1. 1 A QUALITY IMPROVEMENT “STORY” ABOUT PACIFIC ELECTRIC & GAS (PE&G) To illustrate a systematic approach to Quality Improvement, we will describe the activities of a quality improvement team within PE&G’s Haasville District. Our goal is to illustrate the following:  The need to have a quantifiable measure of quality.  The need for the quantifiable measure of quality to be customer oriented.  How to use a Pareto Chart to select which of a problem’s “root causes” to improve.  How to use a Fishbone Diagram to summarize a problem’s root causes.  The importance of Knowledge Transfer and Learning.

2. 2 STEP 1: Identify a Quantifiable Measure of Quality that is Customer Oriented The Haasville team first considers a goal of Provide Reliable Electric Service. Why is this goal inappropriate? “If you don’t measure it, you cannot improve it.” “In God we trust. All others bring data.” Next, the Haasville team considers measuring its service quality as the Number of Power Outages per Year. Although this measure is quantifiable, why is it NOT customer oriented?

3. 3 Finally, the Haasville team decides that its measure of service quality will be the SERVICE UNAVAILABILITY INDEX. EXHIBIT 1: SERVICE UNAVAILABILITY INDEX Data for Most Recent Calendar Year SUI is both quantifiable and customer oriented.

4. 4 Having identified SUI as its measure of service quality, the Haasville team sets a goal of reducing SUI. The team examines each POWER OUTGAGE REPORT (POR). For each power outage, the POR includes:  Time power went out and time it was restored,  Number of customers affected,  Cause of outage (if known) from a list of 35 possible causes. Using the PORs, the team identifies the root causes of power outages and summarizes them with the table below: What should the Haasville team do next?

5. 5 The problem with Exhibit 2 is that it does not display the impact each root cause has on SUI. Exhibit 3 below displays for each root cause both the number of occurrences and the contribution to SUI. Although “Lightening” is #1 in terms of the number of occurrences, “Vehicles” is #1 in terms of its contribution to SUI. The Haasville team constructs the Pareto Chart in Exhibit 4 on the next page. The Pareto Chart displays the root causes of outages in decreasing order of their contribution to SUI. NOTE: To construct within Excel a Pareto Chart similar to Exhibit 4, start the Chart Wizard, click in Step 1 on Custom Types, and select Line- Column on 2 Axes.

6. 6 What should the Haasville team do next?

7. 7 STEP 2: Analyze root causes of vehicle- related outages and determine which one to attack. Using the PORs that were vehicle-related, the Haasville team constructs the FISHBONE DIAGRAM in Exhibit 5 on the next page. The Fishbone Diagram organizes the root causes of a vehicle-related outage. NOTE: To construct within Excel a Fishbone Diagram similar to Exhibit 5, first display the Drawing toolbar by using the menu selection View, Toolbars, Drawing. Then, to draw the arrow-tipped lines, click on the toolbars arrow- tipped line icon.

8. 8 How should the Haasville team determine which root cause to attack first?

9. 9 The Haasville team next constructs the Pareto Chart in Exhibit 6 on the next page. The Pareto Chart displays root causes of vehicle-related outages in decreasing order of their contribution to SUI. Although “Poles on Outside of Curve” is not necessarily #1 in terms of number of occurrences, it is #1 in terms of its contribution to SUI. So, the Haasville team chooses to attack the root cause “Poles on Outside of Curve”.

10. 10

11. 11 STEP 3: Identify alternative countermeasures that will mitigate the root cause, and select one of these countermeasures to implement. The Haasville team uses BRAINSTORMING to develop the following list of 11 alternative countermeasures:  Relocate pole by moving it further back.  Install barricade (doughnut) around pole.  Move wires underground.  Relocate pole to inside of curve.  Install caution lights.  Reduce speed limit.  Install speed bumps on curve of road.  Install reflectors on curbs at curve.  Replace pole with break-away pole.  Increase span between poles (i.e., decrease number of poles).  Replace pole with stronger pole.

12. 12 The Haasville team uses MULTIVOTING to reduce the entire list of 11 countermeasures to 3-5 countermeasures. (On the first vote, each team member can vote for any number of countermeasures. In any subsequent vote, each team member can vote for at most one-half the remaining countermeasures. The vote continues until the list of countermeasures is reduced to 3-5 items.) Using Multivoting, the Haasville team reduces the list of countermeasures to: A. Relocate pole by moving it further back. B. Relocate pole to inside of curve. C. Install speed bumps on curve of road. D. Install reflectors on curbs at curve. To evaluate the four alternatives, the Haasville team selects the following criteria: 1. Cost to Implement 2. Percentage of Problem Solved 3. External Assistance Required

13. 13 To assist in the selection of the “best” of the four remaining countermeasures, the Haasville team uses a technique for choosing the “best” from a set of options that have each been evaluated against a set of criteria. (One such technique is Prioritization Matrices.) After using Prioritization Matrices or a similar technique, the Haasville team selects the following countermeasure: Relocate poles currently located on outside of curve to inside of curve. How should the Haasville team decide the order in which the poles should be relocated?

14. 14 STEP 4: If necessary, repeat Step 2 and/or Step 3, this time attacking another root cause of vehicle-related outages in specific or outages in general. STEP 5: Prevent the problem and its root cause from recurring. To prevent future problems with vehicle-related outages, the Haasville team designs a new process for locating new poles. Furthermore, the Haasville team takes steps to ensure that this new process is transferred to all of PE&G’s districts. STEP 6: Summarize lessons learned. The Haasville team answers the questions:  What did we do well?  What did we not so well?  What could we do differently?