Attaining Sigma - A revolutionary move for power sectors across India
Energy Pulse
There has been tremendous rush towards inclusion of quality standards at the same time which makes it quite difficult to measure and quantify the standards that the power distribution sectors might have set for themselves after the de – regulation. The only viable standard as of now in India is to benchmark and adopt the Six – Sigma measure of Quality.
Six – Sigma is a registered trademark and service mark of Motorola, Inc. In the mid 80’s Motorola created this model and become a benchmark in the industry for measurement of quality. With de- regulation setting in and open access threatening inclusion of competitors, its high time that power sectors took some initiatives in ensuring quality in the distribution sector.
Six – Sigma is a measure of excellence to improve quality & efficiency. It means measuring processes using statistical tools and defining controllable inputs, rather than inspecting for defects at the end of the process. It means maximizing equipment uptime and optimizing cycle time. Six-Sigma is a way to improve our process by measuring the potential of process in a specified limit. Implementation of Six – Sigma in a power distribution utility would mean eliminating all defects; rework & scrap and helping various processes across the power distribution sector achieve high standards of quality.
There can be many definitions of Six – Sigma depending upon the business. But Six – Sigma can be defined in general for all businesses with three arching themes – Customer Focus, Data Driven & Robust Methodology
A WAVE TO CHANGE THOUGHTS
Indian power sector is right now in the transition phase, just like human mind, fluctuating from one end to another with no defined approach to solve a particular problem. It is worthwhile mentioning here that organizations like GE have achieved a high level of satisfaction among its both internal and external consumers by adopting the six – sigma methodology
SIX – SIGMA APPROACH – DMAIC
DMAIC is a six – sigma approach which in itself means data driven quality strategy for improving various processes in the organization.
DEFINE - This usually means to define the strategic direction of the organization. Power distribution sectors after de – regulation are on a fire – fighting mode trying to fix all the problems created by the regulated environment. Fine enough but there is a need to ensure quality even while fixing a problem. But, it has been seen that even after a particular problem is being fixed, it recurs back after a short period of time in most of the cases.
Power distribution sectors need to define its customers and their expectations to achieve quality in their various processes along with the potential risks that they might face. The processes need to be defined first based on the consumers’ expectations.
These power distribution utilities need to identify the core area of operation and map those areas with the expectations of the consumers which should be handled when devising organization – wide strategy. The gap between the strategy defined and the customers’ expectations is the opportunity that the organization needs to work on. To improve upon these opportunities, many times organizations do not really understand the difference between values-add and cost-add.
There are two ways to do this – either increase price of the product or to reduce cost to organization. The mind set of the top level management needs to be flexible and adaptive to change. The catch comes in when it comes to execution. Most of the companies are desperate to improve and they forget there most valuable asset i.e. their employees.
An example in view would prove the above mentioned point. Let us consider the Operations and Maintenance department of a typical power distribution sector, where in this department has to ensure the continuous supply of electricity from power plant to the households, commercial users and last but not the least the industrial consumers. This department has to ensure the proper health of the equipment in grids. The opportunities to improve must be in tune with organizational objectives. This area of O&M is very sensitive in nature. People have to work there 24x7. The grid operation cannot be neglected. This is the area, where people need to concentrate more on output because the work tends to get monotonous and people tend to lose interest in their work. This process needs to be worked upon and people working their need to enjoy their job. In India, where the grids are on the process of automation, the process and its activity needs to be redefined and help the employees want to do what they are doing. There is a definite need to rotate them in other areas, so that they don’t lose the faith the sector.
MEASURE - This usually means to set measures for the strategic objectives of the organization. Measures can be set only if the customers’ expectations are met. Typically in a power distribution organization, when it was a regulated environment, consumers were treated as if they didn’t exist and in many places across India, the same procedure continues.
Going along with the above example of Operations & Maintenance department of a power distribution sector, we need to identify the measure of performance of the core processes. The performance of the process is measured by identifying customer problems by focus groups, survey or word of mouth. The period of downtime of electricity/power to the consumers stands as the measure in an O&M department. The metrics therefore should be prepared to map the defects in the process with respect to the key parameters based on the results of focus groups, surveys etc as identified by the organization.
This type of technique would a typical power distribution sector identify the gaps in the process and also help to prioritize the activities in a better manner. This will enable not to lose the grip on any process and would ensure continuous improvement in each area. Again, it would enable the power distribution sector to identify the opportunity area in each department separately and can link the activity with the processes existing in different departments. Power sector in India does not sensitively think on keeping the uninterrupted power supply and people in India are now used to power cuts. The area of analyzing the “no power condition” will help us in doing better planning, monitoring and executing the jobs. In power sector, especially in distribution sector, concern toward customer is more important, so as to reduce their extra burden of buying alternative power supply like generators.
The objectives of the Define and Measure phase of for any power distribution sector across India and the world are defined as below:
1. Building up a set of metrics for the organization that give definition to the Organization’s Vision
2. Metrics that are Integrated with the Strategic direction and objectives of the organization
3. Metrics that align people and work with their strategic objectives
4. Metrics that serve as effective means of communication for the organization both horizontally and vertically.
5. Metrics that provide insight needed for making decisions, setting direction and correcting course.
6. Metrics which will serve as a continuous source for identifying gaps in the organization and plugging them with various Six Sigma Projects.
The problem most organizations face in the phases of Define and Measure is how to build such an organizational dashboard, which will help achieve the objectives cited above which need be taken care of by the senior management while planning strategy and making the plan available to each and every employee of the organization.
ANALYZE – This usually means to collect data on the measures set on a continual basis and analyze using six – sigma tools and techniques. Sigma is a process measure of variability in any given process. In manufacturing, it is the number of defects in a product and in service; it is the delay in meeting the customer requirement. This can be defined better from the table below:
In the consideration mentioned above i.e., when the downtime is being considered, lots of work needs to be done in order to effect quality. A cause and effect diagram will not only help the power distribution utilities prioritize on the ongoing work but also will help to concentrate on the defined problem. In this, power distribution utilities across India need to identify the sigma level of the processes, in order to fix the priority. In power industry, especially in distribution sector, many companies are thinking on achieving six sigma levels. Analyzing in case of services, it is the reduction in the cycle time, rapid response to customer query and accuracy in managing supply chain which will ensure achieve six – sigma levels that is currently being dreamt of and a lot of work has to be done in the process.
IMPROVE – This usually would mean to identify the opportunities for improvement and convert them to six sigma projects for betterment.
In the example, power distribution utilities across India need to improve upon the cause of defects by assigning acceptable range to key variables & system to measure deviation of the variable. In order to improve upon the no power condition, these utilities need to identify the gaps in the process. Once, the gap stands identified, it would seem easier to work upon the solution. In India, since generation & transmission lies with the government, a fault in transmission lines or even for that reason a frequency drop in the generating station might lead to darkness all around and a power distribution utility has its hands tied unless the lines get changed or the frequency gets corrected.
Power distribution utilities now need to consider power generation of their own so as to reduce the effect of technical faults on its consumers. With open access looming large, these utilities must consider something known as backward integration. This will help broaden the distribution sector’s horizon. The definitive process of improving the condition of power supply in a six – sigma project would also help streamline the process of generation in its stride if these utilities consider on the backward integration in India.
CONTROL – This would mean setting up of a management control action of continuous reviews on the improvements made which had been set in the “define and measure” phase.
The power distribution organization needs to ensure that these process are being monitored regularly on the sigma level and any variation in this might lead to change in the work instructions or procedure and if the variation is due to any other reason, these utilities need to identify the root cause of the problem and share it with all the employees, so that repetition of that particular event can be avoided by taking necessary corrective and preventive action.
The bell curve helps keep track of the sigma capability as a process. Variation in the process is caused due to the number of defects or delay in resolution of service to the customer. The approach appears to be similar to other quality improvement approaches. The key difference is the emphasis on customer requirement & aggressive use of advanced statistical tools & methodology.
THOUGHT DIARY FOR PRIVATE POWER PLAYERS IN THE DISTRIBUTION SECTOR
Opportunity to explore six – sigma across power sectors in India is tremendous. With de – regulation and privatization of power sectors, these private players are striving to provide better services and quality power to its share of consumers. Again, as mentioned with open access looming large, it has become a necessity to provide value added services with no cost attached. In India, about 70% of the people live in rural village, so increasing the tariff would simply mean losing their grip. Six-sigma is just like “Aspirin” for these power distribution utilities. The six - sigma will help power distribution companies to enjoy the power of tangible & intangible benefits by:
* Reaching System Stability Index of 99.9998%
* Reducing Customer Dissatisfaction
* Improved Image
* Zero Breakdowns
* Increased Life of Equipments
* Increase in Company Revenue
The drive to supply power interruptedly to the customer should be driven from Top Management. The Top Level Management needs to redefine the strategy and set the objectives and targets accordingly. The revolution of six-sigma in India has yet to establish itself and there stand lots and lots of opportunities to bring change in the way the power distribution utilities function.
SIX ESSENTIAL ELEMENTS FOR PROPER IMPLEMENTATION OF SIX – SIGMA
Deployment of six – sigma projects is no child’s play. All said and done, proper deployment is necessary and is the vital part to ensure the power distribution utilities to the reach up to the sigma level of quality.
A) Management Commitment – Management needs to be committed after taking the initiative of implementing six – sigma projects. The concept is basically understood mainly by the senior people in the organization and is not driven to the people working at ground level and this creates the huge gap when performance results come to the fore. The management must reinforce the importance of six-sigma in their organization regularly so as to tune meet the targets set in the “define and measure” phase.
B) Synchronization with Organizational Strategy – In most cases, the six – sigma projects are not clearly linked with the organizational strategy. This has to be addressed in order to remain competitive. Linkage of initiative with the quality policy of the organization along with the mission and vision is very much important. The best way is to practice Balance Scorecard. This will help in identifying the improvement projects, which have greatest impact on strategic objectives to derive better business results both in terms of consumer satisfaction and revenue maximization.
C) Tracking Performance & Accountability – Six – Sigma initiatives tend to fail if there is no proper tracking of projects and the persons involved in these projects are not rewarded suitably. Organization must keep a close eye on the progress and performance of employees and identify the key responsible people, who are willing and able to drive the force of six – sigma.
D) Linkage with Ground Staff – A common mistake that is committed when a six – sigma project is initiated or handled without keeping in mind the financial gain aspect. The ground staff normally thinks that six – sigma would mean to improve quality of a particular process and they try their best but the effect becomes null and void because the end result is not conveyed to them. To avoid this problem, it is better to convey the estimated result with the price associated with the particular activity and what the ground staff stands to gain on completion of the project.
E) Human Resource - Identification of people, who are process oriented, drive decision making through data analysis and posses a willingness to learn and relearn. The team must constitute of persons, who posses in – depth knowledge of the business and the processes in hand. Proper training should be imparted to all employees to ensure proper functioning of the projects.
F) Flexible Approach – Six – Sigma is an approach and not a dish. People should be well adaptive. People, who are involved in this type of organization, must be prone to change and ready to adapt. Flexibility is the key to adapt to the changing environment. Employees should not be rigid or robust in his/her approach.
CONCLUSION
Six – Sigma has definitely made a difference across various organizations. People in these organizations are more dynamic and transparent as comparison to organizations which are managed like a proprietorship owned company. The methodology has encouraged teamwork and helped the company’s management to focus and refine its methods in achieving efficiency.
The power distribution companies must really think on these terms in order to enable better services to the customer. On the contrary, this business in India is monopolistic but as the new reforms and policies are made in this sector, this monopolistic market is going to die and people are going to enjoy the free market culture, where they will be able to buy power from any player in the market. Companies should prepare their employees from now onwards in order to gain competitive advantage and more market share once open access stands tall.
The players in the power distribution sector, which are already established and in the fluorescent stage must align their strategy with the current scenario in order to meet the customers’ requirement and delight its customers with better services.
The need for six – sigma for any power distribution company would prove a boon in the future. Six – Sigma would help these private players to adopt and not adapt and be reactive to situations. It would help them be proactive and this proactive attitude would ultimately help not only to quantify the expected results for any improvement project but also help these organizations ensure better quality in its process of operation thus leading to customer retention, satisfaction, earning revenue and finally remaining ahead in the competition.
Six-Sigma can be a big boon to power distribution utilities in India, as these private players are poised to go global. India is now marking its presence in the world globe as one of the best provider of services, so can’t power distribution utilities join the bandwagon. This approach will help the Indian Power sector to grow and unleash its potential globally and can compete in global market with other players like GE, Siemens etc.
