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Nuclear Renaissance and the Global Supply Chain

Avoiding pitfalls, realizing benefits.

Fortnightly Magazine - December 2010

the desired performance improvements and results, supply chain organizations often need to invest in training or hire personnel with global sourcing and nuclear plant construction experience. This can best be accomplished with a two-to-three year organizational development roadmap.

A third opportunity involves governance. Although the business strategy is often well articulated by management and understood by supply chain personnel, conflicts sometimes exist with established performance goals and processes. Improved alignment between business strategy, performance goals, and supply chain processes focuses personnel efforts on improving organizational efficiency, realizing economies of scale, and using only top performing contractors.

Finally, process improvement can yield benefits. While most supply chain personnel can identify process inefficiencies, it’s often difficult for those who have performed the same processes using the same systems for years to develop best practice solutions. Implementation of a rigorous assessment with the assistance of personnel from outside the organization can bring forth otherwise overlooked improvement solutions.

Utility executives proactively implementing a program to identify and address both supply chain challenges and opportunities will be better positioned to manage the variable costs associated with their new nuclear power plant construction projects. Such an initiative, however, must be started shortly after the build decision is made, if the benefits are to be fully realized. Beyond simply ensuring timely receipt of critical components and services, such initiatives often identify better leverage opportunities across other major projects and ongoing operations. Additionally, supply chain processes that are upgraded while individuals possessing nuclear plant construction experience are still employed ensures this invaluable knowledge and experience passes on to the next generation of nuclear supply chain professionals.

While nuclear power plant construction serves as a catalyst for a supply chain assessment and improvement initiative, this effort has the potential to reduce supply chain costs throughout a utility’s fleet.

 

Endnotes:

1. John Downey, “Duke doubles cost estimate for nuclear plant,” The Business Journal , Nov. 4, 2008.

2. “New NRG nuclear plant to cost $10 billion,” Eileen O’Grady, Reuters, June 2, 2009.

3. “Nuclear Costs Explode,” Russell Ray, The Tampa Tribune , Jan. 15, 2008.

4. “DOE NP2010 Construction Schedule Evaluation,” U.S. Department of Energy, Sept. 24, 2004.

5. “Licensing New Nuclear Power Plants,” Nuclear Energy Institute, January 2009.

6. “DOE NP2010 Construction Schedule Evaluation,” U.S. Department of Energy, Sept. 24, 2004.

7. “DOE NP2010 Nuclear Power Plant Construction Infrastructure Assessment,” U.S. Department of Energy, Oct. 21, 2005.

8. “Construction Codes and Standards: Avoidance of New Nuclear Power Plant. Construction Delays (Mattson Report),” Energetics Inc. for the U.S. Department of Energy, Office of Nuclear Energy, September 2008.

9. “NRC Information Notice 2008-04: Counterfeit Parts Supplied to Nuclear Power Plants,” U.S. Nuclear Regulatory Commission, April 7, 2008.

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