimise ‘risk’ and ensure compliance, • streamline activities and ensure consistency of application (i.e.. remove duplication), • optimise ways of working,• identify ‘gaps’ in performance and improve capabilities, • ensure transferability of resources & expertise across UU through standardisation & consistency,• underpinned with the IS/IT system roadmap,


Core Processes - Objective

Our Compelling reason to evolve into an e2e process driven effective & efficient

organisation - July 2008


We needed to establish the UUW e2e Process Framework (Core, Enabling & Directional)

En

ab

lin

g P

rocesses

Core Processes

Strategic Management (Directional Process)

En

ab

lin

g P

rocesses

Enabling Processes

Management Process

Source to Tap

Bath to Bay

Customer to Cash

Licence to Compliance

Technology & Equipment

Man

ag

ing

Assets

Man

ag

ing

Su

pp

liers

Man

ag

ing

Peop

le

Man

ag

ing

Sta

keh

old

ers


Intervention Styles

Diagnostic Led

Results Led Learning Led

The choice is context specific

HappyMappers

BlitzHeads

PerpetualStudent

BalanceZone

We needed to agree the appropriate Intervention style at UUW


Imp

rove

men

t Im

pro

vem

ent

Op

po

rtu

nit

yO

pp

ort

un

ity

TimeTime

Short termgains made Lost and repeated results

due to no sustainability

Or results were lost entirely!

Improvement leveled off and eventually stopped due to

lack of realizing “true” lean opportunity

Greater, sustainedresults achieved

Awareness, education, organisation structurecreated to support lean Source: C. Craycraft, Whirlpool

We needed to consider the longer term picture and to set expectations at the start


UUW Initial Focus for 2009

Where we agreed to focus for 2009 – needed to undertake an e2e Diagnostic and improve Nine prioritised processes


The Top level structure we followed

Mobilise

KEY ACTIVITIES:

•Scope Key Business Process

•Sub process scope defined with the core team

•Engage leaders

•Training / awareness delivered

•Understand deliverables

•Agree project charter and project plan

•Define the project governance approach

•Define and mobilise the core team

Diagnose

KEY ACTIVITIES:

•Data Collection

•Current state and issues

•Understand desired performance features

•Develop stable/future state

•Understand problems

•Inc. compliance if required

•Detailed approval sought for next stage at the end of diagnosis

•Identify people issues

•Develop benefits case

Plan / Do Check / Act

KEY ACTIVITIES:

•Mobilise full implementation team

•Develop a deep understanding of the problems

•Introduce PDCA thinking

•Pilot / Implement changes

•Implement management & CI processes

•Begin benefits tracking and realisation

KEY ACTIVITIES:

•Review progress

•Hand over projects, Management Process & CI to business as usual

•Manage realisation of benefits

•Ongoing continuous improvement process

OUTCOMES:

Core team ready to start implementation

OUTCOMES:

Issues scoped, direction known

OUTCOMES:

Deep understanding of the problems, prioritised plan & actions started

OUTCOMES:

Realisation & monitoring of benefits, standardisation

Implementation


Stabilise State - Plan / Do

Stabilise State – Check / Act

Meter 2 Cash – ongoing CI

Benefits realisedMeter 2 Cash

Process Owners agreed

Cu

sto

me

r to

Ca

sh

2009 2010Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June

Future State – Plan / Do

2009 2010Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June

Benefit realisation

Mobilise

Diagnose Plan / Do Check / ActDebt Management

Resolve customer issues

Benefit realisation

Mobilise

Diagnose Plan / Do

Benefit realisation

Mobilise

Diagnose Plan / Do Check / Act

Benefit realisation

Lean Process Network

BT

B &

S

2T

Peo

ple

In

ves

tmen

t

Investment Prioritisation

UUW Mgt Process

SAP ERP

Regulatory Reporting

Performance Mgt

Fin

an

ce

S

.Ch

ain

R

epo

rtin

gM

gt

Pro

ce

ss

Mobilise

Diagnose Plan / Do

Mobilise


Benefit realisation

Mobilise


Mobilise


Mobilise


Benefit realisation

Benefit realisation

The UUW Top Level plan for the first 12 mths

Finance

HR

Supply chain


From the time A Developer requests to have a Water Connection made to a property

To the time A Customer receives a timely bill and payment is received by UUW

domestic metered customers

Including Front Office and Back Office, (Manila) staff and processes which support

the metering process Customer Relations team at Lingley Mere 3rd Parties i.e. Siemens and H20 Billing teams

Out of Scope The free meter option (FMO) process

The scope of the Meter to Cash e2e process


Measure M2C Current State M2c Future State

Time taken to complete the process (Average)

343 days (with query) 10 days

Percentage Rework (Average) 45% 5%

Customer Complaints 3000 500

Number of Process Steps 21 10

Bad Debt Charge

UU Bad Debt as % T/ over

(Industry Average)

Application Request

Application Request

Inspect Service Pipe


Plan & Schedule work

Plan & Schedule work

Make connection &

fit meter

Make connection &

fit meter

Details on billing

system

Details on billing

system Read Meter

Read Meter

Check details /

Send bill

Check details /

Send bill

Customer Query

Customer Query Supply

Check

Supply Check

Meter Maintenance

Meter Maintenance

A Top level summary of the issues we found from our e2e Process Diagnostic activity


Oakland House

Preston

Lingley Mere

Field (Siemens) Whitehaven

Lingley Mere

Gemini (Vertex)

Manila (Accenture)

Field (UU)

Field (AX4 - Morgans)

Field (AX4 - Balfours)

Field (H20)

Whitehaven

Lingley Mere

Manila (Accenture)

Field (Siemens)

Field (UU)

Field (H2O)

Whitehaven

Lingley Mere

Manila (Accenture)

Duplicated activities, carried out on multiple sites; rework

created due to lack of control &

process

Multiple suppliers, lack of

consistency, low level of quality

checks, lack of UU control &

consequence

Normal cyclic reads are

inconsistent due to data and access issues resulting in

estimated bills

Incorrect meter, customer and / or account details on the bill results in rework activities and / or customer refusing to pay

Process is complex and un-

owned from a customer

perspective – easy option was to ask for repeat supply

checks!!!!

There is debt in debt manager that cannot be collected due to incorrect / missing customer

data or non willingness to pay

Order Creation

Connect customers

Collect customer

usageBill Customer

Resolve Issues

Receive cash

Meter to Cash

Connections organisation Customer Organisation

Some of the issues we found from our e2e Process Diagnostic activity


Field – 2.4%

Back Office – 6.8%

Connections – 9.6%

Front Office – 1.4%

Rig

ht F

irst T

ime

Co

st

Fa

ilure

Co

sts

20

.2%

79

.8%

Approx 20% of the e2e process operating costs were down to rework!!


Customer: “The call was regarding a call that I made previously and somebody still hasn’t got

back to me, that was about 3 weeks ago”

Customer: “……my meter wasn’t read for 2 years and then suddenly you decided that I

owed a lot more money than I should ”

Customer: “…… third

time that I’ve rung and I’m getting quite

annoyed about it now

”

Customer: “…… supposed to be checking that it is just my

water meter that I’m being charged for and not my

neighbours ”

UU: “It takes a couple of weeks to be updated on

the account”

Customer: “…… I’m just getting

annoyed because I’m wasting my

time ringing you, nobody’s ringing

me back and nobody seems to be doing anything

about it. If I stopped my direct debit I’d soon get

a phone call”

Customer: “…… I’d prefer to speak to one of those who I’ve

been speaking to cos otherwise I just go round in

circles explaining everything 28 times ”

UU: “It says here visit about appointment it’s confirmed the meter details but it hasn’t really confirmed much to be honest

anything of anything”

UU: “I can confirm about the water meter void because the

supply check’s been returned….”

And our Customers and call centre staff were not very happy either!!


LEAN PROCESSES IN CUSTOMERFUTURE STATE: Meter-to-Cash

Application Request

Application Request Make

Quotation

Make Quotation

• Application is owned from arrival to the customer being billed correctly

• All applications are completed online with an automated quote generated for real-time payment

• Mandatory data requirements built into end to end systems to ensure correct and consistent data collected. Removing 50% rework from current state process

• No manual hand-offs within the first step (3-5 to 0)

• Consistent process for standard and non standard connections

• Single, co-located connection team (standard and non standard)



Application Request


Quotation

Make Quotation



Release work to Partners


V

• Customers book their own appointments via the web

• Appointment SLAs are met and customers ‘failed’ for non-adherence – reducing GSS payments and UU rework

• Single Field role, with end to end accountability for all activities on site

• Process ensures UU has the correct data before jobs are released - reducing rework and unnecessary contract costs



Application Request


Quotation

Make Quotation





NP Plan & Schedule work


Make connection &

fit meter

Make connection &

fit meter

SLO Admin UU

SLO Admin UU SLO Make

Connection

SLO Make Connection SLO Fit Meter

SLO Fit Meter

H20 Fit Meter

H20 Fit Meter

Connection exceptions


H20 Admin H20 Admin

SLO Plan & schedule

work

SLO Plan & schedule

work

• Single contract for all connections and meter fit activity

• Clear processes, measures and accountabilities in place - reducing errors and non-adherence of Self Lay Organisations (SLOs)

• For non SLO’s, contracts and measurements support an integrated partnership and performance is proactively managed

• Consistent data requirements and improved data quality – less exceptions and one version of the truth

• One stage fit for connections and meters wherever possible



Application Request


Quotation

Make Quotation







Make connection &

fit meter

Make connection &

fit meter

SLO Admin UU


Connection


SLO Fit Meter

H20 Fit Meter

H20 Fit Meter



H20 Admin H20 Admin

SLO Plan & schedule

work

SLO Plan & schedule

work

Details on billing

system

Details on billing

system

Customer moves in

Customer moves in

Read Meter

Read Meter

Check details /

Send bill

Check details /

Send bill

• All customers can be billed when they move in to a new property –data is correct and available on our billing system

• Integration of systems and end to end process measures enable proactive customer management – any query is managed through to resolution

• No missing meters or non notifications due to better management of our processes and data – reduced UU rework and waste

Application Request


Quotation

Make Quotation







Make connection &

fit meter

Make connection &

fit meter

SLO Admin UU


Connection


SLO Fit Meter

H20 Fit Meter

H20 Fit Meter



H20 Admin H20 Admin

SLO Plan & schedule

work

SLO Plan & schedule

work



Application Request


Quotation

Make Quotation







Make connection &

fit meter

Make connection &

fit meter

SLO Admin UU


Connection


SLO Fit Meter

H20 Fit Meter

H20 Fit Meter



H20 Admin H20 Admin

SLO Plan & schedule

work

SLO Plan & schedule

work

Details on billing

system

Details on billing

system

Customer moves in

Customer moves in

Read Meter

Read Meter

Check details /

Send bill

Check details /

Send bill

Customer Query

Customer Query Supply

Check

Supply Check

Meter Maintenance

Meter Maintenance

Re-read

Re-read

• Automated Meter Read (AMR) meters are fitted to all new properties

• Appropriate number of supply checks taking place – reducing Opex cost and improving customer satisfaction

• Lean processes and increased agent skills reduce the time taken to resolve a customer issue

Application Request


Quotation

Make Quotation







Make connection &

fit meter

Make connection &

fit meter

SLO Admin UU


Connection


SLO Fit Meter

H20 Fit Meter

H20 Fit Meter



H20 Admin H20 Admin

SLO Plan & schedule

work

SLO Plan & schedule

work

Details on billing

system

Details on billing

system

Customer moves in

Customer moves in

Read Meter

Read Meter

Check details /

Send bill

Check details /

Send bill


FUTURE STATE – Real Customer Contact

UU: “…..you are going to have quite a large bill”

Customer: “I want to apologise…you were very apologetic a moment ago

because it took a long time, there’s no need to apologise, I think I should

apologise”

• Agent is from the pilot meter-to-cash team in Whitehaven; ‘Front Office Metering’

• Trained and educated to resolve issue and not respond (i.e. set a supply check) – CAs exhaust all options to ensure we take the correct action

Example:

- Metered customer called with unusually high water bill

- Agent spent 17 minutes on the phone

- Agent exhausted all possibilities (did not need to offer a supply check).

- Customer accepted responsibility

- Customer commended the agent and apologised for the contact

• Result:

- Agent empowered / trained not to hand off

- Customer agreed to pay large outstanding bill via direct debit

- No unwanted contact (or repeat contact following first call)

- No supply check set therefore repeat payment to contractors

- Longer time spent on call with customer to ensure ‘right first time’

- Proven concept of ‘right first time’ resolution

- Customer very satisfied with resolution


Process

Process is simple, consistent and the number of processes across customer has reduced

More automation of the processes through implementation of Self Serve

End to end ownership of the Meter Connection Application through to correct details on billing system

Designed to be a single-piece flow i.e. customer should only contact once, and is owned wholly by the same call agent.

System

Meter Connection Application process automated to reduce error & data issues

Agents have visibility of field activity and able to solve customer issue without handoffs

Self serve system is dealing with 30% of contacts from customers

Improved systems to allow greater visibility of customer data to agents and to allow better Management Information to aid debt strategy

Organisation

Single Connections & Metering Team Appropriate and consistent agent salaries &

performance management Mirror image organisation on both Lingley Mere

and Whitehaven sites

People Co-located teams working on mirror image sites across

the end to end customer process (metering & connections working together) with ownership for the customer throughout their contact

Customer agents working across the end to end process are measured on resolving customers enquiries and only +1 day hand-off occurs where there is a field activity to solve.

Single team who deal with any complex issues (approx 30-60 people).

Policies and processes are enforced, with action taken where contracts or performance is not adhered to.

Problems are being fixed within operational teams, minimum large change programmes.


Benefits to date

Reduced rework 70% at Application form submission phase

Save £107K (In One month!!) by introducing a Site Liaison to identify uncollected Developer income

100% success in addressing “Labelling errors” regarding new Service Pipe Connections.

Identified £646K of “missing meter” actual revenue to be collected

Reduced rate of raising Meter checks from 50 to 5 per mth via focussed “Front Office” training saving £60k per annum

Identified £4.3M of outstanding debt previously “hidden” within Supply check backlog which is now being collected


Our focus at UUW for the next 12 mths

2009

2010


Let’s link this story back to the, Year 1 Relevant, sections of the Lean Business

Model


Strategy Deployment

The vision, goals and strategy are clearly communicated

throughout the organisation with key measures, targets and improvement activities

appropriately deployed

Alignment & Engagement

Management Process

Strategic Direction


A summary from our Meter to Cash e2e Process journey – Strategy Deployment

What we found What we have put in placeNo clarity of e2e process ownership M2C Process owner in place with

accountabilities clearly defined (not just a “Figurehead”)

Not even one KPI (from the 100+ that existed in the functions that the M2C process passed through) that was relevant to the e2e process!!

Established a set of 11 relevant e2e process KPI’s that are underpinned by clear targets and a robust Mgt & Governance process ( i.e. – taken away the excuses!!)

Lots of functional, silo KPI’s that were really driving day to day behaviours that very often conflicted with the needs of the e2e process

We have had the right (sometimes brutal) discussions with the right people to enable to ensure that the appropriate (for now) compromise has been reached


Value Stream Management

Improvement is managed through processes and value streams to

deliver outstanding customer value with minimum bureaucracy

and waste

Mapping to identify Waste

Managing to the Future State Result

Understand Strategy and

Customer Value


A summary from our Meter to Cash e2e Process journey – Value Stream Management

What we found What we are putting in placeThere was hardly any understanding of the various e2e process Customers, their requirements and current performance against these requirements

Formal Customer Value Insight exercise undertaken with current (& future) Criteria for all key Customers defined – aligned to Future State e2e process

Functions had mapped their own areas and had tried to fix issues in isolation of understanding the e2e process – thus lots of “sticking plasters” had been put in place

A sustainable CI process is being put in place that ensures issues/root cause solutions are assessed and implemented from an e2e process perspective

Process maps were being undertaken within various functions for purely documentation, not improvement purposes

We undertake a VSM to get “Reasonable data”, to drive improvement which, once Future state achieved, can be documented!


A summary from our Meter to Cash e2e Process journey – Tools and Techniques

What we found What we are putting in placeLots of Visual Displays that were not being used for anything meaningful

Visual Mgt that aligns comes alive as part of the e2e process Mgt and Governance

Little understanding of Foundation Tools (e.g. Root Cause problem solving)

Structured some Foundation tools – e.g. Root Cause problem solving. However, “bundling” the relevant part of the various tools together has been the most successful way – with the name of the tool being irrelevant!! (e.g. We have not done a 5s in the Office project1)

No concept of sustainable Continuous Improvement that is aligned to deployed targets etc.

Putting in place a sustainable CI process – with annual targets, owners, review mechanisms etc. during 2010


Exercise

Select a key Office environment within your organisation Select one (or two if time permits) elements of the Lean Business

model and assess What is currently working well and why, from a Lean Thinking

perspective What is not currently working well and why, from a Lean Thinking

perspective

Work within your own company teams

Allow 20 mins

We will then spend 10 mins on a plenary feedback session


How we see holistic Lean Thinking Implementation…

Research conducted by Professor Peter Hines and the Lean Enterprise research centre identified 5 key elements of success:- Focus on customer value through

policy deployment Deploying through cross functional

processes Value stream management aligned to

business goals Lean tools and techniques aligned to

need Application in the extended

enterprise

S A Partners has learned, adapted, recognised a blind spot about people and created:




Do you have any questions?


Thank you – if you require further info

Jeff Williams, S A Partners Mobile 07974 805075 Email

[email protected] [email protected]

Gerard Eivers, S A Partners Mobile + 353 (0)87 2433714. Email [email protected]

Kate Jones, United Utilities [email protected]

Inspiring success through pioneering, process-based solutions An Insight into applying Lean Thinking...

Documents

Transcript of Inspiring success through pioneering, process-based solutions An Insight into applying Lean Thinking...