To evaluate the adequacy and deployment of the arrangements Jacobs’s has in place to manage their supply chain when considering relevant good practice and the regulatory expectations set out in NS-TAST-GD-077 ‘Supply Chain Management Arrangements for the Procurement of Nuclear Safety Related Items or Services’ (TAG 77).
I carried out a planned vendor inspection of Jacobs to determine the adequacy of their supply chain management arrangements, their deployment and alignment with relevant good practice and the expectations set out in TAG77. The scope of the inspection covered Jacobs’s Corporate Centre Supply Chain (SC) Processes and a sample of how these were implemented on a specific project. The Jacobs’s sites visited were Pillar House Westlakes Cumbria and the Tails Management Facility Project at Capenhurst Cheshire. I was satisfied that the principal objectives set for this inspection have been achieved.
The intervention was performed in line with ONR’s guidance requirements (as described in our technical inspection guides) in the areas inspected.
I found Jacobs’s supply chain management (SCM) arrangements to have positive attributes and that there are a number of on-going improvement initiatives including better consolidation of the arrangements and an intelligence driven review of customer requirements capture. I did however identify a number of areas of potentially increased risk in the arrangements requiring improvement action which when addressed should contribute to reducing the risk of not satisfying licensee requirements. The duty holder acknowledged these areas of potentially increased risk and agreed to provide an improvement action plan to be submitted by the end of November 2017.
Jacobs have management system arrangements both within the corporate organisation and for specific projects that identify the controls for supply chain management; however the arrangements have become fragmented and applied disparately across the projects. Jacobs confirmed that they are at the beginning of an improvement programme to consolidate these arrangements into the ‘One Jacobs Way’. I considered the approach to be appropriate and should enhance consistency of delivery of licensee’s requirements; however I noted that the implementation is still at an early stage of development.
Jacobs confirmed that they develop project specific supply chain strategies but do not have an overarching corporate commercial/supply chain strategy that defines Jacobs’s supply chain management objectives for the provision of nuclear safety related items or services. I am of the view that an overarching strategy would help to deliver consistency and provide a reference document when developing the individual project strategies. This is recognised by the company and a company strategy is under development.
Jacobs’s Intelligent Customer (IC) capability is provided through a multi discipline approach which includes their engineering team who are their technical authority. There are processes for assessing that people are Suitably Qualified and Experienced Persons (SQEP) which are applied both internally and in the supply chain. I was satisfied that the IC role was being adequately addressed.
I found Jacobs’s arrangements for managing specifications to be adequate with specification requirements covering technical and assurance cascading down the supply chain from the licensee through Jacobs to their suppliers. There is a current initiative to improve the specification requirements capture by the technical group and a number of training aids and guides have been developed. These demonstrate clear and logical thinking with a structured approach to take initial requirements through to final delivery. I consider the arrangements for supplier selection and flow down of the client requirements through to Jacobs’s subcontractors via procurement specifications to be adequate.
I found the Quality, Technical Capability and commercial assessments supporting this process to be adequate.
I considered the company’s arrangements for supply chain oversight and their deployment to be adequate.
I found that Jacobs approach to planning for quality assurance and control was satisfactorily described in the relevant project adaptive quality plan (PAQP). The PAQP details the arrangements for the control and monitoring of compliance with their integrated management system and customer requirements during the project lifecycle. Review, approval and subsequent implementation of work face Inspection and Test Plans (I&TP) and resulting lifetime records were found to be in good order.
The discussions on Counterfeit Fraudulent and Suspect Items (CFSI) both corporately and at site revealed that although Jacobs were aware of the potential risk from (CFSI) entering the supply chain they have not systematically implemented mitigation measures to counter this threat. I am of the view that this is a potential risk to delivery of licensee requirements. Jacobs accepted that they could do more to improve their management arrangements for countering this threat.
Jacobs collect data of the “as found conditions” in many processes and perform end of contract reviews. However there is no consolidated structured process for identifying and analysing relevant Operational Experience (OPEX) across the company and for identifying the lessons to be learned and their promulgation. This could be useful in improving the management of future projects and the associated activities. The TMF Project would be a good candidate to subject to such a process.
I have concluded that although Jacobs’s management arrangements have positive attributes they have become fragmented and applied disparately across the projects. I have noted that there is a consolidation exercise to improve the cohesion of the arrangements however this is still in the early stages of development. A number of other areas of potentially increased risk in the arrangements have been identified including arrangements to militate the risks from CFSI, a lack of a company strategy for Nuclear Supply Chain Management and lack of a company process for managing OPEX from projects. The company has provisionally agreed to address these areas of potentially increased risk in the arrangements.
It is my judgement that these areas of potentially increased risk in the arrangements that have been identified potentially increase the risk of not satisfying licensee requirements and that Jacob’s arrangements for supply chain management are not adequately aligned to the regulatory expectations set out in TAG 77. I have therefore assigned an IIS rating of AMBER.
The following recommendations are made:
Consider the benefits of an overall supply chain strategy document describing the company’s approach for ensuring effective supply chain arrangements for the provision of nuclear safety related items or services
Jacobs to submit their Improvement Action Plan for ONR consideration by the end of November 2017, to cover the areas of potentially increased risk identified from this inspection including the following topics:
Consider sharing the learning from this inspection with the Safety Directors Forum (SDF) Supply Chain & Quality sub-group.
Consider an appropriate timeframe for ONR to sample evidence of improvement plan closure.