Equipment

Obsolescence
Management
Program

Definition No. 08-04

Joseph Redmond, PE
Laurine Carret
Jean-Christophe Denis
 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

Table of Contents

Abstract ............................................................................................................................................ 2
Introduction: .................................................................................................................................... 2
Definitions: ....................................................................................................................................... 3
Description of Methodology and Process: ....................................................................................... 3
Data and Results: ............................................................................................................................. 6
Conclusions: ..................................................................................................................................... 8
References:....................................................................................................................................... 9

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

Abstract

Nuclear Power Plant (NPP) Operators are challenged with securing reliable supply channels for
safety related equipment due to equipment obsolescence. Many Original Equipment
Manufacturers (OEMs) have terminated production of spare parts and product life-cycle
support. The average component life cycles are much shorter than the NPP design life, which
means that replacement components and parts for the original NPP systems are not available
for the complete design life of the NPPs. The lack or scarcity of replacement parts adversely
affects plant reliability and ultimately the profitability of the affected NPPs. This problem is
further compounded when NPPs pursue license renewal and approval for plant-life extension.
A reliable and predictable supply of replacement components is necessary for NPPs to remain
economically competitive and meet regulatory requirements and guidelines. Electrical and I&C
components, in particular, have short product life cycles and obsolescence issues must be
managed proactively and not reactively in order to mitigate the risk to the NPP to ensure
reliable and economic NPP operation.

Understanding the risk to reliable plant operations due to the potential for a lack of available
spare parts and replacement components requires a thorough analysis of large amounts of data
from various sources of information and intelligence. The population of obsolete components
and parts installed at the NPPs must be determined to allow for early identification of
obsolescence issues, and so that a planned and controlled strategy to qualify replacement
equipment can be implemented.

Introduction:

There is a widening gap between the age of the Spanish NPP and the average product life cycle
for the safety-related I&C and Electrical equipment. Due to this increasing gap, it is clear that
equipment obsolescence is a problem for the Spanish nuclear fleet, as well as for all Generation
I and Generation II NPPs worldwide. In response to a US Nuclear Utility Obsolescence Group
(NUOG) survey, 22.2% of nuclear plants indicated having experienced lost generation due to
equipment obsolescence problems [1].

Ensuring the reliable and economic operation of the Spanish NPPs will require that equipment
obsolescence issues be managed proactively and in a collaborative approach between NPP
Operators, OEMs, and consultants who specialize in qualification and testing to deliver the
highest quality replacement components with regulatory certainty, at the lowest cost basis.

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

The challenge to solving this industry issue is to gather and manage large amounts of data from
the NPPs and the OEMs to actively monitor and anticipate critical replacement components and
spare parts to improve availability and reduce the cost for procurement, qualification and
inventory management.

A systematic method is required to ensure that a robust obsolescence management program is

implemented in Spain to mitigate the risks of obsolescence and to achieve a lower overall cost
to procure obsolete replacement components and spare parts.

A software program with computational algorithms and data from the NPPs and the OEMs is
required to analyze data efficiently and to identify trends to predict critical supply needs and
establish minimum and maximum inventory levels based on established failure rates, shelf life
expiration, and scheduled maintenance replacements.

Definitions:

Commercial Grade Dedication: When applied to nuclear power plants licensed pursuant to 10
CFR Part 50, dedication is a process undertaken to provide reasonable assurance that a
commercial grade item or service to be used as a basic component will perform its intended
safety function; and, in this respect, is deemed equivalent to an item designed and
manufactured under a 10 CFR Part 50, Appendix B, quality assurance program. This assurance
is achieved by identifying the critical characteristics of the item and verifying their acceptability
by inspections, tests, or analyses performed by the purchaser or third party dedication entity
after delivery.

Equipment Qualification (EQ): The generation and maintenance of evidence to ensure that
equipment will operate on demand to meet system performance requirements during normal
and abnormal service conditions and postulated design basis events. Note: Equipment
qualification includes environmental and seismic qualification (SQ).

Obsolete Equipment: Items in the plant that are no longer manufactured or supported by the
original manufacturer or are otherwise difficult to procure and qualify.

Description of Methodology and Process:

Methodology

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

A thorough analysis of large amounts of data from various sources of information and
intelligence is required to completely understand and quantify the risk to reliable plant
operations due to the potential for a lack of available spare parts and replacement
components. Early identification of the obsolete components and spare parts is critical so that
a planned and controlled strategy to qualify replacement equipment can be implemented.

Interpreting raw data to identify trends and predict results requires a structured and
methodical approach to deliver consistent results that can be repeated and verified. Software
algorithms and data manipulations can provide vital information and statistics required to
assess the supply of critical spares and components. The recommended methodology to
effectively manage the obsolescence risk and deliver lower overall cost is as follows:

Analyze existing inventory levels (both OEM and purchased stock in inventory);
Verify OEM support for spare parts and replacement components;
Develop algorithms to predict when the existing supply of components and spare parts
will be exhausted;
Determine the target number of spare parts to be maintained in inventory;
Place Orders from OEM or identify suitable replacement options based on:
o OEM recommended replacements,
o Alternative vendors to replace obsolete components and parts; and,
o Performing qualification and CGD for obsolete components and spare parts;
Manage inventory between participating NPPs.

Process
Software Development and Equipment Database

A software program and database is required to collect data and develop algorithms to analyze
data and predict critical supply needs. The software must be capable of generating reports to
track components and spare parts as well as to establish minimum and maximum inventory
levels based on established failure rates, shelf life expiration, scheduled maintenance
replacements, etc.

NPP equipment data from plant equipment databases will be uploaded to the software
program. The information uploaded includes the master equipment list, bills of material, and
available stock in inventory. Database fidelity and consistent use of OEM part numbers is vital
to ensure the integrity of data that is used to develop the proper links and relationships
between the NPPs unique stock numbers and the OEMs part numbers. The software will

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

include data from the OEM databases to identify discontinued equipment (obsolete),
recommended replacements and any available OEM inventory. Customer specific databases
and OEM information will be uploaded to the software with the following information (as
applicable):

Equipment Type
Manufacturer
Equipment Description
Equipment Number
Model Number
Classification
Quality Classification
Stock Codes/Number
Catalog IDs
Part number
Part type
System Name/Designation
Number of installed units in the plant
Number of units in customer stock
Number of units in OEM stock
Installation date (commissioning)
Operating data history (optional)
Shelf Life
Scheduled replacement date
Original procurement specifications

Software functionality will be dependent on inputting additional information such as:

Product Lifecycle Status (in production, discontinued, etc.)

Mean Time Between Failure (MTBF)
Operating Experience
Maintenance schedule and strategy (replace or repair with spares)
Occurrence of failures (to calculate MTBF),
Environmental conditions (humidity, temperature, radiation)

Inventory Assessment

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

Taking into consideration the information tracked in the software program and applying the
developed algorithm, the software shall be able to recommend the minimum and maximum
required stocking level. Comparing this result with the current stock of spare parts, the
software reports can identify critical needs as well as surplus equipment or equipment that is
no longer needed and can be salvaged (i.e., sold for scrap).

Resupply to Minimum Stocking Level

Viable and economic options must be evaluated to establish a reliable supply of equipment and
to procure inventory to achieve the desired minimum stocking level. For components that
cannot be procured as safety related items (OEM parts are obsolete and no suitable
replacement is identified), qualification, testing and CGD will be required to supply the critical
spares.

If an item is obsolete and reverse engineering, or qualification and CGD must be performed, the
software program can identify the NPPs that have common components. Cost reduction can be
realized by sharing the qualification and CGD costs amongst the participating NPPs for the
common components.

Inventory Management and Warehousing

The NPPs warehouse inventory represents a large capital investment and a financial burden on
the NPP owner. Inventory optimization can reduce cost by minimizing the amount of
unnecessary parts and components in storage. Outsourcing warehousing functions as well as
sharing of inventory between NPPs can also help reduce the cost of inventory management
(surveillance, inspections, stock rotation, etc.).

The software program will offer the ability to evaluate the supply chains holistically such that a
broad overview of the components installed in participating utilities can be studied. Pooled
inventory between multiple program participants has proven to be a cost reduction practice in
the US, without any increased risk to supply chain shortages. Managing pooled inventory and
performing all required surveillance and handling requirements by an outside vendor can save
costs when shared amongst multiple program participants.

Data and Results:

Research conducted in the US in 2008 concluded that approximately 19% of unique equipment
installed in the US fleet is obsolete. The actual percentage of obsolete equipment is actually
higher, since 21% of the equipment has unrecognizable Equipment Identification Numbers and

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

a large percentage of equipment has indeterminate obsolescence status. Unrecognizable

equipment IDs represent a significant percentage of the equipment analyzed. The quality,
fidelity and ability to search and access equipment data is critical to obtain a clearer picture of
the obsolescence severity. Figure 1 below provides the pie-chart results of the 2008 EPRI
report [2].

Unrecognizable Obsolete
Equipment IDs or 19%
Indeterminant Status
21%

Not Obsolete
60%

Figure 1

Percentage of Obsolete Components from 2008 US Survey

Clearly, there is sufficient data to suggest (a) many of the original NPP systems components and
spare parts either have already been declared obsolete and are no longer supplied by the OEM
or (b) will be declared obsolete well before the end of the design life for the Spanish NPP fleet.
There are OEMs who are working with the NPP owners to address this issue; however, many
OEMs fall short on providing complete life cycle support because the nuclear markets represent
a small percentage of their overall global business.

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

In the US, obsolescence management is being managed through a network of utility

representatives, industry organizations, committees and private consultants. The tools and
services include the Proactive Obsolescence Management System (POMS) [3]; Readily
Accessible Parts Inventory Database (RAPID) [4]; the Obsolete Items Replacement Database
(OIRD)[5]; and, the Configuration Management Interface System (CMIS)[6] to assist the US NPP
operators to manage the obsolescence risk. However, many NPPs in Europe and Spain do not
generally participate in the variety of programs and services that are utilized by the US NPPs.

AREVA recognized that there is not the same level of support and infrastructure in Europe to
manage obsolescence risk. This need compelled AREVA to develop a comprehensive
equipment obsolescence management program (resources, software, infrastructure, test
facilities, warehousing and procedures) to perform the complete line of services to manage
obsolescence risk for the European NPP operator. The core value for the program resides in the
AREVA Plant Obsolescence Tracking System (APOTS). APOTS will facilitate managing large data
and developing data relationships and algorithms to be able to generate reports from data and
trends, which is critical to generate the intelligence and knowledge needed to manage
obsolescence risks.

Conclusions:

AREVA is aware that the NPP Operators in Spain have challenges with managing equipment
obsolescence. Component life cycles are much shorter than the NPP design life, which means
that original replacement components and parts will not be available for the design life of the
NPPs. Therefore, equipment obsolescence is a risk to reliable and economic NPP operation.

The AREVA Obsolescence Management Program and APOTS software will reduce the cost for
procurement, qualification and inventory management, and will manage and mitigate the risk
of inadequate supply of qualified components and parts needed to support safe and reliable
Plant operation. There is potential for significant reduction in cost associated with equipment
obsolescence issues by optimizing inventory levels, sharing costs for procurement and
qualification services (amongst multiple end users and program participants), and outsourcing
warehousing and inventory management services. Cost reduction is also anticipated by
implementing a planned and controlled procurement process via proactive procurement
management, rather than a more expensive expedited purchasing process.

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 Equipment Obsolescence Management Program
Paper for Spanish Nuclear Society
Definition No. 08-04

References:

1. Nuclear Utility Obsolescence Group Survey, 2007.

2. EPRI Plant Support Engineering: Obsolescence Management Program Ownership and
Development, EPRI Report 1016692, November 2008
3. Proactive Obsolescence Management System (POMS), Rolls-Royce
4. Readily Accessible Parts Inventory Database (RAPIDTM), Curtiss-Wright Corporation,
5. Obsolete Items Replacement Database (OIRD) Curtiss-Wright Corporation,
6. Configuration Management Interface System (CMIS), Rolls Royce

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