Is forecasting the solution to operations management difficulties in the South African energy sector?

Abstract

The global growing demand for increased operational availability and safety, system productivity, quality of products and customer satisfaction has all raised the importance of successful operations management. Considering this statement, power stations are still operated with limited knowledge regarding future operational performance. When power generation load output losses or hardware failures occur on a power station as a result of system constraints, employees are forced to respond in a re-active manner instead of having the benefit of pro-actively preventing operational problems from occurring. The primary objective of the study was to establish if Process Variable Forecasting (PVF) can improve Operations Management at a power station. To this end, implementation of Process Variable Forecasting took place in the form of Flowcast®, which is a practical implementation of thermo-hydraulic analysis results from the modelling of coal fired power stations in order to predict its future operational outputs. Flowcast® was developed based on the skills the researcher obtained as part of the NWU SBG MBA course, combining Financial, Operational and Strategic Management courses in order to provide industrial entities with operational performance forecasts. Exhibits are presented of practical results where process variable forecasting was used to alleviate operations management difficulties at Alpha, Kilo and Tango coal fired power stations. Examples include engineering resources applied to other operational constraints subsequent to PVF being used to identify inherent operational constraints. Along with this seasonal capital expenditure of hardware components could be diverted to cover operational costs incurred on other operating units. Maintenance crews which had to do repetitive inspections on previously constrained systems were freed up to be re-allocated to other balance of plant systems to perform preventative maintenance. The total generating output of these stations was also increased, enabling more power to be produced and increasing the revenue of the stations. Secondary objectives were also established in order to support the primary objective of the study. These objectives were shaped after prudent consideration given to literature which outlines critical influencing factors which promote efficiency and effectiveness in any operational environment. The secondary objectives included amongst others, establishing if employees perceive that PVF will positively influence their working environment and duties; if improved learning experiences and knowledge transfer can be stimulated when using PVF; and if PVF will be helpful for operational and routine maintenance planning. A total of 102 respondents from the Charlie, Mike and Tango coal fired power stations took part in an empirical study by way of answering questions via a questionnaire in order to support the primary and secondary objectives of the study. Cronbach's alpha was used in order to determine the reliability of five constructs within the questionnaire namely Working Environment, Quality of Work, Effectiveness of Work, Learning and lastly Forecasting. The Cronbach's alpha of Effectiveness of Work, Learning and Forecasting all showed acceptable reliability of the constructs. A very high percentage (46%) of respondents indicated that they feel over worked in their current working environment, while 92% agreed that PVF can have a positive change on their working environment. This is an indication that PVF can possibly reduce the overburdened sentiment which the respondents experience within their operational working environment. Execution of proper routine maintenance is one of the most important aspects within an operational environment since it provides the platform for operational reliability. More than 95% of respondents agreed that PVF will enable better routine maintenance to be done along with 92% who supported the improvement of effectiveness of operational tasks carried out by virtue of PVF. Amongst others, operations management focus on sustainably preventing defects and minimizing operational constraints as far as possible. Proper management of these constraints and defects are essential since they directly correlate with operational stability, throughput and operations cost. Respondents agreed that PVF enables better management of the effect of defects and system bottlenecks (97%) and more than 96% of respondents agreed that PVF can improve operation management difficulties.