The continual advancement of technology in The Utility Industry has complicated operations for natural gas local distributions companies (LDCs). Stakeholders- including corporate managers, regulators, and customers- have placed ever-higher expectations on LDCs to provide reliable service while adhering to increasingly stringent requirements. In light of this challenge, many utility organizations are seeking best practices that can help increase standardization across their organization. This case history examines a multiphased implementation strategy by a prominent U.S. – based energy company.

CHALLENGE

A large energy company with natural gas local distribution companies (LDCs) across the United States wanted to accelerate the identification of best practices and increase the standardization of gas LDC processes to reduce its cost of service. Because the LDCs were geographically dispersed, fostering interactions among peers, many for the first time, was vital to ensure alignment. With the help of ScottMadden, a workload-based assessment was performed with client teams, using a series of workshops to identify best practices and efficiency opportunities across the LDCs.

PROCESS

• Met with representatives from each of the LDCs to define workload categories
• Allocated FTEs and quantified workload for each category
• Identified differences in workload due to true volume drivers
• Used unit rates to identify the best practices among the LDCs
• Applied a line management/peer group ownership model; had decisions and recommendations created by teams that own the function, not third-party analysis
• Validated change opportunities by quantifying the benefits and defining an implementation approach with leadership from each LDC

RESULTS

• Established a foundation for comparison across the LDCs
• Identified opportunities to create efficiencies across the LDCs through standardization and consolidation
• Senior management aligned on which recommendations to move forward with, as well as decisions on how to use improvements—harvest savings or redeploy to more important activities
• Developed initiative charters to drive implementation
• Enabled team members to make new, lasting connections with their peers