The Unintended Consequences of Cost Savings Initiatives

A variety of factors have led to an overall increase in the price of replacement parts. The “chicken or egg” situation is that reduced purchases from a shrinking market are causing supplier inefficiencies leading to higher prices. Utilities are responding to higher prices with initiatives such as 10CFR50.69, performing their own commercial grade dedication, Code Case N752, reducing purchase quantities, extending maintenance cycles, etc., all of which lead to reduced purchases of safety-related parts, more inefficiency for suppliers, and high prices.

This session will explore whether cost saving initiatives are actually saving costs, or whether the industry is simply robbing Peter to pay Paul. It will also explore improving supplier capacity utilization and other opportunities to jointly realize true cost savings.

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