This document discusses supply chain challenges and leading practices for large-scale smart meter and AMI deployments by utilities. It outlines Capgemini's approach to establishing a Deployment Operations Center to oversee the end-to-end deployment process. Key areas that are addressed include supplier relationship management, integrated supply chain and logistics, cross-dock setup, hardware traceability, vendor management, and quality assurance practices. The document emphasizes the need for adapted processes and procedures to support the increased volume and demands of large deployment projects.

1. Energy, Utilities, and Chemicals the way we do it
2
Smart Grid Operational Services
Supply Chain Leading Practices
Energy, Utilities, and Chemicals the way we do it

2. 3
Supplier Relationship Management for Large Scale Deployment 1
Supply Chain Leading Practices 2
Quality Assurance, The Essential Element 11
Conclusion 12
Contents

3. Energy, Utilities, and Chemicals the way we do it
1
A number of North American Utilities are
endeavoring to undertake smart meter
projects as a means to adjust consumer
energy consumption habits to match
consumption with generation. In certain
cases, it is mandated by the regulator
or government.
Utilities are increasingly aware of the
need to adopt established methodologies
to support such large scale deployments.
While existing operational processes and
procedures are adequate for sustainment,
the tidal wave of meter replacements
over a short period of time stretches the
internal capabilities of utilities beyond
their limits.
AMI and Smart Grid initiatives currently
under consideration by many utilities
depend upon a complex interaction
of available and emerging automation,
communications, and metering
technologies. However, there is growing
realization by proponents of this
technology that the increased needs
for quality and reliability of these
investments will be subject to greater
risks and place new demands upon their
business operations.
While other regions of the world have
experience with the deployment and
operation of advanced meters, the
combination of advanced meters and
communications technologies, in-home
devices, and load control capabilities
(including under-glass, remote disconnect)
has only been deployed on a limited
scale. In addition to the general lack of
mass deployment and specialized project
operational experience, North American
utilities will face further challenges to both
supply chain operations and to product
quality management, as manufacturing of
individual components, as well as entire
assemblies, will increasingly be outsourced
to off shore markets.
Addressing these emerging challenges
requires utilities to radically re-craft
traditional meter quality programs,
outline new protocols for communications
components, and seek to partner with
third-party providers with whom they
may not currently have relationships.
Specifically, a revamped quality initiative
is required to integrate traditional
metering quality validation (e.g., meter
testing, certification) with additional
capabilities, including vendor assessments,
communication systems testing and
certification, and manufacturing standards
validation. As a complicating factor, there
is an absence of a complete portfolio
of appropriate standards against which
integrated devices will be tested. Finally,
any revised or newly implemented
quality program will also need to address
quality controls uniquely required in
an environment of rapid technology
innovation, large scale volumes, and
accelerated installations of the final AMI or
Smart Grid products.
Supplier Relationship
Management for Large Scale
Deployment
Supplier Relationship Management
(SRM) is a comprehensive approach to
managing an enterprise’s interactions
with the organizations that supply
the goods and services it uses. As a
procurement professional that implements
and optimizes SRMs, Capgemini has
developed proven tools and processes
to identify improvement opportunities
within relevant areas of the supply chain.
Such methodologies and procedures can
be adjusted for large scale deployment in
order to eliminate bottlenecks, creating
efficiency and increased accuracy within
the supply chain.
Certain processes and procedures such as
component specifications and sourcing,
cross dock set up and management, in and
out bound hardware movement, change
meter order management including
provisioning, defect and non-conformance
management, and responsible meter
disposal and recycling, have to be scaled
to support the increased volume and
mobility demands.
Smart Grid Operational Services,
Supply Chain Leading Practices

4. 2
When implementing a large scale AMI or
Smart Grid program, Capgemini typically
establishes a Deployment Operations
Centre (DOC). This approach creates a
centralized team that provides end-to-end
support and coordination for AMI and
Smart Grid implementation activities. The
composition of such a team is critical for
a project that has the scale and logistical
complexity of an AMI and Smart
Grid deployment.
The DOC oversees meter and network
deployment processes, tools support,
deployment tracking and reporting, and
issue identification and resolution. As the
nucleus of the whole deployment, the
DOC employs a paperless meter change
process that provides near-real-time
reporting on installation results.
Metrics are published daily through the
DOC to provide immediate visibility to
actual results against targets through
dashboard reports. Weekly and monthly
reports are also created to provide an
integrated view of deployment status. The
reports give the team the ability to identify
trends and proactively triage problems
and issues.
Dashboard reports are created for a wide
range of audience. From vendors to the
president of the utility, the dashboard
provides relevant information to each
reader group. The high visibility of the
metrics helps spark healthy competition
amongst teams to out-perform their
colleagues, spurring the group toward a
common goal.
Supply Chain
Leading Practices
Capgemini advises companies in a cross
section of industries facing supply chain
management challenges. Processes and
leading practices are then developed to
meet specific deployment. The following
is a list of Capgemini’s operational services
supply chain leading practices for AMI
and Smart Grid deployment. These
methodologies have a proven track record
of success, and are highly repeatable
and adaptable, allowing continuous
improvement of each deployment:
Technology selection and managementƒƒ
Vendor and order managementƒƒ
Integrated supply chain and logisticsƒƒ
Hardware traceabilityƒƒ
Bar coding for in and out boundƒƒ
hardware movement
Defect and non-conformance trackingƒƒ
Root cause analysis and correctiveƒƒ
action
Meter and meter base standardsƒƒ
Health Safetyƒƒ
Program Handbookƒƒ
Quality Assurance and Quality Controlƒƒ
Technology Selection
and Management
Utility adoption of emergent technologies
to realize Smart Grid and AMI
opportunities requires new paradigms
for successful technology management.
Fortunately, leading practices already exist
in other business sectors. The high tech
sector, for example, uses proven business
models for hardware development and
venture capital to manage the supply
chain risks and to manage investments
in product development with growth
companies. Over the next decade, utility
success will be dependent on effectively
integrating these types of practices.
The lengthy timeline associated with the
development and deployment of AMI
metering technology presents unique
challenges for utility supply chain
management. Unlike “traditional” utility
products, AMI and Smart Grid hardware
has characteristics more closely resembling
those of computers and consumer
electronics, such as:
Rapidly evolving technologies thatƒƒ
render previous generations suddenly
obsolete
Emerging features and functions thatƒƒ
build upon lessons learned from
similar applications
The need to conform to changingƒƒ
customer requirements and preferences
related to design and usability

5. Energy, Utilities, and Chemicals the way we do it
3
Obsolescence created by a changingƒƒ
application standard as a result of an
evolving utility market place
Embedded communicationsƒƒ
technology made obsolete by
continuing advances in related, but
external, telecommunications markets
A rapidly changing market in whichƒƒ
vendors are constantly emerging,
evolving, and converging
The rapidly evolving nature of this
industry demands unique capabilities
within a utility’s supply chain practice that
differ from today’s procurement norms.
Specifically, a product set evolving as
quickly as AMI or Smart Grid requires the
buyer to consider the opportunity cost of
delayed purchasing, while balancing this
against the value of buying early.
Assuming that a vendor has demonstrated
that its technology is sound and meets
the utility’s business requirements, the
challenge is developing an appropriate
due diligence effort to assess the vendor’s
projected delivery capabilities, often in a
situation where it has no track record or
demonstrated capability. Therefore, this
process is fundamentally an assessment
of the supplier’s processes and associated
results, measured against the utility’s
technical, life expectancy, and deployment
schedule requirements. This information
is used to establish an informed prediction
of “what will be” as opposed to the more
traditional due diligence approach, which
focuses more on “what is.” The advantage
of this approach is early identification and
mitigation of risks to the utility’s program.
Capgemini’s Procurement Process Model is
a proven method for managing all aspects
of the supplier relationship, including
technology vendors and their capabilities.
Our clients are first advised to focus on a
clear vision for their purchasing strategy.
The exercise is used to determine issues
such as which suppliers should become
preferred business partners, and which are
only scored based on simple price and/or
quantity measured. Once the strategy is
formulated, Capgemini then works with
the organization, applying the Capgemini
Process Procurement Model and designing
processes required for their specific
strategy.
Vendor and Order Management
The supply of devices like meters plays a
significant role in the deployment process.
Devices are expected to be delivered at
the intended location, when needed,
without issues. Issues in the process lead
to timelines missed, lost productivity,
additional costs, and customer service
problems.
When demand exceeds supply: Because
of the rapidly increasing rollout of AMI
and Smart Grid deployments across the
globe, demand from various utilities can
exceed market manufacturing capacity,
which compounds the effect on the supply
chain. This already results in longer lead
times for products and vendor responses.
Indeed, we are already finding shortages of
devices in some markets.
In India, for instance, the Lahore Electric
Supply Company and the Ludhiana
Punjab State Electricity Board are both
unable to meet its growing demand for
electric meters. In Australia, one of the
asset owners in Victoria has been informed
by its supplier that AMI meters are subject
to significant delays, causing setbacks in
the program rollout.

6. 4
Outsourcing delays: In the past, utilities
have taken for granted that trusted
and well established suppliers would
provide needed equipment, materials,
and services in a timely and high-quality
fashion. Today, global suppliers are facing
unprecedented demand not only from
North America, but also from Europe,
China, Australia, and India. A number
of manufacturers and service companies
are, or soon will be, facing capacity
constraints due to the demand bubble.
Given the choice between heavy capital
outlays to increase capacity, several are
turning to outsourcing as a means to
relieve the constraint.
Start-ups may take longer: The lucrative
AMI and Smart Grid market has also
fostered numerous start-up companies.
Much of these firms’ primary expertise
is in either telecommunications or
electronics, with minimal experience
in metering or grid management.
Placing a large order with a start-up is
an “investment” in that company, and
provides a cash infusion that enables
the process of scaling up design,
manufacturing, quality assurance and
delivery systems, some of which may not
be fully developed at the time the order is
placed. Most of these start-ups incorporate
outsourcing as a key component of
their strategy.
The effects of the above issues create
significant downstream impacts, resulting
in idle time of installers and delays in
installations. Additionally, defective meters
require a robust return process that is easy
to follow so that the meters can be tracked
and action taken against root causes,
corrective actions and possible
lost revenue.
Managing your supply base not only
involves managing current suppliers,
but also attracting new suppliers and
improving supplier performance. One
specific Capgemini processes manages
multiple vendor contracts using a supplier
scorecard. The suppliers are evaluated
using metrics including total defects,
defect costs, and on-time delivery. By
comparing supplier performance, the
utility is able to partner with the supplier
who offers the best performance, giving
predictable lead times to orders and
delivery, and allowing the utility to
schedule deployment with efficient
use of time and resources by minimizing
idle time.
While vendor management is introduced
to provide a structured and transparent
view to supplier performance, the material
ordering process needs to be scaled.
Even though the sustainment processes are
adequate and effective for day-to-day
utility operations, they are not able to
satisfy the demands of an AMI and Smart
Grid deployment.
The smart meter project materials ordering
process is an example of the supply
chain challenges that exist in a large
scale project. The sustainment process is
typically unable to support the increased
volume efficiently and reliably. This results
in longer order processing time, surplus
materials, and added volatility in planning.
Online ordering systems are implemented
for real-time material management.
The system provides accurate lead times
and visibility into order status, and
allows project resources to make
informed decisions.
Since many sustainment users are not
well versed in electronic order systems,
Capgemini creates and executes
training programs for these user groups.
Giving users step-by-step training on
simple procedures allows for accurate
and efficient completion of orders.
Additionally, the design includes a user-
friendly interface.
The results are visible lead times,
improved productivity, accurate storage
requirements, optimal inventory levels,
and enhanced customer service.
Capgemini’s model of Supply Base
Management applies three focus
areas, Supplier Management, Contract
Management and Procurement
Intelligence. We have experience with a

7. Energy, Utilities, and Chemicals the way we do it
5
range of different Supplier Relationship
Management tools available on today’s
market, solutions we have seen
implemented at various organizations.
Such solutions include sourcing tools,
eProcurement tools, contract management
tools, spend analysis tools, etc. and are
applied according to the specific needs of
our client. These can greatly impact the
procurement practices of organizations
that must first assess and then manage
both suppliers and vendors in large scale
deployment projects.
Integrated Supply Chain
and Logistics
At the center of a successful AMI and
Smart Grid deployment is an efficient
supply chain. The end-to-end process
of ordering, receipt, storage, deployment,
disposal and returns has to be able to
withstand the tidal wave of deployments
that comes with an AMI and
Smart Grid initiative.
Through collaborative efforts with utilities
and their vendors, training of field staff,
and process optimization, Capgemini has
created a complete and proven process for
a smart meter deployment. Our process
addresses the most significant hurdles
such as rapid changes in volume and
resource mobility.
While all utilities have sustainment
processes in orders and changes, these
processes are designed for the volumes
that come with the day to day operations.
A smart meter deployment project requires
replacement of all meters over a short
period of time. Enhanced processes and
rigorous logistical considerations are
critical to manage an aggressive scope and
timeline.
Smart meter deployments are often
geographically disparate. All meters over
the service territory need to be changed,
and the most logical approach is to replace
all meters within one geographic location
(using meter reading routes), and then
move to the next location. This calls for a
repeatable solution that the deployment
team can utilize.
Capgemini assists utilities in selecting
strategic deployment locations,
developing robust logistics processes,
managing vendors, setting up cross docks,
and managing installations, disposals
and defects.
Cross Dock Set-up
and Management
A smart meter installation project requires
the deployment of high volumes of meters
within a short period of time, requiring
thousands of meter change orders per day
at various work locations.
Local utility operation centers are designed
to handle sustainment levels of change
meter orders. The increase in volume
is not typically supported by the local
operation centers, creating two significant
issues, which Capgemini addresses:
Physical space constraints do not allowƒƒ
for the increased volume of meters and
resources. Capgemini has experience
managing temporary cross docks. For
example, using integrated logistics
providers, trailers used to deliver
meters also serve as mobile on-site
storage for new and decommissioned
meters.
Lack of connectivity does not supportƒƒ
the increased volume of work and
resources. Temporary and remote
locations are not equipped with
sufficient connectivity. Capgemini
manages multiple network connectivity
options to create the necessary
solutions. For example, using a
combination of WWAN, WLAN, and
WPAN, a secure, reliable, portable and
cost effective connectivity solution is
achieved.
Capgemini is able to help the utility set
up mobile cross docks at each location on
demand. Installers now have a predictable
staging environment where they can go
through a process of meter exchange,
work order upload and download, and
“tailgate” briefing sessions. This helps
create a predictable work completion rate,
allowing the DOC to manage the
success of the deployment.

8. 6

9. Energy, Utilities, and Chemicals the way we do it
7
Hardware Traceability
Regulation often requires the utility to
have visibility into the location of every
device at any given time. While paper
based solutions are adequate in handling
the sustainment volumes, the deployment
of a multitude of devices in an AMI and
Smart Grid project requires a process that
is efficient and robust.
By bar-coding devices, not only is the
utility able to track devices on a unit-by-
unit basis, but it can also provide obvious
benefits of inventory control, defect
tracking and responsible device disposal.
The typical sustainment process (which
is often paper based) is error prone due
to illegible handwriting, incompleteness,
etc. and not always timely in the updating
of records. A bar-coding based solution
integrated into the deployment process
helps to eliminate this issue.
Devices are shipped from the vendor in
consecutively numbered lots. Each lot
of devices is assigned to an installer for
every day of installation. The challenge
has been that individual devices are not
pre-assigned to installation addresses. By
allocating a lot of consecutively numbered
devices, installers are able to complete the
pick up process more efficiently.
Each new device has a removable
identification sticker attached. During
each installation, the installer removes
the sticker from the new device and
places it on the removed device. This
allows the back office to match the new
and decommissioned devices to the final
installed location.
As a result of the accurate correlation
process, the replaced device can now be
scanned for disposal. Compared to the
previous paper based process, the new
process is more efficient and less error
prone, allowing for thousands of device
disposals per day and an effective asset
depreciation recovery.
Defect and
Non-Conformance Tracking
Defect and non-conformance tracking is
critical to the success of an AMI and Smart
Grid project. The sustainment defect
and non-conformance tracking system is
sufficient for utility day to day operations
but an industrialized solution is needed to
handle the increased volume of AMI and
Smart Grid projects.
By utilizing a program-specific tagging
and ticketing process, Capgemini is able
to develop a solution that provides a
standardized naming convention for defect
trending, creates visible inventory controls
and categorizes issues that commonly
appear. This results in the utility’s ability to
communicate issues to the device vendor
for root cause analysis, thus eliminating
future reoccurrences of any problems.
Capgemini utilizes bar-coding
methodologies for tracking purposes. A
defective device would first be scanned
and the data uploaded to the system. A
report is generated daily for verification
and exception resolution. The devices are
sorted by defect reason then scanned and
shipped to the vendor. The devices are
then repaired, shipped and placed in the
warehouse as usable inventory.
Root Cause Analysis and
Corrective Action
With large numbers of devices being
deployed on an AMI and Smart Grid
project, quality of devices is important to
the on time and on budget completion
of the project. Not only do defective
devices cause delays during installation,
but the tracking of defective devices
adds unnecessary time and cost to the
execution of the project. Some defects can
create health and safety issues
during deployment.
In order to minimize defects from the
vendors, Capgemini introduced the
8-Disciplines approach. We use this
approach to discover the root cause
of issues and then work with the
manufacturer to eliminate
future recurrences.

10. 8
The 8-Disciplines approach is widely
employed in the automotive industry. It
is a problem management tool popularly
used to respond to customer returns or
issues. Its effectiveness stems from the fact
that it incorporates all of the important
aspects of problem management. Users
will describe the problem, contain the
problem, identify the root cause, formulate
and verify corrective actions, correct the
problem and confirm the effects, and
prevent the problem.
Adapting the 8-Discipline approach to
AMI and Smart Grid implementation
allows for an industrialized method
for issue recognition and elimination.
It starts by creating an 8D team drawn
from functions across the organization to
incorporate the 8-Disciplines approach,
collaborate with the manufacturer, and
identify corrective actions or process
improvements in order to minimize defect
recurrences. By minimizing preventable
issues with devices for a large scale
project, time and resource requirements
are decreased, allowing the utility to focus
on its core objective, the rapid deployment
of devices.
Meter and Meter Base Standards
Meters and meter base standards are set
according to industry standards. While
the AMI project team has a high level of
control over the quality of meters, the
quality of the meter bases is typically
beyond control of the AMI and Smart Grid
project teams.
During large deployment, a number
of meter bases are often found to be
problematic, and could cause safety
issues for installers and/or customers.
Additionally, since meter bases are often
considered end user property, the utility
has to determine the bearer of the
repair costs.
Capgemini can assist in drafting new
installation procedures and work
instructions to mitigate safety risks to
installers when broken meter bases are
discovered, while minimizing service
disruptions to the end users. Clear
guidelines are also set to define the
circumstances under which the utility
would bear the cost of repairs versus
the end user, with a robust claims
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:
Meters are manufactured substandardƒƒ
to the industry specification
Components are manufactured belowƒƒ
standards such that the meter would
crack and warp under normal use
Meter installations requiredƒƒ
unacceptable force to install during
deployment, resulting in damage to the
meter base and/or meter
Poor construction practices duringƒƒ
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)

11. Energy, Utilities, and Chemicals the way we do it
9
Capgemini’s project teams continue to
encounter meter bases with damage
during installations. However, safety risks
and service disruption have been mitigated
with updated installation and work
procedures, so damage under the four
common categories can now be effectively
managed and quickly resolved due to
leading practice experience and training.
Health and Safety
Health and safety of workers and/or
customers is paramount to the operations
of a utility. Not only is it required by
law to create a reasonably safe working
environment for all workers, but injuries
also have negative impacts on the overall
morale of the project while creating
installation delays.
One of the key success factors of the
AMI project is to have zero injuries and
minimal property damage. The utility
is already armed with a robust set of
safety procedures and standards and staff
has been extensively trained to manage
daily operations safely. Unfortunately,
discrepancies often exist between the
safety standards of the utility and those of
its contractors. Additionally, contractors
may not always be equipped with the
necessary training and certification.
Capgemini reviews safety standards of the
utility and qualifies potential contractors
to identify the most common gaps. As a
result, commonly missing qualifications
for the contractors such as standard First
Aid with CPR Level A training, electrical
awareness training, and defensive driving
training become part of the project
standards. All contractors are required to
pass tests and obtain certification under
the utility training program to demonstrate
competence in basic safety knowledge. In-
field safety procedures are also monitored,
reported on, enforced and communicated
to all staff.
While basic training is available to
all project staff, there are other safety
considerations for specific staff in the
AMI and Smart Grid projects. In fact,
safety standards often continue to evolve
during the duration of most AMI and
Smart Grid projects. One example is the
Arc Flash safety standard that has become
increasingly necessary during installation.
Arc Flash is a localized and intense
concentration of light and heat energy. It is
most often the result of reduced insulation
and isolation distance between energized
components. A worker can inadvertently
cause Arc Flash by leaving a tool behind or
dropping one into a breaker, or failing to
de-energize equipment.
The flash is immediate and can cause
severe injury. Every year, burn centers
treat more than 2,000 cases of extended
injuries among workers caused by Arc
Flash, according to Institute of Electrical
and Electronics Engineers (IEEE) research.
Electric arcs can produce temperatures
up to 35,000 degrees Fahrenheit.
Milliseconds after the flash, an intense
blast of superheated air can throw an
adult many feet through the air and cause
permanent and possibly fatal scalding
of the lungs if breathed. Arc Flash can
cause third degree burns and melt any
man made fibers to skin, including
clothing worn underneath fire-retardant
gear. Protection from Arc Flash requires
clothing with a specific calorie rating.
Due to the obvious dangers of Arc
Flash, safety training is created and
communicated to all field staff. As a result
of closely monitoring the safety needs of
project staff using a rigorous work process
inspection (WPI) process and identifying
and closing the safety gaps, the AMI and
Smart Grid projects can operate with zero
injuries to workers and customers.

12. 10
Program Handbook
A program with the scale of an AMI
and Smart Grid project, where millions
of devices need to be changed over a
relatively short period of time, requires
a high level of communication between
all collaborating parties of the project.
The program handbook is one of the key
tools employed to help communicate a
consistent set of operating procedures
to field staff.
To avoid conflicting procedures on the
project, a centralized and approved
program handbook is created and
distributed to all program staff. The
purpose of the handbook is to allow field
staff to have quick reference to important
field operational procedures in remote
areas where connectivity is limited or
non-existent. For ease of use, aside
from content and information selection,
ergonomic considerations are also factored
greatly into the design and printing of
the document.
By combining and verifying various
documents available within the utility,
Capgemini helps create a highly
mobile handbook that provides concise
operational procedures to staff and helps
minimize miscommunication, lost time
spent seeking vital information and
inefficiencies in operations. Updates to
the document are typically uploaded to
the utility intranet so that staff can easily
revise their handbooks.
Members of the field staff have a single
point of reference for clarification of
the daily activities. From roles and
responsibilities to decision trees, and from
meter ordering processes to overhead
clearance guidelines, staff can carry out
their daily activities with confidence under
a safe, clear working environment.
Quality Assurance and
Quality Control
A key component of a well-designed
Quality Assurance (QA) program is
an in depth assessment of the AMI or
Smart Grid vendors of choice. This is
a relatively new aspect to supply chain
practices within the utility industry. The
assessments can be performed on-site at
the design or manufacturing operation,
in close collaboration with the vendor’s
key engineering and management staff.
Assessments identify vendor capabilities
within key risk elements, as noted below,
and also identify areas where improvement
is needed for the vendor to ensure that
a utility’s program requirements are met
or exceeded. Elements of a well designed
assessment include but are not limited to:
Risk identification and mitigationƒƒ
Design process predictabilityƒƒ
Manufacturing process predictabilityƒƒ
Supply chain predictabilityƒƒ
Improvement and problem mitigationƒƒ
Configuration management/traceabilityƒƒ
Concurrent business activities impactƒƒ
and predictability
Service and support delivery processƒƒ
predictability
Management process predictabilityƒƒ
Software/firmware development,ƒƒ
testing and integration with hardware
systems.
Within each element, key questions
should be explored that drill down
into the specific aspects of the vendor’s
systems, processes, capabilities, and
management approach. The output of this
process not only facilitates the successful
development of the QA program, but
also provides direct and independent
validation of the capabilities espoused
by the targeted vendors in the utility’s
procurement evaluation.

13. Energy, Utilities, and Chemicals the way we do it
11
Periodic follow up assessments are
conducted focusing on specific issues
identified in the initial reviews, and
validating core and emerging priorities
established by the utility. As a utility AMI
or Smart Grid program evolves, portions
of the risk elements will not require
additional follow up. In addition, the
frequency of assessments will decrease
from the initial assessments, particularly
as consistent results are obtained and
the utility gains confidence in each
supplier’s capabilities and quality/risk
mitigation levels. In the end, the goal is
not for a utility to seek to disqualify a
particular supplier from further business
consideration, but instead to focus on
the factors needed for success. This is
in the best interest of both parties for a
successful outcome and a long lasting
business partnership.
Quality Assurance, the
Essential Element
Given these new market realities for
AMI and Smart Grid products, the focus
of utility procurement efforts needs to
adapt accordingly. AMI and Smart Grid
program leadership must now turn to
outlining, developing, and implementing
an enhanced Quality Assurance (QA)
program and methodology to be applied
throughout the effort, from scoping
through deployment. Based on typical
business case expectations for long term
life cycle reliability and low annual failure
rates, there is greater significance of taking
appropriate precautions to manage the
quality issues before product is delivered
for installation. Additionally, most utilities
should seek to instill proper monitoring
and controls throughout the deployments,
which include meters, operational
technology (OT) communications devices,
field installation logistics, and final
program delivery.
Capgemini recommends that utilities
seek to identify, assess, and mitigate the
potential risks associated with candidate
AMI and Smart Grid vendors and their
solutions, before and during long-term
arrangements with them as supply
chain partners. This is not just a quality
assessment of the supplier’s capabilities
or an audit based on established
quality standards (e.g., ISO 9001).
Instead, utilities should seek a deeper
understanding of a supplier’s capabilities
at all stages of design, production,
and distribution. In particular, utilities
should validate whether the vendor’s
processes in the early and critical stages of
development and
ramp-up can support their technical and
business objectives.
This new focus on QA seeks to answer a
number of key questions, including but
not limited to, the following:
What methodology and processes areƒƒ
needed to identify and resolve key
risks associated with each aspect of the
equipment supply chain – e.g., design,
component sourcing, manufacturing,
packaging, shipment, receipt,
distribution, and/or installation?
What key process indicators (bothƒƒ
corrective and predictive) are required
for both internal and external
performance measurement and
control?
How do these indicators need toƒƒ
change over the course of the program,
once full-scale deployment is initiated?
How does the utility project teamƒƒ
need to incorporate changes to other
program processes in response to
identified supplier risks and mitigating
actions?
What detailed inspection, test, andƒƒ
certification procedures for test
laboratories are needed to support
supplier qualification and efficient
implementation of the program?

14. 12
Conclusion
Supply chain management that
encompasses the management of the
relationships within the supply chain and
the quality control of the products and
services being delivered will continue
to confront companies worldwide,
particularly those engaged in large
implementations that bring together
people, processes and technology. Global
AMI and Smart Grid supply chain
management share these challenges, in
particular the following
key elements:
Rising prices and uncertain qualityƒƒ
controls for third party components
and supplies
Maintenance of high quality levelsƒƒ
to meet buyer expectations during
production ramp-up
Increasing risk of late or unpredictableƒƒ
delivery processes and channels along
the entire value chain
Management of conformance toƒƒ
workmanship standards for outsourced
component manufacturing
Possession of valid test andƒƒ
measurement systems that are traceable
to established standards, while these
standards are
still emerging
With the development of a sufficient
Quality Assurance program, supported
by in-depth vendor assessments, utilities
will be better positioned to address
the uncertainties of emerging AMI and
Smart Grid technologies. Given further
advancements and familiarity with the
deployment and operations of these
systems, these practices should become
a standard for future utility supply
chain practice.

15. Energy, Utilities, and Chemicals the way we do it
13

16. 1
Capgemini, one of the
world’s foremost providers
of consulting, technology and
outsourcing services, enables its clients
to transform and perform through
technologies.
Capgemini provides its clients with
insights and capabilities that boost
their freedom to achieve superior
results through a unique way of
working, the Collaborative Business
Experience.™
The Group relies on its global delivery
model called Rightshore,®
which aims
to get the right balance of the best
talent from multiple locations, working
as one team to create and deliver the
optimum solution for clients. Present
in more than 30 countries, Capgemini
reported 2008 global revenues of EUR
8.7 billion and employs over 90,000
people worldwide.
More information about our services,
offices and research is available at
www.ca.capgemini.com/smartgrid.
About Capgemini and the
Collaborative Business Experience
®®
For more information on Capgemini’s Smart Grid Operational Services, contact:
www.ca.capgemini.com/smartgrid
Copyright © 2009 Capgemini. All rights reserved.
EUC_SPCNPBRO_030609_052
Gord Reynolds
Practice Leader
Smart Energy Services
gord.reynolds@capgemini.com
+1 416.732.2200