“L” for Lean Management

A corporate-management philosophy rooted in the elimination or reduction of waste and process optimisation, with the goal of significantly increasing operational efficiency and stakeholder satisfaction. In short, streamlined management involving the application of targeted physical and IT principles and processes to create value. The term “lean management” refers to this approach to continuous qualitative and quantitative improvement, now widespread worldwide, primarily in production and manufacturing settings.

The Italian national transmission grid operator, Terna, also recognised the need to open up and adopt these methods, launching an initial project in mid-2022 with a range of “improvement initiatives”. This initially involved around 400 professionals of the Grid Development Strategies and Dispatching department, working to optimise efficiency and quality, as well as pursuing tangible benefits for the organisation. Considering the results achieved so far, the scope of the project has been broadened, now involving all personnel of the department.

«Until a few years ago» explains Enrico Senatore, Head of Terna’s Process Technologies and Systems division, «the primary concern was the effectiveness of the results of operational processes. The focus was on the result, therefore, on achievement of targets set without considering whether the achievement was actually the product of improvement in our performance. The first step, also triggered by external inputs and regulatory developments, was that of launching a programme dedicated to performance and lean management through establishment of a cross-departmental structure for business process improvement, acting a strong driver of excellence in operational processes. This prompted a paradigm shift: we can no longer limit ourselves to measurement of operational results, but must define performance targets that optimise use of available resources, introducing improvement actions that enable new methods and tools for the achievement of ever greater results».

The programme was launched in July 2022, and the initial phase was completed in December of that year. This period saw the first initiatives aimed at process improvement, representing a full trial of the lean-management approach.

Next, from January to August 2023 we saw the ramp-up phase. This involved consolidating the new operating model of the Business Process Improvement structure, completion of certain improvement initiatives and the launch of others. Several weeks of kaizen activity were carried out and OEE (overall equipment effectiveness) performance indices were introduced. The Performance and Lean Management programme is now in its third phase for extension and embedding of the methodology.

The project now involves professionals from many areas of the company, such as Regulatory Affairs, Dispatching and Operations, Electricity System Planning and Authorisations, Systems and Technology Execution, System Strategy, Process Technologies and Systems, and Programme Management Office & Project Control.

The operational activity of the Performance and Lean Management programme adopted by Terna is divided into three key thematic areas, explains Alessia Michelsanti from Terna’s Business Process Improvement division. «The first of these relates to “why?”: in a co-design workshop, we established the vision and mission of this new way of working. The main objective is to create and structure a reactive and proactive organisation, capable of anticipating challenges ahead and guiding transformation towards an objective-driven organisation». This means a company led by performance targets, by their monitoring and by continuous improvement of the processes that generate these results.

«The second area relates to “how?”: an essential part of the Performance Management programme is active engagement of colleagues. This is achieved through two approaches. The first is an operational model involving the entire organisation through the appointment of figures who have the task of facilitating application of performance and lean-management methodologies, with the cross-departmental support of the Business Process Improvement division. The second involves propagation of expertise through specialisation courses for hard and soft skills. This has led us to introduce our “Black Belts”. These are colleagues who, for their specific area of competence, have the goal of catalysing and managing comprehensive improvement projects and defining new KPIs for operational performance. Black Belts are supported by “Green Belts”, who have acquired the skills to be able to identify actions for improvement and increased efficiency of their processes». Finally, the “how?” thematic area involves webinars, problem-setting sessions, lean coffee meetings and opportunities for analysis and engagement, increasing awareness of the methodology.

At the end of 2023, 91 professionals were certified Terna Black Belts, from the Grid Development Strategies and Dispatching, People Organization and Change, and National Transmission Grid departments. There were 191 Terna Green Belts, from the same departments.

Finally, the third thematic area relates to “what?”. «We adopt these concepts in our daily work through application of the DMAIC cycle: Define, Measure, Analyse, Improve and Control» explains Alessia Michelsanti. This methodology examines the different phases of improvement of an activity or resolution of a problem.

We began with process-improvement projects, before adding activities for introduction of new KPIs for the individual organisational functions. Terna then introduced a structured model for progress in this regard, the Business Review, which involves Heads of functions, Black Belts and top management. The latter assess results achieved on a monthly basis through a visual-management tool and identify potential improvement actions.

But what tangible results has Terna achieved after almost two years from programme launch? «Through the Business Review, we are structuring, organising and defining the overall-performance goals for the various areas of management. This generates precise key performance indicators and a series of monitoring platforms, used to gather and analyse the key data and information on processes» observes Alessia Michelsanti.

One particularly noteworthy platform is the Value Street Map of the process for connection of systems to the national transmission grid, which arose from the “ConnAction” project. This is an interactive dashboard to monitor all steps, from the number of applications to the time required for passage from one phase of the process to another, with near-real-time updates. The advantage of this tool is that anybody at the managerial level can access the information platform and oversee the process.

Additionally, in the context of the “We Dispatch” improvement project, an indicator has been identified, usually used in manufacturing settings, called Overall Equipment Effectiveness. In our case, this is used to measure performance for processes with the greatest added value and those which are most strategic in terms of dispatching, through analysis of overall efficiency, performance and quality. For this activity, a dashboard has also been created for hourly monitoring of whether a given process is following the correct procedure or not, quickly identifying the problem to be resolved. Previously, this was possible only after careful preventive or final analysis.

There are currently 16 open improvement projects, and work is under way to identify process waste, question current processes and identify new performance goals.

Considering the results achieved, the electricity-system operator has decided to proceed with the Performance and Lean Management programme: the objective for 2024 is to proceed with existing improvement initiatives and launch new ones. Meetings have been under way for several months with the other areas of company management to present this operational model, adapt it and assess whether to deploy it in other contexts.