With all of the challenges facing the energy industry—such as changing baselines, emerging business models, evolving customer expectations—implementers and evaluators are looking for that next big thing, that next widget or delivery channel that can be the answer to the savings gap they see on the horizon. I too have wondered what disruptor is going to emerge to help us meet this challenge. But after spending the past year working at EMI Consulting and getting my Green Belt in Lean Six Sigma, I no longer believe that we need some huge jump in the evolution of our programs to meet industry challenges. Simply identifying incremental changes in how programs are delivered could result in operational efficiencies, more energy savings, and increased customer satisfaction.
This idea of using traditional evaluation approaches in tandem with Lean Six Sigma to optimize programs is the topic of my presentation next week at the AESP Virtual Conference. I will talk about the similarities and differences between the two approaches and how they can inform recommendations for program optimization. I will also discuss in more detail the optimization framework that is mentioned below. But for now, this blog should provide an overview of the value of integrating LSS into standard evaluation practices.
EMI Consulting has developed a framework that starts with traditional evaluation techniques like ideation workshops, geographical analyses, and market research as a diagnostic tool, but also employs techniques from outside the industry, such as Lean Six Sigma (LSS), to provide a new perspective to ongoing challenges. The use of these techniques supports utility administrators in identifying areas to optimize both planned and currently implemented programs.
There are several implementation challenges that program administrators may face throughout the life cycle of a program. However, many of these issues may not have a direct impact on savings and would not be something identified through the traditional impact evaluation process. Though some of these challenges could be addressed in a process evaluation, many program administrators either do not have the budget to fund a full process evaluation or they would rather address the issues in a way that targets a specific issue rather than an overall look at the program processes.
Using traditional evaluation techniques to solve implementation challenges is not so radically different in our industry, but combining them with outside-the-industry methods, such LSS, is innovative. The LSS approach has been applied for many years in the manufactured goods industry. It combines a systematic approach to identifying and eliminating waste with an approach to identifying causes of variation and reducing defects. This combination encourages the reduction or elimination of complexity. The idea is that simplicity will reduce costs, mistakes, or time needed to achieve the goal. But we all know, the path to simplicity is often complicated.
Traditional research and evaluation concepts like journey mapping and process mapping are complemented by LSS processes such as value stream mapping. While journey mapping and process mapping look at the customer experience and the operational flow, value stream mapping identifies if every step in the process provides value to the customer. This value analysis is new to our industry and will require administrators to ask themselves why steps are including in the process if they provide no value to the customer. As they ask themselves these questions, steps will be eliminated resulting in a simpler, less error-prone process. Value stream mapping is only one step in a process develop by James P. Womack and Daniel T. Jones in 1997, where there are five key lean principles: value, value stream, flow, pull, and perfection. (1)
As an LSS Green Belt, I learned that all steps in any process should add value to the customer and that quality is in the process not in the people. In LSS, the customer decides what is value; and since quality is in how value is provided, the customer, by extension, defines quality. This can be a difficult concept to grasp for industries like ours that have historically defined quality by checking implementation boxes and meeting regulatory requirements. The LSS approach does not attribute any value to activities that do not directly increase quality or customer satisfaction. In some circumstances, these activities are required and cannot be removed from the process, but at least all stakeholders are aware that it doesn’t add customer value and, if the opportunity presents itself, the activity should be removed from the process. Applying the Principles of Lean to how we plan, design, and optimize programs will change the way we view program success.
Combining traditional evaluation techniques and LSS approaches can identify valuable information that can help implementers optimize their programs. Using results from this work is an evolution of our industry’s current thinking in program optimization. Innovation isn’t always in the big changes but in those small incremental improvements. Let’s not wait for the next big thing, we can introduce continuous process improvement into our programs today!
To learn more, register for AESP’s first virtual conference here.