strategy milestone

23 – 25 April 2013
Delivering Quality Services
Efficiency In Operating
Water Company
Presenter : Tn Hj Abdul Wahab Abdul Hamid
Chief Executive Officer
SAJ Holdings Sdn Bhd
1
SAJ’s Experience
In Building
Operational Efficiency
2
The Migration Towards Funding Availability
Before
1989
Water Supply Section
– Public Works Dept
Jan
1989
Johor Water
Supply Dept
Feb
1994
Syarikat Air Johor
Sdn. Bhd.
Public Agency
Government
Allocation
Public Agency with
Financial Autonomy
Government
Allocation
Corporatised Company Private Funding
March
2000
Private Company
Private Funding
Sept
2009
Private Company
PAAB Funding
3
Regulatory Regime
Operational Responsibility
State
Government
Catchment
areas,
rivers and
dams
From Source to Tap - Operational Data
Abstraction
From river and
dams
Production
44 treatment plants
Capacity 1,826Mld
Production 1,533Mld
Distribution
Customer
597 reservoirs
More than
20,308 km
(12,620 miles)
pipeline
1,001,920
customers
Exceed 99.7%
coverage
2,012 employees
Annual Revenue – RM 760 million (FY 2012)
4
STRATEGY MILESTONE TO ACHIEVE EFFICIENCY
1
Setting
Targets
2
Develop
Performance
Culture
3
Implement
Enablers
4
Efficiency
Achievements
5
STRATEGY MILESTONE
1
Setting Targets
WATER SERVICES PERFORMANCE TARGET
Performance
Measures
Key Performance Indicator
(KPI)
1
Supply Coverage % Urban Areas Coverage
(% of water supply % Rural Areas Coverage
coverage)
2
Treated Water
Quality
Treated Water
Quality
Compliance Rate
% of water quality chlorine & E coli tests
that meet National Drinking Water Quality
Standards
• Residual Chlorine
• E Coli
• Residual Chlorine and E Coli
• Turbidity
• Aluminium
2012
Targets
100%
99.5%
98.5%
99.8%
99.9%
99.5%
95.0%
6
STRATEGY MILESTONE
1
Setting Targets
WATER SERVICES PERFORMANCE TARGET
Performance
Measures
3
Continuity of
water supply
Key Performance Indicator
(KPI)
•
•
•
4
Water pressure
Communication pipe failures to be
repaired within 24 hours (for cases
where services are affected)
75mm to 200mm diameter pipe to be
repaired and restored supply within
24 hours.
Exceeding 200mm diameter pipe to
be repaired and restored within48hr
Minimum pressure of 10m to be
maintained for not less than 8 hours
within a 24 hours period.
2012
Targets
99.0%
99.5%
7
STRATEGY MILESTONE
1
Setting Targets
OPERATIONAL AND ECONOMIC PERFORMANCE TARGET
Performance
Measures
Key Performance Indicator
(KPI)
2012
Targets
5
Water Loss
Non Revenue Water
29.0%
6
Collection
Efficiency
Collection efficiency
99.5 %
8
STRATEGY MILESTONE
2
Develop Performance Culture
1. Organisation Improvement
2. Enabling Culture
3. Managing Performance
9
STRATEGY MILESTONE
2
Develop Performance Culture
Organization Improvement
District Management
Customer
Focus
Central Management
1. Expertise are confined within certain
district
•
Expertise are combined at central
level.
2. Based on district boundary
•
Based on business function.
3. Slow down decision making due to
layers of red tape.
•
Less layer & more focus: faster
decision making.
4. Several Management approach
•
Uniformity of Management
5. Barrier in adopting changes
•
Easier to adopt changes company
wide.
10
STRATEGY MILESTONE
2
Develop Performance Culture
Enabling Culture
Buy-in of the business direction for support and cooperation from every staff
Empowerment and ownership of actions by providing flexibility (with responsibility) for
staff to perform their duties
Customer focus outlook to improve level of service to customers
Management resources provided for timely and accurate decision making
Communication clarity and ease between management and staff through improved
information flow
Career development path for employees to ensure job security
Continual training for all levels to Improve work performance and productivity
11
STRATEGY MILESTONE
2
Develop Performance Culture
Managing Performance
To meet our standards of excellence, we conducted:
•
Quality Management System accreditation – ISO 9001:2008
•
Health and safety accreditation – OHSAS 18001:2007
•
Targets Setting – Company’s Balanced Scorecard, Customer Charter
Compliance and Quality Objectives Compliance
•
Personnel performance – Total Performance Appraisal Management
•
Risk Assessment – Risk Management Audit.
•
Laboratory accreditation – MS ISO/IEC 17025
•
Internal Service Standard – Internal Customer Charter
12
STRATEGY MILESTONE
3
1.
2.
3.
4.
5.
Implement Enablers
Customer Focus Initiatives
Water Quality Program
IT Application
NRW policy
Asset Management Policy
CUSTOMER
QUALITY TARGET
&
CUSTOMER
CHARTER
13
STRATEGY MILESTONE
3
Implement Enablers
Customer Focus Initiatives
SAJ had declared its
commitment to its customers, to
deliver a high quality of service,
through its Customer Charter.
The declaration encompasses
assurance of water supplied to
consumer to:
• Achieve its safe quality
standard,
• Continuity of supply.
• And an efficient
handling of processes
of clients
correspondence and
applications.
14
STRATEGY MILESTONE
3
Implement Enablers
Water Quality Program
SAJ develop its own water
quality assurance department
through:
•
•
•
•
Establishing its quality
surveillance team.
Central laboratory with
accreditation certificate.
Implement Water Safety
Plan to further ensure
water quality assurance for
supply.
Develop WAQIS water
quality information system
for ease of analysis.
15
STRATEGY MILESTONE
3
Implement Enablers
IT Application
Information Technology, had become an
important supporting infrastructure in SAJ
operation.
Wide application to enable timely analysis
includes;
•
Financial Management
•
Human Resource Management
•
Water Quality Analysis
•
Asset Management
- GIS integration
•
Operation Monitoring
- Reservoir monitoring
- Leakage monitoring
- Pressure monitoring.
16
STRATEGY MILESTONE
3
Implement Enablers
NRW Policy
NRW 45% (1999) to 28.5% (2012)
SAJ since 2000 had engaged itself into a serious NRW reduction program.
Embracing into a Holistic effort, SAJ account all water loss in the supply system
as its responsibility to recover.
NRW program,
• Leakage reduction
through active leakage
locating
• Pressure Management
• Reservoir Monitoring
• Pipe Replacement
• Pipe Repair Management
17
STRATEGY MILESTONE
3
Implement Enablers
Asset Management Policy
SAJ ensure the sustainability of service
through effective management of its asset,
which is a crucial infrastructure to deliver
water supply to its consumer.
Activities includes;
• Creating asset register
- GIS for pipe and distribution
system.
- PCS for plants, equipments & vehicles.
• Maintenance tracking on plant assets
• Asset replacement program
- pipe reticulation system
- plants
- water meters
18
STRATEGY MILESTONE
4
Efficiency Achievement
Before
(1999)
After
(FY 2012)
211
760
(105)
188
Coverage (%)
99
99.7
Staff (per 1000 connections)
2.8
2.02
Non Revenue Water (%)
45
28.5
Billing Cycle (days)
40
30.51
Collection Period (days)
75
38.9
28.4
8.9
Parameters
Revenue (RM million per annum)
Profit Before Tax (RM million per annum)
Active Debts/Revenue (%)
*
of total debt from Active Consumer Account
* Percentage
against revenue collected
19
STRATEGY MILESTONE
4
Efficiency Achievement
WATER SERVICES PERFORMANCE TARGET
Performance
Measures
Key Performance Indicator
(KPI)
1
Supply Coverage % Urban Areas Coverage
(% of water supply % Rural Areas Coverage
coverage)
2
Treated Water
Quality
Treated Water
Quality
Compliance Rate
% of water quality chlorine & E coli tests
that meet National Drinking Water Quality
Standards
• Residual Chlorine
• E Coli
• Residual Chlorine and E Coli
• Turbidity
• Aluminium
2012
Targets
Achievement
100%
99.5%
100%
99.5%
98.5%
99.8%
99.9%
99.5%
95.0%
99.63%
99.95%
100%
99.88%
97.78%
20
STRATEGY MILESTONE
4
Efficiency Achievement
WATER SERVICES PERFORMANCE TARGET
Performance
Measures
3
Continuity of
water supply
Key Performance Indicator
(KPI)
•
•
•
4
Water pressure
Communication pipe failures to be
repaired within 24 hours (for cases
where services are affected)
75mm to 200mm diameter pipe to be
repaired and restored supply within
24 hours.
Exceeding 200mm diameter pipe to
be repaired and restored within48hr
Minimum pressure of 10m to be
maintained for not less than 8 hours
within a 24 hours period.
2012
Targets
Achievement
99.0%
99.9%
99.5%
99.6%
21
Consumer cost
due to inefficiency
22
INEFFICIENCY COST
Inefficiency cost to consumer
WATER SUPPLY DISRUPTION
Time lost, man-hours value, missed
opportunity to generate house-hold
income.
WATER QUALITY VIOLATION
EXPENSIVE drinking water
becomes the only option to
consumer.
NO WATER SUPPLY
Unforeseen cost, fuel,
vehicle (motorbike), labor
hour, limited volume to
transport .
23
INEFFICIENCY COST
24
Operator’s cost
due to inefficiency
25
Cost for Supply
Impact On Operators
The intensity to carry out, preventive operation
maintenance to water supply system
installations, very much depend on planned
work as well as availability of fund to hire
manpower and equipments, to carry out
monitoring and follow up maintenance.
is
Maintenance Cost
Maintenance Intensity
26
Impact On Operators
Cost for Supply
Avoiding preventive maintenance, will incur
operator additional spending when breakdown
occur.
is
Maintenance Cost
Maintenance Intensity
27
Cost for Supply
Impact On Operators
Breakdown cost will include,
• Emergency supply cost, which most of the time is
multiple those if proper bidding could be
arranged.
• Breakdown cost incur replacement of major
component, unlike in proper monitoring program
requires replacement of minor component only.
is
Breakdown Cost
Maintenance Cost
Maintenance Intensity
28
Efficient
Poor
Satisfactory
Cost for Supply
Fail
Impact On Operators
Operator’s Total Maintenance Cost
Breakdown Cost
Maintenance Cost
Maintenance Intensity
29
Conclusion
30
Conclusion
1. Achieving high efficiency in a water supply industry is a must in
order to create an appropriate atmosphere of healthy and
prosperous society.
2. Achieving high efficiency, requires a positive team with clear
objectives, that enable excellent drive for delivery of efficient service.
3. To be able to carry out the above, operator should have adequate
fund, to provide adequate manpower, technology and capital works,
to implement effective operation strategy for high efficiency delivery.
4. It is clear, that efficiency in operation is dependent on the willingness
to pay for a “cost recovery water tariff”.
31
Thank You
32