Supplier News

Article in Nuclear Energy Insider Magazine:

Magnox, responsible for the operation of ten of the UK’s first generation of nuclear power stations, subcontract over 60% of their annual budget into the supply chain, equivalent to over £400m - of which 20% finds its way to SMEs (Small and Medium Enterprises).

The nuclear industry is faced with the challenge of ensuring that the supply chain has enough capacity, capability and expertise in place to deliver the on-going requirements of the decommissioning and clean-up of the UK’s civil nuclear legacy.

In recent years, the industry has seen a move towards larger tier 2 framework contracts, meaning around 90% of spend is with 10% of the supply chain.

Nevertheless, neither Magnox nor the Nuclear Decommissioning Authority (NDA) which owns the sites, want this strategy to exclude tier three and tier four suppliers.

Many of these suppliers have developed in geographical areas close to the Magnox sites – increasing their expertise in key areas for the nuclear industry and leading to both localised centres of excellence and significant regional socio-economic benefit.

At the same time, Magnox has been leading the industry in supplier engagement, providing the supply chain with the right kind of information about forthcoming contracts at the right time.

With NDA’s encouragement, Magnox has taken the step of publicising all contracts >£50k which are planned or which have recently been awarded, in order to provide visibility to the tier three and four suppliers and ‘vertically align’ the supply chain.

This includes contracts within existing frameworks, providing the opportunity for smaller local suppliers to approach larger Tier 2 suppliers for the opportunities to work on the Magnox programme.

The Magnox Procurement Plan, is available via the Magnox website and updated monthly.

At a series of events dubbed ’Meet the Buyer’, Magnox has paired larger framework suppliers with smaller members of the supply chain, looking to break into the nuclear decommissioning market.

As the sites progress through the decommissioning phase of their lifecycle, there is a greater requirement for more conventional services such as construction, demolition, building maintenance – in addition to the highly technical services usually associated with the nuclear industry.

There remain, however, specific requirements for working in the heavily nuclear environment – including working safely in a radiological controlled area and demonstrating the required approach to safety and security.

Ron Gorham, the NDA’s Head of Supply Chain Optimisation and SME Champion, said: “We depend on a healthy, vibrant supply chain to provide us with technical support and innovative solutions to some difficult challenges.

“Magnox has been at the forefront, alongside the NDA and other Site Licence Companies, in encouraging the development of smaller businesses, whose specialist expertise can make a critical difference to achieving real decommissioning progress.

NDA now has an SME Action Plan that we expect all of our SLCs to consider, including measurement of SME spend and the ‘SME friendliness’ of procurement strategies.”

Case Studies:

Mon Maintenance Services

Mon Maintenance Services (MMS) was established in September 2009, following the closure of Anglesey Aluminium - where all 4 directors worked as a maintenance shift. Andrew Samuel, Stephen Evans, Wayne Allman and Andrew Williams all invested a portion of their redundancy forming MMS, who offer mechanical, electrical and Fabrication services to all sectors including Nuclear and have been involved at Trawsfynydd site since June 2010.

Since MMS was established the company have worked hard to position themselves within the nuclear industry. In the first year, setting up accredited quality and health and safety systems, required for work in the nuclear sector.

MMS are employee members of the National Skills academy Nuclear and are training one apprentice through funding received from NSAN, MMS being the first company in Wales to have been awarded this funding. In June 2012 MMS were also awarded certification in the Investing in people Standard and IIP leadership and Management Model.

MMS won the Regional Daily Post Business accelerator award in 2011, were finalists in the National Management and Leadership Awards in the category of Change Management in 2012 and MMS proudly received an NDA Supply Chain Award 2012.

Magnox have supported MMS in many ways over the past 3.5 years. Through the supply chain events organised by Magnox, MMS have gained excellent contacts, exposure and an insight into what is required from an SME wishing to supply into the nuclear sector.

Andrew Samuel, MMS Managing Director, said: “We would not have driven ourselves or invested time and money into our Quality, Health and Safety or Environmental systems without the demand placed on us by Magnox and their suppliers, standards which have not only made us stand out to our peers and from our competitors but have given us the tools to successfully apply and gain contracts in other sectors.”

Arvia

Arvia Technology Ltd - formed in 2007 as a ‘spin out’ company from the University of Manchester - has managed the introduction of a novel technology into this industry through a collaborative approach with Magnox Ltd.

Arvia’s unique technology, the organic destruction cell (ODC), removes and destroys toxic and non-biodegradable organic contaminants from a wide range of aqueous effluents using adsorption coupled with electrochemical regeneration. Originally developed for the treatment of industrial waste effluents, the technology caught the attention of Magnox who were looking for a treatment solution for radioactively contaminated oils that were stored at its decommissioning sites.

Magnox provided a commercial and industrial environment for Arvia to prove the technology could be effective in the nuclear decommissioning environment, with a demonstration unit at Trawsfynydd Site.

In 2012, Magnox signed a design contract with Arvia covering the design of the industrial scale rig that will deliver destruction of 2000 litres of contaminated oil.

Mike Lodge, Arvia’s Chief Commercial Officer, said: “Magnox has helped Arvia develop the business fundamentals, and have been supportive in many areas. There has been a willingness and a degree of flexibility and practicality about their approach on a number of key issues such as accreditation and cash flow – which have been important in allowing us to develop a foothold in the industry.

“When we started working with Magnox, that was our first piece of work in the nuclear industry. Now around 95% or our business is in the nuclear sector.”

London Olympics delivery success: the lessons for nuclear

Staging the London Olympics required unprecedented levels of co-ordination and planning, with issues ranging from financial and project controls to construction and infrastructure as well as political and cultural sensitivities – plus much more.

Sellafield Ltd, the Nuclear Decommissioning Authority (NDA) and the supply chain have benefited from a ‘lessons learned’ session presented by the Olympic Delivery Authority (use this as a link to the http://learninglegacy.london2012.com) (ODA) team and their delivery Partner CLM, who were in Cumbria for a series of half-day events last month.

The presentations focused on three key areas of Commercial, Project Controls and Delivery, with one of the recurrent themes being ‘Do the basics well and with rigour’ and centred on how the delivery programme was managed.

More than 250 senior delegates took advantage of the opportunity to attend the presentations and question the ODA team about details of the complex, multi-billion pound programme which included:

19 major projects
Almost 1,000 planning applications
Delivery of 27,000 activities and milestones
A workforce of more than 15,000

Event organiser Sean Moules, of the NDA, said: “When reading about the Olympics, I was immediately struck by the huge number of parallels with the Sellafield site – when you look at factors such as the numbers employed, the rate of spend, the security and stakeholder aspects, funding mechanisms, brownfield site issues, project control aspects and a host of other metrics, both programmes have major similarities.

“The sessions gave us a valuable insight into the scale of the programme and how it was delivered. The feedback I’ve had so far has been extremely positive and there has been interest from other site licensed companies as well. ”

NDA Chief Executive John Clarke said: "Thanks to all those who attended both to share their experience and to learn from that sharing. Although there are clearly major differences between delivering the Olympics and the nuclear complexities at Sellafield, there are also many parallels where large-scale challenges have been addressed and overcome, and major demolition and construction projects were delivered to time and cost. It was instructive to understand how London 2012 was delivered and there are many lessons we can apply across our estate."

Scott Reeder, Deputy Managing Director - Major Projects, Sellafield, said: "The recent Olympic Delivery Authority learning event provided a valuable opportunity for the project management community from Sellafield to understand the principles applied to meeting the Olympic challenge for large-scale major project delivery to fully meet the immovable commitment date. All of us in the Project Management profession take pride in what was delivered for the recent London Olympics. We will seek to apply the learning from the ODA to the challenges we face at Sellafield. We greatly appreciate the generosity of the ODA team in sharing their experience with us."

A range of material, including video podcasts of the four presentations, is now available via the NDA website (use this as a link to: http://www.nda.gov.uk/stakeholders/newsletter/oda-lessons-learned.cfm)

Further follow-up activities are now in progress to disseminate useful documents more widely and to develop action plans for a number of areas. Please contact sean.moules@nda.gov.uk for further information.

A nuclear decommissioning event by the industry for the industry

Thursday, 22 November 2012, 9.30am - 4.30pm,
De Vere Whites Hotel, De Havilland Way,
Bolton, Greater Manchester, BL6 6SF

The Nuclear Decommissioning Authority (NDA), in conjunction with the Site Licence
Companies (SLCs), will host its second event for suppliers in the nuclear
decommissioning supply chain
www.decommsupplyevent.co.uk

Click here for more information

What the suppliers are saying about SRM

We asked those suppliers that had participated in the SRM programme what they thought about it, here are the responses –

‘We are delighted to have been invited to join the Magnox Supplier Relationship Programme and we believe that this is an important initiative to establishing strong links with key suppliers. We have found this to be a good approach to enabling a better understanding of the key drivers for Magnox and thus improving the alignment between Magnox and its suppliers. There has been open dialogue at a senior level that allows potential issues to be identified and resolved early. This has also been a good forum for sharing LFE.’

Tony Moore
NDA Key Account Director - Support Services
Babcock International Group

“the SRM programme is highly effective in terms of encouraging and obtaining collaboration between our organisations. We found the discussions to be open, stimulating and exploratory enabling a pragmatic view regarding the development of our partnership, including opportunities for joint-working on new initiatives. The strategic nature of the programme is invaluable and we look forward to our ongoing participation”

Nicola McQueen
Director - Managed Services
Capita Resourcing

“Radwise were delighted to be asked to participate in the Magnox Supplier Relationship Programme as we recognise the benefits of discussing relationships, goals & objectives with key players in the Magnox structure. We feel the meeting was very productive and worthwhile and that we were able to discuss in an informal and frank manner any relevant issues encountered through our current framework. It was also very pleasing that the Magnox representatives appeared keen to explore the suggestions for ‘areas of improvement’ that were put forward.

We look forward to further engagement through the Supplier Relationship Programme and are hopeful that through such discussions there will be a greater understanding of the strengths, concerns and aims of our company when delivering against our Framework. This will hopefully result in mutual benefits for both parties.”

David McBride
(Business Development Manager)
Radwise Limited

Magnox Launches SRM

To learn more about Supplier Relationship Management click here