Smart Grid Operational Services Supply Chain Fact Sheet

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Smart Grid Operational Services Supply Chain Fact Sheet

  1. 1. Energy, Utilities, and Chemicals Energy, Utilities, and Chemicals the way we do itSmart Grid Operational ServicesSupply Chain Leading Practices 2
  2. 2. Contents Supplier Relationship Management for Large Scale Deployment 1 Supply Chain Leading Practices 2 Quality Assurance, The Essential Element 11 Conclusion 123
  3. 3. Energy, Utilities, and Chemicals the way we do itSmart Grid Operational Services,Supply Chain Leading PracticesA number of North American Utilities are outline new protocols for communicationsendeavoring to undertake smart meter components, and seek to partner withprojects as a means to adjust consumer third-party providers with whom theyenergy consumption habits to match may not currently have relationships.consumption with generation. In certain Specifically, a revamped quality initiativecases, it is mandated by the regulator is required to integrate traditionalor government. metering quality validation (e.g., meter testing, certification) with additionalUtilities are increasingly aware of the capabilities, including vendor assessments,need to adopt established methodologies communication systems testing andto support such large scale deployments. certification, and manufacturing standardsWhile existing operational processes and validation. As a complicating factor, thereprocedures are adequate for sustainment, is an absence of a complete portfoliothe tidal wave of meter replacements of appropriate standards against whichover a short period of time stretches the integrated devices will be tested. Finally,internal capabilities of utilities beyond any revised or newly implementedtheir limits. quality program will also need to address quality controls uniquely required inAMI and Smart Grid initiatives currently an environment of rapid technologyunder consideration by many utilities innovation, large scale volumes, anddepend upon a complex interaction accelerated installations of the final AMI orof available and emerging automation, Smart Grid products.communications, and meteringtechnologies. However, there is growing Supplier Relationshiprealization by proponents of thistechnology that the increased needs Management for Large Scalefor quality and reliability of these Deploymentinvestments will be subject to greater Supplier Relationship Managementrisks and place new demands upon their (SRM) is a comprehensive approach tobusiness operations. managing an enterprise’s interactions with the organizations that supplyWhile other regions of the world have the goods and services it uses. As aexperience with the deployment and procurement professional that implementsoperation of advanced meters, the and optimizes SRMs, Capgemini hascombination of advanced meters and developed proven tools and processescommunications technologies, in-home to identify improvement opportunitiesdevices, and load control capabilities within relevant areas of the supply chain.(including under-glass, remote disconnect) Such methodologies and procedures canhas only been deployed on a limited be adjusted for large scale deployment inscale. In addition to the general lack of order to eliminate bottlenecks, creatingmass deployment and specialized project efficiency and increased accuracy withinoperational experience, North American the supply chain.utilities will face further challenges to bothsupply chain operations and to product Certain processes and procedures such as component specifications and sourcing,quality management, as manufacturing of cross dock set up and management, in andindividual components, as well as entire out bound hardware movement, changeassemblies, will increasingly be outsourced meter order management includingto off shore markets. provisioning, defect and non-conformance management, and responsible meterAddressing these emerging challenges disposal and recycling, have to be scaledrequires utilities to radically re-craft to support the increased volume andtraditional meter quality programs, mobility demands. 1
  4. 4. When implementing a large scale AMI or ƒƒ Technology selection and management Smart Grid program, Capgemini typically ƒƒ Vendor and order management establishes a Deployment Operations Centre (DOC). This approach creates a ƒƒ Integrated supply chain and logistics centralized team that provides end-to-end ƒƒ Hardware traceability support and coordination for AMI and Smart Grid implementation activities. The ƒƒ Bar coding for in and out bound composition of such a team is critical for hardware movement a project that has the scale and logistical ƒƒ Defect and non-conformance tracking complexity of an AMI and Smart ƒƒ Root cause analysis and corrective Grid deployment. action The DOC oversees meter and network ƒƒ Meter and meter base standards deployment processes, tools support, ƒƒ Health & Safety deployment tracking and reporting, and issue identification and resolution. As the ƒƒ Program Handbook nucleus of the whole deployment, the ƒƒ Quality Assurance and Quality Control DOC employs a paperless meter change process that provides near-real-time Technology Selection reporting on installation results. and Management Utility adoption of emergent technologies Metrics are published daily through the to realize Smart Grid and AMI DOC to provide immediate visibility to opportunities requires new paradigms actual results against targets through for successful technology management. dashboard reports. Weekly and monthly Fortunately, leading practices already exist reports are also created to provide an in other business sectors. The high tech integrated view of deployment status. The sector, for example, uses proven business reports give the team the ability to identify models for hardware development and trends and proactively triage problems venture capital to manage the supply and issues. chain risks and to manage investments in product development with growth Dashboard reports are created for a wide companies. Over the next decade, utility range of audience. From vendors to the success will be dependent on effectively president of the utility, the dashboard integrating these types of practices. provides relevant information to each reader group. The high visibility of the The lengthy timeline associated with the metrics helps spark healthy competition development and deployment of AMI amongst teams to out-perform their metering technology presents unique colleagues, spurring the group toward a challenges for utility supply chain common goal. management. Unlike “traditional” utility products, AMI and Smart Grid hardware Supply Chain has characteristics more closely resembling Leading Practices those of computers and consumer Capgemini advises companies in a cross electronics, such as: section of industries facing supply chain management challenges. Processes and ƒƒ Rapidly evolving technologies that leading practices are then developed to render previous generations suddenly obsolete meet specific deployment. The following is a list of Capgemini’s operational services ƒƒ Emerging features and functions that supply chain leading practices for AMI build upon lessons learned from and Smart Grid deployment. These similar applications methodologies have a proven track record ƒƒ The need to conform to changing of success, and are highly repeatable customer requirements and preferences and adaptable, allowing continuous related to design and usability improvement of each deployment:2
  5. 5. Energy, Utilities, and Chemicals the way we do itƒƒ Obsolescence created by a changing Process Procurement Model and designing application standard as a result of an processes required for their specific evolving utility market place strategy.ƒƒ Embedded communications Vendor and Order Management technology made obsolete by The supply of devices like meters plays a continuing advances in related, but significant role in the deployment process. external, telecommunications markets Devices are expected to be delivered atƒƒ A rapidly changing market in which the intended location, when needed, vendors are constantly emerging, without issues. Issues in the process lead evolving, and converging to timelines missed, lost productivity, additional costs, and customer serviceThe rapidly evolving nature of this problems.industry demands unique capabilitieswithin a utility’s supply chain practice that When demand exceeds supply: Becausediffer from today’s procurement norms. of the rapidly increasing rollout of AMISpecifically, a product set evolving as and Smart Grid deployments across thequickly as AMI or Smart Grid requires the globe, demand from various utilities canbuyer to consider the opportunity cost of exceed market manufacturing capacity,delayed purchasing, while balancing this which compounds the effect on the supplyagainst the value of buying early. chain. This already results in longer leadAssuming that a vendor has demonstrated times for products and vendor responses.that its technology is sound and meets Indeed, we are already finding shortages ofthe utility’s business requirements, the devices in some markets.challenge is developing an appropriate In India, for instance, the Lahore Electricdue diligence effort to assess the vendor’s Supply Company and the Ludhianaprojected delivery capabilities, often in a Punjab State Electricity Board are bothsituation where it has no track record or unable to meet its growing demand fordemonstrated capability. Therefore, this electric meters. In Australia, one of theprocess is fundamentally an assessment asset owners in Victoria has been informedof the supplier’s processes and associated by its supplier that AMI meters are subjectresults, measured against the utility’s to significant delays, causing setbacks intechnical, life expectancy, and deployment the program rollout.schedule requirements. This informationis used to establish an informed predictionof “what will be” as opposed to the moretraditional due diligence approach, whichfocuses more on “what is.” The advantageof this approach is early identification andmitigation of risks to the utility’s program.Capgemini’s Procurement Process Model isa proven method for managing all aspectsof the supplier relationship, includingtechnology vendors and their capabilities.Our clients are first advised to focus on aclear vision for their purchasing strategy.The exercise is used to determine issuessuch as which suppliers should becomepreferred business partners, and which areonly scored based on simple price and/orquantity measured. Once the strategy isformulated, Capgemini then works withthe organization, applying the Capgemini 3
  6. 6. Outsourcing delays: In the past, utilities comparing supplier performance, the have taken for granted that trusted utility is able to partner with the supplier and well established suppliers would who offers the best performance, giving provide needed equipment, materials, predictable lead times to orders and and services in a timely and high-quality delivery, and allowing the utility to fashion. Today, global suppliers are facing schedule deployment with efficient unprecedented demand not only from use of time and resources by minimizing North America, but also from Europe, idle time. China, Australia, and India. A number of manufacturers and service companies While vendor management is introduced are, or soon will be, facing capacity to provide a structured and transparent constraints due to the demand bubble. view to supplier performance, the material Given the choice between heavy capital ordering process needs to be scaled. outlays to increase capacity, several are Even though the sustainment processes are turning to outsourcing as a means to adequate and effective for day-to-day relieve the constraint. utility operations, they are not able to Start-ups may take longer: The lucrative satisfy the demands of an AMI and Smart AMI and Smart Grid market has also Grid deployment. fostered numerous start-up companies. The smart meter project materials ordering Much of these firms’ primary expertise process is an example of the supply is in either telecommunications or chain challenges that exist in a large electronics, with minimal experience scale project. The sustainment process is in metering or grid management. typically unable to support the increased Placing a large order with a start-up is volume efficiently and reliably. This results an “investment” in that company, and in longer order processing time, surplus provides a cash infusion that enables materials, and added volatility in planning. the process of scaling up design, manufacturing, quality assurance and Online ordering systems are implemented delivery systems, some of which may not for real-time material management. be fully developed at the time the order is The system provides accurate lead times placed. Most of these start-ups incorporate and visibility into order status, and outsourcing as a key component of allows project resources to make their strategy. informed decisions. The effects of the above issues create Since many sustainment users are not significant downstream impacts, resulting well versed in electronic order systems, in idle time of installers and delays in Capgemini creates and executes installations. Additionally, defective meters training programs for these user groups. require a robust return process that is easy Giving users step-by-step training on to follow so that the meters can be tracked simple procedures allows for accurate and action taken against root causes, and efficient completion of orders. corrective actions and possible Additionally, the design includes a user- lost revenue. friendly interface. Managing your supply base not only The results are visible lead times, involves managing current suppliers, improved productivity, accurate storage but also attracting new suppliers and requirements, optimal inventory levels, improving supplier performance. One and enhanced customer service. specific Capgemini processes manages multiple vendor contracts using a supplier Capgemini’s model of Supply Base scorecard. The suppliers are evaluated Management applies three focus using metrics including total defects, areas, Supplier Management, Contract defect costs, and on-time delivery. By Management and Procurement Intelligence. We have experience with a4
  7. 7. Energy, Utilities, and Chemicals the way we do itrange of different Supplier Relationship Capgemini assists utilities in selectingManagement tools available on today’s strategic deployment locations,market, solutions we have seen developing robust logistics processes,implemented at various organizations. managing vendors, setting up cross docks,Such solutions include sourcing tools, and managing installations, disposalseProcurement tools, contract management and defects.tools, spend analysis tools, etc. and areapplied according to the specific needs of Cross Dock Set-upour client. These can greatly impact the and Managementprocurement practices of organizations A smart meter installation project requiresthat must first assess and then manage the deployment of high volumes of metersboth suppliers and vendors in large scale within a short period of time, requiringdeployment projects. thousands of meter change orders per day at various work locations.Integrated Supply Chainand Logistics Local utility operation centers are designedAt the center of a successful AMI and to handle sustainment levels of changeSmart Grid deployment is an efficient meter orders. The increase in volumesupply chain. The end-to-end process is not typically supported by the localof ordering, receipt, storage, deployment, operation centers, creating two significantdisposal and returns has to be able to issues, which Capgemini addresses:withstand the tidal wave of deployments ƒƒ Physical space constraints do not allowthat comes with an AMI and for the increased volume of meters andSmart Grid initiative. resources. Capgemini has experienceThrough collaborative efforts with utilities managing temporary cross docks. Forand their vendors, training of field staff, example, using integrated logisticsand process optimization, Capgemini has providers, trailers used to delivercreated a complete and proven process for meters also serve as mobile on-sitea smart meter deployment. Our process storage for new and decommissionedaddresses the most significant hurdles meters.such as rapid changes in volume and ƒƒ Lack of connectivity does not supportresource mobility. the increased volume of work and resources. Temporary and remoteWhile all utilities have sustainment locations are not equipped withprocesses in orders and changes, these sufficient connectivity. Capgeminiprocesses are designed for the volumes manages multiple network connectivitythat come with the day to day operations. options to create the necessaryA smart meter deployment project requires solutions. For example, using areplacement of all meters over a short combination of WWAN, WLAN, andperiod of time. Enhanced processes and WPAN, a secure, reliable, portable andrigorous logistical considerations are cost effective connectivity solution iscritical to manage an aggressive scope and achieved.timeline. Capgemini is able to help the utility setSmart meter deployments are often up mobile cross docks at each location ongeographically disparate. All meters over demand. Installers now have a predictablethe service territory need to be changed, staging environment where they can goand the most logical approach is to replace through a process of meter exchange,all meters within one geographic location work order upload and download, and(using meter reading routes), and then “tailgate” briefing sessions. This helpsmove to the next location. This calls for a create a predictable work completion rate,repeatable solution that the deployment allowing the DOC to manage theteam can utilize. success of the deployment. 5
  8. 8. 6
  9. 9. Energy, Utilities, and Chemicals the way we do itHardware Traceability Defect andRegulation often requires the utility to Non-Conformance Trackinghave visibility into the location of every Defect and non-conformance tracking isdevice at any given time. While paper critical to the success of an AMI and Smartbased solutions are adequate in handling Grid project. The sustainment defectthe sustainment volumes, the deployment and non-conformance tracking system isof a multitude of devices in an AMI and sufficient for utility day to day operationsSmart Grid project requires a process that but an industrialized solution is needed tois efficient and robust. handle the increased volume of AMI and Smart Grid projects.By bar-coding devices, not only is theutility able to track devices on a unit-by- By utilizing a program-specific taggingunit basis, but it can also provide obvious and ticketing process, Capgemini is ablebenefits of inventory control, defect to develop a solution that provides atracking and responsible device disposal. standardized naming convention for defectThe typical sustainment process (which trending, creates visible inventory controlsis often paper based) is error prone due and categorizes issues that commonlyto illegible handwriting, incompleteness, appear. This results in the utility’s ability toetc. and not always timely in the updating communicate issues to the device vendorof records. A bar-coding based solution for root cause analysis, thus eliminatingintegrated into the deployment process future reoccurrences of any problems.helps to eliminate this issue. Capgemini utilizes bar-codingDevices are shipped from the vendor in methodologies for tracking purposes. Aconsecutively numbered lots. Each lot defective device would first be scannedof devices is assigned to an installer for and the data uploaded to the system. Aevery day of installation. The challenge report is generated daily for verificationhas been that individual devices are not and exception resolution. The devices arepre-assigned to installation addresses. By sorted by defect reason then scanned andallocating a lot of consecutively numbered shipped to the vendor. The devices aredevices, installers are able to complete the then repaired, shipped and placed in thepick up process more efficiently. warehouse as usable inventory.Each new device has a removable Root Cause Analysis andidentification sticker attached. During Corrective Actioneach installation, the installer removes With large numbers of devices beingthe sticker from the new device and deployed on an AMI and Smart Gridplaces it on the removed device. This project, quality of devices is important toallows the back office to match the new the on time and on budget completionand decommissioned devices to the final of the project. Not only do defectiveinstalled location. devices cause delays during installation, but the tracking of defective devicesAs a result of the accurate correlation adds unnecessary time and cost to theprocess, the replaced device can now be execution of the project. Some defects canscanned for disposal. Compared to the create health and safety issuesprevious paper based process, the new during deployment.process is more efficient and less errorprone, allowing for thousands of device In order to minimize defects from thedisposals per day and an effective asset vendors, Capgemini introduced thedepreciation recovery. 8-Disciplines approach. We use this approach to discover the root cause of issues and then work with the manufacturer to eliminate future recurrences. 7
  10. 10. The 8-Disciplines approach is widely Meter and Meter Base Standards employed in the automotive industry. It Meters and meter base standards are set is a problem management tool popularly according to industry standards. While used to respond to customer returns or the AMI project team has a high level of issues. Its effectiveness stems from the fact control over the quality of meters, the that it incorporates all of the important quality of the meter bases is typically aspects of problem management. Users beyond control of the AMI and Smart Grid will describe the problem, contain the project teams. problem, identify the root cause, formulate and verify corrective actions, correct the During large deployment, a number problem and confirm the effects, and of meter bases are often found to be prevent the problem. problematic, and could cause safety issues for installers and/or customers. Adapting the 8-Discipline approach to Additionally, since meter bases are often AMI and Smart Grid implementation considered end user property, the utility allows for an industrialized method has to determine the bearer of the for issue recognition and elimination. repair costs. It starts by creating an 8D team drawn from functions across the organization to Capgemini can assist in drafting new incorporate the 8-Disciplines approach, installation procedures and work collaborate with the manufacturer, and instructions to mitigate safety risks to identify corrective actions or process installers when broken meter bases are improvements in order to minimize defect discovered, while minimizing service recurrences. By minimizing preventable disruptions to the end users. Clear issues with devices for a large scale guidelines are also set to define the project, time and resource requirements circumstances under which the utility are decreased, allowing the utility to focus would bear the cost of repairs versus on its core objective, the rapid deployment the end user, with a robust claims of devices. management process. Each broken meter base is logged with the location, time of discovery, and reasons (often including pictures.) It has been discovered that four common reasons for broken meter bases are: ƒƒ Meters are manufactured substandard to the industry specification ƒƒ Components are manufactured below standards such that the meter would crack and warp under normal use ƒƒ Meter installations required unacceptable force to install during deployment, resulting in damage to the meter base and/or meter ƒƒ Poor construction practices during installation of the meter base combined with weather can often cause damage to the meter base (i.e. ground heave without adequate slack on underground services)8
  11. 11. Energy, Utilities, and Chemicals the way we do itCapgemini’s project teams continue to While basic training is available toencounter meter bases with damage all project staff, there are other safetyduring installations. However, safety risks considerations for specific staff in theand service disruption have been mitigated AMI and Smart Grid projects. In fact,with updated installation and work safety standards often continue to evolveprocedures, so damage under the four during the duration of most AMI andcommon categories can now be effectively Smart Grid projects. One example is themanaged and quickly resolved due to Arc Flash safety standard that has becomeleading practice experience and training. increasingly necessary during installation.Health and Safety Arc Flash is a localized and intenseHealth and safety of workers and/or concentration of light and heat energy. It iscustomers is paramount to the operations most often the result of reduced insulationof a utility. Not only is it required by and isolation distance between energizedlaw to create a reasonably safe working components. A worker can inadvertentlyenvironment for all workers, but injuries cause Arc Flash by leaving a tool behind oralso have negative impacts on the overall dropping one into a breaker, or failing tomorale of the project while creating de-energize equipment.installation delays. The flash is immediate and can causeOne of the key success factors of the severe injury. Every year, burn centersAMI project is to have zero injuries and treat more than 2,000 cases of extendedminimal property damage. The utility injuries among workers caused by Arcis already armed with a robust set of Flash, according to Institute of Electricalsafety procedures and standards and staff and Electronics Engineers (IEEE) research.has been extensively trained to manage Electric arcs can produce temperaturesdaily operations safely. Unfortunately, up to 35,000 degrees Fahrenheit.discrepancies often exist between the Milliseconds after the flash, an intensesafety standards of the utility and those of blast of superheated air can throw anits contractors. Additionally, contractors adult many feet through the air and causemay not always be equipped with the permanent and possibly fatal scaldingnecessary training and certification. of the lungs if breathed. Arc Flash can cause third degree burns and melt anyCapgemini reviews safety standards of the man made fibers to skin, includingutility and qualifies potential contractors clothing worn underneath fire-retardantto identify the most common gaps. As a gear. Protection from Arc Flash requiresresult, commonly missing qualifications clothing with a specific calorie rating.for the contractors such as standard FirstAid with CPR Level A training, electrical Due to the obvious dangers of Arcawareness training, and defensive driving Flash, safety training is created andtraining become part of the project communicated to all field staff. As a resultstandards. All contractors are required to of closely monitoring the safety needs ofpass tests and obtain certification under project staff using a rigorous work processthe utility training program to demonstrate inspection (WPI) process and identifyingcompetence in basic safety knowledge. In- and closing the safety gaps, the AMI andfield safety procedures are also monitored, Smart Grid projects can operate with zeroreported on, enforced and communicated injuries to workers and customers.to all staff. 9
  12. 12. Program Handbook Quality Assurance and A program with the scale of an AMI Quality Control and Smart Grid project, where millions A key component of a well-designed of devices need to be changed over a Quality Assurance (QA) program is relatively short period of time, requires an in depth assessment of the AMI or a high level of communication between Smart Grid vendors of choice. This is all collaborating parties of the project. a relatively new aspect to supply chain The program handbook is one of the key practices within the utility industry. The tools employed to help communicate a assessments can be performed on-site at consistent set of operating procedures the design or manufacturing operation, to field staff. in close collaboration with the vendor’s key engineering and management staff. To avoid conflicting procedures on the Assessments identify vendor capabilities project, a centralized and approved within key risk elements, as noted below, program handbook is created and and also identify areas where improvement distributed to all program staff. The is needed for the vendor to ensure that purpose of the handbook is to allow field a utility’s program requirements are met staff to have quick reference to important or exceeded. Elements of a well designed field operational procedures in remote assessment include but are not limited to: areas where connectivity is limited or ƒƒ Risk identification and mitigation non-existent. For ease of use, aside from content and information selection, ƒƒ Design process predictability ergonomic considerations are also factored ƒƒ Manufacturing process predictability greatly into the design and printing of the document. ƒƒ Supply chain predictability ƒƒ Improvement and problem mitigation By combining and verifying various documents available within the utility, ƒƒ Configuration management/traceability Capgemini helps create a highly ƒƒ Concurrent business activities impact mobile handbook that provides concise and predictability operational procedures to staff and helps minimize miscommunication, lost time ƒƒ Service and support delivery process spent seeking vital information and predictability inefficiencies in operations. Updates to ƒƒ Management process predictability the document are typically uploaded to the utility intranet so that staff can easily ƒƒ Software/firmware development, revise their handbooks. testing and integration with hardware systems. Members of the field staff have a single Within each element, key questions point of reference for clarification of should be explored that drill down the daily activities. From roles and into the specific aspects of the vendor’s responsibilities to decision trees, and from systems, processes, capabilities, and meter ordering processes to overhead management approach. The output of this clearance guidelines, staff can carry out process not only facilitates the successful their daily activities with confidence under development of the QA program, but a safe, clear working environment. also provides direct and independent validation of the capabilities espoused by the targeted vendors in the utility’s procurement evaluation.10
  13. 13. Energy, Utilities, and Chemicals the way we do itPeriodic follow up assessments are Capgemini recommends that utilitiesconducted focusing on specific issues seek to identify, assess, and mitigate theidentified in the initial reviews, and potential risks associated with candidatevalidating core and emerging priorities AMI and Smart Grid vendors and theirestablished by the utility. As a utility AMI solutions, before and during long-termor Smart Grid program evolves, portions arrangements with them as supplyof the risk elements will not require chain partners. This is not just a qualityadditional follow up. In addition, the assessment of the supplier’s capabilitiesfrequency of assessments will decrease or an audit based on establishedfrom the initial assessments, particularly quality standards (e.g., ISO 9001).as consistent results are obtained and Instead, utilities should seek a deeperthe utility gains confidence in each understanding of a supplier’s capabilitiessupplier’s capabilities and quality/risk at all stages of design, production,mitigation levels. In the end, the goal is and distribution. In particular, utilitiesnot for a utility to seek to disqualify a should validate whether the vendor’sparticular supplier from further business processes in the early and critical stages ofconsideration, but instead to focus on development andthe factors needed for success. This is ramp-up can support their technical andin the best interest of both parties for a business objectives.successful outcome and a long lastingbusiness partnership. This new focus on QA seeks to answer a number of key questions, including butQuality Assurance, the not limited to, the following:Essential Element ƒƒ What methodology and processes areGiven these new market realities for needed to identify and resolve keyAMI and Smart Grid products, the focus risks associated with each aspect of theof utility procurement efforts needs to equipment supply chain – e.g., design,adapt accordingly. AMI and Smart Grid component sourcing, manufacturing,program leadership must now turn to packaging, shipment, receipt,outlining, developing, and implementing distribution, and/or installation?an enhanced Quality Assurance (QA) ƒƒ What key process indicators (bothprogram and methodology to be applied corrective and predictive) are requiredthroughout the effort, from scoping for both internal and externalthrough deployment. Based on typical performance measurement andbusiness case expectations for long term control?life cycle reliability and low annual failurerates, there is greater significance of taking ƒƒ How do these indicators need toappropriate precautions to manage the change over the course of the program,quality issues before product is delivered once full-scale deployment is initiated?for installation. Additionally, most utilities ƒƒ How does the utility project teamshould seek to instill proper monitoring need to incorporate changes to otherand controls throughout the deployments, program processes in response towhich include meters, operational identified supplier risks and mitigatingtechnology (OT) communications devices, actions?field installation logistics, and finalprogram delivery. ƒƒ What detailed inspection, test, and certification procedures for test laboratories are needed to support supplier qualification and efficient implementation of the program? 11
  14. 14. Conclusion ƒƒ Management of conformance to Supply chain management that workmanship standards for outsourced encompasses the management of the component manufacturing relationships within the supply chain and ƒƒ Possession of valid test and the quality control of the products and measurement systems that are traceable services being delivered will continue to established standards, while these to confront companies worldwide, standards are particularly those engaged in large still emerging implementations that bring together people, processes and technology. Global With the development of a sufficient AMI and Smart Grid supply chain Quality Assurance program, supported management share these challenges, in by in-depth vendor assessments, utilities particular the following will be better positioned to address key elements: the uncertainties of emerging AMI and Smart Grid technologies. Given further ƒƒ Rising prices and uncertain quality advancements and familiarity with the controls for third party components deployment and operations of these and supplies systems, these practices should become ƒƒ Maintenance of high quality levels a standard for future utility supply to meet buyer expectations during chain practice. production ramp-up ƒƒ Increasing risk of late or unpredictable delivery processes and channels along the entire value chain12
  15. 15. Energy, Utilities, and Chemicals the way we do it 13
  16. 16. www.ca.capgemini.com/smartgrid About Capgemini and the Collaborative Business Experience® Capgemini, one of the The Group relies on its global delivery world’s foremost providers model called Rightshore, which aims ® of consulting, technology and to get the right balance of the best outsourcing services, enables its clients talent from multiple locations, working to transform and perform through as one team to create and deliver the technologies. optimum solution for clients. Present in more than 30 countries, Capgemini Capgemini provides its clients with reported 2008 global revenues of EUR insights and capabilities that boost 8.7 billion and employs over 90,000 their freedom to achieve superior people worldwide. results through a unique way of working, the Collaborative Business More information about our services, Experience.™ offices and research is available at www.ca.capgemini.com/smartgrid. EUC_SPCNPBRO_030609_052For more information on Capgemini’s Smart Grid Operational Services, contact:Gord ReynoldsPractice LeaderSmart Energy Servicesgord.reynolds@capgemini.com+1 416.732.2200Copyright © 2009 Capgemini. All rights reserved.1

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