CASE STUDY REPORT

1. Introduction
This report is an overview of an electric distribution company in Iran and then in detail, studies one problem in the company and consequently the process of finding a solution for that particular problem. Electric energy from generation to consumption has to pass through three processes; generation in power plants, transmission (step-up voltage to reduce energy loss) and lastly, the distribution of electric energy (step down voltage for low voltage devices in residential and industrial locations).

Fig.1 Diagram of three stages of electric energy production and delivery

WMREC (West Mazandaran Regional Electric Company) is located between the northern part of Iran and southern part of Caspian sea and has more than 7000km electric distribution line in
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different levels of voltage; 20KV as medium voltage and 400Volt as low voltage, in which about 380000 customers are connected to these networks.

Fig.2 Showing aerial view of WMRECs location

The total number of customers, total annual power consumption, total annual power energy distribution and all other data about the company are shown in the tables below.

Number of customer

Annual energy consumption (KWH)

Annual energy distribution (KWH) 1727136

Peak load (MW)

Number of Networks

Network Distance (KM)

380,000

1483994

470

408

7300

Table 1.1 showing some technical information about WMREC

Area (KM^2) 9040

Sub regional

Service domain (City) 18

Service domain (Rural) 1044

Table 1.2 showing more details about WMREC

2) The Objectives of WMREC a) To provide effective and efficient service first time and every time.
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b) WMREC is committed to the implementation and continuation of a quality system c) Obliged to develop and maintain an environment, which is conducive to quality improvement d) To be financially competitive. e) Commitment to total satisfaction of our customer needs

3) Topical Issues/ Problem Statement The Ministry of Power conducted an appraisal of all power electricity companies, so as to know how well the companies are doing, in terms of meeting its set objectives, employee satisfaction, managerial discipline, power generation and power distribution. At the end of the appraisal, WMREC scored 200 out of 1000. This made the management of WMREC to carry out a self-assessment or internal appraisal to investigate in-depth the numerous problems of the company. The result of this internal appraisal showed that the major problem WMREC had was a STRATEGIC MANAGEMENT PROBLEM.

What is Strategic Management? According to Management Decision Making PowerPoint slides, Strategic Management is an act and science of formulating, implementing and evaluating cross-functional decisions that enable an organisation to achieve its objectives. Strategic Management comprises of three (3) key areas: 2) Strategic Formulation: a) Vision and Mission b) External Opportunities and Threats c) Internal Strengths and Weaknesses d) Long-term objectives
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e) Alternative strategies f) Strategy Selection

fig.3

2) Strategy Implementation: a) Annual Objectives b) Policies c) Employee Motivation d) Resource Allocation

fig.4

3) Strategy Evaluation: a) Internal Review b) External Review c) Performance Metrics d) Corrective Actions

fig.5

Strategic management are basically the decisions, analysis and actions that an organization undertakes in order to create and sustain a competitive advantage. WMREC realised that lack of Strategic Management was the core of their problem. This affected their ability to achieve their goals and objectives, thereby not being able to distribute steady power supply adequately, effectively and efficiently. As is stated in strategy formulation, strategy selection is very important and key to achieving the company goals and objectives.

4) Decision Making Process

In order to select the best strategy to improve its overall performance, WMREC decided to implement EFQM Excellence Model.

What is EFQM Excellence Model? The EFQM Excellence Model is a non-prescriptive framework for organizational management systems, promoted by EFQM (formerly known as the European Foundation for Quality Management) and designed for helping organizations in their drive towards being more competitive. The Model is regularly reviewed and refined: the last update was published in 2010. Regardless of sector, size, structure or maturity, organizations such as WMREC, need to establish appropriate management systems in order to be successful. The EFQM Excellence Model is a practical tool to help organizations do this by measuring where they are on the path to excellence; helping them understand the gaps; and then stimulating solutions. Below is the structure of EFQM framework.

Fig.6 A pictorial diagram of EFQM Excellence Model

The model can be used in four ways, or in order words, the EQFM model can achieve several target of a certain organization. The four ways are to help determine where an organization is on their journey towards excellence, to provide a common language to enable the exchange of ideas and information, both within and outside the organization, to integrate existing & planned activities, improving organizational efficiency and effectiveness and to provide a basic structure for the organizations management system. 5) EFQM Excellence Model Criteria The EFQM Excellence Model allows people and organizations to understand the cause and effect relationships between what the organizations does and the results. The model is nonprescriptive and can be applied to any organization regardless of size, sector and maturity. To achieve sustained success, an organization needs strong leadership and clear strategic direction. They need to develop and improve their human resource capital, partnership and processes to deliver value-added products and services to their customers. The EFQM Excellence model has nine criteria and it comprises of the following: a) Leadership b) Policy and Strategy c) People d) Partnership e) Process f) People results g) Customer results h) Society results i) Key performance results The first five criteria are enablers while the remaining four criteria are results.

6) The Benefits of EFQM Excellence Model to WMREC

The EFQM Model first of all produced good and successful leaders as the Model was implemented. It also created a union of purpose throughout the organization which propelled the company into the desired objective and target. The application of the EFQM Excellence Model also brought about stable management, where any changes required can be managed and carried out successfully. The clear and structured EFQM model encouraged and motivated the stakeholders of WMREC on ways to strengthen and improve the companys day to day operations. This model also provided an upward flow of ideas which was critical in ensuring that WMREC achieved its objectives and targets. In general, the numerous benefits of EFQM to WMREC are listed below: i.
ii. iii.

Satisfied and loyal customers A common sense of purpose throughout the Organization Engaged and motivated employees and other stakeholders An upward flow of ideas Effective use of data Efficient operation Pride and desire that drives further improvement Minimal problem solving in the field Innovation became the norm Excellent results including good financial performance

iv.
v. vi. vii.

viii. ix.
x.

7) EFQM Model implementation process

WMREC decided to implement EFQM in such a unique way to reduce costs, but still achieve the benefits of the excellence model. It starts from the decision to implement EFQM and ends with participation in actual appraisal.

Decision made to use EFQM Model

Employee training

Self-appraisal

SWOT analysis

Key aspects of Organization to improve

Team working

Actual appraisal

Fig. 7 chart showing EFQM implementation process

a) Decision made to implement EFQM Model: This is basically the management decision to fully implement EFQM Excellence model. b) Employee training: After the management decided to implement EFQM Model, they then undertook extensive employee training and re-training so as to make everyone abreast about what EFQM is all about, and how to make it beneficial to themselves first and then the organization
c) Self-Appraisal: Self-assessment of all activities in the company d) SWOT analysis: Identifying the strengths, weaknesses, opportunities and threats e) Key aspects of Organisation to improve: selection of problems areas in the company which

would be targeted for improvement

f) Team working: All departments working together for full implementation of EFQM Model g) Actual Appraisal: Ministry of Power carried out the actual appraisal to check the progress

so far.

8) The Effects on Performance using EFQM in WMREC

EFQM was implemented fully and the result below shows a drastic change from 2006 to 2010. Every sector of the company improved, which in turn lead to improved and efficient steady power supply to its customers. The graph below shows how the different aspects of EFQM were improved. It shows the individual appraisal scores of each of the different aspects of EFQM before the appraisal in 2006 and after implementation of EFQM in 2010.

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Fig 8. Bar chart showing individual appraisal score of 2006 and 2010

The list below further shows in detail the improvement from 2006 to 2010 of all aspects of EFQM 1) Leadership improved from 17 in 2006 to 38 in 2010 2) Policy and strategy improved from 18 in 2006 to 45 in 2010 3) People improved from 24 in 2006 to 48 in 2010 4) Partnership improved from 22 in 2006 to 45 in 2010 5) Processes improved from 23 in 2006 to 46 in 2010 6) People results improved from 27 in 2006 to 55 in 2010 7) Customer results improved from 29 in 2006 to 61 in 2010
8) Society results improved from 17 in 2006 to 33 in 2010 11

9) Key performance results improved from 21 in 2006 to 48 in 2010

9) Total Conclusion
WMREC as an electric distribution company improved its service delivery to its customers by analysing its strategic management problem. The commitment to fully incorporate EFQM Excellence model, as we can see in the chart earlier, shows a very big improvement from 2006 to 2010. WMREC was able to compete well in the power industry and thereby improved its yearly appraisal from the Ministry of Power.

REFERENCES:
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1. Management Decision Making EMM5610 lecture slides (strategic management) 2011 by

Associate Prof Dr Noor Azman Ali (2010) 2. WMREC information. office of planning, budgeting and planning manager,2010
3. http://www.tompkinsinc.com/operations/organizational_excellence.asp 4. http://www.livinginexcellence.com/organizations_of_excellence/ 5. http://www.ehow.com/list_6829658_effects-performance-appraisal-organizational-

performance.html
6. http://sites.google.com/site/myfirststepwithefqmmodel2010/home/1-leadership

7. The Effects of Performance Appraisal on Organizational Performance | eHow.com http://www.ehow.com/list_6829658_effects-performance-appraisal-organizationalperformance.html#ixzz1FF0HZYgR

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