For weeks I have been reading up on the lessons companies have learned from the Covid crisis. My intention was to write a blog about how companies are starting to implement these lessons to drive resiliency and agility in their operations as they start to think beyond COVID-19. So, what are some of these lessons?
- You need to be agile to survive.
- You need to listen to your customers.
- Being “good enough” is not good enough anymore. You need to anticipate and exceed customer expectations to thrive.
- Contingency and emergency planning are crucial.
- Visibility and access to your supply chain are fundamental.
- And finally, technology is the enabler that allowed you to survive the crisis and is the platform upon which post-crisis resilience will be built.
But the question is, have companies truly internalized these lessons? Are they really implementing the structural changes needed to create more agile and resilient organizations that will survive the next crisis, or are they doing just enough to continue “getting by”? And are they leveraging technology and digital innovation to their fullest potential to accelerate change?
The problem with doing just enough to get by is that it only takes one unforeseen event for things to fall apart. This is especially true for companies with complex, mission-critical assets and infrastructure that rely on good planning and clear processes to operate efficiently. Those of us that live in Texas learned that lesson the hard way during February’s winter storm. The massive power outages that were triggered by record cold temperatures, ice, and snow resulted in a tragic loss of life and property.
Much is already being made of who is to blame. I will leave that judgment call to the pundits and the politicians. But one thing seems pretty clear—the systems and processes that were in place to ensure the integrity of the power grid were not adequate for the task. And even the most basic of technology needed to navigate the crisis seems to have been completely missing. So instead of writing a blog about digital disruption, digital twins, or the impact that digitizing and modernizing the grid could have made in averting last month’s disaster, I want to focus on more immediate and practical solutions. In other words, what are some of the basic best practices, enabled by technology, that energy providers should be thinking about implementing in the short term in order to avert the next crisis?
1. Start with your assets
The first question energy providers should be asking themselves is, do I know where all my assets are? Have I identified which of my assets are considered critical assets—the ones that, quite literally, support keeping the lights on? Assets and equipment that can stop production, impact safety, and the environment, or drive major costs when they fail are considered most critical. Once you have visibility into these assets, and you can capture their history, either with IoT-enabled sensors or with technicians in the field, you can start to build the data that will allow you to analyze how, why and when assets fail. You can then use this information to build asset management KPIs to track Mean Time Between Failure (MTBF), Availability, Uptime and other key metrics that can help prioritize maintenance efforts.
Understanding the criticality of an asset can help you determine how much effort (and cost) should be put into keeping it operational. Access to actionable asset data can help you make informed decisions about where to focus proactive maintenance efforts. The more critical an asset is to your operations, the more likely it is to impact the safety and wellbeing of your customers if it should fail, and the more effort you should be putting into ensuring its availability.
Stress testing your assets can help you predict how that asset will perform under certain conditions (for example, colder than normal temperatures), and allow you to build contingency plans for that eventuality. You can even write work instructions and procedures based on stress test data so your service organization can proactively put action plans in place to protect or repair assets should the need arise.
2. Understand your supply chain
One of the biggest causes of generation losses in Texas was that power plants went offline either from lack of fuel as wellheads and pipelines froze, or as generation equipment failed due to the falling temperatures. In this case, having access to resources deployed in strategic staging locations, close to critical assets, can positively impact the speed at which generation capacity is brought back online.
Availability of historical data on critical assets can help you determine which parts are most likely to fail. You can use this data to make intelligent decisions about what emergency parts need to be kept on hand in strategic locations close to your assets, and proactively communicate with your vendors in advance of the storm so they can replenish missing stock. By the same token, you can analyze historical asset failure data to determine which assets might fail and why. You can then proactively deploy field technicians with the appropriate technical competencies to staging locations close to the assets before the storm even hits.
3. Deliver on your customers’ expectations
Almost universally, service providers state that one of the main innovations that will endure past the Covid crisis is the ability to support customers and their assets remotely.
I recently spoke to a customer in the energy space who told me that during Covid they created a remote operations control room that they staffed with technical experts. With this “control room” model, they were able to support their customers through the lockdowns that limited their ability to send technicians onsite to repair equipment. This customer used data from connected assets and Remote Monitoring & Diagnostics technology to monitor their customers’ equipment. Their technical team used historical installed base information combined with live data from sensors to quickly identify trends and intervene on assets before they failed. Where field interventions were inevitable, the control room team was able to access entitlements data and service level agreement data to prioritize service calls.
The ability to continue remote operations past the Covid crisis will allow power generators to provide a new level of service and responsiveness to their customers, while at the same time helping to contain O&M costs and shift those resources to tackling larger, structural issues. Technology and the access to information that technology facilitates will allow power generators to move from being just “good enough,” to trusted partners invested in their customers’ success.
In a blog he wrote a few weeks ago, my colleague Daniel Brabec quoted Winston Churchill who famously said “never let a good crisis go to waste.” Daniel was referring to innovations that service leaders are implementing thanks to the lessons learned from the Covid crisis. I do not want to trivialize what happened in Texas last month. It’s undeniable that the Energy industry will need to face the infrastructure issues it needs to solve. From modernizing grids to winterizing power generation equipment. New processes and technology will need to be put in place at record speed in order to address the challenges of providing safe and reliable power to utility customers.
El Paso Texas is proof that this can be done. They applied the lessons learned from a previous storm to diversify their power generation capacity and winterize their infrastructure. They made it through last month’s storm with only 3,000 residents losing power, and of those, 2,000 had their power back within five minutes! If other energy providers are willing to start building on the lessons learned during the Covid crisis and implement even the most basic of technology and processes that will give them better visibility into their current operations, they will be better equipped to meet tomorrow’s challenges – no matter what the next storm brings.