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ACCOMPLISHING MISSION-CRITICAL SUPPLY CHAIN SOLUTIONS

Jan. 26, 2022
Utility companies should aim to leverage modern technologies to help them
identify new strategies to visualize and rise above potential supply chain
obstacles.
Didem Cataloglu
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 * 
 * 
 * 
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Nowadays, T&D utilities are operating on high alert, managing through COVID-19
pandemic waves and their impending ripple effects on the global supply chain.

Decision-makers are rescuing infrastructure components from unprecedented delays
in supply chain deliverables. They are cutting through cybersecurity
restrictions prohibiting procurement options from China and Russia. They are
also fighting global price wars caused by the ripple effects.

Pandemic disruptions have boosted supply chain management up to a
“mission-critical” function. Should any grid mission-critical components become
deteriorated or disabled, the result could yield a “mission impossible” in
averting severe grid infrastructure degradations and hazardous failures.


PREVENTING “MISSION IMPOSSIBLE” IN YOUR SUPPLY CHAIN DEMANDS

With supply chain management’s new “mission-critical” role, utility
decision-makers will need to be more proactive in foreseeing potential
shortcomings.

Utility companies are finding it increasingly difficult to purchase
infrastructure equipment at an expected pace that adequately enables them to
service customers, while complying with resiliency and regulatory standards. 
One disruption in the supply chain can create a powerful whirlwind effect that
could derail asset management strategy plans aimed at long-term infrastructure
resilience.



More than ever before, there is an urgency for utilities to assess the state of
their infrastructures for the short-, medium-, and long-term.

Decision-makers are viewing the current pandemic as a precedence for
anticipating contingencies of future supply chain uncertainties, based on
various risks.


CYBER-SECURITY RISKS & PROCUREMENT OBSTACLES

Complex or bulk T&D utility components (i.e., power transformers, substations,
and large generators) are only being offered by a few geographically dispersed
suppliers in the world. With globalized trade, Former-President Trump’s May 1
cybersecurity executive order, which protects U.S. electricity systems from
cyber-attacks and foreign influence, could put barriers on the import of some
bulk power grid components from adversary countries, notably China and Russia.
In the last 10 years, China has exported more than 200 large power transformers
to the U.S., which represents a considerable 10% of the total market share.

These factors, among others, are widely contributing to current slowdowns in the
global supply chain, and we are witnessing that is becoming more difficult and
riskier to procure the required complex and bulk T&D components. Securing the
timely availability of components demands careful planning many years in
advance. 


TIGHTER COLLABORATION WITH OEM PARTNERS TO TAKE ON UNCERTAINTIES

In response to the rapidly shifting landscape and its unprecedented supply chain
challenges, T&D utilities should deepen collaborations with current OEM partners
to pin down supply chain strategies in a more proactive and agile manner
following pandemic vulnerabilities and challenges in staffing, production
stagnations, and material shortages. 

Utilities should become faster and more accurate in re-balancing evolving
priorities, risks, costs, and levels of service. Supply chain disruptions and
uncertainties would then be curtailed and accounted for years in advance.
Innovative technology, agile enough to rapidly change gears to adapt to
spontaneous changes, is essential.

Decision-makers should gage all risks to achieve optimal investment of time,
energy, and resources. A tighter collaborative partnership can help overcome the
challenges of inaccurate prioritization of deliverables and imprecise supply
market vision.


THE FUTURE FOR UTILITIES SUPPLY CHAINS 

In conclusion, utility companies should aim to leverage modern technologies to
help them identify new strategies to visualize and rise above potential supply
chain obstacles that could delay commitments in delivering infrastructure
sustainability and customer satisfaction. 

Since certain supplies could take years to plan for, fostering a deeper
collaboration with suppliers could assist utilities in mitigating all supply
chain risks (i.e., those related to OEM suppliers, contractual issues,
geopolitical disputes, cyber-related threats, etc.).

In summary, to ensure future-proof supply chain management, utilities should:

 * Prevent “mission impossible” results in supply chain requirements by assuming
   a more proactive role in foreseeing potential shortcomings in asset
   management strategy plans for long-term infrastructure resilience and
   sustainability.
 * Develop greater visibility to the impacts of cyber-security risks &
   procurement obstacles. Since President Trump’s cybersecurity order may create
   risks for the procurement of complex and bulk T&D components from China,
   utilities must secure the availability of components several years in
   advance.
 * Build tighter collaboration with diverse OEM partners. Strategize on new
   contingency plans with sufficient lead-times. Curtail eventual supply chain
   disruptions and risks. Prioritize deliverables with a clear vision on all
   possible risks, costs, and levels of service. 

Consider Asset Investment Planning (AIP) to optimize your procurement strategy.
AIP assists decision-makers with visibility, analytics, and future-ready
strategies for supply shortage contingency planning. It allows decision-makers
to foresee and evaluate both the potential impact and outcome of all decisions
related to delays and disruptions. It mitigates risks and logistical ruptures in
the supply chain. AIP is agile in prioritizing/resetting business models and
investment strategies based on “what-if” scenario analysis, which consider all
uncertainties that could disrupt the supply chain flow on the short-, medium-,
and long-term. 



Didem Cataloglu is CEO of DIREXYON Technologies.






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