In Partnership with Eaton 1
Leadership - MERCURY
Mercury – Procurement
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ercury is a leading European Contractor that builds and manages complex engineering projects that reimagine how people work and live in the built environment. Their determination and focus enable the delivery of leading-edge construction solutions across a range of key sectors including Enterprise Data Centres, Advanced Technology & Life Sciences, Hyperscale Data Centres, Fire Protection, Technical Support Services (TSS), Data Centre Facility Management, Healthcare & Building Services. Mercury employs over 2,600 people across over 10 locations in Europe and had an overall turnover of €1bn in 2020. Mercury employs the best people, invests heavily in training and education, and ensures that the highest standards of health, safety and governance are applied throughout the organisation. Johnny McFadden joined Mercury as Group Head of Procurement in 2018. A life-long career within the construction sector has seen Johnny cut his teeth from regular residential building sites to Oil & Gas mega projects across Europe, Middle East, Africa, and North America. Mercury’s continued rise created a need for a redefining of structure. Johnny and his procurement team have
made significant steps over the past three years and he kindly offers an insight into the ongoing evolution of the function as well as providing his own outlook on procurement in general. Johnny, what does your role as Group Head of Procurement cover? Primarily, I was recruited to put a supply chain structure in place that is robust, flexible, and smart. We are a support function that endeavours to keep Mercury projects running smoothly, which can be very demanding as construction projects are often pressurised situations. Added to this is the complex nature of executing projects across Europe. In Mercury, the procurement department are responsible for purchasing of Goods/ Equipment, Material Control and Fleet, Tool and Plant requirements. This can only be done in conjunction with our Commercial and Operations teams. Initially, we updated and released new processes and procedures in Q3 2018, which was very important in order to lay down solid procurement foundations. These were very different to what had preceded, so the change management was considerable and is ongoing. Once created, documents should be dynamic and change as the
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Rising
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Leadership should be dynamic and change as the company changes and matures. In many ways, they were probably overzealous, which I trace back to my experience in the more stringent Oil & Gas industry. Working with the leaders in Mercury, I think we are finding the right balance between compliance and flexibility in the construction sector in order to execute accelerated projects. You joined the business in 2018 and set about redefining the procurement function and aligning its structure to mirror that of the business. What was involved in this process? How did you overcome initial resistance? What instant benefits did this structural change create? When I joined Mercury, it was already in a phase of restructuring from a business unit model to a divisional model, of which there were four, with each division having a Managing, Operation, and Commercial Director respectively. The divisions, though similar in many ways, had distinct differences, which procurement had to be able to support and to which we had to provide specifically dedicated personnel. This was based on moving from a centralised procurement model to giving each division a dedicated divisional procurement manager who would support the procurement changes I wished to roll out. This was primarily based on getting procurement personnel
closer to the projects and having buyers on site so that they were closer to being part of the project team. This is where I personally felt I learned the most at the outset of my career, gaining site experience and understanding the pressures and constraints of live projects. This is still very much a work in progress with the change management and the acceptance of what changes the new procurement management team want to bring. There are different views on what supply-chain is within the organization, given the long-held views on the methods by which the construction industry have historically procured and built in the past.
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Leadership
Eaton: Enabling the transition of power
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any businesses like talking about sustainability these days - but intelligent power management company Eaton believes it’s time to start acting. Eaton is already committed to ambitious sustainability goals for the next decade, including halving its carbon emissions and achieving zero waste-to-landfill status at all its manufacturing sites. It’s also allocated $3 billion over the next 10 years to develop more sustainable and energy-efficient technologies and services. As a multi-billion-dollar business with customers in more than 175 countries, Eaton is striving to help the world solve urgent and complex power challenges. From factories and warehouses, to homes and hospitals, the company is dedicated to improving peoples’ lives and the environment with power management technologies that are more reliable, efficient and safe. Tim Darkes, president, Corporate and Electrical Sector, EMEA, reveals how Eaton is leveraging its industry leadership and technical expertise to drive lasting sustainability.
Tim, what does sustainability mean for Eaton? Sustainability lies at the heart of our mission to improve quality of life and the environment. As our world is challenged by climate change, population growth and more, our power management portfolio can help build a sustainable future. We’re empowering our customers to drive long-term sustainability by creating a positive environmental impact with our products and services. In 2020, 47% of our revenue came from products that meet rigorous positive-impact criteria. However, our commitment to sustainability means we don’t just measure the success of our company by financial results alone. We believe we have a broader
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responsibility to society than our bottomline; a responsibility to protect our planet and the well-being of all the people on it. As such, we also define success through our environmental stewardship, social responsibility and strong governance. That’s why we’re also striving to lessen the footprint of our own operations, to engage all our employees in an inclusive environment, to give back to our local communities, and to do business right everywhere we do business. All of these facets make up our sustainability vision. How is sustainability changing Eaton’s approach to market? Right now, we’re going through the most significant transformation in our 110-
year history. We’re rapidly transforming our portfolio of power management technologies and services to support the accelerating transition to a more sustainable, low-carbon future. Driven by renewables replacing fossil fuels, clean air regulation, and widespread electrification of different industries, this energy transition is creating huge complexity as well as enormous opportunities. The power delivery model we all know is being upended. Electricity will no longer flow in one direction from centralized power plants to end users. Instead, people will produce their own energy locally, use or store what’s needed and, in many cases, resell excess power back to the grid. Distributed renewable power generation and storage, two-way electricity flows across the grid, and the electrification of everything from cars and buildings to heavy industry, all demands smarter, more flexible power networks than ever before. We’ve put enabling this energy transition at the heart of everything we do because we believe it’s vital to creating a more sustainable future for each other and our planet. It holds the key to addressing both climate change and pollution, as well as to enabling more reliable, efficient and affordable power. What is Eaton’s strategy to support the energy transition? Our approach to reinventing the way power is distributed, stored and consumed is called ‘Everything as a Grid’. Our core capabilities in electrical and mechanical power management mean we’re well7
Leadership placed to help customers across a wide range of industries navigate the transition to a low-carbon future. We’re helping our customers understand the challenges and opportunities in the new energy value chain, enabling them to embrace electrification and to integrate renewables effectively. We’re also applying our expertise in microgrids, digitalization, energy storage, and power management to help build a grid that’s more intelligent, adaptable and stable. While decentralized renewable power brings complexity, it also creates exciting potential - future where homeowners can use vehicle batteries for backup power during blackouts, where data centers operate using renewable energy stored on-site, and where manufacturers lower running costs by selling electricity back to the grid. Can you give some examples of how Eaton is accelerating this transformation? Buildings Through our Buildings as a Grid approach, we’re helping commercial and industrial building owners transform their properties into energy hubs by making it easier to
The Catholic University of Lille
French postal service La Poste
integrate renewables, energy storage and electric vehicle (EV) charging infrastructure. This allows them to optimize energy costs, lower carbon emissions, and enhance power resilience, while also capitalizing on new revenue streams from EV charging or the sale of energy back into the grid. The energy storage system we deployed for the Catholic University of Lille, France, is a great example - accelerating its journey towards becoming a zero carbon campus by enabling solar power to be harnessed much more effectively. Our 250 kWh system stores power from the university’s 1,300 m2 photovoltaic panels, enabling it to be consumed on demand - even when the sun is no longer shining. By integrating charging infrastructure into buildings, we’re also supporting the rapid move to EVs during the energy transition enabling charging to be both more widely available and dominated by local green power generation. For instance, as part of a trial project we recently helped La Poste, the well-known French postal service company, meet up to 80% of the electricity demands of its EVs by integrating solar panels with our energy storage solutions and smart charging capabilities.
Advertisement Feature Data Centers We’re also enabling the data center industry to capitalize on the energy transition. Data centers are expected to account for over 3% of the EU’s energy consumption by 2030, so helping these facilities meet more of their power requirements from renewables is crucial to a low-carbon future. Uptime and reliability are critical for these facilities, so uninterruptible power supplies (UPS) are already a prerequisite for doing business. For instance, Dutch hosting provider Worldstream relies on our UPSs to ensure continuity, scalability and energy-efficient operations. However, energy storage can also enable data centers to capitalize on renewables that would otherwise be too unreliable to power their operations. Our EnergyAware UPS solution can go even further - turning a necessary investment into a revenue stream. It effectively monetizes a data center’s ‘sleeping’ assets by enabling power to be sold back into the grid. The solution is already in use at our corporate headquarters in Dublin, Ireland.
more sustainable power infrastructure. For instance, most switchgear today uses SF6 as an insulator - a potent greenhouse gas with a global warming potential 23,500 times higher than CO2. We manufacture SF6-free switchgear that eliminates the risk of this gas escaping into the atmosphere. Most recently, we supplied Bane NOR, the company responsible for Norwegian railway infrastructure, with our SF6-free Xiria switchgear for the newly completed Ulriken tunnel.
Utilities Our approach to grid modernization is also helping utilities build more resilient, efficient, sustainable and secure power networks ready for the energy transition. We’re harnessing digital technologies connected devices, data models, insights and analytics - to let utilities anticipate consumers’ real-time energy requirements and to enable the flexibility to integrate an ever-larger share of renewable generation. We’re also seizing opportunities to rollout
All these examples only scratch the surface of the change that’s coming. From air conditioning to zero-emission vehicles, power now affects every area of our lives - and so will the accelerating energy transition. The potential for flexible, intelligent power is limitless. The value for our customers is enormous. And we’re proud to be taking the challenges of the energy transition head-on to help the world seize these new opportunities.
Ulriken tunnel. Photo credit: Bane Nor/Eivind Larsen
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Leadership - MERCURY We laid out some fundamentals in engaging in commercial negotiations with vendors directly, who can then make commercial commitments on behalf of the company, endeavouring to reduce the amount of maverick buying on projects. There are many stakeholders involved in the procurement process in any industry and so we are working toward finding the right balance. The executive management team have been supportive and recognize that the required changes don’t happen overnight. There are elements you wish would change quicker, however resistance to change means you have not won over or perhaps targeted the right stakeholders. Conversely though it is those elements you expect to be a lot trickier to get buy-in which actually sail through. Creating a diverse and inclusive function was high on your priorities with the majority of your team now being female. Did your previous experiences working within a large multinational drive your desire to create a more diverse culture or was this a personal point of preference? How beneficial has adding a younger dynamic to your team been? I do like to have diversity in my team, it makes life more interesting and the right dynamic of inclusion makes for a stronger team. This would primarily come from my time working in very diverse teams in the Middle East, Africa and Canada. It has happened organically in Mercury as I inherited some very strong personnel both male and female. Then as the new roles came up, we just seemed to find some very strong female candidates. The goal is always to find the best fit for the candidate and the team.
Now we have a strong balance with Irish, British, Mexican, Italian, Brazilian, Romanian, Indian, German and Polish nationals working together in our Mercury procurement team from junior to senior levels, female and male. The nature of the Construction business is evolving fast, and Mercury is changing accordingly. The Mercury mantra is to be brave and lead the way in all that we do. We are focused on creating diverse teams for a multitude of reasons. We want female leaders in our team, and we want to be able to converse easily in native languages and promote not only our company, but the industry. Changing the perception of how construction is viewed by younger generations is vitally important to attracting the best talent. We have hired some younger personnel who are so keen to learn, which drives us all forward to better define what is expected and map out career paths that keep them interested is very important. My belief is that to get the best out of procurement personnel, they need to be on site to appreciate the urgency. This helps a buyer become part of the execution team which is important for them and the function. Smaller projects absolutely still require the centralised office support, but on the scale of projects Mercury were now executing it made sense to have site buyers and material control personnel. This is starting to pay dividends and build the trust that is required to buy into the supply chain method we are trying to deploy. What are the primary challenges of overseeing a procurement function of a projects driven business operating across Europe?
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There are so many factors that can impact projects and the function on any given day. Especially now in the clutches of a pandemic and Brexit which complicates everything further. There are the external factors as stated previously around how aggressive schedules are now for projects. We would have faced struggles with language barriers in certain countries, which means that getting through the bureaucracy can be difficult sometimes. That has been alleviated somewhat by having so many different language speakers in our procurement and construction team. Dealing with the urgent requirements on projects present difficulties, as well as getting the balance between forward planning and a flexible supply-chain. Given that lead times of most materials because of commodity disruptions (copper, steel, rubber and plastic) have been stretched to a critical point, places additional pressure on everyone.
Supply-chain has a major part to play in Mercury navigating through the next few quarters especially. The shortages in the market mean that due diligence and relationships with suppliers becomes critical to delivering successful projects. As such we need to create an environment where projects are not siloed, for their own benefit and Mercury. Our purchasing personnel are dynamic with a focus not solely on purchasing, but also the expediting and logistics. With the direction we are heading the skills and knowledge required for the movement of goods is increasing rapidly. Our aim is to have a department that is flexible and innovative to all the supplychain needs. You operate in an innovative sector. How important are strategic supplier relations in driving innovation? Are there processes in place to involve suppliers at 11
Leadership - MERCURY the onset of projects? How have supplier relationships developed since you joined the business? Would you say that the success of a project and the potential to win further contracts is often dependent on the level of cooperation with a given supplier? Yes, it is a very innovative sector with a lot of smart people working on next generation methods of construction (i.e. 4D modelling or virtual site walks/ inspections) to meet the schedule demands. I would attribute a lot of the success to the performance of our subcontractors and suppliers on projects. The repeat business comes from Mercury and our supply-chain collaborating well together and successfully delivering projects for our clients. Projects are holistic and the sum of all parts, and construction is tough and fast paced. There are always issues on projects and equally for supply chain, but it is how a company deals with a problem that is the true acid test. Thankfully we have good partners who, like Mercury will always own up to mistakes and ensure that we find solutions. Quite often, it can come down to a specific project team, or a specific country where a company who has otherwise performed well can struggle. We continue to try to develop and take heed from lessons learned. This is easy to write, but more difficult to put into practice with the pace and nature of projects these days. As well as Mercury leading the way in data centre construction, Mercury enjoy continued success in the life sciences and pharma industries along with our
fire protection and new TSS division. None of which would be possible without Subcontractors, suppliers and partners who can support our aspirations to deliver best in class projects. The schedule pressures are getting more and more compressed as the demand for data increases. The procurement function has a significant role to play in driving the sustainability ambitions of a business. Your clients demand for sustainability to be positioned at the heart of their projects is becoming paramount. As a business you are aware of the need to stimulate sustainability within the supply chain. What steps are your taking at present? Sustainability is such a broad topic covering everything from diversity to the environment and how we treat the planet and other human beings. Whether it is looking at environmental product declarations for carbon emission calculations or diversity in the workforce, procurement will be at the forefront working with our supply chain to bring the new changes about. There are so many different new initiatives that we have got to be pragmatic about setting the priorities and the approach. Mercury focused on what pillars mattered most to our personnel, communities, clients, and suppliers. We set up a committee of which I am part to lead sustainability in the group. We have recently conducted a sustainability survey with our supply chain which returned an excellent 60% response rate. Based on that, we will get some key actions for the future. But the carbon
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footprint is vitally important to us all so that is getting a lot of focus and support from the business. It is important for me to do the right thing as an individual because then I can speak to my team who can influence others in Mercury so that we truly live the Mercury Mantra of “Our Planet, Our Duty”.
our commercial and construction teams to bring good solutions. Having a consistent and simple message is important and I had probably over complicated certain elements when I first came in. I think when I initially introduced the full procedure suite of documents it was too much too soon.
It’s fair to say that since 2018 your function has progressed significantly and has embedded itself as a key partner to stakeholders throughout the business. If you could point to one reason that your plans have come to fruition, what would it be? I believe there are 2 keys reasons for this. Firstly, the department has progressed enormously, and a considerable amount of that progress is down to the hard work of the divisional procurement managers and their teams. They work on a daily basis with
Secondly, changing the focus to working with the divisional directors to simplify and collaborate more on the direction they need procurement to go is proving far more beneficial to all concerned. There is still frustration and arguments on both sides, but it is a lot healthier and more proactive in nature. We all want what is best for Mercury and it is important not to lose sight of that when evaluating conflict situations. The last twelve months have been the most turbulent in recent times. What
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Leadership - MERCURY have you learnt about your function during this time and how have you adapted? It has been an incredibly uncertain and difficult time for all concerned. All Mercury personnel working on projects never stopped and have been working through incredibly difficult and unprecedented times. Those working in Europe had to leave their families for months at a time to ensure that projects meet the ever-present aggressive schedules. Between Covid and Brexit many of the impacts have pushed procurement to be constantly on alert and providing solutions to problems that never existed on projects in Europe before. What I have learned is that our people are so resilient and very dedicated, which in a working from home scenario for many is very difficult. The procurement personnel have
brought many smart solutions throughout the pandemic. The human impact to a lot of what the last year has brought is humbling. We all share the same frustrations with the limitations placed on our lives. We just have to look out for one another as some deal better with stresses than others. The trust in systems and technologies to work remotely has increased dramatically which I think stands us in good stead for the future.
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JOHNNY MCFADDEN
IN HIS OWN WORDS My early career was working on construction jobs as a labourer in the summers. This led me into carpentry progressing on to leading crews on residential and commercial projects. I worked in Dublin, Melbourne, Chicago and New York over a period of 10 years, which certainly gives me an understanding of what site life is like. I then took up a position with Kentz Engineering in Saudi Arabia in 2007, thanks to my older brother Alan – though I was not thanking him at the time! To say it was a culture shock, and an extremely challenging baptism of fire is an understatement. Expat life and working on Oil and Gas projects is not for everyone, I did grow to enjoy it. Working with people who are by proxy the same people you socialise with, may seem claustrophobic, but this was not the case for me. There were strong bonds that made people vested in teaching you all they know. Since there were no clubs, pubs or cinema you tended to work a lot, so the learning process was accelerated, and I really enjoyed it. I had excellent mentors who gave me the foundations to build a career in procurement, and more so the opportunity to do so. Over the next 10 years I worked all over the Middle East, Africa and North America progressing through the various procurement management levels from Project – Divisional – Country – Regional (Continent). I gained experience in every aspect of supply chain, from site set up, to procuring the most expensive stainless-steel vessels or equipment upon which the project critical path schedule depended. I enjoyed the pressure and the interaction with all the different stakeholders. In 2017 we moved back to Germany for a year working with Brand Industrial Solutions before making the move to Mercury Engineering and the current role I occupy. It was an offer with a company I could not turn down, and the opportunity to live back in Ireland now that I have a family was an important element for sure.
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Technology
Transform Your Data Centre By Ciarán Forde, Data Centre Segment Leader, Eaton EMEA
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t Eaton we believe the time has come for data centre designers, owners and operators to revisit many aspects of not only data design, but also the commercial model associated with their facility. We have arrived at this conclusion for several reasons, and we can offer some points of advice. The first reason relates to the Energy Transition. This is the industry term for what is essentially transition from fossil fuel power generation to renewable energy generation, distribution and consumption. The environmental case for renewable energy
has been evident for many years, but its adoption was extremely limited until recently. In 2017, however, our work with the research company BloombergNEF identified that the tipping point for renewable energy adoption had been reached in economic terms. Yet, whilst renewable energy would become very significant, gaps would remain beyond the tipping point. Now, as a result of recent policy shifts in the EU, its member states and UK, the push towards renewables has been accelerated and mandated. So, the question data centre
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designers, owners and operators must ask is this: ‘Is our industry ready for the energy transition and what will it mean for energy strategy and procurement, even security of supply?’. All this comes at a time when data centre tenants are taking a closer look at the sustainability credentials of the companies providing facilities or hosting their IT and applications. Guarantees of origin and Renewable Energy Certificates may not be enough for those looking to disconnect their IT from fossil-based energy. A very positive aspect of the energy transition is that it will require grid operators to enlarge and ‘open up’ the grid auxiliary service markets that provide a variety of energy services the grid operator needs in order to adopt high levels of renewable energy on the grid. Traditional fossil-based electricity generation has an inherent momentum or inertia which it affords to
the grid. Renewable electricity generation (wind/solar) does not have this, so additional reserves and services are required to ensure the grid remains stable, matching production to consumption. As flexibility is essential for a future renewable energy grid, it is a tremendous opportunity for forward-thinking data centre operators, because data centre back up power systems already have significant latent capacity to provide these services. What better accolade for a data centre, than its ability to not only use ‘green’ energy but also provide the grid operator with essential services to decarbonise electricity at grid level. Data centre operators can help ‘green the grid’ for themselves and others, ensuring stability of supply and be remunerated for doing so, simply by using assets they already have. The added advantage is that providing such services in no way impacts the primary function of these assets - which is to provide a 100% guaranteed supply of power to the data centre, should grid power fail - because the backup system remains fully available to the data centre. Services, such as fast frequency response, can be as short as milliseconds or seconds but on aggregate, across the entirety of the grid, they ensure the grid stays within its 50 Hz limits. That is why, since 2014, Eaton has embedded this function into its UPS systems. This technology is called EnergyAware UPS and it transforms a data centre into a gridinteractive data centre. The second reason for re-evaluation of data centre transformation relates to adopting what Eaton calls the ‘System & Service’ approach. Having examined the 17
Technology
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Now, as a result of recent policy shifts in the EU, its member states and UK, the push towards renewables has been accelerated and mandated. So, the question data centre designers, owners and operators must ask is this: ‘Is our industry ready for the energy transition and what will it mean for energy strategy and procurement, even security of supply?’.
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complexity and cost of data centre design, procurement, build, installation and commissioning, we identified several ways to reduce cost and time to market, and at the same time enhance the resilience and efficiency of the data centre. To do this, we innovate, design and manufacture at the component level, product level and system level: from the smallest critical circuit breaker, to the largest critical power system; and from the medium voltage substation, switchgear, transformers, UPS, and power distribution units, to the intelligent rack PDUs. Each electrical building block in the data centre is understood from the lowest level to its highest function. We use this knowledge to support data centre design via value engineering, dimensioning, and optimising the known performance and functionality of the various elements and how they work together. Despite best efforts in system engineering, working with a variety of products from a variety of vendors, the engineering effort and the result can rarely obtain the same performance or optimisation levels compared to a portfolio that has been developed to work ‘as a system’ from the outset. There are less unknowns, uncertainties and more insights to be gained. This means the system integration, interfacing, coordination, ratings, protection and safety tasks become less onerous and can produce a higher performing design. There is, of course, the practical and project implementation side, too, with benefits in shortened timelines and costs. But it is not just the system performance ‘day one’ that matters. A successful data centre is one that can sustain performance
operationally with options to scale up and provide the flexibility to accommodate changing commercial objectives and opportunities. This is where services come into play. From the outset, by combining system design with the anticipated services required to operate and maintain the facility, both can be cross optimised, and it is the reason why Eaton created its System Integration Services (SIS) unit. By combining system integration and service capabilities into one coherent unit, the data centre design support factors in the suite of services that may be required. This tailored approach means that services which are not required can be removed or reduced and it also means that other areas are not overlooked or underestimated. With a combined system and service approach Eaton can assist data centre consultants, designers, owners and operators to transform their method of approach and transform the overall economic and functional performance of their data centre, not just for ‘day one’ but over its operational lifetime. Other aspects of data centre transformation, including cybersecurity, intelligent connectivity and edge data centre can be found on the Transform Your Power Network website along with our supporting whitepapers and on-demand webinar series.
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