StrategyDriven Advisory Services for Nuclear Utility Executives and Managers

• 1. StrategyDriven alignment, accountability, accelerated results Enhancing safety, reliability, and efficiency in nuclear electric power generation

2. An Evolving IndustrySafe,OperatingWorkforceCapitalRetailreliable costs perexperience,investment marketplantmegawatt knowledge, cost priceoperations generatedskills, andrecovery uncertaintyavailabilityTo meet these challenges, nuclear plant owners mustComplex issues challenge thefind cost effective ways to replace aging componentssafe, reliable, and efficient and obsolete equipment, transfer knowledge and arespect for the uniqueness of nuclear power to a newoperation of nuclear power plants.generation of workers, release currently unavailablecapital, and optimize operations and maintenanceThe safe, reliable, and efficient operation of nuclearprograms.electric generating stations is a responsibility shared byall nuclear professionals. Aging infrastructure, retiringStrategyDriven advisors are seasoned nuclearworkers, growing regulation, rising capital costs, andprofessionals. As such, we have tailored our tools andincreasing budget pressures combine to challengemethods to meet the unique needs of nuclear plantnuclear executives and managers now more than everoperations and are committed to being exceptionalbefore.teammates in your pursuit of excellence.Enhancing safety, reliability, and efficiencyin nuclear electric power generation2StrategyDriveneffective executives, efficient employees 3. The StrategyDriven Difference StrategyDriven advisors possess stood the watch nuclear power generation experience:StrategyDriven uniquely combines decades of leading day-to-day nuclear plant operations,nuclear plant operating experience, deep supervising refueling and maintenance activities, andbusiness acumen, and industry specific methods overseeing infrequently performed testsand tools to provide solutions that enhance the and evolutions safe, reliable, and efficient operation of nuclear Our nuclear professionals have been awarded top industry licenses, certifications, electric generating stations. and qualifications: U.S. Nuclear Regulatory Commission Senior Reactor Operator LicenseStrategyDriven focuses on business performance improvement U.S. Navy Chief Nuclear Engineer Officer Qualification U.S. Navy Engineering Officer of the Strategy Development Watch Qualification Institute of Nuclear Power Operations StrategyDrivens methods and tools have Strategy Translation been specifically tailored to meet the Plant Operations Evaluator Qualification Accountability special needs of nuclear plant operations,Program ManagementAlignment aligned with U.S. Nuclear Regulatory National Academy for Nuclear Training Commission (NRC) requirements and Event Investigator Certificationvalidated against Institute of Nuclear ProjectOperations Power Operations (INPO), World ManagementManagement National Academy for Nuclear Training Association of Nuclear Operators (WANO) Instructor and Facilitator Certificationand Nuclear Energy Institute (NEI) Tactical Execution standards and guidelines. Project Management Institute ProjectDay-to-Day Operational Management Professional CertificationOperations OutcomesEnhancing safety, reliability, and efficiencyin nuclear electric power generation3 StrategyDriven effective executives, efficient employees 4. Achieving Operational Excellence Diverse, Global Client Experience 13 submarines StrategyDrivens nuclear professionals advise 4 aircraft carriers executives and managers at dozens of Fortune 500, government, and large regional utilities on how to best achieve increasing levels of safe, reliable, and efficient nuclear plant operations. United States 30 nuclear power plants from 18 utilities Enhanced 18 U.S. nuclear powered naval vessels safety through 1 coal-fired fossil power plant from 1 utilityeffective risk 1 natural gas delivery system from 1 utility analysis, management, and Canada Improved ongoing 4 nuclear power plants from 4 utilitiesoperationalperformance Japanreliability andmonitoring and 1 nuclear power plant from 1 utility lower direct assessment 1 U.S. nuclear powered naval vesselReduced costs throughintegrated United Kingdom indirect costsprocess value 2 natural gas-fired power plants from 1 utilitythroughanalysis, Central & South America (El Salvador, Peru, and Brazil)benchmarkingstreamlining, andand workforce 1 hydro dam from 1 utility standardizationoptimization 1 diesel generator power station from 1 utilityEnhancing safety, reliability, and efficiencyin nuclear electric power generation4 StrategyDriveneffective executives, efficient employees 5. What We OfferStrategyDriven can help you accelerate the achievement of improvedoperational safety, reliability, and efficiency through the application of our deephands-on operational experience and leveraging our nuclear specific tools andmethods in the areas of: Enhanced safety Corporate Risk Analysis, Management, and Mitigation Internal Assessment Decision Making and Management Improved operational reliability and lower direct costs Enterprise Performance Measurement Program / Project Development, Management, and Improvement Equipment / System Life Cycle Maintenance Management Online and Outage Work Management Optimization Reduced indirect costs Domestic and International Benchmarking Succession and Workforce PlanningEnhancing safety, reliability, and efficiencyin nuclear electric power generation5 StrategyDriveneffective executives, efficient employees 6. Corporate Risk Analysis, Management, andMitigationHow We ServeWe help reduce corporate nuclear risk exposure through an independent assessment of your enterprise riskprograms. We can help you develop a nuclear risk profile, benchmark your risks against industry peers, identifyrisk management program gaps, and develop and implement a multiyear oversight program to manage nuclearrisks consistent with industry guidelines. A StrategyDriven advisor mapped a large Midwestern utilitys corporate risks to their nuclear business unit risks and then to the processes from which those risks couldCase Study be manifest. Oversight mechanisms for these programs were identified including gaps; providing a basis for a multiyear internal audit assessment schedule. Our advisor worked with the utilitys corporate managers and staff to capture theEngagement existing internal audit framework and developed a gap analysis of their risk profile;Approach identifying risks not currently categorized or audited and opportunities for further program enhancement based on industry leading practices. Only seventy-five percent of the utilitys nuclear-related high-risk programs were routinely assessed by either the utilitys nuclear quality assurance or its corporateValue Deliveredinternal audit programs. Addressing the twenty-five percent gap will enable the utility to considerably reduce its safety, reliability, and efficiency risk exposure.The StrategyDriven DifferenceDecades of operational stood the watch nuclear risk management and mitigation experience. Co-authored the nuclearindustrys operational risk management guidelines and evaluation methods. Proprietary risk to process to oversight mapping tool.Enhancing safety, reliability, and efficiencyin nuclear electric power generation6 StrategyDriveneffective executives, efficient employees 7. Internal AssessmentHow We ServeWe perform independent, objective, and detailed reviews of core line and support organization functions; assessingperformance against U.S. NRC requirements, INPO, WANO, and NEI performance standards and guidelines, andindustry leading practices. Our resulting recommendations offer a unique actionable value proposition focused onimproving operational safety, reliability, and efficiency. A StrategyDriven advisor led teams of highly experience nuclear utility personnel in the ongoing evaluation of plant operations at one of a large nuclear fleet utilitysCase Study generating stations. Provided objective assessment of operations standards, reactivity management programs, and licensed operator training. Our advisor worked with senior station managers to identify personnel performance and programmatic gaps and develop near and long term improvement plans. InitialEngagement assessment and routine follow-up evaluations were conducted onsite. PeriodicApproach leadership team video conferences and weekly Operations Manager discussions helped promote high accountability and continued progress. Specific, actionable performance improvement plans were developed and routine follow-up helped drive implementation. A uniquely organized system healthValue Deliveredmeasurement system assessing integrated plant safety functions was created to further identify critical equipment improvement opportunities. A later industry evaluation assessed the plant as exhibiting excellent operational performance.The StrategyDriven DifferenceDecades of hands-on nuclear operations, maintenance, engineering, supply chain, work management, and regulatory experience.Developed the U.S. nuclear industrys plant operations and operational focus guidelines and evaluation methods.Enhancing safety, reliability, and efficiencyin nuclear electric power generation7 StrategyDriven effective executives, efficient employees 8. Decision Making and ManagementHow We ServeWe can assist you with the development and implementation of a high risk operational decision managementprogram. Additionally, we can assess and recommend improvements to your existing program; evaluating itagainst industry leading practices and the common programmatic and execution shortfalls StrategyDrivensproprietary research has identified. We also support leaders while making their important decisions; asking thetough questions that prevent group think, introduce new approaches, and help foster success.A StrategyDriven professional advised a Fortune 200 nuclear utilitys managementteam in the development of their fleet-wide high risk decision-management program;Case Studyconsistent with the Institute of Nuclear Power Operations Principles for EffectiveOperational Decision-Making guidelines and incorporating industry leading practices.Our advisor worked with senior utility managers to identify and benchmark industryleaders in each phase of the decision-making process. He then supportedEngagementconsolidating and harmonizing these practices into one cohesive process document.ApproachLastly, a process execution assessment was performed at one of the utilitys severalnuclear plants to ensure effective implementation of the program.This client successfully developed and implemented an end-to-end industry leadingpractice decision-management program; promoting increased levels of operationalValue Delivered safety and reliability. The programs development was accelerated by insights intothe tested practices from numerous other utilities introduced by our StrategyDrivenadvisor.The StrategyDriven DifferenceCo-authored the nuclear industrys operational decision-making guidelines and evaluation methods. Extensive experiencesupporting numerous utilities design and implement their high-risk decision management programs.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 8 StrategyDriveneffective executives, efficient employees 9. Enterprise Performance MeasurementHow We ServeWe can work with you to assess and improve your performance measurement system; yielding metrics and reportsthat are operationally relevant, organizationally consistent, and economically implemented. The resulting systemhelps improve managerial decision-making, organizational alignment, and individual accountability. A StrategyDriven professional advised a Fortune 200 nuclear utility management team in assessing their organizational performance measurement system; identifyingCase Study monitoring and communication gaps and developing an improvement plan that included supporting system configuration upgrades. Through a series of workshops and interviews, our advisor worked with senior station managers to catalog existing performance metrics and reports, recognizeEngagement gaps to industry leading practices, identify additional measures needed, and developApproach a phased approach to upgrading the utilitys measurement system. A fleet-wide metrics and reports governance program was also developed. An actionable performance monitoring system upgrade plan was created that, once implemented, will provide executives and managers with the accurate and timelyValue Deliveredinformation needed to support effective decision-making. This comprehensive roadmap contained a step-by-step plan for establishing a fully integrated performance monitoring system supported by data collection and processing procedures, application configuration, program governance, and management and employee training.The StrategyDriven DifferenceComprehensive, proprietary collection of U.S. NRC, INPO, WANO, and NEI performance metrics enhanced by broadlybenchmarked industry leading practice performance measures. Extensive experience implementing measurement systems.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 9StrategyDriveneffective executives, efficient employees 10. Program / Project Development andManagementHow We ServeWe can assist you in the effectiveness assessment and improvement of existing internal program and projectmanagement plans, oversight of contractor projects, and implementation of a program / project management office.For capital construction and other major projects, we can analyze program / project risk models and evaluatecontracting method and management effectiveness to ensure strategic benefit realization and delivery timelines. A StrategyDriven advisor spearheaded the planning, execution, and on-time delivery of a 12-month, $325 million large-scale, integrated nuclear maintenance andCase Study modernization project employing 1800+ personnel across multiple work specialties and organizations. Implemented robust operational risk mitigation, technical management, metrics analysis, and project management tools. Our advisor worked with station managers at all levels to actively manage daily work schedules and resources, improve meeting and operational efficiencies, overseeEngagement contractor commitments and acceptance criteria, and ensure efficient integration ofApproach work through the use of Project Management and Lean Six Sigma analysis. Assisted in the definition, interpretation, and analysis of key performance metrics. Achieved a safe, on-time return to service of two nuclear plants and supporting equipment within original cost estimates. Provided for sustainable first-time workValue Deliveredsafety and quality improvements through standardization and documentation of streamlined outage work management processes.The StrategyDriven DifferenceDecades of nuclear experience in operations and maintenance execution and planning, identification and utilization of the mostefficient and applicable plant metrics, and analysis and enhancement of existing processes using Lean Six Sigma practices.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 10StrategyDriven effective executives, efficient employees 11. Equipment / System Life Cycle MaintenanceManagementHow We ServeWe can assist your organization assess the cost efficiency of your plant equipment life-cycle maintenanceprograms. We are particularly effective in identifying cost-saving improvements in maintenance plan scheduling,resource use and balancing, and consolidation of industrial skill sets to optimize personnel deployment andphysical equipment storage/floor footprints. A StrategyDriven advisor, through the implementation of Lean Manufacturing principles and constraint analysis, identified multiple cost and schedule savingCase Study improvements to a nationwide nuclear submarine rotatable equipment pool storage system. Our advisor worked with in-house delivery management representatives and those of other national coordinating logistical organizations to analyze delivery times,Engagement maintenance repair times, and packaging schedules using Lean Six Sigma ValueApproach Stream Analysis. The approach focused directly on the largest cost and schedule constraints and provided immediately actionable process improvements. Improvements included gains in component repair and equipment delivery times. Delivered a 10 percent overall schedule execution time reduction (overallValue Deliveredmaintenance turnaround time) and over 25 percent reduction in logistics material delivery timelines.The StrategyDriven DifferenceExecutive level experience managing a nationwide maintenance program including life cycle management of major industrialplant equipment and identification and implementation of performance metrics driving continual improvement.Enhancing safety, reliability, and efficiencyin nuclear electric power generation11 StrategyDriven effective executives, efficient employees 12. Online and Outage Work ManagementOptimizationHow We ServeWe can work with you to assess and improve your end-to-end work management program; yielding anoperationally focused process driving improved organizational alignment and supporting high equipment reliability.The resulting program will directly support increased operational and personnel safety, higher capacity, andreduced maintenance, inventory, and expediting costs.A StrategyDriven advisor qualitatively and quantitatively assessed a Fortune 200utilitys work management function performance, including the integration betweenCase Studythe work management, operations, engineering, maintenance, and supply chainorganizations, relative to industry guidelines and global leading practices.Through direct observation, interviews, and quantitative analysis, our advisor workedwith senior station managers to assess the focus and efficiency of the workEngagementmanagement program. This assessment identified people, process, and technologyApproachgaps to industry leading practice performance for each process phase as well as acollection of performance improvement recommendations to eliminate shortfalls.Implementation of identified work management program improvements wereprojected to improve process efficiency and equipment reliability; enabling increasedValue Delivered plant safety and total generation capacity, reduced total maintenance cost, and lowercomponent inventory and associated carrying costs.The StrategyDriven DifferenceDecades of online and outage work management experience. Proprietary, INPO guideline compliant process frameworkcomplimented by hundreds of execution leading practices, metrics and reports, and maturity model assessment tools.Enhancing safety, reliability, and efficiencyin nuclear electric power generation12 StrategyDriveneffective executives, efficient employees 13. Domestic and International BenchmarkingHow We ServeWe assist clients in the comparative analysis of their operational performance to that of domestic and internationalpeers. Our assessment approach enhances available industry and government data with StrategyDrivensproprietary collection of operational data, metrics, process maps, and organizational charts and further benefits fromour advisors decades of direction performance observations at dozens of domestic and international utilities. Theresulting analysis informs integrated future state performance target-setting and outcome achievement monitoring.A StrategyDriven advisor supported a United Kingdom based power generation utilityin the comparative operational assessment of its natural gas fired generating stationsCase Studyoperations, maintenance, work management, engineering, and supply chain programsagainst North American and European industry performance and protocols.Our advisor worked with senior utility leaders, functional area managers, and lineorganization staff to compare operational program processes and results with thoseEngagementof leading power generation utilities and European program standards. The resultingApproachanalysis identified programmatic and performance shortfalls, specified improvementopportunities, and defined future state operational goals.Client executives and managers gained foundational insights on their generatingstations operational performance compared with that of industry peers. Additionally,Value Delivered they received a three-year resource-loaded performance improvement roadmapspecifying the execution, program, and technology enhancements needed to achievetheir benchmarking-informed future state goals.The StrategyDriven DifferenceRobust, proprietary domestic and international utility performance information enhanced by experienced onsite analysis and evaluationat dozens of utilities. Improvement opportunities tied directly to increased employee efficiencies and operational cost savings.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 13StrategyDriven effective executives, efficient employees 14. Succession and Workforce PlanningHow We ServeWe help clients enhance their succession and workforce planning programs through pipeline and capabilityprojection, training and development program assessment, and improvement plan design and implementationassistance. Our evaluations identify retention, replacement, productivity, and quality risks while providing leadingpractice strategies for maintaining full staffing including temporarily filling vacancies with highly qualified personnel.A StrategyDriven advisor supported a Fortune 200 utilitys internal audit teamassess the succession and workforce planning of key nuclear plant managementCase Studyand employee positions.Our advisor worked with senior plant leaders to identify management and workforcestaffing and experience shortfalls, including the underlying drivers, for positionsEngagementwithin the online work management and outage planning organizations. Senior utilityApproachmanager briefings were conducted on the fundamentals of succession and workforceplanning programs and potential near-term solutions to fill existing vacancies.Our client received foundational insights on how to establish a robust managementsuccession and workforce planning program, including key program elements andValue Delivered execution effectiveness measurement. Recommendations to close positional andprogrammatic gaps were provided to temporarily alleviate the plants near-termstaffing shortfalls.The StrategyDriven DifferenceResponsible for a management rotational program. Ground-up experience building a nuclear organizations workforceplanning program. Proprietary collection of succession and workforce planning program implementation and evaluation tools.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 14 StrategyDriven effective executives, efficient employees 15. StrategyDrivens Nuclear Professionals Nathan IvesGreg Gaskey PrincipalPrincipal Advisory ServicesAdvisory Services +1 678 313 0150+1 360 340 6540 [email protected]@StrategyDriven.comNathan Ives is a StrategyDriven Advisory Services Principal Greg Gaskey is a StrategyDriven Advisory Services Principalwith over 20 years of Energy industry and consultingwith over 20 years of nuclear plant operations, maintenance,experience. His experience includes 12 years of externaland large-scale program and project managementand internal advisory work within the Energy industry experience. An experienced Operations Manager, he hasspecializing in strategic planning, resource management,managed critical Department of Defense programs, projects,project management, managerial decision-making, and business lines; spanning multiple engineeringoperational risk management, organizational alignment, andmaintenance disciplines including mechanical, electrical,operator performance. Nathan has advised executives and hydraulic, and instrumentation and controls systems. He hassenior managers at numerous utilities on improvingextensive knowledge of initial system design development,generation fleet and individual plant operating performance.lifecycle maintenance planning and optimization, existingHe authored the nuclear industrys risk management, high- system modification and modernization, and end-of-liferisk decision management, and operations performancedisposal.guidelines and evaluation methods.Greg has over 10 years experience in nuclear andNathan also has 8 years of experience managing andenvironmental Emergency Management Operations,supervising (military and commercial) nuclear plant including environmental and terrorism incident responseoperations, online and outage work management, andcoordination and Emergency Operation Center (EOC)maintenance and held the U.S. Nuclear Regulatoryoversight for the U.S. Navys largest regional maintenanceCommissions Senior Reactor Operator license andfacility. He previously served as Combat Systems OfficerU.S. Navys Chief Nuclear Engineer Officer qualification. onboard a NIMITZ Class Aircraft Carrier and as a nuclearweapons courier and maintenance supervisor for TRIDENTClass ballistic missile submarines.Enhancing safety, reliability, and efficiencyin nuclear electric power generation 15 StrategyDriveneffective executives, efficient employees 16. Nuclear Industry Thought LeadershipStrategyDrivens nuclear professionals have long supported the nuclear industry through co-authorship of performanceimprovement articles and nuclear industry standards and guidelines documents.5 Insights for executivesImproving safety and reducing costs in the powerINPO 03-004, Performance Objectives and CriteriaThe answers in thisissue are supplied by: Improving safety and reducing costs in the power and utilities sectorand utilities sector, Ernst & Young LLP, April 2012 Publication documenting the standards for corporateFive steps to a more effective relationship between and station performance in the operation and Five steps to a more effective relationship between work management and supply chain The work management organization at an electric generating station appeared to be understaffed and was performing many of its duties behind schedule. An investigation revealed that resourceDana Hansonconstraints within the supply chain organization compelled work management personnel to+1 704 491 0894perform several component procurement and issuance functions. Subsequently, work [email protected] suffered and delays in component requisitions resulted in higher-than-needed inventories in an effort to avoid expediting costs.work management and supply chain. maintenance of nuclear electric generating plants. Process misalignments made the situation worse. Because the work management and supply chain departments reported to different executives with separate business objectives, the two functions did not collaborate when developing processes that impacted the other group. For example, work managements executing timing did not account for average component lead times. Work management personnel typically ordered needed parts two or three weeks in advance of work execution. However, the average lead time for many of these components was four to six weeks. To avoid high expediting costs, supply chain personnel raised the safetyNathan Ives stock levels of frequently used components. This signicantly increased inventory levels and+1 404 817 [email protected] associated carrying costs. Without losing sight of the operational benets to be gained in a more effective work management and supply chain partnership, such as increased parts availability and improved productivity, the focus of this paper is the sizable cost savings opportunity when the two functions operate in sync. By examining the interactions between the supply chain and work management functions, says Nathan Ives, a senior manager in Ernst & Young LLPs Power & Utilities and Global Nuclear practices, the utility in the example above identied an opportunity to reduce inventory by 20% to 45%, resulting in millions of dollars in savings for the organization. While the circumstances at each utility can vary widely, eliminating obstacles between the supply chain and work management functions often yields signicant cost savings by reducing inventories, minimizing expediting costs and lowering spare parts obsolescence.Responding to a Black Swan, Ernst & Young LLP,Principles for Effective Operational Decision-Building on the Principles Responding to afor Enhancing Professionalism Black Swan Principles and protocols forPrinciples responding to unexpected for EffectiveAugust 2011 Making, INPO 2001 catastrophic events Operational Decision-MakingPrinciples and protocols for responding to unexpected,December 2001Principles-based document on risk informedcatastrophic events.managerial decision-making; published in sixlanguages and serving as the performance model at Total word count in this layout: approx. 6,850 Each page can hold approx. 875-900 wordsnuclear plants worldwide.Reducing Lifecycle Expenditures, Public Utilities INPO 01-002, Guidelines for the Conduct of Business & MoneyIn fact, acquisition costs (specifically purchase price) are frequently the sole basis for making purchasing decisions, Reducing Lifecyclewhile often accounting for less than half of total asset costs.2 Employing TCO Expenditures to identify less obvious lifecycle costs aids in early identification of best-fit purchasing decisions and long-term cost Total cost of ownership accountingsavings across the project and ultimately the asset lifecycle.3Fortnightly, May 2009 Operations at Nuclear Power Stations optimizes long-term costs.A cross-functional team of supply BY STEVEN MCCABE ET AL. chain, operations, maintenance, engi- A neering, finance, and project-manage-large regional utility forfeited significant operating revenues after it replacedGuidelines for the ment personnel should conduct thepulverizers at several of its coal-fired power plants. Because the replacement TCO analysis. The team works collabo-pulverizers were sized to operate at 100-percent capacity during operationsratively to develop a comprehensive costConduct of Operations using the coal typically procured by the utility, upgraded plants had to be derated model for the asset to be installed during following a change to lower BTU-rated fuel. the project and provides estimates for If utility decision makers had used a total cost of ownership (TCO) framework,each relevant cost category (see Figure 3). they could have avoided this situation. An operations and maintenance cost assess-at Nuclear PowerTotal cost of ownership accounting optimizes long-termDocument establishing the operational performance A distinct cost model is developed for ment would have revealed the operational effect of the fuel change, allowing theeach supplier and scenario under con- company to consider oversized pulverizers to accommodate lower-grade fuels andsideration while estimates are based thereby maintain the power plants capacity.A confluence of market, regulatory, aligned with corporate goals, regulatory upon historical data and detailed market analysis. After completing this detailedStations and technical factors will drive sustained requirements and investor demands. analysis, the team is capable of making levels of capital investment across each The implementation of the TCOwell-informed purchasing recommenda- segment in the utility value chain for the method during a long-term capital pro- tions, identifying areas for potential cost next 10 years. The ongoing credit crisis jects planning phase (see Figure 1) reductions, and quantifying the long- significantly increases both the cost of,ensures asset-expenditure decisions areterm value associated with their recom-costs standards, based on industry leading practices, for and competition for, capital that will well informed and balanced with corpo- mendations. Furthermore, cost model force numerous utilities to reevaluate rate, regulatory and investor demands. completion enables the team clearly near-term capital expenditures.1 DuringThis method is a supply-chain manage-to communicate the rationale behind these unprecedented times, its increas- ment leading practice; providing a wide- specific purchasing decisions to key ingly important that utilities focus onranging view of the costs associated withstakeholders so they understand the key reducing lifecycle expenditures, while asset ownership. TCO classifies costs, executing capital projects and not nar-direct or indirect, incurred throughout rowly focusing on short-term procure-the acquisition, operation and mainte- Steven McCabe ([email protected]) ment gains. A near-term focus on nance, or retirement of an asset (see Fig- is senior manager with Deloitte. Kwasi acquisition costs can result in unin-ure 2). Traditionally, there has been little Mitchell and Nathan Ives are managersnuclear electric generating stations. formed decision making that is mis-difficulty in identifying acquisition costs. with the firm.FIG. 1CAPITAL PROJECT LIFECYCLE Source: DeloitteGENERAL DISTRIBUTIONPlanning &FeasibilityProcure ConstructClose Out May 2001Design Definition of project need, Preliminary design and Material, equipment andManagement of asset / Asset / facility testing Guideline benefits and risks resource need definitionlabor procurementfacility assemblyand commissioning 01-002 Ability to Influence Project Cost Decreases with Time / Project Phase 22 PUBLIC UTILITIES FORTNIGHTLY MAY 2009www.fortnightly.comEnhancing safety, reliability, and efficiencyin nuclear electric power generation 16StrategyDriven effective executives, efficient employees 17. 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