Evaporating Costs with Vertical Condensation

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Vertical integration consists of expanding a business’s slot in the supply chain vertically—that is upward to become its own supplier and downward to become its own customer. This tactic, well used by the oil barons of the industrial age, can pay large dividends in savings thus benefiting the company and the end user, but only when the conditions are right. Vertical integration can often be difficult to profitably enact in highly specialized industries like that of nuclear power generation, but there are examples of its use—and opportunities for its use.

  • Nuclear reactor vendors such as GE, Westinghouse, and Areva have expanded their business to fuel fabrication to great effect worldwide. Westinghouse now “supplies global engineering services, fuel components, specialty metal products, and fuel-related services” to utilities along with their reactors.[1]
  • According to world-nucelar.org, the United States has the capacity to fabricate 3,700 tons of enriched uranium into fuel assemblies per year, compared to the European Union’s combined capacity of 2,650 tons per year.[2] However, the EU sports a 19,700 kSWU per year enrichment fleet while the U.S. lags behind at just 3,500 kSWU. This mismatch in continental enrichment and fabrication siphons money into transportation costs as the highly controlled substance is brought back and forth across the seas. There is much to save—therefore much to gain—by vertical integration on both sides of the Atlantic to fill in the gaps in the local supply chain.
  • Nuclear Training Institute provides training to nuclear enterprise professionals on a variety of industry relevant topics. Though it is far from the only company to do so, NTI is also able to benefit from vertical integration; by owning the requisite training facilities rather than renting them from a third party, NTI is able to lower its operating costs to the benefit of its customers. Furthermore, NTI is vertically integrated with its sister company, United Controls International, both as a source of experience and knowledge for the process of commercial grade dedication and as a working demonstration of the principles taught in NTI’s many courses.

To assist any sector of the nuclear industry to expand its supply chain horizons, NTI offers professional training in such areas as Nuclear Receipt Inspection and NQA-1 Lead Auditor Training. These curricula respectively assist nuclear enterprises in retaining requisite levels of quality assurance before and after any work is done without having to rely on a third party. Additionally, students also benefit from NTI’s vertical integration, experiencing unparalleled ease of implementation at a matchless cost.

[1] Fuel. (n.d.). Retrieved June 29, 2015, from http://www.westinghousenuclear.com/Operating-Plants/Fuel

[2] World Nuclear Association. (n.d.). Retrieved June 29, 2015, from http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Conversion-Enrichment-and-Fabrication/Uranium-Enrichment/

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