Operations Strategy - FPL Quality Improvement Case

OPERATIONS STRATEGY CASE STUDY ON FLORIDA POWER LIGHT QUALITY IMPROVEMENT Submitted to:-

Dr. Sanjay Jharkharia Submitted by:Soumen Sen: ePGP-03-174 Supriya Anant Chaugule: ePGP-03-089 Sharad Gupta: ePGP-03-166 Vikas B Nair: ePGP-03-189

CASE BACKGROUND FLORIDA POWER LIGHT (FPL), Florida’s largest utility company, which provided electricity to two-third’s of the state’s population, in 1981 was in the process of developing a countrywide Quality development program with an objective to provide “Reliable Electric Service” to all its customers & become the best managed electric utility in United States. The purpose of this case study is to study in detail the activities of the FPL quality team in the St. Augustine, FL district & understand & interpret the challenges faced by FPL, using a problem solving mechanism known as the Quality Improvement Story. The QI Story includes seven specific steps: 1. Reason for Improvement 2. Current Situation 3. Analysis 4. Countermeasures 5. Results 6. Standardization 7. Future Plans

Question 1 AS A MEMBER OF THE TASK TEAM, WHICH PART OF THE EQUATION(FREQUENCY OR DURATION) WOULD YOU ARGUE SHOULD BE WORKED ON FIRST? WHY? WHAT INFORMATION DO YOU NEED TO MAKE THIS DECISION? Answer: Frequency = Sum of (Each Outage x No. of customers affected) per year Total no. of Customers Duration = Total Outage minutes No. of outages per year Service Unavailability Index (SUI) = Frequency x Duration ---------

Equation

In the above Equation, the Frequency parameter should be worked on first, which gives the Average number of Outages per customer per year. If, in the Frequency parameter, the no. of Outages per year decreases, then the sum total of the no. of customers per year decreases, which in turn can drastically reduce the SUI.

Question 1 In case of Duration Parameter, as the total no. of Outages per year decreases, the total outage minutes also decreases, which means both the numerator & the denominator decreases, but to what extent is unknown for now.

As such, the Frequency parameter should be worked on first. Information required to calculate the Frequency parameter are:  No. of customers affected each outage  Total no. of outages per year  Total no. of customers for FPL

Question 2 WHERE WOULD YOU START ON THE DATA PROBLEM? WHAT DATA DO YOU NEED? Answer: The Data needed are as below:  List of Distribution or feeder lines  Chart of distribution lines serving localitywise  No. of customers in each locality  Outages extent/effect on no. of localities  Time for which service was disrupted  Total no. of outages per year  Total no. of customers of FPL  Cause for the outage  Time taken for repair

Question 2 Of all the above data, to start with & to estimate the Average no. of outages per customer per year, we would need: No. of customers affected each outage  Total no. of outages per year  Total no. of customers for FPL

Question 3 WHAT WOULD YOU DO NOW? BE SPECIFIC IN TERMS OF WHAT YOU IN BOB SMITH’S SHOES WOULD DO? WHAT DO YOU THINK WOULD BE THE MAJOR OBSTACLE? Answer: Having discovered that the procedure of reporting customer interruptions was not within control & the data in hand was in correct/incomplete in many cases, the job in hand now is very critical in nature.  All earlier SIR’s should be corrected to the maiximum extent as possible to get right data on hand to work on.  Immediately, a new reporting system needs to be formulated, which would reduce the chances of making any error. A new software which would have options for rechecking of data entered, including attaching the scanned copy of the SIR along with the soft copy report is recommended.  Incomplete entries should not be accepted by the software, thereby forcing the reporting personnels to enter complete data.

Question 3  Person reporting the SIR should put his name in the copy for the purpose of accountability in future. This would give a sense of responsibility to the person reporting the SIR.  A companywide training on the new software, the importance of correct information & the need to maintain quality data should be stressed on. PROBABLE MAJOR OBSTACLES :-

 Change management within the organisation  Collection of incomplete data in earlier SIR’s/Correction of SIR’s  Inculcating the sense & the need of quality management within FPL employees  Modification of the SIR procedure & software development & training

Question 4 WHAT IS THE MOST IMPORTANT CAUSE OF THE SERVICE INTERRUPTION FOR THE TEAM TO CONSIDER? WHAT DATA IS NEEDED TO MAKE THIS DETERMINATION? Answer: If we go by the data as per Exhibit 5 – “Number of SIRS by cause”, lightning with 22 no. of occurrences seems to be the most vital factor behind the electricity service interruption, however as per Exhibit 6, which gives the Average no. of interruptions per customer against failure types, shows vehicle (approx. 27% of total causes)to be the major cause for the service disruptions. As our measure is Service Unavailability Index, which takes into account the Average no. of outages per customer per year, we would go with the Cause factor Vehicle as our primary reason for service disruptions. This would help to keep customer inconvenience as the main focus of all the analysis.

Question 5 DRAW A CAUSE & EFFECT DIAGRAM, USING THE BLANK DIAGRAM IN EXHIBIT 8 Answer:

Question 6 COMPARE EXHIBIT 9 WITH YOUR PREVIOUSLY DRAWN CAUSE & EFFECT DIAGRAM. HOW DID YOU DO? WHAT ARE THE REASONS FOR ANY DIFFERENCES? WHAT DOES THIS TELL YOU ABOUT THE USE OF THIS TECHNIQUE? Answer: Comparing Exhibit 9 with previously drawn Cause & Effect Analysis, we find it to be almost the same when all the 13 SIRs were analyzed using the vehicle related data. However it is good to see no machinery related failure happening leading to vehicle and as such service disruption. Going by the data, the Poles placement, the road contour & man related issues seem to draw the most attention, which needs to be addressed to reduce service disruptions. The cause & effect analysis is certainly a powerful tool to determine the root cause of problems and helps to focus on the problem areas in a systematic way.

Question 7 GIVEN THAT THE ROOT CAUSE (OF VEHICLE RELATED ACCIDENTS)- POLES ON THE OUTSIDE OF CURVES – HAS BEEN IDENTIFIED, GENERATE LIST OF POSSIBLE COUNTER MEASURES THAT WOULD LESSEN ITS IMPACT ON SERVICE INTERRUPTIONS Answer: Possible Counter Measures to address the root cause of Vehicle related accidents - POLES ON THE OUTSIDE OF CURVES : Signboards indicating Electricity poles ahead & indicating turns ahead  Educating residents of Florida on the possibility of accidents & its impact on FPL & its services  Repositioning of poles having the greatest chance to get hit by vehicles  Speed limit to be imposed on roads which are narrow & has poles outside of road curves  Protecting the poles by building concrete blocks in front & pasting reflective strips on it for increased visibility & attention  Road profile & poles arrangement planning to be relooked upon & analysed

THANK YOU Submitted by:-

Soumen Sen: ePGP-03-174 Supriya Anant Chaugule: ePGP-03-089 Sharad Gupta: ePGP-03-166 Vikas B Nair: ePGP-03-189