www.rolls-royce.com/nuclear NUCLEAR INNOVATION & TECHNOLOGY

CAPABILITY OFFERING

NUCLEAR SERVICES

Strategic SourcingA Proactive Approach Leveraging Industry-Wide Material Availability and Demand to Increase Material Availability and Reduce Costs

The Rolls-Royce Strategic Sourcing initiative is a partnership between Rolls-Royce and participating companies to significantly reduce material costs and increase material availability. Strategic Sourcing proactively uses industry-wide processes including bulk purchasing, excess inventory, shared material, Commercial Grade Dedication (CDG), and alternate suppliers to ensure site needs are met to support PM schedule, and emergent work while reducing costs.

A comprehensive approach utilizing a wide and unique range of industry, vendor, fleet, and site information

Rolls-Royce Strategic Sourcing analyzes site and industry material demands and proactively identifies opportunities for cost savings. The initiative is an industry-wide approach, offering services from identification of site needs and savings opportunities through delivery of material.

Identifies industry demand and increases cost effectiveness

The Rolls-Royce Strategic Sourcing process identifies and implements key opportunities for cost savings by using industry experience and information. Strategic Sourcing analyzes the industry demand to identify surplus and bulk material purchasing opportunities resulting in discounted material for the buyer and increased investment recovery return for the seller when selling surplus/stranded materials. The initiative reduces expediting costs by proactively resolving the demand of inventory items.

Nuclear Energy Institute’s Top Industry Practice (TIP) Award 2013

TIP award in management processes and support services for implementation of PIERSS program.

Strategic Sourcing is a key initiative in the award winning Rolls-Royce Proactive Integrated Equipment Reliability and Strategic Sourcing (PIERSS) program. PIERSS is a comprehensive approach that uses early identification of needs and leveraging of knowledge from industry and site organizations to improve equipment reliability and supply chain processes.

Strategic Sourcing addresses following Performance Objectives and Criteria (PO&Cs):• WM.1 - On-line and Outage Work Management

• PM.1 - Project Management

• ER.3 - Long-term Equipment Reliability

• OR.1 - Nuclear Organization Structure and Traits

• OR.3 - Management Systems

• CO.5 - Corporate Support and Performance

Improved Supplier Base

The Rolls-Royce Strategic Sourcing initiative identifies Commercial Grade Dedication (CGD), reverse engineering opportunities, and alternate suppliers.

Rolls-RoyceNuclear Services410 Rouser RoadMoon Twp, PA 15108Tel: +1 412-865-3040 www.rolls-royce.com/nuclear

© 2013 Rolls-RoyceWhile this information is given in good faith, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce or any of its subsidiary companies.

Strategic Sourcing

Strategic Sourcing: A comprehensive approach from identification of opportunities through delivery of material

Rolls-Royce Strategic Sourcing identifies and implements key opportunities for cost savings by using industry experience and information. Bulk and excess material purchases, CGD, material sharing and alternate suppliers result in discounted material for the buyer. Material sharing reduces inventory carrying costs.

Alternate suppliers

Identification of lower-cost alternate suppliers.

Industry excess material purchasing

Review of upcoming material demand and match with stranded inventory at other utilities which decreases cost and lead time issues for the buyer and increases investment recovery return for the selling utility.

Industry bulk purchasing

Proactive identification of opportunities by determining material demand 104 weeks prior to work execution resulting in a large industry-wide demand as leverage for vendor discounts.Early identification of vendor discontinued (obsolete) parts so that solutions can be developed or bulk buys can be arranged, saving engineering resources and increasing material availability.

Industry material sharing

Sharing of high-cost equipment and contingent materials to reduce inventory carrying costs while ensuring availability of equipment if needed.

Commercial Grade Dedication (CGD)

Identification of CDG opportunities and determination of required testing to commercially dedicate material to provide potential cost saving opportunities.

Key point of contactBrad DiggansRolls-RoyceNuclear ServicesTel: +1 412-865-3040 x302E-mail: brad.diggans@rolls-royce.com