Scaling project production to meet fluctuating demands
The utilities sector faces immense pressure to build electrical transmission networks that meet the increasing and uncertain demands of both consumers and industries. With the transition to renewable energy sources and rapid technological advancements, there is a need for a significant expansion and development of the transmission network within a short time frame. This puts pressure on companies to execute their project portfolio to develop and scale assets.
While the knee-jerk response to fluctuations in demand is often to allocate more resources, many utilities find that this does not lead to a corresponding increase in efficiency. The challenges faced by companies in scaling project production are compounded by several factors:
- Focusing too much on technical solutions and losing sight of the bigger picture
- Spending too much time on internal interfaces rather than making progress on projects
- Facing strong competition for the right resources
- Working on a project-to-project basis without utilising the full production potential of their project portfolio
Sounds familiar? Then read on.
Five measures that solve the future production challenge
To meet the demands of fluctuating demand and scale project production efficiently, utilities need to rethink their operating model and scale their project production efficiently. We’ve identified five measures that can create the foundation for efficiency and scalability in production:
- Scalability through partnerships, where joint production and portfolio management are combined in a long-term partnership. By creating long-term partnerships, there is a possibility to create a shared collaboration model; instead of working from project to project, it is possible to do improvement work across many projects at the same time. Furthermore, work can be better transferred to the partners when there is a greater degree of familiarity between the parties.
- Modularisation and standardisation of user specifications create room for innovation and better solutions. The utilities industry is quite heavy and technocratically oriented. We see this in an incredible number of detailed standards and a lack of overview of connections, and a lot of time is spent discussing standards and solutions rather than creating customer-oriented progress. A modularisation concept can create technical modules and standards, financial management and digitisation.
- Management transparency across silos will contribute to creating a common leadership and planning system that works across companies and partners. We typically see many small silos with own managers who manage only small parts of the total value chain. To create an overview of the entire value chain, you will need a unified data-driven value stream management system.
- Creating light through data and transparency across silos will contribute to supporting the actual business need. This can be done by creating a unified data platform and coaching managers in data-based management.
- Fostering a performance culture that strives for continuous improvement and talent development with the customer’s needs at the centre. Culture and mindset with the customer in focus will create a shared understanding of the management for the journey and can be used as a guiding star.
The five measures are based on a successful transformation journey with a public utility company, where Valcon demonstrated its ability to design a new operating model with an end-to-end total value stream focus, enabling on-time in-full delivery of green transition projects.
To read more about how we helped the public utility company upscale operations through turnkey partnership please click here.
Key observations for a successful transformation journey
Navigating through a transformation journey requires a willingness to make course corrections and collaborate as a team. The development path is full of uncertainties that can be best addressed through small, value-driven steps based on the current situation. Drawing from our experience working with clients on transformation journeys, we have made the following observations:
- Effective leadership in a constantly changing environment demands commitment and prioritisation of time
- The market reflects our behaviours, and to meet the demands of future delivery models, we must be willing to change
- An outside-in perspective is essential to establish an effective operating system for the future
- Culture has a strong influence on strategy, and it is challenging to change deeply ingrained cultures that have developed over many years
- Communication is key and must not be overlooked
Take the first step in your transformation journey today with Valcon
At Valcon, we have the experience and expertise to help you navigate large-scale transformations, sourcing strategies and value stream leadership. Contact Valcon today to take the first step towards your more scalable, efficient and digital future in the utilities sector.
Thomas Nellemose Rosenlund, Partner, +45 2049 5427 or email [email protected]
Ulrick Sebber, Associate Partner, +45 2787 2111 or email [email protected]