The Tennessee Valley Authority (TVA) has recently launched a new major project to challenge the culture of procurement in the business.
As a result of reduced budgets and demand for nuclear in the US, many of the country’s top utilities have new initiatives to streamline spend throughout supply chain operations. Whilst organizational restructures and redundancies are the headline grabbing initiatives, TVA has opted to initiate a number of far more positive ideas.
Accepting that there are some inadequacies in the purchasing process, TVA have recently launched an Inventory Optimization Initiative, tasked with identifying how the procurement culture of the business can be improved.
TVA’s Jon Cooper, who is leading the project internally, commented “The ultimate objectives are to reduce the financial value of our overall inventory by removing stranded material, reducing reorder rules around items that are slower moving and ensuring that we optimize inventory for items where we have a higher stockout rate”.
By utilizing new inventory analysis software and creative algorithms within the inventory management systems, the team aim to avoid overstock and unnecessary purchase of low usage items. This logical step towards addressing a common, but often overlooked industry challenge, has reinforced the growing leadership role now adopted by TVA.
TVA has identified the challenges that come with their new process:
“The biggest obstacle to date is the (procurement) culture and changing it with respect to utilizing more systematic and assertive means to analyze inventory and take the actions necessary to optimize it” Mr. Cooper added “I think one of the biggest barriers is the ostrich head in the sand syndrome. The problem will not go away but only get worse if it continues to go unchecked”.
There are a number of objectives associated with the project, however the team are aiming to “increase inventory turns in categories where it makes sense with a balance of keeping the right material on hand to reduce the risk of jeopardizing critical path work that require spare parts”.
The initial progress has been varied, but Mr. Cooper is confident that the success of the project will have a lasting impact, not only in the TVA, but the nuclear community on the whole.
Mr. Cooper will also be speaking at the 5th Annual Nuclear Supply Chain Conference, where he will offer full insight into the successes and challenges faced by the team. Here, Mr. Cooper will assess all the lessons learnt from the initiative and offer advice to anyone else considering such a project.
For more information on the 5th Annual Nuclear Supply Chain Conference, click here: http://tinyurl.com/ptg29et