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Nuclear Promise: Reducing Cost While Improving Performance

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To remain competitive, nuclear operators must take aim at all addressable costs, ensuring maintenance is optimized, taking proactive steps to minimize unplanned outages and, where possible, reducing administrative and other overhead costs. There are multiple opportunities to reduce capital and operational spending, while improving safety and reliability.

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Nuclear Promise: Reducing Cost While Improving Performance

  1. 1. DELIVERING THE NUCLEAR PROMISE Reducing Cost While Improving Performance The nuclear power industry faces a time of unprecedented challenges and vast opportunity. Pressures to reduce greenhouse gas emissions and hedge against the cost uncertainties associated with fossil fuels have created renewed demand for nuclear energy. At the same time, nuclear power faces cost pressures caused by historically low natural gas prices and technological advancements in traditional and renewable electricity generation technologies. To remain competitive, nuclear operators must take aim at all addressable costs, ensuring maintenance is optimized, taking proactive steps to minimize unplanned outages and, where possible, reducing administrative and other overhead costs. As captured in the “Delivering the Nuclear Promise” released February 2016 by the Nuclear Energy Institute (NEI), there are multiple opportunities to reduce capital and operational spending, while improving safety and reliability. Booz Allen Hamilton, a leading strategy and technology consulting firm, has a long history of helping clients transform their cost structures. We use proprietary methodologies and advanced cost modeling tools to help decision makers identify their most significant cost drivers. Cost and Efficiency Transformation Booz Allen’s Enterprise Cost/Efficiency Transformation (ECT) approach provides government and commercial clients with a thorough understanding of their current cost profile to simultaneously reduce operating costs while improving performance. Our team has a series of capabilities to support the nuclear power industry: • Objective-Driven Change: Transformation framework to drive enduring change, achieving efficiencies and performance improvements • Financial Analytics: Analysis of capital and operational cost data to identify and quantify cost levers by category, department, and program • Enterprise Benchmarks: Measure cost, headcount, performance, and practices with comparable companies or organizations to quantify improvement opportunities • Zero-Based Budget: A robust bottom-up budget process that identifies and eliminates non-value spending and ties to the organization’s annual budget and planning processes • Enterprise Cost Savings: A cost savings management program and governance structure where all employees partner in pursuing and executing savings initiatives
  2. 2. To learn how Booz Allen Hamilton can help your business thrive, contact: Richard Goffi Vice President Tel +1 703-902-5091 goffi_richard@bah.com Inigo Ahedo Senior Associate Tel +1 703-902-5331 ahedo_inigo@bah.com Christopher Carabetta Lead Associate Tel +1 703-377-6561 carabetta_christopher@bah.com www.boozallen.com Booz Allen Hamilton has been at the forefront of strategy and technology for more than 100 years. Today, the firm provides management and technology consulting and engineering services to leading Fortune 500 corporations, governments, and not-for-profits across the globe. Booz Allen partners with public and private sector clients to solve their most difficult challenges through a combination of consulting, analytics, mission operations, technology, systems delivery, cybersecurity, engineering, and innovation expertise. With international headquarters in McLean, Virginia, the firm employs about 22,600 people globally, and had revenue of $5.41 billion for the 12 months ended March 31, 2016. To learn more, visit www.boozallen.com. (NYSE: BAH) • Enterprise Cost/Data Analytics & Modeling: Track, model, and analyze actual cost performance, validate cost savings initiatives, and adjust budget baseline and performance • Supply Chain Transformation: Improve efficiency and drive cost down through strategic sourcing and Lean Six Sigma in logistics, distribution, inventory, and procurement • Infrastructure Maintenance Analysis: Evaluate and improve planning, efficiency, and effectiveness of preventive and corrective maintenance actions, as well as capital investment decisions to lower overall life-cycle cost • IT Transformation: Develop/Re-energize strategy for network architecture, hardware, software and how data is stored and accessed across the firm Enterprise Benchmarks to Size and Target Savings Opportunities Benchmarking can provide particularly insightful understanding of the organization’s competitive position within and across industries to identify areas with biggest opportunity for improvement. Competitive benchmarking can lend objectivity and credibility to internal stocktaking. Leaders need to understand the art of the possible, what others are doing, and best practices that could be applied from within and outside of their industry. Once leaders understand their organization’s relative positioning, they must adjust their strategy and inspire their organizations to change and, in some cases, transform. Leaders need to convincingly make a case for change—to create the burning platform—and to define the way forward. Benchmarks, along with the associated baseline, arm management with data needed to make the case for change and justify budgets and new investment in process improvement, additional resources, and capital expenditures. Booz Allen has experienced benchmarking practitioners with access to proprietary databases, detailed case studies, and a benchmarking library comprising third-party data. In cases where sufficient data doesn’t exist, we have experience in designing and building custom surveys, conducting primary research, recruiting participants, and generating new knowledge and insights. We can also facilitate benchmarking consortia among competitors, and carefully handle, clean, and anonymize data for the benefit of the study sponsors. Client Success Stories Booz Allen has numerous success stories where our Enterprise Cost/Efficiency Transformation approach allowed our clients to identify and execute significant savings: • Cost Optimization for International Financial Institution: Booz Allen baselined and benchmarked a $7 billion banking institution to optimize costs and target $400 million in cost reductions over 3 years. We shared common “best practices” for large-scale change implementation in areas such as HR, shared services, IT optimization, procurement and sourcing strategy, facility optimization, and core process improvement. • Merger/Transformation for Cost Reduction for Government-Owned Manufacturing Enterprise: Booz Allen is partnering in the execution of the merger and transformation of two manufacturing sites with an annual budget of over $1.8 billion. Booz Allen developed a comprehensive cost and staffing baseline and benchmarking and best practices analysis that allowed identification of a comprehensive and detailed roadmap to achieve over $3 billion in targeted cost savings over 10 years.

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