A2.36 Transformer Procurement Process

Transformer Procurement Process Tutorial

Tom BreckenridgeWG A2‐36

Why Procurement?

Scope : Design, construction, manufacture and operation for all kinds of power transformers, including industrial , DC converters and phase‐shift transformers and for all types of reactors and transformer components (bushing, tap‐changer…)

Today, the two Strategic Directions for A2 future activities are :• Services to Customers ( Reliability, Life management,Economics, Tutorials, ...)• Technology Issues (Safety, New technologies and Newconcepts, Electrical environment, Pre‐standardisation work, ...)

Transformer Procurement Process Tutorial Session 11th September 2013 Zurich

Why Procurement?

Scope • Design, construction, manufacture – these are key parts of

the procurement process• Good decisions made here impact on future life

experiences• Bad decisions made here lead to service problems or early

failure

Services to Customers• Life Management begins at conception through design and

manufacturer – it doesn’t start when the transformer is commissioned

• Future reliability is determined at the purchase stage• Economics of transformer operation is heavily influenced

by purchase cost and the underlying design


Transformer Procurement

• Not simply the act of purchasing a transformer• Decisions made in the procurement process affect

– The future operating costs of the transformer– The future reliability of the transformer– The life expectancy of the transformer– Can influence overall system performance

• How can procurement be organised to maximise the asset value at minimal costs?

• How can the purchaser ensure a fit for use product is the end result?


The Perceived Problem

• Loss of experience in purchasers could lead to inferior products being sourced through ignorance

• Pressure on asset costs from purchasing managers• Pressure on asset performance from operations managers

• Balance of increasing costs with desire to reduce purchase price

• Purchasers need to rely more heavily on external agencies


Procurement Process


Transformer Procurement

• Three new Cigré Technical Brochures provide support and guidance in this critical area.– TB 528 – Guide for the Preparation of Specifications for Power Transformers

– TB 529 – Guidelines for Conducting Design Reviews for Power Transformers

– TB 530 – Guide for Conducting Factory Capability Assessment for Power Transformer

• Warning! ‐ These guides do not cover all aspects of transformer procurement


Transformer Specifications


TB 528


• What has been prepared?• A revised version of the previous specification guide TB 156

• The new guide builds on the previous guide and enhances it in many areas where experience shows additional information is necessary

• The previous guide was considered to be still a valid and good document prior to the update

• The new guide removes the voltage and rated power limits as it is applicable on a more widespread basis

Transformer Specification

• What is the main purpose of a specification?• Should be used to provide information to Tendererson;– What is required in terms of the key parameters of the transformer, e.g. Rated voltage, current and power; impedance, tapping range, losses, noise etc.

– How the purchaser would like this to look in terms of construction style, general arrangement

– Any limitations in the design and manufacturing approach which the purchaser thinks is necessary

– Any other aspects of the manufacture, delivery and installation that may need to be advised



• What is the main purpose of a specification?• Should also be used to obtain information on;

– The technical parameters of the transformer being offered by the supplier

– The type of ancillary equipment to be fitted by the supplier, e.g. Tap changer, bushings, oil, coolers etc.

– Any areas where the supplier cannot meet the specified requirements, i.e. where the supplier deems his offer to be non‐compliant for any reason



• But there are often issues of misunderstanding or even major errors in many specifications

• Why is this?


Specifications – The Customers Perspective



• What is a specification?– A Specification details what is to be done and how.– It specifies applicable standards.

Transformer Procurement Process

• Or is it:“An accumulation of bad experience derived from manufacture and service performance”.........

Tutorial Session 11th September 2013 Zurich

UK – BEBS‐T2 (1966)

• Too Prescriptive• Constraints on Innovation

• Constraints on Manufacturing

• Less Competitive


The Solution?

• Functional Specifications– Keep it simple– Minimises input at specification time– Shifts risk to the supplier– Puts the Customer in the driving seat

• Or does it?


Issues with Functional specifications (1)

• High degree of technical expertise required– Specifications require frequent revision– Initial comprehensive tender evaluation– Detailed design review– Manufacturing inspections– Witnessing of Type and Routine tests– Robust Quality Audits

• Is the experience available?


Issues with Functional specifications (2)

• Cultural & Language issues– Lost in Translation– Face to face meetings– Leave nothing to chance

• Procurement & Purchasing Challenges– Global Market Place– Lowest Cost ‐> Best value for money?– What is the lowest cost? ‐> Lowest capital cost or lowest lifetime cost


Functional Specifications


• How does the experience of using functional specifications over time change the purchasers view of this method of specification?– Need to be more prescriptive to remove issues that have arisen

– Need to be more descriptive about what is and what is not acceptable

– But this is seen by procurement people as anti‐competitive and leading to higher tender prices

– In trying to remove uncertainty, even more uncertainty is added!

Functional specificationsThe Evolution

• Move back to a more detailed specification• Cultural & Language issues

– Ensure that requirements specified are clear and unambiguous

– Leave nothing to chance

• Procurement & Purchasing– Reduces the Field– Reduces the infiltration of “non compliance”– Potentially increases the quality of the product



• Where does the Evolution take us?


Forward?



• Where does the Evolution take us?


Or back to the future?


Specifications – The Manufacturers Perspective


Purpose of the Specification

• What is the purpose of the specification? Is it:– To prescribe to the manufacturer exactly what to make & how to set about making it?

– To confuse the transformer supplier such that they have to take a best guess on what is required?

– To trick the transformer supplier into missing something that the client can then claim they should have been aware of because it was in the specification?

– To provide a functional framework to enable potential suppliers to bid for a transformer which fulfils the system requirements and interface requirements?


Types of Specification

• Some specifications recently received:– The one liner– The multi‐document refer to this, refer to that, refer to the other

– The “never miss a single national or international standard and /or specification” that way you’ll never have overlooked anything!

– The dusted down blast from the past

– The perfect specification?


Respect the Specification

• The specification is the key stone in the technical understanding of any potential contract, therefore it should:– Be clear and unambiguous– Use simple language which is difficult to misinterpret– Define limitations in terms of the design criteria– Identify interface points and requirements

– Recognise site specific requirements when possible


Understand your Specification

• The specification is the purchasers opportunity to get the right equipment with the minimum of problems:– Enlist support

• Technical experts• Manufacturers

– Be prepared to tear up existing specifications– Avoid multitudes of pre‐tender questions by arriving at a clear specification

– Check Tenderers understanding and offers with post tender meetings – don’t assume

– Be prepared to robustly defend a specification


How to use TB 528

• The guide is structured in a manner that could be used as the format for a purchase specification

• The guide provides lists of items that need to be considered in each section and discusses key points

• The guide includes a suggested/ recommended set of schedules for inclusion in a specification for the Tenderer to complete

• The complexity of the specification needs to take into account the criticality of the application and any unusual aspects

• There is a need for a degree of expert input to any specification produced by the guide in order to fully ensure the unit procured is suitable for the intended purpose.


How to use TB 528 (2)

• Follow the guide and you will end up with a good specification, but –– Need to ensure that the level of detail included in your specification is consistent with your requirements

– Need to understand the technical issues in some areas to be able to correctly specify for it – what the guide does is draws attention to the area

– The guide cannot cover every eventuality and if there is any uncertainty about any aspect then seek additional assistance


Design Review


TB 529

• What has been prepared?• A much more detailed design review guide based on the work done in producing TB 407 ‐ HVDC converter transformers ‐ guidelines for design review

• The new guide will help improve the quality of design reviews carried out in the future

• This in turn should mean better more reliable transformers are commissioned


What is a Design Review?


• Design Review– The key step in the procurement process ensuring you get what you want and need!

– The last chance to change the design at minimum cost– Any other modifications after manufacture will be more expensive, if not impossible

– Ensure the supplier has correctly interpreted the specification in all aspects

– TB 529 provides all the necessary guidance

What is a Design Review?

• A joint review of the proposed design of transformer between the manufacturer and the purchaser to:– Assess compliance with specifications and standards– Understand quality issues– Ensure both sides agree on what is being supplied– Guide suggests that it should be convened and chaired by the Purchaser, but there may be times when this may need to be manufacturer led

– Should be held at the manufacturers factory


Is a Design Review needed?

• Seen by some utility managers as a waste of time• Comments arise such as:

– Do you really need to do this?– Can’t they come to our office?– You don’t have the time to do this, I need xxx done instead

• Some suppliers try to request design reviews but never manage to succeed.– Manufacturer sometimes has to guess what the customer really means in the specification

• Design review helps both manufacturer and purchaser


Objectives of a Design Review

1. To ensure that there is a clear and mutual understanding of the technical requirements

2. To verify the system and project requirements as per specification and to indicate areas where special attention may be required

3. To verify that the design complies with technical requirements4. To identify any prototype features and evaluate their reliability and

risks5. To identify relevant design margins vs the test requirements and

the design margins possible significance for the lifetime performance of the transformer. To identify possible betterments.


Why do a Design Review?

• To verify that the design complies with the technical requirements

• To identify any prototype features and evaluate their reliability and risks

• To interchange experiences that can be used to identify eventual betterments in the design and, or improvements and changes in the specification

• For purchaser to better understand the technical capabilities of the manufacturer


Why do a Design Review?

• To ensure supplier has fully and correctly understood the customer requirements

• To ensure the customer fully understands what the manufacturer intends to do before manufacturing commences

• To develop understanding and enhance the customer/ supplier relationship

• To agree how the final acceptance tests will be carried out

• The design review is the most important step in ensuring the final transformer meets the originally defined requirements.


When to do a Design Review

• Various “reviews” can take place during the contractual discussion period, both before or after contract award

• A full design review is best left until:– The manufacturer has completed the full design, including electrical,

thermal and mechanical designs

– The manufacturer has completed the dimensional drawings and the rating plate diagram

– But it should be done before any key material and components are ordered


Format of a Design Review

• It may be useful to split the review into two parts which may take place with some time between

• Electrical review – to review the basic design of the active part of the unit in terms of dielectric, thermal and mechanical design rules ‐ type of bushings, OLTC position in the windings etc. This stage will allow the purchaser to order the long lead time items before the mechanical review takes place.

• Mechanical review – to review the general arrangement of the transformer, the tank and all ancillary components such as coolers, fans, pumps, control cabinets, pipe work etc.


Concerns of a Design Review

• There are a number of issues that need to be clarified in order to facilitate a good design review– Protection of intellectual property and know how

– Information made available on a “need to know” basis

– Confidentiality agreements needed?


Topics for Design Review• Purchaser specification.• Supplier quotation.• Applicable standards.• Plans (quality, production, test, transport and site erection and commissioning).• System data.• Environmental data.• Transformer design.• Transformer ancillaries and accessories.• Manufacturing methods.• Testing.• Transportation.• Site erection and commissioning.• Risk assessments.• Methods statements (how you do it and why).• Health and safety requirements.• Operations and maintenance (O&M) manuals.• Contract documents (drawing, photographs etc.).


How to use TB 529

• The guide lists the basic issues for all aspects of the design that need to be considered in a review

• Guide includes indicative schedules which should form the basis of a design review

• Each purchaser should develop his own design review schedules based on the example given

• Complexity of the design review depends on the criticality and cost of the transformer being procured, and on how unusual the design is

• Guide provides lists of items that should be considered in an in depth design review


The assessment of manufacturers capability

Manufacturing plant assessments


TB 530

• What has been prepared?• A comprehensive document to guide inexperienced engineers through the complex process of assessing the capability of a specific factory– To help focus the engineer on the key issues depending on his specific needs and the factory methods adopted

– To assist manufacturers understand the assessment which customers may be undertaking of their factory


TB 530

• What has not been produced?– A methodology of assessing and ranking factories for publication to support/ enhance existing ISO accreditation

– The guide could be used as the basis for some form of independent third party assessment system, but this will require a lot more work – who should do this?

– It is also much more controversial!– It is considered that this is something that Cigré will not want to undertake as it is outside scope of Cigré


Capability Assessment Introduction

• The Key Question is:• From whom should I purchase one of these?


Capability Assessment

• Agenda of Capability Section• Introduction – why is it so difficult to find a supplier?• When to Inspect?• How to Inspect?• What to look for? – outline of Cigré TB 530• Conclusions


Why is it so difficult to find a supplier?


Nothing new about transformers – have beenmanufactured since the 1880’s




• Nothing new about large transformers – have been manufactured since the 1920’s

• Development of transmission networks in industrialised countries was most intensive in 1945‐70




Age profile of UK transmission transformer population




• Many manufacturers were established to meet high demand during this period.

• Reduced demand in the period which followed resulted in large scale consolidation.

• Increased international competition for manufacturers in industrialised countries followed the collapse of Communist governments in Central and Eastern Europe in 1989.

• The creation of the single European Market in 1992. • The founding of the World Trade Organisation in 1994. • All of this created pressure for further large scale

consolidation.




HSPT works at Walthamstow closes in 2003, after building transformers since 1919. Owners (FKI) withdraw from large transformer manufacturing.

Three out of four large transformer factories in UK close 2002‐03.


When to Inspect?


• Open Tenders– Best time for inspection is probably following tender evaluation.– May waive inspection for established suppliers.

• Invited Tenders/ Frame‐Work Agreements– Best time for inspection is probably as part of the pre‐qualification

process, before the invitation tender/final negotiations concerning the frame‐work agreement.


When to Inspect?


• Managing New Suppliers– Some users place trial orders with new suppliers to evaluate their

performance more thoroughly than is possible with an inspection.– Trial order may be subject to enhanced scrutiny during manufacture

and test.

• Re‐Qualification– The situation will change in time and the user may need to re‐

evaluate manufacturers to see that they are still able to meet their needs.


How to Inspect?


• Realism ‐ Part 1• Aim of pre‐qualification is to see whether a particular

supplier is a suitable partner. – No supplier is perfect; all have weaknesses. – Different suppliers have different weaknesses.

• Certain weaknesses can be overcome, e.g. by enhanced design review or manufacturing inspections.

• Certain weaknesses may be acceptable for certain transformers, but not for others.


How to Inspect?


• Realism ‐ Part 2• No pre‐qualification process, no matter how thorough, will

find all of the weaknesses of a particular supplier. • If a user wishes to go ahead and use a particular supplier

about whom they have doubts, a trial order might be a good solution.


What to look for?


The main areas to consider, include:• ISO certification; Quality management• Basic technology, design• Purchasing• Manufacturing• Test• Environmental protection• Human resource management; Health, safety and working

environment• Transport, storage, installation and commissioning;

Warranty


What to look for? ‐ Quality


• Almost every transformer factory in the World has an ISO 9001 certificate

• Check issuing authority, date and scope

• Many manufacturers are also certified to ISO 14 000 (environment) and OHSAS 18 000 (health and safety)


How to inspect ‐ quality


Special emphasis is placed on the role of the manufacturers’ Quality Manager in protecting the customers’ interests.

It is important that this Manager is:• Suitably qualified and experienced (engineering graduate or

equivalent, registered professional engineer)• Dedicated (the role is too important to combine with that of

engineering or production manager)• Permanent (the role is too important for a six‐month

secondment)• Respected (sits on main management board)


What to look for –basic technology


• What basic technology do the manufacturing plant use? E.g. Core/shell form, disc/layer winding, etc.

• How well is it documented and understood by the engineers?


What to look for –basic technology


• To keep up with trends in the industry, all suppliers need to invest, directly or indirectly, in research and development.

• Ask them for details of recent projects and recent technical publications by their staff.

• Check these have been published in major journals or at major conferences.


What to look for – engineering


• Does the manufacturer have a proven track record with similar designs?


What to look for – design


• Design calculations are mostly made using specialised computer software, rather than with pencil‐and‐paper.

• The supplier must have adequate design software and an adequate design manual.

• Some aspects of design require detailed computer modelling, e.g. short‐circuit withstand, lightning impulse withstand.

• The manufacturing plant must have adequate capabilities.


What to look for – supply chain


• Who does what?– What is done in‐house? – What is sub‐contracted?

• How are suppliers selected? • How is their performance reviewed?

• Does the manufacturing plant enjoy harmonious, long‐term relationships with their main suppliers?

• Or do they simply procure their materials on a spot market basis?


What to look for –manufacturing


There are lots of very specific points which an experienced inspector will look for (a full list is included in TB 530).

In general, these can be grouped into three areas:

• Cleanliness• Organisation• Build Quality

Everything else follows from these three ........




Cleanliness




Lack of cleanliness




Drawing GANTT charts is easy, making the factory run according to the GANTT chart is much harder


What to look for – test


Users should check that the manufacturer is able to perform all of the routine and types tests they require. Particularly important if the purchaser intends to purchase transformers which are close to the limits of the manufacturer’s experience.

– There are two tests which determine the maximum size of transformer which can be produced:

– Temperature rise determines the maximum rating, following from the amount of reactive compensation the manufacturer can supply

– Lightning and switching impulse determine the maximum voltage




The key principle should be:

If they can’t test it, ….. they can’t manufacture it!




There are two main types of test area:• Separate test laboratory

The best solution – allows background noise and partial discharge to be excluded, so transformers can be tested without disrupting production. Also good for preventing unauthorised access.

• Test “corner” in main assembly workshopMay be acceptable for smaller transformers or for special product lines. Not ideal.




This is what we like to see ..


What to look for –health & safety


No one in their right mind wants to see this ..

If the factory does not care about its employees, does it care about the quality of your transformer?


What to look for – transport


Once the transformer has passed test, it needs to be moved from the factory to the user’s site. Need to enquire which transport methods are available and whether any particular limits on mass or dimensions apply.


What to look for – installation


Once the transformer has reached site, it needs to be installed. Need to enquire how the manufacture would do this.

If the manufacturer is unfamiliar with working in the country where the transformer is to be installed then it might be better if they used a reliable local partner for some or all of the work.


What to look for – performance


As part of their ISO 9000 compliance process, most manufacturers compile overall performance statistics.Transformer users may be particularly interested in the following:

• Test failure rate• Service failure rate (or possible rate of warranty claims)• On‐time delivery rate

Notes: Different manufacturers may not compile these statistics on the same basis. There is no clear consensus on what constitutes a failure


Capability Conclusion


The new CIGRÉ TB 530 should be a big step forward for the industry, improving the quality of manufacturers and allowing users to get best value for their money.


Transformer Procurement Process Tutorial

ANY QUESTIONS?


A2.36 Transformer Procurement Process

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