Contractor Work Management in Asset Maintenance for Transmission & Distribution Business
Transmission & Distribution business has typical and specific business processes among the utilities industry. T & D is an asset oriented business model with millions of low value assets in operation. Maintaining and managing these less value assets(in millions) is a key area to meet the growing challenges in reducing cost, new customer demands and staying competitive in the market with good profit margins. Any T&D business makes money by reducing operation & maintenance costs of assets and this constitutes majority portion of their profits.
For cost effective and efficient asset maintenance, T&D business includes contractors in addition to their skilled internal crew. Managing contractor and the works performed by them plays a major role in the asset maintenance. This article will talk about our learning from an implementation of integrated SAP technology solution for a T&D client, its business process in contractor work management and high level process flow of our solution.
Business Process & Requirements:
Our client is into Power transmission and distribution business, which involves external contractors in the area of Asset Installation, Removal and Maintenance. Similar to any industry, in our client business, the work requirements for asset maintenance or installation or removal will be gathered based on the routine inspections, customer requirements and demands. All these gathered requirements will be grouped and used to prepare a work sheet for work execution. If these works are decided to execute through external contractors, then the work sheet will be shared with the contractors for scoping and finalization.
As a best practice in T&D business, our client has negotiated prices with the contractor for each service, called as Fixed Unit Prices. This will reduce the efforts on the frequent negotiations while controlling their costs in the asset management. In conjunction with the developing and finalizing fixed price services, contractors participates in the work scoping collaboration by providing field analysis called as Site Readiness. This kind of Work scoping collaboration is a typical business process for any T&D business. Work Scoping Collaboration happens by sharing the work sheet and allowing contractors to identify fixed unit services. Finally the scope of work will be agreed and purchase order (commitments) will be handed over to the contractor to perform work.
On completion of work, contractor submits the paper package involving purchase orders, work sheets and work requirements to field accountant for completion and capturing asset service information (for ex. Asset in Service Date). The delay (normally one or two weeks) in capturing asset service information will lead to delay in capturing the asset data (for Ex. Start Depreciation) in finance books. If at least hundreds of assets are maintained per day then any one can easily calculate the delay in start of depreciation for assets in a week or month. This is a bigger issue in any T&D business involving Contractor for asset maintenance.
Our client has lot of challenges in the below functions in terms of manual labor requirement, visibility, tracking and efficiency.
1. Work Sheet preparation
2. Work Scoping Collaboration
3. Work completion and performance tracking
Client expects a technology solution in this business process which will give them
1. Better and simplest process to create work sheets and purchase order commitments with minimal user intervention
2. Better tracking of contractor work scoping and performance
3. Visibility in the work scoping and execution.
4. Effectively capturing the financials in the work execution.
The solution we provided in the area of Contractor work management is highly customized for the client’s business requirement involving integration of SAP ECC and SRM Supplier Self Service (SUS) environments. SRM SUS (Supplier Self Service), which is a web based functionality, is used to collaborate with the contractors during work scoping and sharing the purchase order commitments.
Work sheets are prepared by grouping maintenance notifications and maintenance work orders (work requirements) in SAP ECC environment created from routine inspection and customer demands. A customized solution has been provided for preparing work sheets which facilitates the client to easily pick the work requirements, assign work to contractors and share the work sheet on portal with contractors. A customized solution in SRM supplier self service allows the Contractor to access the work sheets on Portal and identify Services (fixed unit services) as a result of Site Readiness. This solution makes client to effectively collaborate with contractors and efficiently track the site readiness activities. As a result of work scope finalization, work sheets are used to trigger purchase orders in SAP ECC and share the commitments with contractors on portals.
In addition to the work scope collaboration, this solution provides visibility and tracking of actual work completion through SUS. While sharing the purchase orders with the contractors, work requirements are also transferred to the portal where contractors can provide the exact and actual completion information for each work requirements. The SRM SUS standard functionality on service confirmation is enhanced to force the contractor to complete work requirements while submitting the services delivered. This gives more reliable and actual completion information which will improve client’s efforts in capturing actual asset service and operation information.
This integrated solution provides following business benefits for the client,
1. Effective and easy work sheet preparation
2. Work scope collaboration with more visibility and control
3. Using Supplier Self Service in the solution helps the contractor to easily communicate with the client during work scoping and work completion
4. Reduces manual work in creating purchase requisition and purchase orders for contractors
5. Tracking and capturing actual data on the work completion.
Though the solution is a tailor made for our specific client business, this solution is designed to fit the best practices of Contractor Work Management in T&D business and for any other business which involves work scope collaboration with contractor in asset management.
Author: Nikhil Kashikar & Thiyagarajan Gurunathan