What lessons can we learn from the smart meter rollout?
In field services, we often find ourselves questioning just how scalable our supply chain really is. Demand is always subject to change and even the best forecasts have margins for error. More importantly, all of us want to be able to respond quickly to demand spikes. After-all, if you are not able to meet a rise in demand, someone else will.
This is a position many utilities companies found themselves in 2012 when the smart metering rollout was announced. The goal of the project is to offer 30 million premises in the UK the chance to switch to a smart meter by 2020. In total this accounts for around 53 million smart meters that will need to be installed.
The smart metering rollout, is an excellent case study for the strains extra volume can put on a supply chain. Through the rollout, utilities companies have been able to test just how scalable their supply chain really is and in-doing so, have encountered issues they never would have predicted in advance. So what can be learnt from their experiences to better prepare for demand spikes in the future?
What was noticeable during the initial stages of the smart meter rollout was that some previously small inefficiencies had become larger costs when volumes increased. For example stock that was being shipped from supplier to distributor was booked in through a goods in process which required that each item was manually scanned to ensure it had arrived correctly. As the smart meter rollout began to pick up pace, full pallets were regularly being delivered which sometimes had 300 or more items on them, so booking in each item became a time consuming process.
This issue could be very effectively resolved by asking suppliers to provide an Advanced Shipping Notice (ASN) these would get added to the goods in system and instead of scanning 100% of the items that arrived, goods in would scan around 5% to verify the pallet was correct. The stock could then be moved onto the next stage of the process much faster. The annual cost saving for utilities companies just by implementing this process is around £300,000.
Another process which was shown to be inefficient once volumes started to increase was how damaged meters were handled. Shipping is not always a secure process and when large volumes are involved, items can get damaged in transit. Previously, the policy for damaged meters was to ship them back to the asset owner, who would then either replace or repair it. This process worked, but was time consuming and often costly.
However, a lot of the damage that was caused in transit was cosmetic. Cracked screens, or bent screws were the most common issues. When a customer is expecting a brand new smart meter, turning up with a damaged meter isn’t acceptable, but there was nothing fundamentally wrong with the internal workings of the asset.
The solution was to have a dedicated repair facility to fix these smaller issues. When meters were damaged, an in-house repairer would assess the fault, see if it was something they could fix straight away and if so, make the repair. If not, the meter would still go back to the original manufacturer. Depending on volume this entire procedure added no more than an hour to the overall return process, but made a huge difference in the number of assets that could be instantly returned to the field. This allowed the utilities companies to take on more jobs as they weren’t stuck waiting for assets while the manufacturer assessed them.
The smart meter rollout is still very much in its infancy, however, even at this early stage there are great opportunities to make things work more efficiently. Neither of the issues discussed above were huge failings in the supply chain, but were cracks that began to appear when volumes started to rise. When preparing supply chains to be scalable we often overlook these smaller issues in favour of making sure the bigger processes are in place. But, these problems will limit your ability to take full advantage of demand spikes, so why wait to get them fixed?
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