Paul Harper, Director of Asset Delivery, Northern Ireland Water
Having worked in Asset Management for some 30 years, primarily in the water sector I have seen many models being used. There are also many different variants of how teams and resources are organised. But what are they all trying to achieve?
Water companies in the UK and Ireland are heavily regulated in terms of economic regulation, water quality, and wastewater compliance. There is a tension between what the customer needs and the expenditure required to achieve the desired outcomes. In addition, economic regulators set efficiency targets to minimise the impact on customer bills.
The UK and Ireland Water Companies have different ownership models. They range from publicly listed, Investment Company owned, full government ownership to one with no shareholders run solely for the benefit of customers. There is clearly no single model and each must work in the way that best works for them, whilst answering to their shareholders and customers alike. All companies’ face the same challenges, including becoming even more efficient. So how will the industry achieve this? I share some of my thoughts below.
Fig 1: The Asset Life Cycle
Virtually all water companies worldwide will face similar challenges. Water Shortages, impacts of climate change, insufficient resources and skills, funding challenges, population and economic growth and an increasing expectation from customers and citizens. To help balance these challenges water companies must organise themselves to deliver their assets efficiently. Besides, why should customers pay more than they really need to?
We need to achieve a state of calm in our asset management and capital works planning, which will in turn facilitate becoming more efficient
Towards Production Line Thinking
Manufacturers have long been masters at lowering the cost and improving the quality of products. So why should the industry ignore this knowledge? From my experience in asset management, project management and organisational change there is an opportunity to apply LEAN Thinking to how we deliver and care for our assets throughout their lifecycle. A simple high level model is shown below:
Fig 2: The Production Line Strategy as applied to Asset Delivery
The beauty of this approach is that you can co-locate staff and set out your office to match the work flow, similar to the production line. This has the benefit of greatly improving communications, improving information flow using a single source of data and encourages collaborative working. Integrating the supply chain, operations and maintenance turns this end to end process into a continually improving cycle, while achieving better customer outcomes.
Like any production line, the predictability of demand is important. In this context, demand may be expressed as ‘Flow’. The flow is dictated at least in part by funding which is historically cyclical in the UK and Ireland Water sector. The Investment Cycle and indeed annual changes in funding can cause stop/starts in vital infrastructure delivery. Like driving a car - stopping and starting is inefficient, uses more fuel and the journey takes longer. The industry needs to take a longer term view, smoothing out the journey, which is good for company internal resources and supply chain alike.
The most efficient approach to production line thinking is to fit the people into the process, not the other way around. It is crucial that any organisation using a production line approach develops their internal capabilities to meet the demands, rightsizing and optimising both internal and external resources. In addition, recognising the asset lifecycle develops a better understanding of the condition and performance of assets. A move towards reliability centred maintenance underpinned by enhanced data and use of data analytics will also facilitate digital transformation of the industry.
In Search of Calm
I have a simple philosophy. We need to achieve a state of calm in our asset management and capital works planning, which will in turn facilitate becoming more efficient. We need to shift our mind-set and behaviours by saying that we can act even through there is some uncertainty. There will always be change, but if you can design your approach and keep looking toward the end goal then any adjustments will be a much lighter touch and not significantly impact on momentum. Moving toward a LEAN production line approach, underpinned by predictable flow and efficient use of ever tightening resources will help achieve the state of calm. This will align to the longer term needs of companies, their assets and most importantly, customers.