- Site: Sellafield
- IR number: 20-081
- Date: December 2020
- LC numbers: 17
Executive summary
Purpose of Intervention
The Office for Nuclear Regulation (ONR) undertakes regulatory interaction with the Sellafield site licensee (Sellafield Limited (SL)) against a strategy defined by the ONR Sellafield, Decommissioning, Fuel and Waste (SDFW) Division. Following a number of recent supply chain events, ONR conducted a targeted supply chain intervention at Sellafield. The purpose of this intervention was to sample evidence of implementation of SL’s Supply Chain Management arrangements to inform a regulatory judgement regarding the licensee’s compliance with relevant statutory provisions and good practice.
Interventions Carried Out by ONR
The Nominated Project Inspector and a Nuclear Safety Supply Chain Inspector carried out the intervention. Due to the current COVID-19 (Coronavirus) pandemic restrictions, the intervention was undertaken remotely (utilising video conferencing) and followed a modular approach that has been successfully deployed in other recent ONR remote interventions.
The intervention included a review of relevant documentation supplied by SL in advance of, and during, the two intervention modules. These inspections were structured interviews and focused on:
- Module 1 – Supply Chain Strategy – SL’s approach to supply chain strategy for the procurement of nuclear safety related/high risk items or services. Including consideration of measures to reduce risks from supply chain issues i.e. make or buy, dual sourcing etc; and
- Module 2 – Supplier selection and contract award – SL’s arrangements for selection and verification of a competent supply chain (ensuring that suppliers have the organisational and technical, capability, capacity and culture to deliver items or services to the specification prior to placing any contract). Including intelligent customer, use of sub-contractors and the capability and competency of the supply chain particularly in meeting manufacturing requirements such as welding and fabrication.
The purpose of this inspection was to sample evidence of implementation of the Supply Chain Management arrangements as applied specifically to the Self-Shielded Box procurement, in order to inform a regulatory judgement regarding the licensee’s compliance with relevant statutory provisions and good practice.
The intervention was undertaken against LC17(2) and informed by ONR’s technical assessment guides NS-TAST-GD-077: Supply Chain Management Arrangements for the Procurement of Nuclear Safety Related Items or Services, Revision 5 (July 2019), NS‑TAST‑GD‑049: Licensee Core and Intelligent Customer Capabilities, Revision 7 (April 2019), and NS- TAST-GD-079: Licensee Design Authority Capability, Revision 6 (June 2020) informed the inspection.
Explanation of Judgement if Safety System Not Judged to be Adequate
Not applicable since this was not a safety system based inspection.
Key Findings, Inspector's Opinions and Reasons for Judgements Made
The following summarises the key observations arising from discussions, sampled documentation and inspection of the Supply Chain arrangements during the intervention.
I examined a sample of the procurement documentation relating to the design and manufacture of Self-Shielded Boxes. No significant matters were identified as requiring immediate regulatory attention. A minor shortfall was identified in SL’s supply chain and procurement arrangements for Intelligent Customer for the Self-Shielded Box project, specifically a lack of casting and manufactured products expertise, and a lack of clarity regarding how the Intelligent Customer requirement was discharged throughout the supplier selection process, including the Source Evaluation Board. This will be followed up as a Level 4 regulatory issue as part of routine regulatory business. I recognise that the procurement of Self-Shielded Boxes went to market in 2015, since then SL has taken steps to strengthen its arrangements via a number of improvements including; the introduction of the Sourcing Team, the Holliday Checklist, improved financial assessment/monitoring and more specifically relating to technical expertise gaps – the introduction of the Manufactured Products organisation. I will examine the adequacy of implementation of these improvements as part of the routine (level 4) supply chain engagements.
The Self-Shielded Box procurement is already facing significant delays, and the SL procurements Risk Contingency Plan has not been triggered. I advised that SL should consider whether the Risk Contingency Plan trigger points are adequate, and whether the plan is fit for purpose. The decision to review the SSB Risk Contingency Plan is planned in the Decision Calendar June 2021. I also provided regulatory advice that SL should consider the timing of this decision and whether this is conducive of exploring all available options to accelerate hazard and risk reduction.
With regards to the Risk Contingency Plan, SL gave a commercial justification as to why it had not taken steps to secure a separate supply of boxes. Whilst viewed through a commercial lens this may seem appropriate, in my opinion it does not take in to account the potential consequences of not moving forward with a second supply, particularly the potential for delays to hazard and risk reduction should the current supplier experience disruption or significant failure. This matter has also been raised by ONR at a senior level through the G6, which includes senior level representatives from NDA and SL to consider strategic supply chain contingency. I also recognise that this intervention focused on the commercial team who are not in a position to make a judgement regarding the high hazard and risk reduction programme, and that decisions such as this require input from the delivery Programme/Value Stream. Whilst this is not an immediate threat as SL is in the process of establishing a new supply of boxes, it is still unclear whether the new supplier will be able to meet SL’s required demand profile or quality requirements. It is my intention follow this up during the next phase of the intervention which includes a module on contract management and will involve representatives from the delivery programme.
I noted a particular area of good practice in relation to the approach to the comparison of the technical solutions of the bids received.
My findings were shared with, acknowledged and accepted by the Head of Procurement & Supply Chain Delivery as part of normal inspection feedback.
Conclusion of Intervention
On the basis of the evidence sampled, I judge that, the licensee’s Supply Chain Management arrangements for Supply Chain Strategy and Supplier Selection & Contract Award are adequate to ensure SL will meet relevant good practice, with only a minor shortfall which I have addressed by raising a Level 4 Regulatory Issue. Noting the ONR guidance on inspection ratings, it is my opinion that an inspection rating of Green (no formal action) is merited here.