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HAPUA Project Group No. 3 – Service Group. SUB-GROUP NO. 3 HAPUA SPARES MANAGEMENT Proposal for Bilateral Arrangement. Team Member: Aznoran Mohd Noor Rohaizad Samudin. 26 February 2009. CONTENTS. HAPUA Generation Projects - Spare Management Sub- Working Committee
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HAPUA Project Group No. 3 – Service Group SUB-GROUP NO. 3 HAPUA SPARES MANAGEMENT Proposal for Bilateral Arrangement Team Member: Aznoran Mohd Noor Rohaizad Samudin 26 February 2009
CONTENTS • HAPUA Generation Projects - Spare Management Sub- Working Committee • Objectives of Spares Management Project • Scope of Works • Updates on HAPUA Spare Management Sub-Working Group’s activities • Decision Made During 9th. HWG1 Mtg. • Malaysia’s Proposal
NO PROJECT GROUP LEADER COUNTRY 1 Project Group 1 - Generation O&M Mr. Bambang Susianto INDONESIA 2 Project Group 2 - Plant Performance Benchmarking & Database Mr. Pithsanu Thongveerakul THAILAND 3 Project Group 3 - Service Group Mr. Ahmad Rashdi Jaafar MALAYSIA SUB-WORKING GROUPS UNDER PROJECT GROUP NO3 • Sharing of repair facilities and service provider • Power Plant Engineering and Design • Spares management 3. Spares Management THE 3 HAPUA GENERATION PROJECTS
Objectives of Spares Management Project • To reduce plant outages due to unavailability of spares by sharing • To reduce inventory level among member countries having similar plants e.g. sharing of large and expensive items such as transformers or rotors • To reduce the price of spares by having a better negotiating position with OEMs • To reduce the price of spares by having options whether to buy from OEMs or from alternative sources or to fabricate the parts through reverse engineering in recognised workshops
Scope of Works - Spares Management Sub-Working Group • To identify common strategic spares that can be shared among ASEAN Countries. • To come up with the mechanism of sharing of spares. • To set up spares pooling community and networking among members. • To share the knowledge and experience in the use of alternative parts. • To share information on the suppliers and manufacturers of alternative parts. • To share the knowledge and information in materials management initiatives.
Spares Management Sub-Working Group - 1st. Coordination Meeting • Date : 21-23 Aug 2006 • Host :EGAT, Thailand • Venue : Montien Hotel, Pattaya • Attendance: • Thailand (EGAT) – 9 persons • Vietnam (EVN) – 5 persons • Malaysia (TNB) – 3 persons • Philippines (NPC) – 2 persons
TNB’s representatives The Delegates
Activities During Coordination Meeting - Sharing of information and experience on: • Gas Turbine Technology - initially focusing on Frame 9Es and MS 701F • Model, location and year commissioned of each GT. • History of operation and conditions • Experience in the use of alternative parts and Spares pooling • Materials Management Strategies and initiatives – optimizing stock value & cost savings initiatives
Meeting Outcomes/Status • Action Plans/Resolutions: • EGAT to come up with a standard format and compile all data on GT for all GT models-DONE. • EGAT and TNB to submit the list of all gas turbine models-DONE. • To proceed with the setting up of Data Warehouse & Information Network-IN PROGRESS • The sub-working committee to identify Frame 9E strategic spares that can be shared among ASEAN Countries-DONE. • To firm up with the mechanism of sharing the spares-IN PROGRESS
The way forward • To schedule the 2nd. sub-working committee meeting. • To follow up on the action plans / resolutions from the 1st. Meeting. • To discuss and resolve issues / blockers (if any) that may hinder success.
Decision Made During 9th. Meeting of HWG1 • Date : 12th November 2008 • Venue : EGAT, Nonthaburi • Attendees : From 3 countries only i.e. • Indonesia Power (Mr. Darwis M. Daud) • EGAT (Mr. Pithsanu Thongveerakul) • TNB (Mr. Mohd Nazri Shahruddin) • Decision made : to continue with spares management / spares pooling project
Spares Management Group Mtg. No. 1 (15th June 2007 in CBPS) Resolutions To share / pool strategic spares for Model Frame 9E strategic spares between TNB & EGAT 14 units of GE Frame 9E in TNB 18 units of GE Frame 9E in EGAT To share / pool spares for Model Alstom GT 13E1strategic spares between TNB & Indonesia Power 4 Open Cycle units in CBPS, 6 Combined Cycle units in Tanjong Priok, Indonesia Possibility of trading of spares/parts between HAPUA members
Spares Management Group Mtg. No. 2 Internal meeting No. 2 on 10th July 2007 in TNB REMACO PJ Office Agenda Detail discussion on each methodology Finalizing milestone To come up with details of MOU To identify liaison person from EGAT and Indonesia Power Next course of action Meeting No. 3 – 18th Sept 2007 Agenda - discuss on Process Flow & MOU
Spares Management Group Mtg. No. 3 3rd meeting held on 18th Sept 2007 Finalized concepts on Spares Management Reviewed and verified DRAFT MOU from Legal Services Department Reviewed proposed action plan
Rationale for Bilateral Arrangements TNB and EGAT Adequate units of Frame 9Es to justify sharing and pooling Pilot project before the model is extended to other HAPUA members Very active in HAPUA spares management initiatives Opportunity to reduce stock holding cost TNB- CBPS and Tanjung Priok - Indonesia Power Users of Alstom 13E1 in South East Asia Opportunity to reduce stock holding cost Proposed Pilot project - Bilateral arrangements between two utilities are easier to manage
Proposed Mechanism Principles Based on mutual benefits / win-win strategy Specific agreement for every transaction Covers strategic spares which Not available off shelf / at site Emergency/urgent need Require long lead time to deliver High capital items Methodology Loan/purchase of existing new (unused) spares between utilities Sharing / pooling of new (unused) spares
Proposed Concept – Loan/Purchase of Spares Loan/purchase of new (unused) existing spares between utilities New (unused) spares are available at either party The loan/purchase must be based on mutual agreement without jeopardizing the operation of either utility The replacement parts must be purchased and returned within an agreed period All cost e.g. insurance, risk, logistics incurred shall be borne by the requestor
Proposed Concept –Purchase of Spares Purchase of spares Identify spares (new or refurbished) that can be sold / to be purchased Willing seller – willing buyer concept Mutually agreed Terms and conditions Price Payment terms Delivery Insurance & Logistics Warranty issue
PROCESS FLOW CHART FOR LOAN OF SPARES BETWEEN TNB & EGAT / INDONESIA POWER REQUESTOR/ BORROWER Closed 4.0 Forward official request & arrange logistic + insurance 6.0 Delivery acceptance 7.0 Purchase of replacement parts 8.0 Arrange for replacement parts delivery 1.0 Preliminary inquiry on parts availability No 3.0 Availability of parts and possibility of borrowing? LENDER Yes 5.0 Assist and arrange for parts delivery 2.0 Check / confirm availability 9.0 Delivery acceptance of replacement parts Closed
PROCESS FLOW CHART FOR PURCHASE OF SPARES BETWEEN TNB & EGAT / INDONESIA POWER BUYER Closed 4.0 Forward official request to purchase 6.0 Delivery acceptance 1.0 Preliminary inquiry on parts availability 7.0 Arrange for payment No 3.0 Availability of parts and price confirmation SELLER Yes 5.0 Aarrange for parts delivery & insurance 2.0 Check / confirm availability 8.0 Acceptance of payment Closed
Proposed Concept – Pooling of Spares Pooling / Sharing of new (unused) spares Identify and agree on expensive strategic spares that can be pooled to ensure reliability of plants Establish a shareable database Sharing / pooling issues to be detailed out Cost sharing Minimum stock level Storage location & preservation Logistics management Insurance and risk management Inventory replacement
PROCESS FLOW CHART FOR POOLING / SHARING OF SPARES BETWEEN TNB & EGAT / INDONESIA POWER BORROWER / REQUESTOR/ Closed 4.0 Forward official request & arrange logistic + insurance 6.0 Delivery acceptance 7.0 Purchase of replacement parts 8.0 Arrange for replacement parts delivery 1.0 Preliminary inquiry on parts availability No 3.0 Availability of parts and possibility of borrowing? LENDER Yes 5.0 Assist and arrange for parts delivery 2.0 Check / confirm availability 9.0 Delivery acceptance of replacement parts Closed • Assumptions: • Spares to be pooled have been purchased on cost sharing basis. • Utility which is responsible to keep the pooled spares have been identified and agreed. • Lender = utility which keeps the pooled spares, Borrower = utility which requires to use the pooled spares.
Issues In Implementation • Sharing and understanding the objectives, benefits and concern of this project by utilities in Thailand, Indonesia and Malaysia • Commitment from all parties • Legal issues • Inventory database • Further deliberation required to cover all other possible scenarios for implementation
THANK YOU • “Keeping the Lights On”