DEVELOPMENT OF A DRINKING WATER IMPROVEMENT PLAN TO DRIVE BUSINESS IMPROVEMENT

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1 DEVELOPMENT OF A DRINKING WATER IMPROVEMENT PLAN TO DRIVE BUSINESS IMPROVEMENT Mark Angles 1, Mark Crabtree 1 1. Sydney Water, Sydney, NSW, Australia ABSTRACT Sydney Water has a regulatory requirement to develop and implement a five year drinking water quality management plan (the Plan). Historically, the Plans have been not been instruments for driving business improvement and efficiency. They have been focused wholly on ensuring that Sydney Water continues to meet guideline and Operating Licence requirements for water quality, including preparedness to meet emerging water quality issues. This lent itself to a non-strategic, bottom up approach to introducing drinking water quality improvements. A new approach has been taken that allows the risks to drinking water delivery to be addressed while also identifying the opportunity for business improvement. INTRODUCTION An outcome of the 1998 Sydney water quality incident was the requirement for Sydney Water to develop a water quality management plan every five years. This requirement is enforced through Sydney Water s Operating Licence and Memorandum of Understanding with NSW Health. To date Sydney Water has delivered three five year Plans. Typically, the Plans described the: regulatory framework for the Plans drinking water quality planning process assessment of catchment-to-tap risks to water quality investigation of emerging risks forward five year strategies to continue to address the 12 elements of the Framework for Management of Drinking Water Quality (NHMRC,NRMMC, 2011) drinking water quality improvement actions. The Plans have been focused primarily on meeting compliance and regulatory requirements. This is arguably due to the regulatory framework in which the Plans were positioned but also potentially due the initial purpose of a Water Quality Management Plan i.e. the apparent need in 1999 to address specific water quality issues following the 1998 Sydney water quality incident, and to rebuild public confidence in the water supply. In effect the Plans have been silent on driving business improvements. This approach has the potential to create an inward looking and conservative compliance culture with business improvement in water quality management seen as a risky proposition. The water industry, however, is currently repositioning itself to be more customer focused and efficiency driven (WSAA, 2013). This necessarily involves finding the balance between maintaining a high standard of water provision while providing value to customers through greater efficiency in service provision. In this regard, future drinking water improvement planning will need to meet the core requirements of supplying high quality water in an innovative way that progresses business efficiency and improvement. This paper describes the development of the next version of Sydney Water s drinking water improvement plan. The approach addresses the key risks in the delivery of a safe water product while endeavouring to introduce business improvements to improve efficiency and reduce costs. DRINKING WATER MANAGEMENT FRAMEWORK Past versions of the Plan encompassed all aspects of drinking water quality management, including improvement actions, in one document, as described in the Introduction. Given that the Plans covered a five year timeframe, there was little opportunity to adjust and revise improvement actions as situations changed; in short the improvement actions tended to lose relevance towards the end of the Plan cycle. In addition, being regulatory documents, the Plans were publically available which tended to restrict the type of information included in the Plans, particularly in relation to business improvement. Greater flexibility was required around capturing and presenting business improvement to allow for changes in business direction over time.

2 In order to address this issue, the current version of the Plan is presented in two parts. The first part comprises how Sydney Water implements its drinking water management system based on the 12 elements of the Framework for Management of Drinking Water Quality (NHMRC,NRMMC, 2011). This Drinking Water Management Manual is essentially a static public document subject to periodic review. The second part comprises the Drinking Water Improvement Plan (the Improvement Plan), as described here. The Improvement Plan provides a high level overview of the improvement actions that Sydney Water will undertake to manage key risks and uncertainties to water product quality and quantity, and to progress improvements. The Improvement Plan is a rolling plan that covers an approximate 5 year timeframe. It is a dynamic document that has the flexibility to adapt as business conditions and needs change. Importantly the Improvement Plan is considered an operational document and hence can be more detailed than if it was publically available. IMPROVEMENT PLAN DEVELOPMENT Input sources The Improvement Plan is based on a top-down approach to provide clear justification of improvement actions and to ensure they are aligned to business needs. The inputs to the Improvement Plan focus areas include (Figure 1): outcomes of the catchment-to-tap risk assessment process based on prioritised risks and improvement actions business improvement opportunities identified through strategic planning and research actions arising from meeting the Water Product Specification improvement areas identified through audits and benchmarking exercises incident/scenario debrief actions. Catchment-to-tap risk assessment A key purpose of the Improvement Plan is to address risks to the quality and quantity of drinking water supply, and to reduce the uncertainty of controls. Risks to the supply of the water product, and associated controls, are captured and assessed as part of the periodic catchment-to-tap risk assessment process. Catchment-to-tap risk assessments are undertaken as a requirement of the Sydney Water Drinking Water Management System. The catchment-to-tap risk assessment is central to the development of the Improvement Plan by: identifying improvement areas around risk and control uncertainty identifying strategic planning areas to progress business improvement assessing risks relating to water product specification implementation. As stated in the Framework for Management of Drinking Water Quality Management (NHMRC,NRMMC, 2011) An integrated management approach with collaboration from all relevant agencies is essential for effective drinking water quality management. This is especially relevant in the context of the Sydney water supply system which features a separation of responsibilities for such management between Water NSW (the Sydney Catchment Authority) which has responsibility for catchment management, and Sydney Water which has responsibility for water treatment and onward distribution to customers. To this end, Sydney Water, the SCA and the state health regulator, NSW Health, have all participated in the catchment-to-tap risk assessments undertaken every five years since 1999, including mid-way reviews every two and half years.. In keeping with the periodic review cycle, a comprehensive five-year review of the catchmentto-tap risk assessment was held in 2014 to inform the development of the current Improvement Plan. A series of focused workshop discussions of key risks for both the quality and quantity aspects of the water product were undertaken. While in the past the catchment-to-tap risk assessments focused predominantly on quality issues, the current risk assessment looked at both quality and quantity issues and the relationships between the two. Some of the topics discussed during the risk assessment included: quality pathogens/cyanotoxins, taste & odour, raw water treatability quantity pressure, continuity, water loss changes to Sydney Water and its operating environment skill/capability retention, and competition. The approach used provided a holistic view of the risks from catchment to tap and importantly allowed the interdependencies between more complex risks and controls to be captured. Outcomes of the risk assessment process highlighted focus areas for inclusion in the Improvement Plan. Strategic planning and research Strategic planning involves addressing issues by taking into account whole of business needs, rather than addressing specific and isolated issues. Areas of strategic planning included in the Improvement

3 Plan arose from identifying groups of similar risks during the catchment-to-tap risk assessment process (Figure 1), which would be better addressed under one strategic approach. This ensured that the interdependencies of impacts and solutions are accounted for, and that issues will be dealt with efficiently and consistently. Strategic planning inputs to the Improvement Plan also originated from the identification of business improvement opportunities (Figure 1) that need to be defined and delivered using a strategic approach. Business improvement opportunities were ultimately justified by linking back to addressing needs identified through the risk assessment process. Drinking Water Product Specification Inputs to the Improvement Plan were also derived from issues with meeting the Drinking Water Product Specification (the Specification). The Specification identifies the key performance indicators that need to be met to ensure that delivery of the water product protects public health while meeting customer expectations and regulatory obligations. Many of the critical limits identified in the Specification are based on Australian Drinking Water Guideline (NHMRC,NRMMC, 2011) targets and hence reflect Operating Licence compliance requirements. Importantly, the Specification is a change instrument. Improvements to business efficiency, changes in regulation, or improvements in customer service relating to the water product are implemented operationally via a change in the target criteria, critical limits or action limits of the Specification. Changes to the Specification need to be evidence based and hence are delivered through projects in the Improvement Plan. These changes can be based on business improvement opportunities that allow the intent of the Specification to be met more efficiently or that better target key performance measures. Auditing/benchmarking Sydney Water participates in various audits and benchmarking exercises including: Operating Licence audits ISO 9001 certification audits benchmarking based on the Water Services of Australia Aquality assessment tool internal quality system audits. These activities can result in actions to address deficiencies or lead to the identification of opportunities to improve existing processes. These may include more strategic issues that need to be addressed. These opportunities are identified as business improvement initiatives and are delivered through the Improvement Plan via the strategic planning process (Figure 1). Actions and improvement opportunities from audits and benchmarking may also indicate larger and more strategic issues that need to be addressed. These opportunities are identified as business improvement initiatives and are delivered through the Improvement Plan. Incident/incident scenario debrief Sydney Water holds debriefing sessions following major incidents to capture learnings as well as areas for improvement. Actions or improvement opportunities usually relate to the adequacy of controls to reduce risk. Typically, actions that are considered to represent business improvements, rather than an incremental change to a businessas-usual task, are included in the Improvement Plan (Figure 1). Policy and procedures It is likely that the outcomes of some of the activities in the Improvement Plan will result in the development or revision of policies or procedures that support delivery of the overall Sydney Water Drinking Water Policy. As with the Specification, polices and in particular procedures, are effective change instruments to drive business improvements back into the business at an operational level. IMPROVEMENT AREAS Key focus areas have been established that deliver business improvements by strategically addressing risks to water quality and quantity. Fundamental to this process is the prerequisite of addressing improvements within a wider business context rather than as isolated activities to meet specific needs. In this way addressing a focus area becomes a business improvement with broad outcomes rather than a quick fix with narrow benefit. Improvement benefits from addressing water quality and quantity risks will be assessed against improved efficiency in service delivery resulting in lower costs more robust system and process management improved knowledge capture and management improved sustainability of compliant supply. As an example, highly ranked risks were identified regarding raw water quality variability and treatability, and subsequent impacts on treated water quality and quantity (plant capacity). Risk

4 reduction actions were put in place based on the following scope: optimise treatment processes to ensure plant capacity meets demand under varying raw water quality conditions optimise treatment processes to ensure compliance is met under varying raw water quality conditions define the limits of plant capacity given the above and identify potential areas for capital expenditure capture treatment knowledge by defining processes implement the above with a view to improving efficiency. In a second example, the catchment-to-tap risk assessment highlighted a group of risks concerning disinfection. While the risk ranking of each risk was not high, there was a clear business improvement opportunity by addressing all risks collectively through a disinfection strategy. The strategy will: provide a preferred disinfection approach leading to the development of a disinfection policy optimise primary and secondary disinfection (location and type) leading to a an improved compliance/public health outcome capture water quality management knowledge by defining processes implement the above with a view to improving efficiency. By using a strategic top-down planning approach, the links between treatment (removal of organic matter and turbidity) and secondary disinfection (chlorine decay and disinfection by-product formation) were made. This lent itself to the implementation of an overarching monitoring and control strategy that addresses each of the business needs outlined above. It is arguable if the same level of business improvement could be achieved by taking a bottom-up approach that addresses individual risks. As an example of a direct business improvement opportunity, a key organisational risk highlighted during the catchment-to-tap risk assessment was the shortage of water quality management and operational skills. This is an issue impacting the Australian water industry (GSA, 2013). In a Sydney Water context, key water management skills, including those for treatment and networks operation, will be lost over the next few years due primarily to retirement. Loss of these skills impacts on the ability to effectively run the system and respond to incidents. To date there has been no formal process to identify, capture and store relevant knowledge or to retain the necessary skills to implement the knowledge. A formal process will be established that allows: identification of the relevant knowledge to be captured and who holds it knowledge capture both explicit and tacit knowledge how the knowledge will be stored, interrogated and disseminated mentoring, documentation, training, community of practice, knowledge exchange etc. Knowledge will also be captured through defined processes as noted in the previous examples. One of the original drivers of the improvement planning process was improved customer confidence in the water supply. A large component of this is effective customer communication. The current Improvement Plan acknowledges this by including an initiative to improve the way Sydney Water communicates drinking water quality to customers via its website. Current water quality communication by Sydney Water and the wider water industry is end point monitoring focused, is practically inaccessible, and does not fully inform customers of the risk-based quality management approach that is used to ensure high quality treated water. The end result is that customers believe water quality is good because of monitoring and not because Sydney Water implements supply chain quality controls. This leads to a misinformed public that is difficult to engage with in terms of water value. The improvement initiative identified in the Plan will address this by providing more interactive and relevant water quality information to customers, while reinforcing the messaging around risk-based quality management systems and the supply chain. It is expected that improved customer water quality and supply awareness will result in a better engaged customer base thus enabling a better dialogue around proposed servicing options, greater understanding around events and greater understanding of water value. CONCLUSIONS While improvement plans are primarily about addressing risks, the approach described here allows for business initiatives, as well as other business inputs, to be included in the improvement planning process. This top down and strategic approach is necessary to identify the links between improvements and ensure broader and more comprehensive benefits. This approach lends itself more to making step changes in business improvement, rather than more narrow incremental changes that generally result from addressing individual risks alone. Nevertheless, it was necessary to base the improvement plan on the outcomes of the catchment to tap risk assessment, albeit expanded to include quantity and corporate

5 risks relevant to the supply of drinking water. This provided justification for the improvement initiatives being proposed as well as providing a line of sight between business needs and improvement outcomes. REFERENCES GSA Environmental Scan Government Skills Australia. Adelaide, South Australia, Australia. NHMRC, NRMMC Australian Drinking Water Guidelines Paper 6 National Water Quality Management Strategy. National Health and Medical Research Council, National Resource Management Ministerial Council, Commonwealth of Australia, Canberra, ACT, Australia. WSAA Vision & Outcomes to Water Services Association of Australia, Melbourne, Victoria, Australia.

6 Figure 1. Inputs to Drinking Water Improvement Plan and key outputs