Nuclear industry urged toward UK supply chain collaboration

24 July 2008
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25 July 2008 | Paul Snell

Procurement teams across the UK nuclear decommissioning industry should work more collaboratively for the benefit of buyers and suppliers.

In a consultation published this month, the Nuclear Decommissioning Authority (NDA) said it wanted to make its supply chain more attractive as well as cheaper and easier for suppliers to access. It is hoped this will make the supply chain become a "market of choice" for international suppliers, and develop UK firms to compete globally.

The NDA spends about £1.2 billiona year with second tier suppliers, 35 per cent of which goes to 20 suppliers and most of the total going to UK firms.

It wants the firms in charge of decommissioning - site licence companies (SLCs) - to provide more consistency for suppliers in parts of tenders such as standard terms and conditions. And if suppliers only had to provide information once, rather than for each tender, it would reduce their costs.

According to Ron Gorham, head of supply chain development and commercial relationships at the NDA, this move would have benefits for buyers and suppliers.

The report also suggested collaborative procurement could bring together spend currently on multiple contracts and increase buying power. In addition, it raised the possibility of developing a common purchasing system for different sites and common policies on areas such as sustainable procurement.

And Gorham believes the strategy could not only benefit the decommissioning sector, but also the wider nuclear sector, including clients such as the Ministry of Defence.

Steve Morgan, director, commercial and contract management at Sellafield, agrees that collaborative procurement is the way forward. SLCs already operate an informal "buying club" looking at areas such as electricity and, he says, the attitude towards working together is positive.

"We need to take the national approach with collaborative procurement. It is the next way to go and will be the next big slab of cost reduction," he added.

Gorham agrees there is a positive approach to collaboration and that there are few commodities and services in the sector that are too niche to make it unworkable. He also believes a consultative approach is important to get existing and new suppliers interested in the market.

SMjul2008

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