CASE STUDY
Process optimization leads to $7.9m
cost savings
Background
The client is a gas transmission and service
provider within one of the largest commu-
nal energy utilities in Europe. As the distri-
bution network operator, the business is
responsible for providing gas safely and
efficiently to around 70% of all end users in
the area. The business employs more than
1000 staff looking after several thousand
miles of transmission pipe as well as local
connecting pipework. In addition, the client
also undertakes related maintenance activi-
ties as well as planning and installing new
assets. Despite its status as a state-owned
enterprise, the organization is fully commit-
ted to reducing costs and improving effi-
ciencies in anticipation of upcoming EU
requirements on, for instance, unbundling
and competitive practices. The client re-
quested a complete evaluation of the entire
value chain to encompass value-add as well
as productivity. Specific emphasis was laid
on the processes relating to the planning,
execution and maintenance of new techni-
cal assets.
Scope
T.A. Cook started with detailed analyses of
key processes relating to:
Home connection
Transmission and distribution
Excavation works
Benefits
In-sourcing of all $2.9m
contractor costs
Productivity gains
of $5m Euro
Optimized capacity planning
Improved internal
communications
Optimized management
control and reporting
Following on from this, work was under- system for all levels
taken to create a:
Reduction in number of
New implementation plan for an interfaces
operational KPI system
Conceptual performance-based Avoidance of duplication
remuneration and reward system and double-work
The aim of this work was to optimize the Transparent processes
processes, organization and interfaces be-
tween departments. In order to implement Increased motivation
these improvements it was necessary to amongst workforce
determine constraints and develop appro-
priate measures to overcome these. As part
of this scope, the T.A. Cook team was to
lead the project set-up and management as
well as the development of the route map
for implementation. Having implemented
the improvements, the final element of
work was to evaluate the quantitative and
qualitative magnitude of the real benefits
achieved. In all, the exercise was to be
completed in seven months.
Approach
T.A. Cook Consultants Inc.
As a first step, and to ensure full and
4601 Six Forks Rd. Suite 500
effective communication of the purpose and
Raleigh, NC 27609
nature of the exercise, the team discussed
USA
the scope, expectations and methodology
with representative managers and senior Phone +1(1)919 510 8142
staff throughout the organization. Fax +1(1)919 510 8143
www.tacook.com
info-us@tacook.com
1/2
As part of the analysis phase, processes Development of ground rules for the
were mapped and systematically evaluated implementation of an IT capacity plan-
for improvement potential across the or- ning tool
ganization. By involving staff at different A structure for a report on organiza- AREAS OF EXPERTISE
levels and from numerous departments, the tional efficiency
approach ensured a high level of buy-in. Development of three options for per- ASSET STRATEGY

The use of detailed yet anonymous obser- formance-based remuneration based BENCHMARKING & STUDIES
vations provided specific insight into the upon operational KPIs

BUDGETING & CONTROLLING
efficiency and effectiveness of processes; Specific suggestions for reduction in
such that it was possible to use the well- excavation costs through improved CAPEX & PROJECT MANAGEMENT
established brown paper process to bench- processes, use of new pipe laying tech- CONFERENCES & SEMINARS
mark and identify specific issues, hence niques and technologies
quantify concrete financial opportunities for CONTRACTOR MANAGEMENT

improvement. Implementation ENERGY IMPROV EMENT

The process resulted in improvements and
cost reductions valued at around $7.9m.
This meant:
An increase in the staff utilization
In-sourcing of contractor activity such as
These actions are being implemented to-
EQUIPMENT IMPROVEMENT
gether with the client in a series of pre-
planned steps. The improved efficiency of HSSE & BUSINESS RISK MANAGEMENT
the business will allow it to hold its own MAINTENANCE STRATEGIES
within an increasingly competitive European
energy market. The effectiveness of the PLANNING & SCHEDULING

pipe laying implementation plan will be determined by RELIABILITY, AVAILAB ILITY &
More efficient use of deep excavation an audit program which has already been
MAINTENANCE
resources agreed.
Use of new technologies ROOT CAUSE ANALYSIS
Reduction of specific material costs SAP UTILIZATION

Solution SERVICE ENGINEERING

In order to achieve the aforementioned SPARE PARTS MANAGEMENT

benefits the following activities were de-
T/A-, SHUTDOWN MANAGEMENT
fined:
Restructuring of the organization and TRAINING & COACHING

reengineering of key processes in the YIELD OPTIMIZATION

construction and service areas
Determination of true capacity in the
service area
Improvements to the interfaces be-
tween the planning and execution areas
with assurance of capacity utilization

T.A. Cook is a management consulting firm focusing on Asset Performance Management with offices in Berlin, Birmingham, London,
Munich and Raleigh, NC (USA). The core competence of the consulting business is the sustainable implementation of asset, opera-
tions and service-oriented excellence. As a change management specialist, the firm delivers measurable value enhancement and
bottom-line productivity gains. In order to achieve these results T.A. Cook offers a wide range of professional services which ensure
that all business processes - from strategy definition through management to organizational design are effective, efficient and
sustainable. Complementing the consulting business, the T.A. Cook Academy has become a leading organizer of international confer-
ences and seminars relating to Asset Performance Management. Annual events include the MainDays summit as well as conferences
centered on topics such as Shutdowns & Turnarounds and Capex Management. T.A. Cooks clients are typically businesses, their
suppliers and contractors working with significant industrial assets across multiple sectors. The company has particular expertise in
the petrochemicals, plastics, pharmaceutical, transport, mining and food sectors as well as excellent knowledge of the regulated
environments occupied by gas, water and electricity utilities. Further information about T.A. Cook may be found at: www.tacook.com