TVA presentation 1

8/7/2019 TVA presentation 1

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STRATEGIC CONFERENCESTRATEGIC CONFERENCESYDNEY AUSTRALIASYDNEY AUSTRALIA

FEBRUARY 28, 2006FEBRUARY 28, 2006

INVENTORY OPTIMIZATIONINVENTORY OPTIMIZATION

BYBY

DAN OLIVERDAN OLIVER


2/28

GeneratingPlants

TransmissionSystem

UTILITY SystemUTILITY System

DistributorCustomers

Residential, Commercial, Industrial

Directly Served

Industries

Interconnection Points


3/28

11 fossil plants (59 units)

3 nuclear plants (5 units)

29 hydro plants (109 units)

4 combustion turbine

plants (48 units)

1 pumped storage station

17,000 miles of

transmission line

Generating FacilitiesGenerating Facilities


4/28

Win-Win-Win

Win for UTILITY

Win for UTILITY

Supplier Partners

Win for UTILITY

Customers

158 power distributors 62 direct serve industries

Over 8 million people in an 80,000 sq mile service area

Public users of land and recreational facilities

Communities with economic development assistance

CUSTOMERS SERVEDCUSTOMERS SERVED


5/28

A key part of the Supply Chain challenge continues to be the change

from a price focus to a Total Ownership Cost (TOC) focus:

TOC Focus

PURCHASE

COST

Actual

Opportunity

or

TOC(The whole iceberg)

PerceivedOpportunity

(Above the Waterline)

FORECASTING: equipment life/failures system improvements system capacity

technology driversTECHNICAL: reliability standardization design / scope clarity configuration management

PROJECTJUSTIFICATION: project justification criteria business unit alignment TVA-wide ROI analysis

INVENTORY

PRACTICES:

inventory ownership(SMI, consignment)

risk mitigation re-deployment of

useable

RETIREMENT

PRACTICES: disposal cost

secondary users

OPERATIONAL

PRACTICES: install & support costs maintenance costs capacity utilization training costs

CONTRACTING: TVA leverage potential technology convergence re-bid frequency


6/28

TYPICAL INVENTORYTYPICAL INVENTORY

SITUATIONSSITUATIONS

DESIRE TO REDUCE SIGNIFICANTDESIRE TO REDUCE SIGNIFICANTCAPITAL INVESTMENT INCAPITAL INVESTMENT ININVENTORYINVENTORY

CONCERN FOR BALANCINGCONCERN FOR BALANCINGINVENTORY WITH RELIABILITYINVENTORY WITH RELIABILITY

DESIRE TO CONTROL FUTUREDESIRE TO CONTROL FUTURE

INVENTORY GROWTHINVENTORY GROWTHCONCERN FOR COMPLIANCE TOCONCERN FOR COMPLIANCE TOSARBANES OXLEYSARBANES OXLEY


7/28

TYPICAL REASONS FORTYPICAL REASONS FOR

INVENTORY GROWTHINVENTORY GROWTH

OVERBUYING FOR MAINTENANCE OROVERBUYING FOR MAINTENANCE OR

CAPITAL IMPROVEMENTSCAPITAL IMPROVEMENTS

CANCELLED OR DEFERRED MAINTENANCECANCELLED OR DEFERRED MAINTENANCE

RETURNS AFTER COMPLETION OF WORKRETURNS AFTER COMPLETION OF WORK

ADDITION OF NEW ITEMSADDITION OF NEW ITEMS

INCREASES TO EXISTING MIN/MAXSINCREASES TO EXISTING MIN/MAXS

INCREASED PRICESINCREASED PRICES


8/28

PROGRAM ELEMENTSPROGRAM ELEMENTS

STRATIFY INVENTORY DATASTRATIFY INVENTORY DATA

IDENTIFY APPROPRIATE STRATEGYIDENTIFY APPROPRIATE STRATEGY

FOR EACH INVENTORY CLASSFOR EACH INVENTORY CLASS

ESTABLISH TARGETSESTABLISH TARGETS

IMPLEMENT PROPOSEDIMPLEMENT PROPOSED

ALGORITHMSALGORITHMSIMPLEMENT EACH STRATEGYIMPLEMENT EACH STRATEGY

TRACK RESULTSTRACK RESULTS


9/28

TYPICAL STRATIFICATIONTYPICAL STRATIFICATION

EXAMPLESEXAMPLES

CLASSIFICATIONCLASSIFICATION

LOCATIONLOCATION

COMMODITYCOMMODITYDOLLAR VALUEDOLLAR VALUE

OVERSTOCK/SURPLUSOVERSTOCK/SURPLUS

SLOWMOVING NO ISSUE IN XSLOWMOVING NO ISSUE IN XYEARSYEARS


10/28

PROGRAM SUCCESSESPROGRAM SUCCESSES

$147M REDUCTION OVER 5.5 YEARS$147M REDUCTION OVER 5.5 YEARS

SIGNIFICANT CASH FLOWSIGNIFICANT CASH FLOW

IMPROVEMENTIMPROVEMENT

SUCCESSFUL IN DIVERSE MROSUCCESSFUL IN DIVERSE MRO

INVENTORIESINVENTORIES

NO IMPACT TO OPERATION ANDNO IMPACT TO OPERATION ANDRELIABILITYRELIABILITY


11/28


12/28

INVENTORY OPTIMIZATIONINVENTORY OPTIMIZATION

HIGHLIGHTSHIGHLIGHTS

OBTAIN SENIOR MANAGEMENT BUYINOBTAIN SENIOR MANAGEMENT BUYIN

PERFORM INVENTORY ANALYSISPERFORM INVENTORY ANALYSIS

STRATIFY INVENTORYSTRATIFY INVENTORY

SET INVENTORY REDUCTION TARGETSSET INVENTORY REDUCTION TARGETS

TRACK PROGRESSTRACK PROGRESS

COMMUNICATE TO ALL LEVELS OFCOMMUNICATE TO ALL LEVELS OF

ORGANIZATIONORGANIZATIONCELEBRATE SUCESSESCELEBRATE SUCESSES


13/28

VALVES & PARTS

TURBINES/ GENERATORS

PUMPS

INSTRUMENTATION

MISC ELECTRICAL

BOILERS & BURNERS

MECH PWR TRANS EQUIP

CIRCUIT BREAKERS

GASKETS & PACKING

PULVERIZERS & ASH HA

0

10,000

20,000

30,000

40,000

50,000

39,209

31,315

29,849

18,805

12,26311,296 11,056

10,096

9,119 8,818

MATERIALS MANAGEMENT Inventory Analysis & Reporting STRATEGIC SOURCING INITITIAVES TURBINE/ GENERATOR TEAM

PRELIMINARY "SNAPSHOT"

TOTAL INVENTORY VALUE AT FISCAL YEAR END 1997 = $ 276,845,892.

TOTAL INVENTORY VALUE OF TOP TEN = $ 181,826,000.

INVENTORY INVESTMENT OF TOP TEN COMMODOTIES IN STOCK

ALL BUSINESS UNITS

"MAMS" INVENTORY SYSTEMREPORT GENERATOR (RMDS)

REPORT NAME = TOPTEN 10-03-97

PREPARED BY: Bill Rosenberger

N:\PPT\ INVENCON\billr\ TOPTEN.PPT,10-07-97

( $ MILLION )


14/28

13.5

37.7

0

10

20

30

40

JUN JUL AUG SEP

1-30D > 30D

Months Supply - ActiveBrowns Ferry

20.4

30.6

0

10

20

30

40

JUN JUL AUG SEP

1-30D > 30D

Sequoyah

13.5

50.3

0

20

40

60

JUN JUL AUG SEP

1-30D > 30D

Watts Bar35.8

31.5

0

10

20

30

40

JUN JUL AUG SEP

1-30D > 30D

NSI


15/28

-40

-9

-111

-5

-120

-100

-80

-60

-40

-20

0

JUN JUL AUG SEP

(Thousan

BFN SQN WBN NSI

Outstanding On Order

1.4

1.1

0.4

1.0

0.0

0.5

1.0

1.5

2.0

JUL AUG SEP OCT

(M

illio

n

BFN SQN WBN NSI

Net ROP/ROQ Changes


16/28

MATERIALS MANAGEMENT

Inventory Analysis & Reporting

INVENTORY STRATIFICATION

FOSSIL LOCATIONS

SPARES

PLANT

LOCATION

STOREROOM

LOCATION

CODE

INVENTORY

VALUE OVERSTOCK

SLOW MOVING

(NO MOVEMENT

3 YEARS)

WIDOW CREEK 3700 $15,937,688.20 $2,642,926.50 $8,054,527.52

JOHNSONVILLE 4300 $8,898,315.12 $1,620,071.95 $2,393,344.77

KINGSTON 4700 $6,546,930.44 $1,170,550.31 $1,994,490.27

SHAWNEE 4800 $7,933,564.34 $952,233.36 $3,035,614.59COLBERT 4900 $7,470,185.38 $1,479,333.25 $2,720,707.90

GALLATIN 5000 $3,714,996.16 $411,572.00 $1,084,249.10

ALLATIN OUTAGE 5060 $79,444.12 $75,164.56 $0.00

JOHN SEVIER 5100 $4,124,437.31 $856,676.06 $1,121,598.56

PARADISE 5200 $19,587,857.59 $2,801,711.19 $8,361,141.95

RADISE OUTAGE 5260 $3,750.00 $3,750.00 $0.00

ALLEN 5400 $3,747,105.49 $533,177.85 $1,354,186.33

BULL RUN 5500 $3,821,354.36 $777,712.39 $1,401,195.73

CUMBERLAND 5700 $20,314,379.00 $4,607,234.32 $7,030,254.80

CUMBERLAND

SCRUBBER 5735 $2,961,071.95 $176,052.14 $11,008.46

CUMBERLAND

AUXILIARY

STORAGE

HARTSVILLE 5739 $1,447,222.57 $559,874.14 $0.00

TOTAL VALUE OF SPARES $106,588,302.03 $18,668,040.02 $38,562,319.98

BULK COMMODOTIES

PLANT

LOCATION

STOREROOM

LOCATION

CODE

INVENTORY

VALUE OVERSTOCK

SLOW MOVING

(NO MOVEMENT

3 YEARS)

WIDOW CREEK 3700 $1,400,549.51 $262,335.07 $526,891.29

JOHNSONVILLE 4300 $1,283,140.86 $138,870.76 $234,174.18

KINGSTON 4700 $1,277,119.33 $143,565.95 $263,424.35

SHAWNEE 4800 $1,211,748.41 $94,709.64 $297,124.79

COLBERT 4900 $507,203.99 $377,105.29 $488,395.05

GALLATIN 5000 $136,282.65 $64,989.69 $201,916.93

JOHN SEVIER 5100 $283,370.60 $188,198.05 $195,224.97

PARADISE 5200 $1,807,874.83 $503,935.77 $636,735.23

ALLEN 5400 $415,818.80 $68,365.95 $123,674.77

BULL RUN 5500 $311,187.19 $190,578.46 $184,886.28CUMBERLAND 5700 $1,761,584.13 $506,389.75 $651,926.29

CUMBERLAND

SCRUBBER 5735 $12,074.49 $5,689.66 $7.84

CUMBERLAND

AUXILIARY

STORAGE

HARTSVILLE 5739 $97,321.32 $59,666.54 $0.00

TOTAL VALUE OF BULK $10,505,276.11 $2,604,400.58 $3,804,381.97


17/28

INVENTORY PERFORMANCE FY02INVENTORY PERFORMANCE FY02

GROWTHGROWTH

REDUCTIONREDUCTION

STRATEGIESSTRATEGIES

13.867M

13.196M

October 2001 Beginning Inventory $100.072M

September 2002 Ending Inventory $99.401M

FYTD FYTD

1358135813581358

886865

3,271

7,943

2310

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000 GROWTH DRIVERS

Planned

Work

Receipts

Non-Inv

Planned

Work

Receipts

Inv

Initial

Stock

2,442

1,153

10,272

0

2,000

4,000

6,000

8,000

10,000

12,000REDUCTION DRIVERS

Shared

Inventory

ROP/ROQ

Reduction

Dollars($0

00)

Dollars($000)

Writeoffs Adjust-

ments

Normal

Receipts


18/28

756




GROWTHGROWTHREDUCTIONREDUCTION


7,184K

6,764K

FYT

DFYTD

756

1358




GROWTHGROWTH

REDUCTIONREDUCTION


2,864K

2,769K

FYTDFYTD

7561358

321225

371

1,631

221

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000GROWTH DRIVERS

Planned

WorkReceipts

Non-Inv

Planned

WorkReceipts

Inv

Initial

Stock

3 4 7

2 ,069

44 8

0

5 00

1 ,00 0

1 ,50 0

2 ,00 0

2 ,50 0

3 ,00 0REDUCTION DRIVERS

Shared

InventoryROP/ROQ

Reduction

Dollars($000)

Dollars($000)

7561358

7561358

2,225

340

1,366

2,833

0

500

1,000

1,500

2,000

2,500

3,000

3,500 GROWTH DRIVERS

Planned

WorkReceipts

Non-Inv

Planned

WorkReceipts

Inv

Initial

Stock

34 2

1 ,021

5 ,585

23 60

1 ,00 0

2 ,00 0

3 ,00 0

4 ,00 0

5 ,00 0

6 ,00 0


Shared

Inventory

ROP/ROQ

Reduction

Dollars($000)

Dollars($000)

1358




GROWTHGROWTHREDUCTIONREDUCTION


5,758K

5,675K

FYTDFYTD

7561358

7561358

7561358

362300

1,534

3,479

0

500

1000

1500

2000

2500

3000

3500

4000GROWTH DRIVERS

Planned

Work

ReceiptsNon-Inv

Initial

Stock

1 ,614

2 ,618

5 53

97 3

0

5 0 0

1 ,0 00

1 ,5 00

2 ,0 00

2 ,5 00


Shared

Inventory

Adjust-

mentsROP/ROQ

Reduction

Dollars($000)

Dollars($000)

Normal

Issues

Planned

Work

ReceiptsInv


GROWTHGROWTH

REDUCTIONREDUCTION


73K

0 K



FYTD FYTD

13581358135813580

100

200

300

400

500GROWTH DRIVERS

10

4 6

1 7

0

5 0

1 00

1 50

2 00REDUCTION DRIVERS

Shared

Inventory

Dollars($000)

Dollars($000)

Adjust-

ments

Adjust-

ments

Writeoffs

Normal

Receipts

WriteoffsNormal

Receipts

Adjust-

mentsNormal

Issues

Writeoffs


19/28

TVA INVENTORY MANAGEMENT

INVENTORY PLAN

FY 1998-2002($ Millions)

POTENTIAL

ITEM CATEGORY CALCULATION REDUCTION

1 Write-off or make available for sale, $2.541

slow moving consumables.

2 Write-off or make available for sale, 80% of $9.185M or $7.349

slow moving bulk commodities. $7.349M

3 Review consumables for SMI or vendor 60% of $12.400M $7.440

consignment. or $7.440M

4 Negotiate sale or return to vendors 80% of $9.978M $7.982

overstock bulk commodities. or $7.982M

5 Establish consignment contracts for bulk 60% of $13.208M $7.925

commodities. or $7.925M

6 Write-off or make available for sale, spare 50% of $18.706M $9.353

parts that are both overstock and slow or $9.353M

moving.

7 Write-off or make available for sale, 100% of $.307M $0.306

slow moving items at Distribution Centers. or $0.306M

8 Identify total turbine, boiler, transformer, 34% of $110.150M $37.451

and cable inventory for negotiation within or $37.451M

the first wave of sourcing strategy for

vendor buy back & vendor stock.

9 Write-off or make available for sale 25% of $9.750M $2.448

inventory with 10 yrs. or more supply or $2.448M

on hand.

10 Establish "Shared Inventory" for common 50% of $27.494M $13.747

items across all TVA business units. or $13.747M

11 SCAS Review of Spare parts reorders $4.250

TOTAL POTENTIAL REDUCTION $100.792

C:\MYDOCUMENTS\GJ B\TVAINVMG.XLS, EDJ , 08/20/97


20/28


SHORT-TERM PLAN


POTENTIAL

ITEM CATEGORY CALCULATION REDUCTION FY 98 FY 99

1 Write-off or make available for sale, $2.541 $2.541

slow moving consumables.

2 Write-off or make available for sale, 50% of $9.185M or $4.593 $4.593

slow moving bulk commodities. $4.593M

3 Review consumables for SMI or vendor 50% of $12.400M $6.200 $1.860 $4.340consignment. or $6.200M

4 Negotiate sale or return to vendors 50% of $9.978M $4.989 $2.000 $2.989overstock bulk commodities. or $4.989M

5 Establish consignment contracts for bulk 50% of $13.208M $6.604 $2.000 $4.604commodities. or $6.604M

6 Write-off or make available for sale, spare 25% of $18.706M $4.677 $2.338 $2.338parts that are both overstock and slow or $4.677Mmoving.

7 Write-off or make available for sale, 40% of $.307M $0.122 $0.122slow moving items at Distribution Centers. or $0.122M

8 Identify total turbine, boiler, transformer, 4% of $110.150M $4.406 $2.203 $2.203and cable inventory for negotiation within or $4.406Mthe first wave of sourcing strategy forvendor buy back & vendor stock.

9 Write-off or make available for sale 6% of $9.750M $0.600 $0.200 $0.400inventory with 10 yrs. or more supply or $.600Mon hand.

10 Establish "Shared Inventory" for common 15% of $27.494M $4.124 $1.650 $2.474items across all TVA business units. or $4.124M

11 SCAS Review of Spare parts reorders $2.000 $1.000 $1.000

TOTAL POTENTIAL REDUCTION $40.856 $20.507 $20.348

C:\MYDOCUMENTS\GJB\TVAINVMG.XLS, EDJ , 08/12/97


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LONG-TERM PLAN


POTENTIAL

ITEM CATEGORY CALCULATION REDUCTION FY 2000 FY 2001 FY 2002

2 Write-off or make available for sale, 30% of $9.185M or $2.756 $1.000 $1.000 0.750slow moving bulk commodities. $2.756M

3 Review consumables for SMI or vendor 10% of $12.400M $1.240 $0.400 $0.400 $0.404consignment. or $1.240M

4 Negotiate sale or return to vendors 30% of $9.978M $2.993 $1.000 $1.000 $0.993

overstock bulk commodities. or $2.993M

5 Establish consignment contracts for bulk 10% of $13.208M $1.321 $0.400 $0.400 $0.520commodities. or $1.321M

6 Write-off or make available for sale, spare 25% of $18.706M $4.677 $1.580 $1.500 $1.600

parts that are both overstock and slow or $4.677Mmoving.

7 Write-off or make available for sale, 60% of $.307M $0.184 $0.184

slow moving items at Distribution Centers. or $0.184M

8 Identify total turbine, boiler, transformer, 30% of $110.150M $33.045 $9.000 $10.000 $14.050

and cable inventory for negotiation within or $33.045Mthe first wave of sourcing strategy for

vendor buy back & vendor stock.

9 Write-off or make available for sale 19% of $9.750M $1.848 $0.616 $0.616 $0.616inventory with 10 yrs. or more supply or $1.848Mon hand.

10 Establish "Shared Inventory" for common 35% of $27.494M $9.623 $3.000 $3.000 $3.620

items across all TVA business units. or $9.623M

11 SCAS Review of Spare parts reorders $2.250 $1.000 $0.750 $0.500

TOTAL POTENTIAL REDUCTION $59.937 $18.180 $18.666 $23.053

C:\MYDOCUMENTS\GJ B\TVAINVMG.XLS, EDJ , 08/12/97


22/28

TVA INVENTORY MANAGEMENT PLAN

NUCLEAR

($ Millions)

FY 98 FY 99

ITEM BFN SQN WBN HGR SHARE TOT BFN SQN WBN HGR SHARE TOT

1 0.603 0.349 0.634 0.000 0.000 1.586 0.000 0.000 0.000 0.000 0.000 0.000

2 0.714 0.856 0.666 0.143 0.000 2.379 0.000 0.000 0.000 0.000 0.000 0.000

3 0.341 0.301 0.351 0.000 0.011 1.004 0.797 0.703 0.820 0.000 0.024 2.344

4 0.267 0.364 0.461 0.085 0.037 1.214 0.401 0.547 0.692 0.128 0.054 1.822

5 0.216 0.238 0.253 0.022 0.016 0.745 0.504 0.556 0.591 0.052 0.034 1.737

6 0.315 0.441 0.334 0.068 0.000 1.158 0.315 0.441 0.334 0.068 0.000 1.158

7 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

8 0.063 0.036 0.031 0.056 0.006 0.192 0.063 0.036 0.031 0.056 0.006 0.192

* 9 0.047 0.041 0.043 0.002 0.000 0.133 0.093 0.083 0.085 0.006 0.000 0.267

* 10 0.156 0.138 0.142 0.009 0.000 0.445 0.234 0.207 0.214 0.013 0.000 0.668

** 11 0.139 0.123 0.127 0.000 0.021 0.410 0.139 0.123 0.127 0.000 0.021 0.410

TOTAL 2.861 2.887 3.042 0.385 0.091 9.266 2.546 2.696 2.894 0.323 0.139 8.598

C:\MYDOCUMENTS\GJB\NUCINMGT.XLS, EDJ, 8/20/97 - DRAFT

Allocated to sites based on site % of total nuclear category (slow-moving consumables, overstock bulk commodities, etc.)

* Allocate based on % total inventory July 97 (nuclear) excluding shared. BFN 35%, SQN 31%, WBN 32%, HGR 2%

** Allocate based on % total inventory (nuclear) excluding 7300. BFN 34%, SQN 30%, WBN 31%, SHARE 5%


23/28


($ Millions)

FY 98 FY 99 LONG-TERM (2000-2002)

ITEM NUC F/H TPS DIST FAC TOT NUC F/H TPS DIST FAC TOT NUC F/H TPS DIST

1 1.586 0.902 0.011 0.039 0.003 2.541 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

2 2.379 1.934 0.276 0.004 0.000 4.593 0.000 0.000 0.000 0.000 0.000 0.000 1.427 1.160 0.166 0.003

3 1.004 0.615 0.045 0.157 0.039 1.860 2.344 1.442 0.107 0.366 0.081 4.340 0.670 0.410 0.030 0.105

4 1.214 0.588 0.165 0.033 0.000 2.000 1.822 0.870 0.248 0.049 0.000 2.989 1.821 0.875 0.248 0.049

5 0.745 0.652 0.548 0.055 0.000 2.000 1.737 1.456 1.280 0.131 0.000 4.604 0.496 0.422 0.366 0.037

6 1.158 1.082 0.074 0.024 0.000 2.338 1.158 1.082 0.074 0.024 0.000 2.338 2.316 2.165 0.148 0.048

7 0.000 0.000 0.000 0.122 0.000 0.122 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.184

8 0.192 1.960 0.051 0.000 0.000 2.203 0.192 1.960 0.051 0.000 0.000 2.203 2.644 29.410 0.991 0.000

9 0.133 0.044 0.015 0.007 0.001 0.200 0.267 0.088 0.030 0.014 0.001 0.400 1.267 0.366 0.143 0.066

10 0.445 1.089 0.083 0.033 0.000 1.650 0.668 1.633 0.124 0.049 0.000 2.474 2.598 6.411 0.505 0.109

11 0.410 0.380 0.190 0.020 0.000 1.000 0.410 0.380 0.190 0.020 0.000 1.000 0.923 0.855 0.428 0.044

TOTAL 9.266 9.246 1.458 0.494 0.043 20.507 8.598 8.911 2.104 0.653 0.082 20.348 14.162 42.074 3.025 0.645

C:\MYDOCUMENTS\GJB\INVMGTPL.XLS, EDJ,


24/28


FOSSIL / HYDRO

($ Millions)

FY 99

POOL &

ITEM WCF JOF KIF SHF COF GAF JSF PAF ALF BRF CUF RAC HYDRO RET HED CT TOTAL

1 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

2 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

3 0.135 0.152 0.159 0.130 0.113 0.064 0.095 0.265 0.042 0.076 0.130 0.028 0.003 0.023 0.020 0.007 1.442

4 0.078 0.042 0.043 0.029 0.112 0.020 0.054 0.151 0.020 0.057 0.172 0.020 0.004 0.066 0.001 0.001 0.870

5 0.185 0.169 0.169 0.160 0.067 0.017 0.038 0.239 0.055 0.041 0.248 0.025 0.004 0.031 0.000 0.008 1.456

6 0.160 0.070 0.055 0.066 0.123 0.012 0.061 0.151 0.026 0.036 0.267 0.018 0.000 0.028 0.000 0.009 1.082

7 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

8 0.300 0.159 0.118 0.135 0.135 0.070 0.074 0.339 0.058 0.071 0.449 0.000 0.000 0.052 0.000 0.000 1.960

9 0.012 0.008 0.006 0.006 0.006 0.004 0.004 0.016 0.002 0.004 0.018 0.002 0.000 0.000 0.000 0.000 0.088

10 0.217 0.126 0.096 0.114 0.109 0.056 0.062 0.274 0.052 0.057 0.333 0.036 0.011 0.059 0.000 0.031 1.633

11 0.051 0.029 0.022 0.027 0.025 0.013 0.014 0.064 0.012 0.013 0.078 0.008 0.003 0.014 0.000 0.007 0.380

TOTAL 1.138 0.755 0.668 0.667 0.690 0.256 0.402 1.499 0.267 0.355 1.695 0.137 0.025 0.273 0.021 0.063 8.911

C:\MYDOCUMENTS\GJB\FHINVMGT.XLS, EDJ, 08/20/97

MATERIALS MANAGEMENT

I t A l i dR ti


25/28

Inventory Analysis and Reporting

INVENTORY STRATIFICATION

INVENTORY VALUE OVERSTOCK SLOW MOVING

SPARE PARTS

TPS $19,053,754.58 $3,992,428.03 $325,815.80

F&HP $117,288,784.83 $22,316,524.46 $42,076,312.17

NUCLEAR $98,979,744.51 $34,209,579.60 $34,638,493.80

DISTRIBUTION $1,617,624.29 $788,807.30 $261,140.35

FACILITIES $0.00 $0.00 $0.00TOTAL $236,939,908.21 $61,307,339.39 $77,301,762.12

BULK COMMOD.

TPS $5,033,132.48 $824,840.91 $552,091.62

F&HP $11,002,436.39 $2,917,841.18 $3,867,663.34

NUCLEAR $15,793,370.95 $6,071,315.40 $4,758,014.48

DISTRIBUTION $542,750.71 $164,058.23 $7,614.97

FACILITIES $0.00 $0.00

TOTAL $32,371,690.53 $9,978,055.72 $9,185,384.41

CONSUMABLES

TPS $304,439.68 $39,649.39 $11,924.90

F&HP $4,103,650.24 $967,722.32 $900,523.55

NUCLEAR $6,695,653.39 $2,559,248.90 $1,586,289.37

DISTRIBUTION $1,044,614.29 $350,055.74 $39,386.18

FACILITIES $252,045.79 $94,312.30 $3,507.54

TOTAL $12,400,403.39 $4,010,988.65 $2,541,631.54

BUS UNITS TOTALS

TPS $24,391,326.74 $4,856,918.33 $889,832.32

F&HP $132,394,871.46 $26,202,087.96 $46,844,499.06

NUCLEAR $121,468,768.85 $42,840,143.90 $40,982,797.65

DISTRIBUTION $3,204,989.29 $1,302,921.27 $308,141.50

FACILITIES $252,045.79 $94,312.30 $3,507.54

GRAND TOTAL $281,712,002.13 $75,296,383.76 $89,028,778.07

NOTE: If you look at the overstock and slow moving (no use in 3 years)

columns, there is an overlap between these two of $18 million.

Therefore, the combined target would be $146,325,162 ($75,296,384 +

$89,028,778 - $18,000,000).


26/28

FY05 Materials Indicators

97,286

9 9 ,0 9 0

9 6 , 0 0 0

9 7 , 0 0 0

9 8 , 0 0 0

9 9 , 0 0 0

1 0 0 , 0 0 0

B UDG ET A CTUA L

T V A N M a r ch 2 005 I n ven t o r y V a l

($000)

Beginning

Balance

Month

Ending

Balance Change

Spare Parts 16,419 19,902 3,483

Consumables 1,055 1,038 (17)

Bulks 2,065 2,162 97

Disposition of Inactive Inventory

Definition: Inventory with no issues or receipts in

3 years or longer

CLOSED WORK ORDER MATERIAL USAGE ($000)

4,828

1,5801,682

2,8813,105

890

2,829

9509661,511

1,783

425

0

1,000

2,000

3,000

4,000

5,000

6,000

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Material $ Requested Material $ Used

EXPEDITING COSTS ($000)

68

147

1314

326

73

11

4049

264

374329

66

0

50

100

150

200

250

300

350

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD

Total

Cost for Expedited Orders ($000) Cost for Expedited Freight ($000)

In d i c a to r

M o n th l

S u b m it t

M o n th l

C a n c e ll

Y T D $

S u b m it t

Y T D $

C a n c e ll

O v e rm a x 5 0 1 1 8 7 3 , 8 7 9 9 2 9

N e w I t e m s 3 8 6 1 , 2 1 8 2 0 1

T o ta l $ 5 3 9 1 9 3 5 , 0 9 7 1 , 1 3

S IR C L E A D IN G IN D IC A T O R S ($ 0

Indicator Month YTD

Stock Level Reductions at

Reorder ($000) 11 204

Write-offs ($000) 49 214

Due In/ERN Review ($000)

(Cancelled Due In/ERN $) 377 2,402

Shared Inventory (Transfer

Issues) ($000) 96 455

Surplus Material

Redeployment ($000) 317 2,105

SUPPLY CHAIN LEADING INDICATORS:

March2005


27/28

SERVICE OFFERINGSSERVICE OFFERINGS

BENCHMARKINGBENCHMARKING

BILL OF MATERIAL DEVELOPMENTBILL OF MATERIAL DEVELOPMENT

INVENTORY DATA ANALYSISINVENTORY DATA ANALYSIS

PHYSICAL INVENTORYPHYSICAL INVENTORY

SUPPLIER MANAGED INVENTORYSUPPLIER MANAGED INVENTORY

INVESTMENT RECOVERYINVESTMENT RECOVERY

WAREHOUSINGWAREHOUSING

MATERIAL STANDARDIZATIONMATERIAL STANDARDIZATION

PROCEDURE DEVELOPMENTPROCEDURE DEVELOPMENT

INVENTORY OPTIMIZATION MODELINVENTORY OPTIMIZATION MODEL


28/28

Rev. 6/6/05Rev. 6/6/05

INVENTORY

OPTIMIZATIONSUPPLIER

MANAGED

INVENTORY

REVERSE

ENGINEERING

PROCEDURESSUPPLY CHAIN

INVESTMENT

RECOVERY

POOLED

INVENTORY

INVENTORY OPTIMIZATION MODELINVENTORY OPTIMIZATION MODEL

SARBANES

OXLEY

SHARED

INVENTORYMATERIAL

STANDARDIZATION

KPIS

GOALSANALYSIS

RATIONALIZATION

BILL OFMATERIAL

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