Supply chain: standards
The value of nuclear quality standards13 September 2011
Recent nuclear industry supply-chain failures have included cost overruns and delays on new-build power stations in Finland and France. While some major apex industries, such as pharmaceuticals and aerospace, have produced their own supply chain quality standards for suppliers, the nuclear industry has not. It is time to start. By Paul Murphy
In the 1970s and 80s, a steady flow of high-added-value orders meant UK and international nuclear industries had huge influence on the supply chain. Utility/supplier relationships lasted decades. Staff moved between suppliers and utilities, cementing an understanding that nuclear was special. Supply chains were short and sub-supplier staff knew that only the highest standards would do.
The nuclear industry not only helped to develop BS 5750 and its successors, the ISO 9000 series of standards, but required effective quality assurance arrangements on nuclear sites by law. The industry drove the adoption and deployment of quality assurance standards throughout manufacturing. It was the heyday of nuclear industry technical and quality standards for the supply chain, including ASME III, ASME N-stamp, International Atomic Energy QA Code 50-C-Q and BS 5882. So how did the industry lose this influence?
The halt of the building of new nuclear power stations in the 1980s, the oil price crash of 1985 and the Chernobyl disaster in 1986 rapidly eroded the influence the nuclear industry could exert on its supply chain. Many of the bigger nuclear suppliers went elsewhere or went bankrupt. The situation in the UK was also exacerbated by the break-up of the industry through privatisations, buyouts and mergers.
In 1989, the nuclear power stations’ exclusion from the privatisation of the UK electricity industry, due to a lack of market interest, was a clarion call to nuclear companies to regain their reputation for safe and cost-effective generation, and to become more commercial and cost-aware. In the 1990s, UK nuclear plants’ performance improved, largely due to the application of methodologies such as total quality management.
Into the supply chain of the 1990s came ‘commercial grade’ and ‘off-the-shelf’ items as nuclear companies tried to control suppliers’ over-specification and mark-up. This meant more rigorous tendering procedures, with emphasis on cost and transfer of risk to the supplier. Suppliers could now expect a more hands-off approach from their nuclear customers, with less-detailed procurement specifications. The industry would no longer maintain and set its own standards, but rely on suppliers applying commercial standards such as ISO 9001 instead.
Prior to the implementation of ISO 9001, when you wanted to buy a item you could stipulate that the manufacturer apply the requirements of BS 5750. The odds were, however, that the manufacturer would not be certified. The nuclear industry had to do its own audits and inspections in order to get some modicum of assurance. If you worked in quality in 1987, most of the time you were either auditing or being audited. Companies had audits coming out of their ears.
Then along came ISO 9000 in 1987. It didn’t take long for everyone to grasp that if they started procuring from ISO 9000-standard certified companies they could cut supply chain audits dramatically.
Along with cuts in supplier and scheme audits, companies also cut back on supplier inspections, goods inwards inspection at their own facilities, meaningful approved vendor lists, the need for costly manufacturing and test records/data books, and so on.
As a result, throughout the 1990s, staff numbers on existing UK plants fell and, while great attention was paid to safety, organisational knowledge was lost, particularly in the supplier control and procurement area. The organisations lost personal relationships and communications between buyers and suppliers; internal technical knowledge of the purchased product; internal supply chain intelligence and buyer/specification writer competence. The loss of these soft, knowledge-based issues has come back to bite us.
External changes such as the collapse of European markets for major industrial plants and the shift of manufacturing to the Far East and subsequent lengthening of supply chains with the loss of end-purchaser influence and control have all brought new supply-chain challenges. These challenges cannot be dealt with (or exploited) by merely sourcing from ISO 9000 certificated companies. They require the application of the sort of organisational intelligence and knowledge that had been lost.
While ISO 9001:2000/2008 is undoubtedly a brilliant standard, the broadening of its applicability has reduced its use in manufacturing, some people say. They hold, for instance, that the 2000/08 standards section on customer-related processes doesn’t adequately cover contract review.
But I don’t agree. The standard is not at fault. I believe that it is the loss of the wider knowledge and ability required to effectively use the standard to buy and deliver products that is more to blame. I have to acknowledge however that many find ISO 9001 too esoteric and far too general for their purposes. I now find myself on a couple of nuclear industry working groups advocating the development and deployment of industry-specific standards for the nuclear supply chain.
The nuclear industry has been quite slow off the mark in this respect. This was mostly due to the hiatus in nuclear new build during the nineties and noughties. In the meantime, many of the apex industries have updated and developed standards. Some of them—particularly standards in the aerospace, pharmaceuticals and automotive industries—are very good.
SAE AS 9100C
I am particularly impressed with the international aerospace standard, SAE AS 9100C, 2009-01, “Quality Management Systems–requirements for Aviation, Space and Defence Organisations”. The standard was prepared by the International Aerospace Quality Group with input from companies in the Americas, Asia/Pacific and Europe.
The aerospace industry is in many ways surprisingly similar to the nuclear industry. Product timescales run to decades. Many defence and commercial aircraft still flying today were conceived and designed as far back as the 1950s and 60s, just like many of our existing nuclear sites. Although the airframes may be generally the same, control and avionics systems have changed beyond the wildest imagination of the original designers and manufacturers, again just like control and instrumentation systems of existing nuclear power plants. Similarly, in both industries, the original design companies (and certainly the designers), the builders, the parts suppliers, the maintenance and servicing organisations, and so on, may have long gone. Finally, like nuclear, the mass of modifications carried out to aircraft must be configuration-managed for a generation and remain demonstrably safe (and not ‘assumed-to-be-safe’, which was the root cause of the Nimrod disaster).
The core of the aerospace standard is still ISO 9001: 2008. Additional clauses showing extra controls are highlighted in bold text. These include product and personal safety; critical items; tighter traceability; cleanliness and protection requirements; project management requirements; configuration management and requirements for the control of work transfers. The useful manufacturing term ‘special process’, which was dropped from ISO 9000: 2000, is brought back. It also introduces requirements for control of risks—something that many in the profession have asked to be included in ISO 9001 for years. The standard also defines specific industry terms that are used throughout the document, for example ‘special requirements’, ‘critical items’ and ‘key characteristics’.
Not surprisingly though, it is in Section 7.4 ‘Purchasing’, that we find most of the additional and more onerous clauses. For instance, the organisation is required:
- to maintain a register of its suppliers that includes approval status (like old lists of approved vendors)
- to periodically review supplier performance
- to define the action to be taken when dealing with suppliers that do not meet requirements
- to allow customers to approve suppliers’ special process.
There is also a requirement to determine and manage the risk when selecting and using suppliers. It is made clear that the organisation is responsible for the conformity of products purchased from suppliers. Moreover, it stipulates that although supplier quality data from objective and reliable sources can be used in evaluating a supplier (sources might be certification by government or by an accreditation body), such data is only one component of a supplier control process.
SAE AS 9100C recognises that the world changes significantly over the lifetime of the aerospace product—which ISO 9001 does not. SAE AS 9100C addresses and/or places extra emphasis on elements like configuration management, change control, risks, consideration of the impact of new technology, post-delivery support, the retention of technical details and knowledge, and the transfer of work from one organisation and culture to another. I would contend that every one of these topics is of critical significance to the safe operation of nuclear facilities over their 50-plus years of operation.
It states that “while primarily developed for the aviation, space and defence industry, the standard can also be used in other industry sectors where a quality management system with additional requirements over an ISO 9001 system is needed”. I agree; this standard could be used as it stands for any high-hazard industry, like nuclear or offshore oil and gas, where high manufacturing integrity is required. With some minor amendments, this standard could be of massive benefit to the whole nuclear industry-suppliers, contractors and site operators alike. Building on our industry-accepted ISO 9001 foundations, we could set out the aspects and arrangements of management systems that are crucial to our industry, and how these will be preserved and/or evolve into the future.
There is more to effective procurement than asking for a particular standard to be applied. Without the application of the skills of competent people, nothing can be assured.
Paul Murphy, MCQI CQP, is a member of UK’s Chartered Quality Institute (CQI); email: [email protected] He is also a member of the CQI’s Nuclear Special Interest Group, which is open to quality, safety and regulatory staff in the nuclear industry (www.neimagazine.com/cqinuclear)