We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Modified over 6 years ago
CH/1 © Dr. Christian Hicks and Dr Tom McGovern An analysis of the impact of the restructuring of the UK civil nuclear industry on tier 1 and tier 2 suppliers Tom McGovern and Chris Hicks Newcastle University Business School http://www.staff.ncl.ac.uk/presentations/QIK.ppt
CH/2 © Dr. Christian Hicks and Dr Tom McGovern UK Civil Nuclear Industry Main challenge is the decommissioning of existing plant The current estimated cost is £72bn (2006) over a 25 year period. Nuclear Decommissioning Agency (NDA) formed under the Energy Act 2004. NDA took ownership of 85% of civil nuclear assets and liabilities on 1 st April 2005. The remainder resides with British Energy. Assets include 20 civil nuclear installations comprising 39 reactors, 5 fuel reprocessing plants, 3 fuel fabrication plants, 1 enrichment plant and 5 nuclear laboratories. 50% of the 20 sites will be put out to competition by 2008, it is likely that new international companies will compete, which will increase the skill base.
CH/3 © Dr. Christian Hicks and Dr Tom McGovern Structure of the Industry Key: NDA – Nuclear Decommissioning Agency HSE – Health and Safety Executive EA – Environmental Agency OCNS – Office for Civil Nuclear Security
CH/4 © Dr. Christian Hicks and Dr Tom McGovern Site Licence Company (SLC) Owned by a parent for the duration of the contract. SLCs are first tier suppliers to the NDA. BNFL parent to SLCs: British Nuclear Group (Sellafield) ltd., Magnox Electric ltd. and Springfields Fuels ltd. UKAEA parent to SLCs: Dounreay, Harwell, Windscale, Winfrith and the JET facilities at Culham.
CH/5 © Dr. Christian Hicks and Dr Tom McGovern Site Licence Companies The Life Time Plan (Life Cycle Baseline) contains details of the scope, schedule and cost of decommissioning and clean up for each site. The Near Term Work Plan (NTWP) is the first 3 years of the Life Time Plan. The NTWP is the basis of the contract between the NDA and the SLC. The SLC uses the NTWP to monitor the schedule and cost of work carried out. The contractors are paid their allowable costs and fees against performance targets.
CH/6 © Dr. Christian Hicks and Dr Tom McGovern Research Methodology In depth case studies at two SLCs and two suppliers prior to the formation of the NDA. Semi-structured interviews with 7 managers involved in tendering, project and contract management and supplier monitoring. Interviews with the SLCs were of 6 hours duration. The interviews with suppliers were of 3 hours duration. The purpose of the interviews was to identify how the supply chain was responding to the restructuring of the nuclear industry.
CH/7 © Dr. Christian Hicks and Dr Tom McGovern Site License Company A Power generation ceased in December 2006. Management has fundamentally reviewed operations and strategy. Targets set for safety, cost, output and head count. Contractors now invited to draw up detailed specifications. Moving towards ‘bundled contracts’ where a supplier delivers many services, which increases efficiency and reduces costs. Single facility management company appointed to supply catering, cleaning and scaffolding. Technical services also bundled and outsourced. Two suppliers deliver 80% of outsourced work. Contractors monitored in terms of a traffic light system based upon KPIs. This formed the basis of a supplier development initiative. Nuclear risk resides in the NDA; non-nuclear risk is passed down the supply chain.
CH/8 © Dr. Christian Hicks and Dr Tom McGovern Site License Company B Power generation ceased in 1989. Management of specification same as SLCA Contractors evaluated in terms of a KPI system, but not traffic lights. Cross functional teams formed that include staff from suppliers. Contractors given functional specifications.
CH/9 © Dr. Christian Hicks and Dr Tom McGovern Tier 2 Supplier A Originally an OEM to the Central Electricity Generating Board (CEGB). Set up as a regionally based company to match the structure of the CEGB. Strategy to develop long term partnerships and it has acquired companies with nuclear capabilities. Competencies include design, operations, maintenance and decommissioning. Functional specifications allow the company to offer the client several options. Clients require fixed price contracts and discourage extras. Found KPI systems time consuming. New industry structure with long term contracts reduces risk and reward. Scarcity of Suitably Qualified and Experienced Personnel is the major strategic problem.
CH/10 © Dr. Christian Hicks and Dr Tom McGovern Tier 2 Supplier B Company strategy based upon customer and operational excellence. Service include facilities management, asset management, mechanical services, management of process plant and civil engineering. Aim is deliver the NTWP as cost effectively as possible to enable more work to be brought forward and attract future work. Strong focus on bundling of services to reduce overheads and increase the utilisation of staff. Focus on partnerships including open book accounting. Nationalised industry still prevalent in SLCs – seek ‘intellectual sponsors’, who are receptive to the new business model.
CH/11 © Dr. Christian Hicks and Dr Tom McGovern Conclusions NDA has introduced a new competitive environment in the nuclear industry. The aim is to minimise the cost of decommissioning and dramatically reduce the time required. 50% of SLC contracts will be put out for tender by 2008 – this is a major driver of change. Competitive benchmarking is now possible. New business models have been developed including the: –bundling of services to reduce costs; –use of KPI measurement of suppliers; –implementation of supplier development models based upon KPIs; –incentive to complete work at minimum cost to bring additional work forward within the NTWP.
CH/12 © Dr. Christian Hicks and Dr Tom McGovern Conclusions A shortage of Suitably Qualified and Experienced Personnel is a major problem. NDA is seeking to expand the skill base by attracting in companies from outside the industry and well as encouraging supplier development within the industry. The industry is likely to become more competitive when more companies own Site Licence Companies. The new industry structure appears to be successfully reducing costs and the duration of decommissioning activities.
Developing a Decommissioning Acquisition Strategy for
Looking to the Future for the NDA Skills Strategy Dr Ian D. Hudson, Head of Technology & Skills Division Nuclear Safety, Security, Environment and Engineering.
NuLeAF Opportunities for Storage Consolidation of Higher Activity Wastes 4 th November 2011.
Contract Models Terms and Conditions Joyce Matthews September 2003 LMU Tier 1 Supplier Forum.
Total Utility Management Services, LLC is committed to helping your organization make the best informed energy decisions with decades of cost-proven results.
W O R K P L A C E F U T U R E S THE CRYSTAL February 12 th, 2012 With thanks to our sponsors.
What is the Enerjetic Business? The business offers consulting and reporting tools to report on energy and related data for business purposes. Common uses.
Facilities Management Review William Kenealy Facilities Management Review.
TM/WSP 5-9 Nov Group D3- Nuclear fuel cycle, nuclear waste - Site and supporting facilities - Environmental protection - Emergency planning QUESTIONS.
TM/WSP 5-9 Nov Group D1- Nuclear fuel cycle, nuclear waste QUESTIONS / DIFFICULTIES Why is the NPP decommissioning required / necessarily? How.
Civil decommissioning market – an update Presented by Ron Gorham Head of Supply Chain Development and Commercial Relationships.
Research and Development in the NDA The UK National Cleanup Programme Neil Smart Nuclear Research Coordinator, NDA.
The Power Academy Dr Nicholas Moiseiwitsch Head of Engineering Policy The IEE.
Steve Slater “DDP” – Requirements 13 th Feb 2014.
UK Nuclear Policy Andrew Beirne
IGLS04/1 Dr Tom McGovern and Dr Chris Hicks Specifications and Supplier Development in the UK Electrical Transmission and Distribution Equipment Industry.
Software Development Contracts and Legal Issues Cost plus Fixed price Combined.
© C.Hicks, University of Newcastle KNOW99/1 Knowledge Management in Capital Goods Companies Dr. Christian Hicks University of Newcastle upon Tyne.
Month Year Working together to achieve your desired outcomes, by delivering service excellence. Building Engineering Solutions for the optimisation of.
The UK Nuclear Market. Paul Lester CEO Lord Mandelson Secretary of State for Business, Innovation and Skills.
© 2022 SlidePlayer.com Inc. All rights reserved.