While it has always been considered a vital role, the responsibility of procuring industrial applications and materials has been especially important in today’s social climate. Acquiring stainless steel, in particular, has become significantly more difficult.

Stainless Steel World Americas had the pleasure of talking to Victoria Armstrong, Project Control Manager at Plug Power, which was recently acquired by Joule, about what a position in the procurement entails, the challenges of acquiring stainless steel during a global pandemic, and why transitioning into the world of hydrogen liquefication will be important next steps for the industry.

By Sara Mathov

Armstrong has been working in the pro­curement industry for several years. She joined the Joule Processing team in 2018 and has had a primary focus on procuring materials and applica­tions such as stainless steel and heat exchangers, for midstream applications involving natural gas.

Since working at Joule, Armstrong pro­gressed from her initial position as a Project Coordinator to Procurement Lead, before taking on her current position as a Projects Control Manager. Although her role as a project control manager focuses more on project management than pro­curement, Armstrong’s multiple years as a procurement lead has made her an expert on the current ins and outs of the procure­ment industry.

Victoria Armstrong.

What is Procurement?

Procurement, by definition, is the pro­cess of acquiring goods and/or services to distribute them. For an EPC company like Joule, this process entails interacting with manufacturers from the approved vendors list (AVL) to acquire materials and distribute them to its customers.

More specifically, procurement is used as an overarching term for processes such as: purchasing, sourcing, requisi­tions, and purchase orders. The act of procurement involves various steps, all of which provide the necessary insight into how to assess costs and how to minimize spending while enhancing ef­ficiency by streamlining the purchasing process.

As the former procurement lead, Arm­strong has overseen the procurement of heat exchangers, vessels, and other engineered equipment while simultane­ously sourcing and acquiring vendors to become pre-qualified for the projects her company undertakes.

Approved Vendors List

There are several factors that are taken into consideration before a vendor will be considered for placement on an AVL. This list acts as a scorecard of pros and cons for each of the potential vendors. It is a method of detailing whether there were prior issues dealing with said vendor, and if Joule would be willing to work with them for future projects. Finding the ideal ven­dor goes far beyond assuring they have the necessary product. It also includes making sure they abide by safety regulations.

“Safety is incredibly important at Joule. For us to work with a company, we need to make sure they abide by all the necessary safety precautions, as well as being OSHA certified,” said Armstrong. “While a ven­dor could check all the boxes on paper, if our quality control inspector goes out and notices issues with the facility, we cannot go forward with using them. Safety must always come first.” Aside from safety, cost also plays a role in whether procuring from a manufacturer is worthwhile.

Heat Exchangers and Stainless Steel

“When we work on a project, we purchase everything. For example, heat exchangers, pressure vessels, control valves, instru­mentation, manual valves, and at times, we also purchase filters, pumps, ESDs and PSVs. Essentially everything that goes on a skid. Heat exchangers, I would say, are quite a large percentage of our spend­ing on a skid; it is a complicated appli­cation and it is very important that we make sure all aspects of it are correct,” explained Armstrong. “From the process standpoint, the size of the heat exchang­er also matters because it dictates the size of the skid. The competitiveness on price and delivery also plays a role, es­pecially the delivery, because at times we have a very limited window to deliver it. Therefore, timing plays a role because I might select a heat exchanger with a shorter lead time.”

In addition to project skids, Armstrong has also worked on creating full models of plants. “For this service we require sizing, data sheets, and a number of other requirement specifications from our vendors; we use these to create 3D models as a deliverable,” she said. For valves, instrumentation, and materials specifically, Armstrong explained that many customers have their own ap­proved lists and preferred vendors.

Procuring Stainless Steel and its Difficulties

One of the primary issues the procure­ment industry has been facing is finding reliable stainless steel sources. Over the last few years, the cost of stain­less steel, as well as its availability, has made it difficult to acquire.

“With the pandemic, and other ongoing crises, we are noticing that not only is the price of stainless steel going up, but the availability is low. I can no lon­ger go to a customer and guarantee a delivery date, as I must work with my supply chain to understand when they will have stock in,” explained Arm­strong. She noted that there have been shortages with aluminum, among oth­er materials, as well.

As most stainless steel is sourced from China and Europe, delivery times have been drastically altered; shipments have become less frequent and increasingly unreliable. “I no longer have long valid­ity dates, because of the volatility of the market,” said Armstrong. “It is important that individuals in a procurement posi­tion understand the new challenges, and how to manage them, to differentiate yourself as a vendor from your competi­tion. Overcommunicating is essential to help ensure trust as a vendor.”

Remaining in constant communication with all the individuals involved in the procurement and delivery process is therefore essential. To operate smooth­ly, everyone involved should be privy to when the order is set to arrive. This has been a learning curve for vendors and companies alike; the inability to confirm a delivery date has made the ability to explain the market to customers a crucial part of a procurement professionals’ role.

Looking to the Future

Joule has begun to focus on what its next steps look like, in response to the renewed push towards environmental responsibility. “We have been looking towards the use of hydrogen liquefac­tion technology, nitrogen recovery units, and other technologies that produce not just hydrocarbons, but liquefied hydro­gen,” stated Armstrong.

With the process of hydrogen liquifica­tion becoming more prevalent, stainless steel is becoming increasingly important for piping and equipment, to handle ex­tremely low temperatures. “The material selection is becoming very important. Be­fore, I could go to a heat exchanger event and request a run of the mill carbon steel exchanger and it would service most ap­plications. Now, with the added require­ments for extremely low temperatures, the stainless steel must meet several ad­ditional standards.” To address this grow­ing trend, Joule is making a conscious effort to offer applications for the hydro­gen transition. For low temperature, Arm­strong said the company currently uses a significant amount of 316L.

Hydrogen liquefication occurs when gas­eous hydrogen is liquefied by cooling it to below -253°C or -423°F. Once this occurs, the liquefied hydrogen can be stored in large, insulated tanks within a liquefac­tion plant. While liquefaction plants use between 30 and 35% of a plants energy, making it rather costly, hydrogen in a liqui­fied state can be stored for longer and in larger quantities making it cost efficient.

“Hydrogen can be used on vehicles and fuel cells, or can be used on trucks, so we are fully on board on this hydrogen train. We believe that this is the future, and this is where the industry is going to go. As a result, we are completely retool­ing and reviewing our AVL,” explained Armstrong. “We are hiring specialists who know about this industry, as we see the future as being more of a hydrogen driven than hydrocarbon driven.”

Armstrong also noted how she sees Joule pivoting towards integrating more unique materials into their processes, such as us­ing vacuum chambers in place of formerly used carbon steel as a method of contain­ing the heat exchangers within the mate­rial. The constant influx of new materials and technologies makes the procurement of goods an ever evolving process.

“A lot more customers have been com­ing to us for quotes on engineering stud­ies. The energy transition, including hy­drogen and fuel cells, seems to be really picking up speed. I am very excited for the new inventions and ideas and this could lead to,” said Armstrong.

In Conclusion

The procurement industry has seen change over the last few years. What began as a role that sourced manu­facturers and distributing materials to buyers, has turned into an interperson­al career, prompting those within the industry to stay in constant communi­cation as a means to provide the best service possible with the most accu­rate delivery times.

This new way of forming relationships within the industry is one that has been both beneficial and informative to all in­volved in the process, indicating that it will be here to stay long after the materi­al shortage is remedied.

Joule Processing at a Glance

Joule was acquired by Plug, a leading provider of turnkey hydrogen solutions for the global green hydrogen economy in January 2022. Joule’s liquefaction process is being deployed in Plug ‘s green hydrogen plants, most specifically the production plant under development in Texas.

Joule Processing is an engineering, process equipment, services and process optimization company dedicated to finding new and better ways to meet the needs of midstream ope­rators. Their work with pipeline and midstream companies has aided them in becoming a prominent name within the industry since being founded in 2009.

Previous articleWorking Hand in Hand to Move Innovation Forward
Next articleScott Hamilton: The Importance of Bolting Education