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Utility managers today are faced with a variety of challenges that often defy or simply not amenable to the kinds of technical solutions that have helped to improve performance for many years. Increasingly, these challenges, which include aging infrastructure, new regulatory requirements, increased public expectations for service at lower costs, and private competitiveness pressures are forcing utility managers to consider management tools that have proven effective in the private sector, particularly manufacturing, but are often unknown in the public sector. Overlaying these pressures are an aging workforce and the need to ensure that the “on the ground” knowledge acquired through many years of practical experience is not lost as employees retire or move from line jobs into management positions.

Managers are often besieged by literature and other communications touting the latest management techniques guaranteed to make their organizations “world class”, “state of the art”, or any number of other superlatives. At the same time, the industry itself has taken heed of the need to focus more on effective management and has launched various other initiatives to help utilities understand and adopt best practices, benchmark their performance against others, and generally operate “smarter”. Yet, the evidence suggests that the majority of utilities have still not moved significantly beyond the view that certain tried and true indicators like environmental compliance and others are good enough. Those that have adopted various management improvement approaches have often done so in a piecemeal fashion, with little understanding of how these approaches relate to each other and how they can truly address the looming challenges of the 21st century. This has often led to confusion among staff and a sense that management is simply adopting a “flavor of the month” philosophy.

Recently, a small but growing number of utilities have begun to turn to a management systems approach for managing their operations. The term management system in the context of this paper is not a generic term, but rather a description of well established approach centered around a framework of Plan-Do-Check-Act, that is also embodied in principles of Total Quality Management. These systems provide a set of standard procedures and steps to support consistent, replicable, and continual improvement across a wide range of utility operations. They do not impose any new legal or technical requirements, but rather provide a dynamic framework for an organization to continually assess, manage, and improve its performance in order to realize positive outcomes in areas like environmental performance, health and safety, financial performance, and human resources. The most commonly used management system approaches include ISO 14001 for environmental management, ISO 9001 for quality management, the OSHA Voluntary Protection Program (VPP). More recently, a number of industries have adopted tailored management systems approaches, including the National Biosolids Partnership environmental management systems program and the Responsible Care program for the chemical industry.

Utilities that have chosen to adopt a true management systems approach, usually through an environmental management system (EMS) based on ISO 14001, have generally seen a suite of important benefits including cost savings, improved compliance, better internal controls and communication, and improved relations with their communities. In a few cases, the financial community has also begun to acknowledge the value of these systems.

Management systems would also seem to be an ideal way to integrate any number of more narrowly focused utility management programs in order to achieve performance improvements across a variety of outcome areas.

Despite these potential benefits, a number of important challenges still face utilities as they decide whether and how to move to a true management systems approach and how best to use the management system as way of integrating other management improvement programs that are already in place without detracting from the value they may already be bringing to the utility.
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Document Type: Research Article

Publication date: 2004-01-01

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