Energy, Utilities, and Chemicals the way we do it

AMI Operational Services

Supply Chain Leading Practices

2
Contents

Supplier Relationship Management for Large Scale Deployment 1

Supply Chain Leading Practices 2

Quality Assurance, The Essential Element 11

Conclusion 12

3

AMI Operational Services,
Supply Chain Leading Practices
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-
Energy, Utilities, and Chemicals the way we do it
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.
1
 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
2
and adaptable, allowing continuous
improvement of each deployment:
• Technology selection and management
• Vendor and order management
• Integrated supply chain and logistics
• Hardware traceability
• Bar coding for in and out bound
hardware movement
• Defect and non-conformance tracking
• Root cause analysis and corrective action
• Meter and meter base standards
• Health & Safety
• Program Handbook
• Quality Assurance and Quality Control
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 that render
previous generations suddenly obsolete

• Emerging features and functions that
build upon lessons learned from
similar applications
• The need to conform to changing
customer requirements and preferences
related to design and usability
• Obsolescence created by a changing
application standard as a result of an
evolving utility market place
• Embedded communications technology
made obsolete by continuing
advances in related, but external,
telecommunications markets
• A rapidly changing market in which
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
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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.
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
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 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.
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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 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.
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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 allow
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 support
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.
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6

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.
Energy, Utilities, and Chemicals the way we do it
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.
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 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.
8
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 substandard to
the industry specification
• Components are manufactured below
standards such that the meter would
crack and warp under normal use
• Meter installations required unacceptable
force to install during deployment,
resulting in damage to the meter base
and/or meter
• 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)

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.
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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.
9
 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.
10
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 mitigation
• Design process predictability
• Manufacturing process predictability
• Supply chain predictability
• Improvement and problem mitigation
• Configuration management/traceability
• Concurrent business activities impact
and predictability
• Service and support delivery process
predictability
• Management process predictability
• Software/firmware development, 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.

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.
Energy, Utilities, and Chemicals the way we do it
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 are
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 (both
corrective and predictive) are required for
both internal and external performance
measurement and control?
• How do these indicators need to change
over the course of the program, once full-
scale deployment is initiated?
• How does the utility project team need
to incorporate changes to other program
processes in response to identified
supplier risks and mitigating actions?
• What detailed inspection, test, and
certification procedures for test
laboratories are needed to support
supplier qualification and efficient
implementation of the program?
11
 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 quality
controls for third party components
and supplies
• Maintenance of high quality levels
to meet buyer expectations during
production ramp-up
• Increasing risk of late or unpredictable
delivery processes and channels along
the entire value chain
12
• Management of conformance to
workmanship standards for outsourced
component manufacturing
• Possession of valid test and 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.
Energy, Utilities, and Chemicals the way we do it

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

About Capgemini and the

Collaborative Business Experience
®

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 92,000 people
worldwide.
More information about our services,
offices and research is available at
www.capgemini.com.

For more information on Capgemini’s AMI Operational Services, contact:

Gord Reynolds Natasha Brand

Senior Manager, GSA EU&C Senior Manager, CS
AMI Operational Services Leader AMI Project Management
gord.reynolds@capgemini.com natasha.brand@capgemini.com
+1-416-732-2200 +1-416-277-8903