Jay N. Davis
LMITCO

Through an integrated reengineering effort, the Idaho National Engineering and Environmental Laboratory (INEEL) is successfully implementing process improvements that will permit safe and compliant operations to continue during the next 5 years, even though $80 million was removed from the Environmental Management (EM) program budget. A 2-year analysis, design, and implementation project will reengineer compliance-related activities and reduce operating costs by approximately $17 million per year from Fiscal Year (FY) 1998 through 2002, while continuing to meet the INEEL's environment, safety, and health requirements and milestone commitments. Compliance reengineering's focus is improving processes, not avoiding full compliance with environmental, safety, and health laws. In FY 1997, compliance reengineering used a three-phase approach to analyze, design, and implement the changes that would decrease operating costs. Implementation for seven specific improvement projects was completed in FY 1997, while five projects will complete implementation in FY 1998. During FY 1998, the three-phase process is being repeated to continue reengineering the INEEL.

As a result of the Fiscal Year (FY) 1996 Environmental Management Requirements/Defensible Costs Project (commonly known as the "murder boards") at the INEEL, significant reductions were made in out-year budget requirements. These reductions were accomplished by deleting activities that did not have a solid requirements basis, linking the remaining work directly to that basis, and scrubbing down each task to ensure that it was being accomplished efficiently. As a part of this effort, major site-wide issues that were not solved during the murder board project were identified.

The INEEL took the position that these site-wide issues could be solved with a resulting increase in efficiency. The Environmental Management (EM) program budgets were cut an additional aggregate $80 million over the 5-year period, FY 1998 through 2002, and a new project, Compliance Reengineering, was funded at a level of $5 million in FY 1997 and $10 million in FY 1998. The specific mission of this project is to identify inefficiencies and reengineer EM processes such that the necessary work can be conducted safely and in compliance with applicable rules and regulations, but at a cost of $80 million less than was estimated to be required after the murder board effort was completed. Note that compliance reengineering's focus is improving processes, not avoiding full compliance with environmental, safety, and health laws.

A three-phase approach was selected for the FY 1997 Compliance Reengineering Project activities. Phase 1 (opportunity analysis and selection) was conducted from October through December 1996, Phase II (process redesign) was conducted from January through April 1997 and Phase III (implementation) was conducted from May through September 1997. A similar approach is planned for FY 1998.

A joint Lockheed Martin Idaho Technologies Company (LMITCO) and Department of Energy Idaho Operations Office (DOE-ID) Compliance Reengineering Team was assembled. A Compliance Reengineering Steering Board of senior LMITCO and DOE-ID managers was designated. Recognizing that changes would have significant cultural and organizational dimensions, in addition to technical solutions, the INEEL partnered with a private firm, Gerald E. Dunn, Inc. (GDI), which has extensive experience integrating these dimensions of change in both the public and private sectors.

Criteria for selection of specific improvement projects included not only a detailed business case that estimated at least a five-to-one benefit-to-cost ratio, but also the individual board members' perceptions of the organization's ability to achieve successful implementation and a personal willingness to participate in the change. On this basis, over sixty potential projects were evaluated and twelve specific improvement projects were selected by the board for final design and implementation.

Implementation of twelve projects providing the following significant improvements will have avoided costs in excess of $20 million in FY 1998 and $100 million in FY 1998 through FY 2002:

• Project Management Systems: Integration and standardization of EM project management processes to include life-cycle planning, EM program office and project manager roles and responsibilities; integrated site-wide scheduling and resource management; software utilization; prioritization of potential projects; project management training; and project and program reporting.
• Safety Analysis: Consistent risk evaluation guidelines for all INEEL nuclear facilities; improved process for upgrading/updating safety analysis reports (SARs) to reduce unnecessary reviews and revisions; and a single electronic data base, allowing access to pre-approved current versions of safety-related documents.
• Occurrence Reporting: Improved fact-finding process; time frame for completing reports; greater use of critiques for near-miss events; improved root cause analysis and lessons learned programs.
• Resource Conservation and Recovery Act (RCRA) Permit Compliance: Significantly reduced cost of compliance with RCRA Part B permit at the Radioactive Waste Management Complex (RWMC) by streamlining training and equipment preventive maintenance processes; use of lessons learned in developing future INEEL facility permits.
• Training: New site-wide guidance that significantly reduces the number of people who are required to attend compliance-related training; improved training delivery methods and techniques.
• Maintenance: Site-wide implementation of Enhanced Work Planning principles for team planning and hazards identification; standard maintenance performance indicators and preventive maintenance optimization; integrated scheduling and maintenance management system.
• Shorten General Plant Projects (GPPs): Team concept utilized at the inception of GPPs to enhance planning, maintain personnel continuity, and optimize the annual construction season; key areas identified to shorten overall time required to design and completed GPPs.
• Integration of Facility Closure: Facility closure process integrated to eliminate multiple transfers of facilities and duplication associated with meeting RCRA and Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) requirements.
• LMITCO/Parsons Internal Review Process: Integrated process for review and approval of technical documents required for environmental restoration work in which both companies are involved.
• LMITCO/Parsons Project Management Interface: A single line organizational structure that eliminates layered and redundant positions in environmental restoration work; a project control (cost and schedule) interface that creates an electronic link between LMITCO and Parsons baselines, reduces information transfer time, and enhances task agreement process time.
• LMITCO/Parsons Project File and Vendor Management System: A single library system that eliminates duplicate and redundant distribution of documents.
• Environmental Restoration Ad-Hoc Requests: A process that monitors and tracks unplanned requests and the resulting implementation to improve response and followup.

One of the important components of the Compliance Reengineering Project is to align its objectives with all other ongoing improvement initiatives at the INEEL. This effort has enjoyed some success, but much work remains to be accomplished. In the original analysis, it was discovered that there were over 50 major ongoing improvement initiatives at the INEEL, and that personnel viewed most of them as a "flavor of the month," with no real connection to the overall mission of the INEEL. Significant efforts are now underway to critically examine each initiative, to delete redundant initiatives, and to align those that remain with the overall site-wide objectives. A process to evaluate future improvement initiatives has been recommended for site-wide use. Each new initiative will fill a specific need and fit in a synergistic manner with other ongoing initiatives in order to be accepted.

In addition to the projects above, the following eleven new FY 1998 projects are in progress for FY 98:

• Enhanced Work Planning: Evaluation and improvement of the site work management programs for identifying, planning, approving, controlling, and executing work to improve efficiency, productivity, safety, and environmental compliance. Specific activities include (1) standardizing and streamlining the approval process for work through the application of a graded approach, (2) increasing efficiency by using a common standardized work package format and common work control procedures, (3) streamlining training for maintenance and work control personnel, (4) reducing the number of procedures requiring document control, and (5) improving safety with standardized hazard identification and mitigation.
• EM Operations Training Delivery and Administration: Implementation of an information and training delivery system that will be accessible and useable by all EM employees in order to improve the efficiency of the training administration and personnel qualification process. This system will provide access to qualification status information for operations and crafts personnel, desktop delivery of computer and network training, and registration and scheduling for training courses. Downloadable qualification standards and checklists will include a central repository of standards.
• Document Distribution Centers: Establishment of approximately 15 document distribution centers throughout the site, to store complete sets (paper copies) of the company-wide manuals. The company standard for access to the documents will be provided by computer work stations to access the documents on-line. Paper distribution of these documents beyond the distribution centers will be eliminated. Implementing this project includes providing for training for personnel access to documents and performing an engineering analysis to determine where distribution centers will be necessary and what costs will be involved.
• Electronic Drawing Distribution Automation: Reduction of the turnaround time for access to new or revised drawings and to reduce the costs for releasing, printing, and controlling drawings. By enhancing the Electronic Document Management (EDM) imaging system, all EM drawings will be electronically imaged and made available to customers at their personal computers or common-use work stations and the drawing release cycle (currently 2 to 4 weeks) can be reduced to approximately 24 hours.
• Environmental Monitoring Consolidation: Establishment of a site-wide environmental monitoring program to integrate monitoring schedules and reduce the number of analytes sampled to only those that are required by permits or CERCLA agreements. An evaluation of methods for more efficient use of resources and equipment and improved tracking and reporting will also be performed.
• INEEL Waste Generator Services Reconfiguration: Consolidation of the LMITCO waste generators services functions into a centralized organization of waste management professionals optimizing resources, improving efficiencies, minimizing waste rejection rates, improving oversight and customer relationships, and ensuring compliance. The consolidated waste management functions (information management systems for waste, RRWAC compliance, waste characterization and certification, packaging and transportation, waste forecasts, up-front generation approval, and temporary storage) will provide a single point of responsibility and remove those issues from facility operations.
• Self-Assessment Pilot: Development of self-assessment processes and procedures to improve operational safety, compliance to environmental and operational requirements, efficiency of operations, and employee involvement in work processes. The self-assessment process will help sustain improvements made through the site-wide improvement programs currently underway. The process developed for the pilot will involve a cross-functional team representing the major INEEL operations and maintenance areas, and will be piloted at one facility for 6 months to identify measures and enhancements. Lessons learned will be incorporated following the pilot.
• Procedure Compliance Update: Reduction of project management planning costs and provide an automated expert system (Project Control Expert system, ProConX) that institutionalizes a consistent company approach to project management by reinforcing Project Management Institute (PMI) principles, integration of LMITCO's company-wide procedures and maintenance of regulatory compliance. Improvements will include establishing a consistent company-wide methodology for project management compliance using an automated expert system to establish project criteria, maintain compliance with applicable procedures, and electronically store an audit trail.
• Integrated Waste Tracking: Development and implementation of a site-wide system for facility inventory control, cost tracking for waste shipment, processing, and disposal, and reporting. Activities will include waste inventory assessment, container identification and coding, system deployment, facility-specific modifications, and archival of legacy database systems.
• Systems Engineering Support: Development of documentation detailing the steps necessary to produce required systems engineering documents and providing training materials for project management training related to systems engineering processes and tools.
• Material Availability/Warehousing: Development and implementation of operational supportability analysis (quantitative technical analysis methods to determine material support requirements for EM operational systems), stocked material disposal (a unique process to dispose of excess stocked material inventory assets), and supply chain management (material supply methods that reduce material costs). The implementation of these key actions is interrelated; each item leverages information from OSA (operational supportability analysis).

Tables I and II provide additional details on the projects described above.

The process involved several hundred people from EM and the support organizations within LMITCO. Initially, the subteams were structured to focus on three major areas:

• Site processes and procedures: operational, safety, and environmental opportunities
• Business management practices: budgeting, program management and tracking, and reporting opportunities
• Business case and organization assessment: financial analysis and benefits quantification, assessment of people issues.

The sub-teams evaluated how compliance-related work was being accomplished and made recommendations for improvements. Multiple reengineering diagnostics were performed simultaneously. The sub-teams evaluated how compliance-related work was being accomplished and made recommendations for improvements. Core business process redesign opportunities were selected by the following process:

• Examining and analyzing requirements, and comparing those requirements to actual implementation in the field.
• Analyzing possible process improvements and developing the business case, including the costs of implementing potential reengineering projects and their financial benefits.
• Analyzing present attitudes and beginning to mobilize the personnel associated with the processes, in order to successfully implement the projects selected for Phases II and III.
• Developing the basic redesign of the selected processes.

Multiple reengineering diagnostics were performed simultaneously. The key Phase I diagnostics are illustrated and described below.

The Phase I foundation was established by conducting focus interviews with many INEEL employees and executives to gain a consistent understanding of people's perceptions of change and to begin the reengineering mobilization process. To assure standardized data, each person was asked the same set of questions, worded in the same manner. The results of the focus interviews included introducing the Phase I compliance reengineering effort to employees, building teamwork, enabling the project team to assess the organization's position towards change, and identifying individuals' perceptions of organizational performance in key areas.

The process flow analysis (commonly called "brown paper") was a short, intense data-gathering and mobilization activity performed for each of the site and business management work processes. The purpose of the process flow analysis was to describe the process as it was being implemented and to generate comments regarding the effectiveness of each process. The brown-paper diagnostic provides a low-tech, high-touch approach to describing the process, its strengths, and the potential reengineering opportunities. Small project teams did the initial diagramming of the process flows. Process refinement, employee mobilization, and building of ownership occurred during the widespread "brown paper reviews" or "fairs." The participants identified more than 154 improvement opportunities.

From each brown-paper analysis, the teams developed lists of the top improvement opportunities. The top opportunities were selected based on the degree of potential savings and the expected employee buy-in. Additional analyses documented assumptions and quantified the potential cost savings. This information was summarized on an opportunity chart for each reengineering option. The opportunity charts are included in the Compliance Reengineering working files. The top opportunities were presented to the Compliance Reengineering Steering Board. The steering board approved the selection of the high priority/high potential target areas for further analysis.

Targeted area probes were a supplemental diagnostic aimed at providing relatively quick answers to help the teams focus on the best reengineering opportunities. Project team members developed a list of additional potential reengineering opportunities and related subjects that required targeted probes. The investigation techniques included conversations by phone, meetings with principal players, and research into the workings of particular processes. The results of the targeted area probes were used by the subteams doing the planned analyses.

Multiple communication and mobilization activities were conducted to actively involve an increasing number of employees in the reengineering process. The objective was both to inform the employees and to gain their active support. Communication and mobilization were achieved through three types of activities:

• Direct involvement (interviews, brown papers, focus groups)
• Communication progress updates (e-mail notes)
• Leadership engagement (Compliance Reengineering Steering Board meetings, workshops, and decision making meetings).

The purpose of the change readiness assessment was to identify characteristic behaviors at the INEEL in order for the project team to identify gaps in the capability to change and determine the actions required to address the gaps. To evaluate change readiness, the team conducted eight focus group sessions of 1-2 hours each. The sessions were led by an experienced facilitator and included 111 people representative of different levels, jobs, and organizations

The purpose of the initiatives assessment and alignment was to identify the INEEL's significant improvement initiatives and understand their impact relative to compliance reengineering. The intent was to accomplish the following results:

• Identify similar efforts and avoid duplication of work.
• Group similar efforts to achieve synergies.
• Prioritize the objectives of all change efforts so that resources are committed appropriately.

Attempting a large number of improvement initiatives reduces the likelihood of success for all of them and interferes with needed coordination, integration, and efficient use of resources. The analysis identified specific problems:

• There were more than 50 initiatives, many unbudgeted, with more initiatives to be approved.
• The INEEL did not have a systematic approach to approving and managing its initiatives.

The objective of business case development was to provide an irrefutable business case that contained both the quantitative and qualitative assessment of the value that would be generated as a result of the reengineering implementation effort. The business case approach synthesized the work done in the other reengineering diagnostics. Like the other diagnostics, it was both an analytical tool and part of the communications and mobilization strategy so critical to reengineering.

The purpose of the 2²4² matrix, a diagnostic tool developed by GDI, was to determine the organizations' opinions regarding proposed reengineering projects and to identify the projects with the highest value and chance of success. There are four dimensions of the matrix, grouped into two categories:

Behavioral elements:

• Personal willingness to support and participate in change
• Perceived potential to achieve successful implementation

Financial elements:

• Perceived costs to implement the change
• Perceived magnitude of the financial benefits.

The Compliance Reengineering Steering Board members and senior advisors were asked to rate each potential opportunity based on the descriptions and cost-benefit estimates. The LMITCO and DOE-ID voters rated the opportunities on the four elements. The responses, which were plotted on a 2x2 matrix, as indicated below, represented the level of economic and behavioral buy-in of the members. Only those with results in the upper right hand quadrant were selected.

The reengineering process redesign (Phase II) and implementation (Phase III) followed normal disciplined project management principles.

Even with the buy-in indicated, success in implementing these projects requires constant management attention and communication to all involved. The path forward includes the following critical factors:

• The necessity of measurable continuous improvement in all processes
• Value revolving around project completion, not effort
• Performance measures, rather than budgets, driving the business
• Personal accountability being clearly defined and accepted
• Each person having personal accountability for his or her own safety and the safety of others
• Clearly defining the use of the graded approach
• All activities being tied to the successful delivery of INEEL core products
• An effective process being in place for redeployment of personnel throughout the company

Lessons learned include the following:

• Low-hanging fruit has been picked off in previous efforts
• Employee participation in identifying opportunities, selecting projects, redesign of processes and implementation is absolutely essential
• Evaluating behavioral as well as economic probability for success is very important in project selection
• Alignment of all major improvement initiatives is necessary for success
• It takes a managed investment to make meaningful changes
• The critical factors to success require constant attention and promotion

Through this integrated reengineering effort, the INEEL is successfully implementing process improvements that will permit safe and compliant operations to continue during the next 5 years, even though $80 million was removed from the Environmental Management (EM) program budget. This 2-year analysis, design, and implementation project is reengineering compliance-related activities and reduce operating costs by approximately $17 million per year from Fiscal Year (FY) 1998 through 2002, while continuing to meet the INEEL's environment, safety, and health requirements and milestone commitments.

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