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Economic justification work management and AM/FM/GIS systems
Robert L Trotter
Executive Consultant, Logica
Energy & Utilities Division
10375 Richmond Avenue, Suite 1000
Houston, TX 77042, 713-954-7000
Executive Consultant, Logica
Energy & Utilities Division
10375 Richmond Avenue, Suite 1000
Houston, TX 77042, 713-954-7000
Introduction
This paper describes benefits and pay back that a utility may expect to gain by installing a work management information system (WMIS) and/or an AM/FM/GIS system (WMIS/GIS). It also describes a process for evaluating the current processes and defining the specific benefits for a particular company considering its organization and operating practices.
Utilities in the United States are facing new challenges, including deregulation, competition, stranded asset recovery, process reengineering and downsizing for cost control. Along with these pressures are environmental issues, such as the total social cost of generation, hazardous waste sites and etc., which utilities must resolve these issues while trying to run their core business, selling electricity and gas to customers. The transmission and distribution (T&D) expense for capital improvements and maintenance is second only to the cost of generation in most electric utilities. In gas utilities the cost of the distribution system is a bigger part of the cost. Only in recent years have utilities begun to change processes that have been in place twenty years or more by re-engineering and automation of the core utility processes. To survive and better yet, prosper in the new paradigm of competition requires that utilities consider immediate process changes, new organization structures and new technologies to achieve operational excellence. This leads to improved customer service and customer loyalty. Customers able to choose between suppliers will base their decisions on price and service. Using computer technology as a strategic asset offers four primary advantages.
- First, customer service will be more responsive and the costs reduced in all areas of operations. For example, a request for new service can usually be handled with one phone call. A customer's questions about the status of requested service restoration during a storm can be answered immediately; and work can be planned and scheduled more easily.
- Second, resources, both human and physical, can be utilized more effectively. For example, maintenance and construction work can be addressed "just in time" based on a known need date. Purchasing can be better controlled, allowing reduction of inventory. Redundant work and mundane clerical tasks can be eliminated.
- Third, installation of WMIS/GIS provides an opportunity to review processes and practices throughout the utility. Many work methods in use may not have changed for some time. Also, the installation of new technology can encourage employee participation. Employees know what their work requires, what customers want, and how processes could be changed for the better. Their knowledge should be tapped.
- Fourth, records can be consolidated, thus improving timeliness, accuracy and availability. This will also reduce the cost by not having to put data in multiple data bases. Client-server technology is in place, but in many cases high volume applications are used sparingly. It is difficult to fill requests from the operating areas for systems or for information. Departments, such as operations, do not have some of their major functions computerized. There is a transformer file, a pole file, a street light file and so on; but they require that a piece of paper be sent to a data entry operator for input. With the paper system it is not easy to know when changes have been made but with an automated system the work request is tracked until all changes have been done. This helps assure that when reports are sent out periodically they are up to date.
Traditional Manual Work Flow Problems
With this brief background, let's first review problems with traditional, paper-driven work flow and then describe a WMIS/GIS system, see how the work flows automatically, and discuss the savings.
There are many typical problems with a traditional, paper-driven work flow. Each department keeps its own log books, causing redundant records. When two departments communicate by paper, a lost sheet of paper means the loss of potentially important data. When a customer has a question about a job, only the one person working on that job can answer the question fully. Management cannot know what is occurring at all levels of the organization and cannot easily compile statistics to search for cost-cutting improvements.
As an example, we will create a hypothetical job and follow it through the manual system. When customers request needed work, the customer service department initiates a form or a memo in multiple copies. They send it to other departments, and record the job. The papers are received by the other departments, and they log the job. Someone in each department is assigned to each relevant task, but other departments do not know who that is.
Each department begins the tasks associated with the job and many tasks are duplicated. For example, the meter department and the engineering department both may visit the simplest service drop. Each department devises the necessary plan and does the paperwork. The engineer takes field notes at the site and creates a rough sketch of the work area. At the office, the existing maps are used by the engineer to create a work plan drawing. From this drawing and the field notes, the order is written and may require several copies. Each order takes a great deal of clerical time often done by the engineer. The completed work order package is sent to the construction department and placed on a stack of orders, waiting for construction.
The stacks of orders cause a constant state of chaos in the construction department. Employees search for jobs, while customers wait for the status of their job. Piles are searched and when the order is found, crews are pulled off on-going work to put out the "fire." This results in not only an irritated customer, but also a loss of productivity for the crews. The root problem is lack of planning; planning is impossible without knowledge of the workload and the status of every job. Worse yet, the areas or districts are run as many small companies doing their own thing. No one is able to compare overall priorities and backlogs.
The result is that crew scheduling is done at the last possible moment to avoid the "fires." Last minute scheduling is worse: crews lose valuable time by standing around waiting for orders and wait for materials. They may return with the job incomplete since the supervisor did not check that the job was correct and ready for crews in the field. The crews do the best they can, but have less time available to do the construction, because of the delays. In addition, the schedule is not based on estimated times for a job or location. This results in excessive travel, jobs set up twice, and many crews are assigned less than eight hours of work.
Crews are required to do the accounting for the jobs. Their daily time sheets are filled out with the account numbers that are used to record time and provide data used for vehicle reports. Many errors are made; the accounting is not consistent or accurate. There is a tendency for people to use a few numbers that they remember because they use them often. This same daily time sheet is used to post payroll and to cost out the jobs. Paperwork that is sent into corporate for close-out is often missing or inaccurate. Close-out is also difficult in the local areas. First, the paperwork is trued up to match the material issued with the work order. This manual process requires searching for paper as most orders use several issue tickets. The field sketch has to be manually posted to all versions of the maps. If the company has an older mapping system that has primary, secondary, pole, street light, underground, and feeder tie maps, it means the information may be posted to three or four maps. The drafter retrieves the working map, "red lining" in the changes. This is done one job and one map at a time. When "enough" red lines are on a working copy, the original is updated, reproduced, and distributed. The process requires a great deal of work and the maps and facilities' records are always out of date, sometimes by several months.
In some companies no one is planning and scheduling to optimize the total work force and its activities. This may be caused by the fact that there is no company wide data bases that show how much work is planned, where it is and when it needs to be done. There is no man-hour estimate available for each job. This results in the work force controlling and determining the quantity of work that constitutes a full day. Not every job has a specific problem, but the traditional manual system itself is not an effectual or efficient work process. The process prohibits jobs moving quickly and at the lowest cost due to the redundant and mundane clerical work required. A work management system helps to eliminate these problems, allowing for better customer service with lower costs.
Automated WMIS/GIS System
The WMIS/GIS should be a corporate effort strongly supported by upper management and the Information Services (IS) department. The user must be a part of the process and must provide strong support and buy in to this new way of doing business. The installation of a WMIS/GIS should start with an examination of existing systems, procedures and paperwork. Users should examine the major functions: interfacing with customers, writing work orders, designing projects, scheduling work, procuring material, construction management, maintenance management, etc. The users must then decide how best to operate. A team should look at all of company's areas and see how they work; chances are the areas operate differently. Find the best practice and adopt it for the entire company, then review it for further improvements.
Figure 1 shows a flow chart of a WMIS/GIS system. We will be following it to see how the operation can change. This sample flow diagram shows how the WMIS/GIS handles work initiated by customer request, engineering planning, maintenance analysis or trouble work. To understand the process and recognize the savings, we will follow a request for service through WMIS/GIS.
A customer service clerk takes a customer request and puts it directly on the computer. This initiates the job and instantly assigns a work request number. There are no multiple part forms to burst and mail, no chance of losing a job as it moves immediately into engineering, metering and other departments. The customer receives one call shopping, as the clerk is able to obtain the required information without transferring the customer to another department. Work from other departments within the company is entered in a similar manner by the person closest to the work. The company gets the benefit of one time entry of information; no one has to re-enter any of the information. WMIS is able to track the job; the system classifies each job in one of the stages shown on Figure 1.
Figure 1. Work Management System/GIS Work
Field investigation results in either a simple service drop or construction required (more than a service). Entries as to estimated length and size of the cable are made in WMIS/GIS for a simple service by the designer and the as build data is entered by the construction crew. The result of these entries is all the necessary work orders, material issues, and etc.. This reduces a thirty-minute job to a few minutes.
If the customer were to call, the clerk can look up the status of the job since it is being tracked in WMIS.If a work request is required, the engineer creates the work order specifying the requirements for materials and specific operations or maintenance (O&M) tasks. The material is grouped into compatible units, requiring only that the item be highlighted and selected. The system automatically applies the detail (that is bill of materials associated with an operation, labor hours, and the proper accounting codes along with correct distributions for O&M, Capital, and Cost-of-Removal). WMIS/GIS is used to prepare all the associated documents such as the material issues, vehicle tickets, and daily time sheets. It requires less than ten minutes instead of the traditional forty minutes. The system divides the job into logical work segments such as pole work, equipment needed and service only.
Work orders that reside in the WMIS are available for counting, sorting and review. WMIS generates planning lists, composite work order detail sheets, lists of work by type, required material, etc. This is an integrated system; therefore every entry serves multiple uses. The job stays in the system until all requirements are completed. Nothing is lost, overlooked forgotten or hidden from a thorough set of reports. When WMIS is missing information it reminds the responsible person. Fields can be structured such that the request cannot be processed until data is entered.
Requirements are those things that must be done before the actual work can be done. They are things such as permits, right of way and etc. Once all requirements are removed by completing the activity necessary to clear it, WMIS will retain a record of its completion. The job is now ready for scheduling. If a customer phones, any one can answer most question instantly by looking at WMIS.
A list of jobs is generated as being ready for scheduling along with the hours the job is expected to take (a by-product of the few minutes spent writing the work order). A scheduler assigns the work to the crews for the next day or week. WMIS sends material lists to stores with a date the material is needed. Work requests are printed for the crews to follow, along with a time sheet telling them the order in which to do the jobs. WMIS knows the job is scheduled, and when time is posted against the work, it is moved to the "under construction category." This simple process results in a 6%-10% crew time saving. Because there is no wait time for materials, crews have more productive hours of work, less excess travel, and routine jobs are completed with one trip.
The crews turn in their time sheets, and time can be entered directly into the WMIS. Line workers do not do accounting since the person entering the work request enters the accounting.. This is done by the crew simply reporting the time the crew worked on the work request and WMIS automatically does the accounting. WMIS knows who is on the crew and the proper accounting for that particular work request. No time sheets are rejected for bad accounting numbers. There is no typing of account numbers, as they are based on the job type and compatible units used. Time sheets require little effort, usually less than one or two minutes per crew for each work request. WMIS can immediately start to calculate the productivity of the crews against the estimate. Workers recognize they are being measured and this results in an increase in productivity. A typical company can expect a 2%-8% increase in productivity from reduced time reporting and the setting of standards and the "enforcement" of those standards.
The job is now complete and ready for closing. WMIS/GIS does most of this automatically, modifying the job to "as built." All the material, labor, vehicle, and engineering costs are used. WMIS eliminates the need for a clerical group to close work. WMIS performs and analysis that compares the estimate to actual charges and will automatically close those that meet the tolerances that are set. Only jobs that went overbudget or other selected tolerances need to be examined to find out what happened. Since the GIS design capability was used to make the construction sketches, the map revisions can be made by noting that the work was done as designed. In those cases where there are field revisions, only the revisions need to be changed on the maps. The customer secured service through an integrated process that saved money in labor, reduced supplies (forms and fuel), provided management with knowledge, and assured that the customer would be satisfied with the company's performance. In the background the system was doing more than that. The WMIS/GIS System:
- Standardized the way all the operating districts and areas do their work-- and the standard was the "high water mark" of the best way they could find to do the process.
- Communicated with "legacy systems", either electronically or via paper, to share and/or update corporate data property records, accounting and payroll.
- Eliminated the need for islands of automation as it provided the T&D department with the systems they requires.
- Provided data to other processes such as planning and scheduling.
- Reduced design and drafting labor by utilizing WMIS and even more if the AM/FM/GIS design capability is used.
The qualitative value of a WMIS/GIS system is easy to talk about, but it is more difficult to define the quantitative value. Some of the savings discussed above are hypothetical and assumptions are easy to make. Your savings will depend on several variables, such as:
- Where are you today in work practices, automation, and union agreements?
- What is the company's service territory and what are the characteristics of that territory?
- Are you installing only a WMIS package or is it integrated with an AM/FM/GIS system?
- How willing are you to interface the legacy systems to WMIS?
- Will WMIS become the driving force for new systems, utilizing all the capabilities?
The Value and Savings Associated with WMIS
The customers receive better information and service, as the employees have a tool that allows easy one-time entry of information. Management similarly has tools that are real time to use for planning, benefiting the customer with quicker response at lower cost. The whole company works as a unit to get the most important tasks completed. WMIS helps eliminate the separation of departments, allowing people to "fix the problem, not the blame." There is no confrontation between the employees, because the system is the requesting party.
Overall operational costs will be lower with an integrated system. Planning will require supervisors to look at jobs the day before. It is not unreasonable to expect that 25% of jobs that go out uninspected result in a one hour delay. The scheduler knows the location and the duration of the job. Using this information, travel time can be reduced, especially on crews with several jobs serving rural territory. As fewer miles are logged fuel used by the trucks will also drop. The process has a domino effect therefore, saving ten minutes per crew requires little effort.
The crews save wait time at the store's area since the material is staged ahead of need.. Stockroom work will be spread over eight hours, allowing for a reduced number of workers. Similar work savings will occur for people doing clerical tasks. Company people spend 30-40% of their time on paperwork either eliminated by or made a by-product of the integrated system. For example, notice of construction, permits, CATV letters, etc., are byproducts.
Management will also save. Managers will have information about the operation that is current, complete, and accurate. Engineers will no longer do clerical tasks, and the ten minutes or less spent choosing construction compatible units will supply the company with more useful information than many minutes of form filling could do. Supervisors will be in the field with the crews, looking at the next future work, not searching piles of work orders.
Many of the T&D support functions will also be affected. There will be a need for a much smaller clerical staff to close work as WMIS does that function automatically except for work requests that are outside the tolerances set by the utility. Store inventory can be lowered due to the planning and scheduling capabilities of the WMIS. Trucks will travel less, resulting in less fuel and service.
The potential dollar savings--just the obvious items, such as wages and transportation- are a large part of the operating expense of a company. Assume that the company had the following resources:
- 350 2-man crews; crew leader, line workers and line truck -- $60/hr.
- 100 Engineers; engineer and vehicle--$35/hr
- 15 clerks in closeout and 120 T&D clerks in the field--$14/hour
Line crews: Work an average of 6.5 hours due to weather and delays (coffee, lunch, travel); the true on the job rate is then: (8/6.5)($60/hr.)= $73.00/hour. WMIS will save at least 30 minutes per day due to improvements in planning (wait at stores, travel, full day scheduled), previewing jobs (job is ready and correct), and increased productivity through measurements. Therefore
.5 hour x $73.00/hour x 350 crews = $12,775/day
$2.5 million per year
Engineers: Office work includes writing 4 to 6 work orders per day. Just 4 orders at the original time of 40 minutes per work order compared to 10 minutes or less it now takes with WMIS saves
2 hours/day/engineer. This is $7,000/day on engineering cost.
$1.4 million per year
Clerical: The close-out clerks and 25% of the field clerks will no longer be required to support the operation.
$1.4 million per year
Systems integration, the tying of older "legacy systems" to the WMIS, offers both hard and soft savings. Out-dated systems can often be integrated with today's software and are given a new "lease on life." If they can be used with the WMIS, the need to develop new support systems are avoided. The bulk of the processing is done in the new WMIS relational database. This will often make the support of these legacy systems easier for the IS department. Additionally, WMIS is implemented in a client-server environment and the company's mainframe costs can be relieved. Most importantly, the new WMIS can be operational quickly with full capabilities. It should be pointed out here that even without the interfaces to some of the legacy systems a large part of these savings can be realized.
The savings at first glimpse are very impressive. The savings of people may not mean that they leave the company since they may be needed for other functions and tasks that are being ignored or delayed today. It is worth noting here that while some of the savings appear to be part of an individual's time, these are real savings from the installation of one of new system. Often whether that savings can be realized is whether steps are actually taken to effectively remove or reassign the resources made available by these changes. For example, line crew savings are real only if you have the work and can eliminate contractors, overtime, or your own crews. You are not the example company, and you need to figure your own numbers.
Economic Evaluation Process
Logica recommends a process that would help to identify a quantitative value for the savings that can be achieved by installing a WMIS/GIS system. It should be noted that there are other benefits that, while not quantitative, are very important in the evolving world of competitive energy markets. It is recommended that as the process is followed qualitative benefits be recorded since they too are important, they may be just as important in the justification.
The approach recommended for this analysis is to assemble a team consisting of members representing operations, customer service, engineering, information systems and property accounting departments together with a facilitator. There are two major areas to look at when evaluating the economical benefit of installing a work management system. These major areas are:
- Analyze the current processes used to manage work and estimate their cost.
- Evaluate changes to the current process by implementing a work management
There are usually sizable costs to maintain the manual system currently being used. The process recommended is to step through the project stages of initiation, design, scheduling, construction and closing and evaluate current costs and look for the areas that can be improved. There are also some benefits that are outside these stages that should be analyzed. They are improvements in customer response, data in other company systems and processes, and improvements in areas such as stores.
Utilities have often found improvements and savings in the following categories:
Paper work
- Reduction in paper work costs by one time entry of data
- Improvement in accuracy can be expected
- Savings in job preparation by improving reduction of time to do things such as making material lists
- Improvements in material inventory by reducing the number of individual items
- Reduced inventory due to better standardization
- Evaluate the savings on equipment inventories with a better understanding of where and when work is to be done.
- Improved accuracy by eliminating key stroke entry of materials Reporting
- Reduction in crew time to prepare time sheet
- Improvements in accuracy of data by providing crews with accounting information
- Data available for job analysis by type, location, crew and etc.
- Reduction in paper work needed to provide closing data
- Cost benefits of closing work quickly
- Savings in job preparation time by having up to date records
- Reduced costs by knowing where and when work will be done
- Reduced inventory of construction equipment by better scheduling
- Better able to meet customer commitments
- Reduction in cost of answering customer questions by having accurate up to date information
- Improved customer relations
- Provide direct access to customer data through Internet
- Reduction in elapsed approval time by using on line approval Reduction of paper copies by using on line approval
- Reduction in cost of material, equipment and manpower due to better data
- Improvements to budgeting due to better tracking of work and costs
- Improvements can be expected in forecasting of material and personnel
- Build historical data base about all work
Conclusion
Work Management Systems and GIS Systems are important for utilities who want to improve the efficiency and effectiveness of their design and operations. Often they offer the best return on investment of any utility computer system. They improve the operations in the following ways:
- provide for improvements in customer service by improving response time,
- change the operation for the better, making better utilization of resources,
- provides an opportunity to review processes and practices throughout operations,
- improves the timeliness, accuracy and availability of records.
- evaluate the split between contract and internal labor,
- allocate personnel between work locations based on work history and trends
- more accurate billing data for facilities
- notification of events in WMIS request process (e.g. Send e-mail to design engineer when ROW is complete)
Appendix A
List of Benefits
This list contains some of the benefits which WMIS/GIS users have actually realized. It will help the potential user company evaluate the benefit to them.
- Capture data at point of origin
- Minimize redundancy and duplication
- Maintain information integrity and security
- Provide access to all approved users
- Provide data analysis to improve completeness
- Meet user performance expectations to extent possible
- Ensure user friendly interface and support
- Seek the most cost effective solution for meeting remote work center requirements
- Improved efficiencies in use of materials, company labor and contract services
- Cost savings resulting from more efficient utilization of resources and tighter integration
- Process improvements
- Construction scheduling control
- Standardization of materials and tools
- Inventory reduction
- Real time reporting
- Increase employee productivity
- Decrease capital budget unit costs
- Provide improved customer service
- Make and meet customer commitments
- Reduce job preparation time
- Plan & schedule resources efficiently
- Improve accuracy
- Streamline job closing
- Expenditure forecasting and budgeting
- Construction scheduling and control
- Reduce the process steps