Key Results
The Opportunity
Streamlining Complex Processes in a Growing Energy Company
A Houston-based holding company primarily engaged in the production and sale of electric energy, capacity, and ancillary services faced significant challenges in its core support functions. The client was emerging from bankruptcy, and the new owners sought a thorough and complete guarantee of savings of $200M before the year ended.
They sought to understand the current state within the disparate organizations, aiming to identify all potential avenues for process enhancement. This included designing processes that are both efficient and effective, minimizing manual labor, paving the way for modernization through the implementation of new systems, eliminating redundant labor expenses, and evaluating which processes could or should be modified, streamlined, eliminated, or updated.
With a fleet of operating power plants across eight states and a diverse customer base including RTOs, ISOs, utilities, and industrial customers, the company recognized the need for change and improvements in several large, essential functional processes.
The complexity of their operations increased due to multiple acquisitions over the previous three years, resulting in a variety of systems, software, and procedures used in field operations. This complexity needed to be reconciled at the corporate office for staff to generate their deliverables effectively.
Key areas requiring attention include
Monthly and quarterly financial closings
Vendor payments
Settlement of raw material cost data
Regular inventory reports
401k and benefit payments
Scheduling raw material delivery and processing
Bi-weekly payroll for 1000+ employees in 6 states
Before addressing these critical processes for improvement, the client committed to understanding the current state and engaged consultants to map and analyze these processes.
The Solution
Comprehensive Process Mapping and Analysis
To address the complex challenges faced by the energy company, a team of consultants developed a strategic approach to map and analyze the current processes across finance and Human Resources. This comprehensive solution was designed to provide a clear understanding of existing workflows, identify inefficiencies, and lay the groundwork for future improvements.
Key Components of Success
Targeted Process Mapping
The consulting team focused on mapping four critical areas:
• Accounts Payable
• Financial Close
• Procure to Pay Fuel Management
• HR Timekeeping and Payroll
Success driver: Focused approach on high-impact areas
Collaborative Approach
Working closely with process owners and internal experts, the team conducted a series of interviews and mapping sessions. This collaborative approach ensured accurate representation of current processes and buy-in from stakeholders.
Success driver: Engagement of key stakeholders and subject matter experts
Process Improvement Methodology
After interviewing 45 team members across the organization over a period of 6-8 weeks, the team created highly visual process maps that clearly illustrated the transactional tasks performed for each sub-process. The analysis identified areas for immediate improvement, highlighting systems used, rework points, and handoffs, thereby providing a comprehensive view of end-to-end dynamics.
Success driver: Identified improvement areas through detailed process maps
Lean Six Sigma Framework
The team followed a Lean Six Sigma framework to support the broader optimization of the entire HR, finance, accounting, and fuel management functions. This included regular coaching of process leads to facilitate progress. A team of certified Master Black Belts played a crucial role in achieving this transformation. Their expertise in Lean Six Sigma methodologies ensured that process improvements were effectively implemented, leading to significant efficiency gains across the board.
Success driver: Application of proven process improvement methodologies
The Results and Impact
Driving Efficiency and Laying the Foundation
for Continuous Improvement
The implementation of this comprehensive process mapping initiative provided the energy company with valuable insights into its operations and laid the groundwork for significant improvements.
Clear Visualization of Processes
The finished process maps allowed the client to quickly visualize what was working, what was not working, and why. This clarity was critical in creating a cross-functional perspective on the importance of collaboration in resolving process issues.
Identification of Improvement Opportunities
The analysis revealed several areas for immediate focus, including:
• Quick wins, such as automating a task that previously occupied 25 man hours a month
• Solutions to reduce waste, such as eliminating redundant approvals
• Areas of risk, such as potential non-compliance with internal or regulatory deadlines
• Modest technology enhancements to assist in “error-proofing” processes
Foundation for Process Improvement
The process maps provided baseline source data for brainstorming and Kaizen events, enabling the client to kick off several process improvement efforts based on the consultants’ recommendations.
Enhanced Cross-Functional Understanding
By sharing process maps with teams in each functional area, a complete foundation of what was occurring was established, clearly illustrating the interdependencies within and across departments.
Operational Improvements and Business Impact
- Established process mapping teams within responsible departments, fostering ownership & continuous improvement
- Developed a weekly cadence of interviews, mapping, and review sessions, managing critical business requirements
- Identified the number of handoffs, iterative and inefficient processes, systems utilized, control and approval points, significant cycle time delays, and pain points
- Provided a basis for standardizing processes across the organization
- Enabled more informed decision-making regarding resource allocation and technology investments
- Improved cross-departmental communication and collaboration
Rediscover the power of personalized consulting with alliantConsulting. Contact us today to schedule an initial consultation and begin your journey towards improved profitability and long-term value.
