Lowering operating costs of the largest US operator
The largest US Nuclear Power Plant operator uses all facets of Paragon’s nuclear inventory program to lower operating costs and reduce inventory.
Paragon provided RAPID Response, Investment Recovery, and Catalog Health services to deliver real inventory reductions. Here are a few examples of this success:
- As a participant in the RAPID Response program, Paragon helped this utility increase sales by 50%, selling $4M of inventory to other nuclear power plants since program inception.
- Through our unique Investment Recovery program, the utility averaged a return of 30% for material scrapped and sold by Paragon. The utility averages $400K of yearly commission payments for sales from the Paragon warehouse of their material.
- Paragon screened and identified 25,000 potential duplicate CATIDs in the utility catalog; 8,600 duplicate CATIDs were consolidated by the Paragon team with 7,200 CATIDs demonstrated as unique. This consolidation effort will save the utility $1.25M each year through avoided purchases and reduced part stocking levels.
Material Cost Reduction Programs
In 2017, Paragon was selected to lead the Material Cost Reduction (MCR) Program for the Utility Service Alliance (USA). This program, based on Delivering the Nuclear Promise EB 16-30, is focused on strategies to reduce costs, while maintaining the level of safety and reliability expected for the nuclear industry. To help USA members achieve their cost savings goals, Paragon deployed multiple programs and technologies working under composite project management. Paragon and USA worked together to achieve over $9M in savings by identifying Reverse Engineering opportunities, thereby reducing plant modifications and costly digital upgrades.
A great demonstration of helping USA members achieve their cost-saving goals is our documented plant savings of $7.9 million. “Plant Engineering, working with Paragon, identified an alternative option that could be completed to not only sustain the current product line but provide the plant significant cost savings by eliminating the need for the modification. As a result, Paragon ensured the availability of spare units in the plant inventory, refurbishment of the electronic units (EGM and the ramp generator signal converter [RGSC]), and the actuator (EGR), and reverse engineered EGM and RGSC units from Paragon.” (MCR Program for the Utility Service Alliance)
Through improved circuit card repair management, Paragon helped USA members save $100K per year at each site. To achieve this, Paragon used USA member data and developed an I&C circuit card repair program that gave USA members access to needed cards while reducing the number of cards in stock. Paragon helped sites identify correct min/max levels and identify cards as repairable so that new cards are not needed. Additionally, Paragon identified obsolete circuit cards common among members so that inventory could be shared and obsolescence risk mitigated.
Using the nuclear inventory management program, Paragon saved USA members $200K over 12 months by enabling them to share inventory as if they are a common ERP platform. Analysts look at part demand from USA sites and match that demand to overstock inventory at other USA member sites. Using this approach, part costs and lead times are reduced while members reduce site inventory and sell excess spare parts.
The bottom line is there is not a one-size-fits-all material cost reduction plan. A company’s plan must be tailored to its specific needs and the culture should drive the entire organization to ask the question, “Is there an alternative solution that could save the company money?”
The answer is that the savings add up quickly from inventory optimization, reverse engineering, and other sourcing.