Specifications and supplier development in the UK electrical transmission and distribution equipment industry

Abstract

Specifications have a large impact upon capital and operating costs because they are formulated early in the design process. Models of the specification process have been developed for the automotive industry. These models have many shortcomings and have limited application in other sectors. This paper examines the development and use of specifications relating to customised plant for the electricity supply industry. Two case studies are presented that examine the specification process at the National Grid Company (NGC) and SupplierCo, one of its strategic suppliers. Functional models are developed to explore the application and use of specifications. Previous research suggests that there is a choice between functional or technical specifications. This research found that functional specifications were used for each contract, but these were applied within a detailed framework of technical specifications. NGC has developed a supplier development programme that aims to improve the capability of its supply chains within its framework of specifications. NGC's use of specifications enables it to effectively meet the requirements of The Office of Gas and Electricity Markets (OFGEM) and its shareholders.