Operational Excellence in Distribution –
Project
Contractors Meeting
28th October 2015
SEC Vision is to become a modern company with world
class performance…
Committed to improve
We serve our
customers and country
by delivering world
class power services
Serving two stakeholders:
Our customers and society
Long-term ambition to
become world-class
Offering power and services
in future
… and distribution wants to significantly contribute to this
SEC vision through the Operational Excellence initiative
1
Distribution business unit has selected ambitious
targets for 7 KPIs to closely monitor its performance
KPIs Description
Target till 2019
BU OPEX / MWh
Business unit operational expenditure
(excluding depreciation ) in SAR per MWh
energy sold
13%
R&I CAPEX /
Additional MWh
Capital expenditure (including reinforcement &
integration) in SAR per additional MWh sold
22%
NB CAPEX/ New
Customer
New built capital expenditure in SAR per new
customer
12%
SAIFI
Average number of interruptions per delivery
point
18%
SAIDI
Average interruption duration per delivery point
42%
New connection
time
Average time required to install a new
connection
59%
O&M OPEX / Km
Operations & maintenance operational
expenditure in SAR per distribution network line
km
22%
Source: Arthur D. Little
*2014 KPI Status according to final 2014 figures
2
The initiative will be split into 10 modules over a period
of 12 months
Module
Description
1
Asset management Policy and
Strategy
2
Outage Management: Contingency
Planning
Develop plans and procedures maximizing operation continuity of critical assets
3
Asset Standardization
Define component standards, evaluate potential savings and propose conversion
strategy to new technical asset standards
4
Planning Management
Develop and implement load forecast process & network loading model, secure
quality & control of supplied materials and distribution equipment
5
Control Center structure
improvement
6
Power system protection, system
operation & design
1 Connection procedure streamlining
2
Life Cycle Management and
Value-based maintenance strategy
3
Technical losses reduction
4
New asset service model
development and roll-out
Define Asset Management Policy & Strategy to set a financial and strategic
framework for AM of all major asset classes
Develop network operation strategy, define clear responsibilities between national
grid and distribution control centers, provide control center org. structure including
definition of procedures & processes
Develop Protection Strategy & Planning and Protection System Operation & Design
to support functional protective relaying with minimum impact on grid reliability
Definition of streamlined connection process model to ensure safety and “first-timeright” milestones delivery
Implement life cycle management and value based maintenance strategy for key
assets to reduce TOTEX1) of key distribution assets
Define implementable actions to reduce technical losses including installation points
for meters and checkpoints to reduce losses
Develop new asset service model including measures to increase staff utilization,
contractors management and call-centers performance and define the roll-out plan
3
Connection procedure streamlining module will
comprise of several activities
Module
1
Asset management Policy and
Strategy
2
Outage Management: Contingency
Planning
3
Asset Standardization
4
Planning Management
Main Activities Performed

Analyze root causes for large disparities in connection time across
Kingdom to be improved to achieve the targets.

Develop strategy to ensure safety and “first-time-right” for all
process steps and minimize overall number of steps (e.g. through
task bundling) and number of involved organization parts (ensured
end-to-end responsibility with right check and balance process).
5
Control Center structure
improvement
6
Power system protection, system
operation & design

and other government agencies) and propose improvement to the
exiting communication means.

1 Connection procedure streamlining
2
Life Cycle Management and
Value-based maintenance strategy
3
Technical losses reduction
4
New asset service model
development and roll-out
Study the lack sides in the coordination with outside agencies (Utility
Finalize implementation plan including necessary tools, capacities
and capabilities.

Develop planning and construction ,procedures ,standards and
inspection procedures and forms needed for ( Network design,
planning, construction ) ,Programs and system Technology needed
from end-to-end responsibilities.
4
Life Cycle Management and Value-based maintenance
strategy module will comprise of several activities
Module
1
Asset management Policy and
Strategy
Outage Management: Contingency
2
Planning
Main Activities Performed

Develop Value-based maintenance strategy for all asset, covering at
least asset health, maintenance cost, replacement cost, useful life
time.
3
Asset Standardization
4
Planning Management
5
Control Center structure
improvement
6
Power system protection, system
operation & design

Propose advance asset monitoring systems and real time condition
monitoring process including technology requirements and reevaluate based from existing technology in order to recommend
better and reliable solutions.

Identify best practice for maintenance. Including factors such as
improving the existing DMM’s to international standards and
developing the missing ones considering hot, humid, foggy and
1 Connection procedure streamlining
2
Life Cycle Management and
Value-based maintenance strategy
3
Technical losses reduction
4
New asset service model
development and roll-out
dusty weather, maintenance strategy, risk assessments and
training.

Develop Roles, Polices, responsibilities, procedures and capabilities
needed for asset maintenance management and decision-making
structure, covering both strategic and tactical decisions.
5
New asset service model development and roll-out
module will comprise of several activities (1/2)
Module
1
Asset management Policy and
Strategy
2
Outage Management: Contingency
Planning
3
Asset Standardization
Main Activities Performed

Activity-based analysis of field staff utilization, Field Force
Management to confirm the adequacy of the size of the manpower
to the assigned activates.

Research best practices on deployment models and assess
relevance for COMPANY.
4
Planning Management
5
Control Center structure
improvement
6

bundling, one-man units, start from home and others) and
determined capability and technology gaps and shall develop
Power system protection, system
operation & design
1 Connection procedure streamlining
Develop appropriate measures to increase utilization (e.g. task
measures to increase field staff utilization in operations,
maintenance, and construction.

Define system for continuous auditing of resource utilization
improvements.
Life Cycle Management and
2
Value-based maintenance strategy
3
Technical losses reduction
4
New asset service model
development and roll-out

Perform analysis of best practice on field force management &
deployment models and assessment of their relevance for SEC and
alignment with new organization (operations, maintenance,
construction).
6
New asset service model development and roll-out
module will comprise of several activities (2/2)
Module
1
Asset management Policy and
Strategy
Main Activities Performed

Develop the best practice for managing contractors, evaluate the
operation, construction and maintenance contractors manpower
2
Outage Management: Contingency
Planning
,call-centers complains requests, field force manpower (COMPANY
Inspectors, Contractors) and the best way to integrate with financial
3
Asset Standardization
4
Planning Management
department and other related Business lines or Departments.

Develop Asset services Management performance assessments
and improvements with IP’s and KPI’s measures and alignment with
5
Control Center structure
improvement
6
Power system protection, system
operation & design
new organization and approved KPI’s.

Define IT system tools, programs, workflow, process, manpower
(work force) capabilities, training requirements needed to implement
the new assets services from substation to Customer Meter.
1 Connection procedure streamlining
2

contractors practices across Distribution System Operators (DSOs)
Life Cycle Management and
Value-based maintenance strategy
3
Technical losses reduction
4
New asset service model
development and roll-out
Review the current operation and maintenance contracts/
and all the procedure related to contracts/ contractors and analyses.

Develop strategy to ensure safety and “first-time-right” for all
process steps and minimize overall number of steps (e.g. through
task bundling)
7
2
To ensure project success, work on the streams will be
Project Organization
done with close cooperation with our contractors
Our key focus for improvement:

Higher harmonization of processes, procedures and standards across regions

Close monitoring and benchmarking of costs and network reliability

Strong emphasis on Quality and HSE
month
What this means for you as a contractor:

New world class processes and procedures will be implemented across multiple areas

We will introduce new condition based maintenance methods

We will enhance our IT support especially in the field force management area together with clear time norms
and utilization reporting

There will be new technical standards implemented in the future

Optimization of connection processes and time norms will be one of the key customer oriented efforts

There will be a new outsourcing/ insourcing model across multiple areas
8
Each module delivery will be supported by experienced
consultants and international experts
Expert team
Consulting team
SEC team
SEC Partners
Subject matter experts
nominated by leading
western utilities
Management consultants
with utilities
transformation programs
management
Selected top performers
and technical experts
Contractors and
suppliers
Role:
 Provide technical
expertise in the specific
areas of asset
management and asset
service
 Share best practices and
benchmarks
 Transfer of technical
expertise from leading
DSOs and their service
companies
Role:
 Project management &
leadership according to
work-plan
 Overall responsibility for
high quality project
deliverables
 Coordination of experts,
transfer of knowledge
and best practices
 KPI monitoring
Role:
 Understanding of recent
practices in SEC and
data collection
 Definition and full
ownership of final
recommendations
 Responsibility for
implementation in their
geographical area
 Communication with
respective geographical
units
Role:
 Support SEC team on
implementation of
recommendations
 Support initiative team
on understanding of
roles and policies
9