Utility Success Story
The results of the implementation were seen in both cycle time and resource costs.
The transmission business of a large utility serving four states was in the process of implementing project management for their capital projects. Their objective was to reduce the cycle time for designing and building capital projects while also reducing costs. This was occurring in a changing business environment where the nature of capital projects was becoming more complex. Large industrial customers were increasing their demand for the installation of cogeneration capabilities. The task was complicated by two major factors.
First, the role of the project engineer was deeply imbedded in the culture of the transmission business. The project engineer had historically been the business manager, project coordinator, technical overseer and troubleshooter from concept through commissioning. The engineering organization viewed relinquishing any of these roles as a reduction in stature. Second, the organization had been through several major regional buyouts, reorganizations and consolidations over the previous five years. The existing business processes were the residuals of former business entities and operating philosophies.
Our process templates were used as the template to define the management and workflow processes of individual projects and the entire portfolio of $50 million in capital projects. Process design for individual projects incorporated the use of project phases and gates with universally understood deliverables, cross-functional teams with clear accountability and new business-focused, non-technical responsibilities for project managers from concept through commissioning. The core of the portfolio management processes was resource scheduling to maximize resource utilization and assure schedule attainment.
Implementation addressed the cultural barriers that had frustrated previous efforts. Cross-functional teams were called together early in the scoping phase to develop the technical design and project requirements. The involvement of non-engineering resources prior to design had previously been viewed as a waste of time if not inappropriate. Project managers were assigned to projects at initial scoping. They were made accountable for the overall project schedule, cost and performance with emphasis on customer satisfaction and project coordination. The project engineers became strictly accountable for the technical delivery and quality of projects, enabling them to place more emphasis on engineering excellence and standardization. Capacity planning and scheduling of engineering and construction resources was instituted on an ongoing basis assuring proper balance between project demand and capacity.
The results of the implementation were seen in both cycle time and resource costs. The new project management organization was able to achieve significant reductions in cycle time of selected projects. An example is that the design and construction of a 115/13.8 kV substation, historically requiring 48 weeks, was completed in 3 months. The capacity scheduling processes achieved a 23 percent increase in engineering utilization valued at $1.2 million in engineering output.