To Mitigate Economic Challenges, Utility Companies Should Adopt Lean Operations
- Mar 11, 2021 3:29 pm GMT
From existing staffing challenges to unpaid customer bills and disconnection moratoriums, utility companies have struggled to grapple with the storm caused by the COVID-19 pandemic. Why? Compared to their peers, utility companies have lagged in terms of adopting digital technologies. This made it difficult for many of their employees to make the work-from-home switch back in March 2020.
Harder still, the work of field technicians — a hands-on, close-quarters role — doesn’t lend itself especially well to social distancing. Utilities have certainly made a valiant effort to adapt, but the opportunity to improve operations remains significant.
One of the most impactful areas for operational improvement is the way utility companies communicate with workers. In times of deep uncertainty such as these, employees want to feel comfortable with the flow of information and want to be more connected to their employer. Yet a recent survey from Edelman shows that employees have little trust in CEOs and senior managers: In fact, only 14% of workers genuinely trust these leaders — the lowest number found by the organization’s study.
When employees feel disconnected from leadership — as is often the case at utility companies as well as many others — it only makes employees feel less confident and engaged. This is critical for utilities that are aiming to better engage with rapidly changing workforce dynamics.
Technology can help resolve this problem if utilities can overcome some institutional obstacles. However, a PwC survey of utility professionals showed that 64% think their workforce is either somewhat prepared or not prepared to embrace new technology.
Knowing that, it’s not enough for utilities to “catch up” in terms of digital adoption, as adding new technology as quickly as possible won’t alleviate the problem. Instead, utilities need a strategy around that technology.
The Many Advantages of Lean Operations
After conducting a different survey of CEOs about their companies’ post-pandemic plans, PwC also concluded that they “will prioritize business models that are digital and flexible.” That’s simply a different way of saying they will prioritize leaner operations.
The concept of lean operations management originated in manufacturing, where factories have perpetually tried to fine-tune variables to do more with less. Now, it has migrated into other industries and applies to operations generally.
Any organization can become “lean,” meaning it systematically replaces wasteful or redundant processes with alternatives that maximize efficiency and cost-effectiveness. Overall, lean operations is about eliminating anything deemed extraneous while optimizing everything considered essential.
Lean operations principles can apply to everything from administrative tasks and workforce configuration to operational processes, and every aspect of a company’s core structure can (and should) be addressed when moving toward a leaner operating model.
These days, digital tools are one of the most effective methods for companies that want to integrate lean principles into the core of their operations. They can support real-time communication, automate repetitive tasks, and eliminate barriers to information that can slow workflows — all valuable perks for companies trying to save money and connect all levels of the business.
Similarly, lean operations management can make utility companies’ work environments safer and more efficient, which will both be priorities during COVID-19 and well into the future. Technology such as automation can also delegate high-risk tasks to IoT-equipped tools so that human technicians can fulfill roles that are inherently safer (and perhaps more valuable). Technicians can also work smarter with the aid of things such as collaboration apps, messaging tools, and mobile capabilities.
Because they help companies maximize existing resources, these are all hallmarks of lean operations.
Why Lean Operations Starts With Effective Communication
When we consider how well a company functions, it always boils down to how well it communicates. Is the C-suite cut off from the rest of the organization? Is the frontline workforce included in communication?
The more connected each worker is with the varying departments in his or her company, the leaner that organization becomes. Business outcomes improve when communications flow freely inside an organization; misunderstandings and crossed wires no longer lead to inefficiencies and preventable mistakes.
A company that’s transparent with employees about its plans to emerge from the pandemic and its progress toward that goal becomes more unified as a result. Workers understand their purpose and value within the bigger picture.
They also gain faith and trust in leadership at a time when that’s essential but often lacking. Improving internal communication is a simple formula that results in greater engagement, more collaboration, and innovative ideas — all of which yield higher productivity rates.
The Importance of Centralizing Information
Streamlining communication and collaboration is one way to level the playing field between employees, as everyone can access information that helps them perform their jobs better. If frontline utility workers can access documents on equipment maintenance directly on their mobile devices, for instance, they can problem-solve on the spot without searching for the information in a dusty file.
This is a huge win for those who go lean.
According to research by Nintex, nearly half of full-time employees admit that the process of locating documents is “broken” at their organization. This is an unnecessary waste of time and money that’s easily fixed with collaborative tools (a communication hub being one example). Besides this, digitally managing inventory also allows workers to track every item with greater accuracy and keep material on hand when it’s needed rather than, say, incurring storage costs.
And when companies automate their operations at the same time, smart machines can also do their own preventive maintenance, avoiding preventable stoppages in turn and freeing up employees to do more valuable work. After all, equipment breakdowns are expensive and disruptive for utility companies, and it costs an average of $260,000 for every hour that equipment is unexpectedly offline. Creating a cloud-based network of mobile technology and machines also enables circular communication within an organization that eliminates waste and runs like a well-oiled machine.
For industries new to the concept of lean operations — utilities included — it’s vital to treat this approach like a journey rather than a destination. Streamlining internal communications is just one step in that journey. Make that the next priority, then commit to constantly evaluating processes and seeking maximum efficiency throughout.
Utilities, like many other industries, has been slow to change in the past. Now, it’s time to embrace these shifts wholeheartedly.
Get Published - Build a Following
The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.
If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.