STREAMLINING PRODUCTION | COVER STORY


of economies of scale. These cost increases can be offset through standardisation, modularisation and production learning. But it is clear, if SMRs are stick-built they will cost more than large reactors. SMRs need modern construction methods to compete. Furthermore, if the programme contained sufficient


projects, nuclear power plant unit cost would reduce over time through production learning and the electricity they generated could be as low as $70-80/MWh, competitive with renewable energy.


Optimising production Modular designs using standard components are important, but it is the ability to design/optimise and control production system that brings it together and delivers the improvements in performance. This approach has been used for decades to improve the performance of designing and building large capital goods from ships and aircraft to trucks and cars. But before applying it to a programme of SMRs, it is important to understand how it differs from the project management systems that are presently used to deliver nuclear power stations. Table 1 summarises the principal characteristics


of traditional project management and a production management when applied to large infrastructure projects. It is based on a study into the application of production management to construction that was carried out by Anglian Water with support from Heathrow and National Highways in 2019. The study identified the six key features of a production system that are used to make this comparison. This approach is not new. In 1995, BAA Plc developed a production system to deliver the new Terminal 5 at


Heathrow. Using long-term relationships with their suppliers, standard components, computer aided production engineering and production management, BAA completed the new terminal on time and close to the budget. The critical feature of BAA’s approach was that for six years before the start of construction in 2002, they used their ongoing investment programme at their airports to develop their supply chain, the production system and their own management team. Subsequently, Anglian Water adapted the approach to deliver a large part of their investment programme making extensive use of modular designs and standard components. According to the Institution of Civil Engineers 2017 report ‘From Transactions to Enterprises – A new approach to delivering high performing infrastructure,’ over a period of 10 years, they reduced the unit costs of their infrastructure by 30%. Nuclear power can best address its serious and


persistent cost and build schedule problems by adopting a programmatic approach, repetitively building of standard nuclear power plants that have been designed for modular construction, together with investment in series production facilities. Adopting these methods will allow nuclear power to regain competitiveness, allowing it to play a significant role in many countries in addressing climate change. The key to making these process changes and delivering


attendant benefits lies with transforming the mind-set of the nuclear industry from one project at a time, to a series of projects delivered by a production system. Both because the history of the industry and the experience of nuclear project construction managers this will not be easy but is essential if we want nuclear to play a meaningful role in the future energy equation. ■


Table 1 – Project management vs production system Project management


Product Development


Unique project designs completed before the supply chain is in place.


Suppliers do detailed engineering during project delivery. Process Development Supply and Logistics


Processes for manufacture and assembly developed by individual suppliers


Each supplier responsible for their own supply and logistics. Organisation And Culture


Fragmented organisation held together by contractual commitments.


A new organisation for every project. Every supplier working to optimise their own outcomes.


Information Architecture


Each supplier holds their own information about design and production and guards it for fear of it being used against them.


Governance and metrics


Vendor’s commercial managers coordinate the work through the sub-contracts with suppliers.


Objective – to deliver a project on time and budget. Execution


Heavily focused on scheduling, contracting strategy and management, risk management and project controls.


Production management


Standard designs for a series of projects done with the suppliers.


Engineering done by the suppliers working together before construction begins.


Processes developed with the product by the integrated team of suppliers.


Supply and logistics integrated with the process and provided for all suppliers.


Integrated organisation held together by commitments to improve performance.


The same organisation and supply chain working together and learning from project to project.


The whole organisation working together to outperform their targets.


Common systems providing information about design and production that can be accessed in real time by all suppliers.


An alliance board drawn from the vendor and the suppliers manages the team.


Objective – to deliver a series of projects faster, cheaper and predictably.


Map, model and control the production system. Uses the five levers of production systems performance – product design, process design, capacity, inventory and variability.


www.neimagazine.com | October 2023 | 33


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