Case Study

Name: City of Detroit Public Lighting Department Date: 2004 – 2005 Project: Performance Improvement

Summary: IMG analyzed resources, skills, and work practices in the Detroit Public Lighting Department, yielding significant performance improvements in just four months and resulting in the implementation of an action plan identifying over 30 recommendations to generate revenue and improve efficiency.

Issue: The City of Detroit Public Lighting Department (PLD) operates and maintains a 180MW natural gas fired power plant as well as thirty-one (31) substations throughout the City; it provides power to over 1,800 public and private customers, 87,000 street and alley lights, as well as 1,200 traffic signal installations. PLD was in a state of disrepair with less than 20% of its generating capacity available for service; 44% of its critical equipment in service; over 12,000 streetlights out-of-service; and an organization that was not functioning as one cohesive unit. IMG was asked to identify opportunities for business and operating improvements in the PLD and develop an action plan to implement immediate and long-term performance enhancement as well as operating and capital cost efficiencies.

Solution: IMG began by lending the PLD an executive manager to shadow the existing management staff, adding another perspective to the department’s functionality. IMG also conducted over 90 interviews with management and personnel, performed site inspections, analyzed business processes, and assessed the organizational structure. Following these evaluations, IMG helped the City’s Chief of Utilities execute a methodical approach that included implementing over 30 discrete improvements.

Value Created: Significant process improvements were gained in just four months including the expansion of critical equipment operability from 44% to 90% through management initiatives, the increase of reliable generating capacity from 15 MW to 75 MW through work order management, and the reduction of the streetlight repair backlog from an estimated 12,349 to 3,469 streetlights. Revenue recovery included the collection of $400,00 from past due accounts as well as delinquent cable reel deposits totaling $67,000, while future initiatives will reduce the backlog of claims ($750,000 in revenue), improve receivables collection ($2.8 million in revenue), and remove obsolete and overstocked inventories ($2.0 million in revenue). Recurring annual O&M costs have been reduced by $1.5 million, and three of the power plant’s natural gas-fired generating units have been certified under EPA Acid Rain regulations.