Thinking differently to create revenue streams

Our client is a large multi-function nuclear site operating services that include reprocessing, waste storage, and decommissioning. The client is a key employer within its region and vital for the local economy. Discover how we offered support through a supply chain transformation program.

Challenge

Our client was going through a major transformation, of which their supply chain was a key focus area. As part of this program, the client was assessing various options for its operating model and needed to understand whether they could find alternatives for the delivery of some key internal services rather than risk large numbers of redundancies which could lead to a negative impact on the socio-economics of the region.

Proxima was engaged to provide commercial and operational challenge in the development of a business case to consider the commercialization of some of these key services; offering expertise as a service to similar organizations many of whom would be facing the same challenges in coming years.

The business case would need to explore the creation of a joint venture with a private-sector organization. The client sought to rigorously test whether a private sector organization could help them exploit their intellectual property to create a revenue stream to support a new joint venture business.

Approach

Utilizing the principles from the HM Treasury Green Book, we developed a set of business cases to explore with the client and their parent company’s governance process. Over 12 months, we worked closely within an internal working group consisting of representatives from across the business and Proxima consultants.

In numerous collaboration sessions, we facilitated open critique and challenge to the proposed approach and course correction as needed. We initiated two rounds of soft market engagement to test the market’s understanding of the proposition and to test the commercial and operational construct.

In collaboration with the client team, we designed a set of strategic objectives which formed the basis of our analysis. The initial long list of potential options, using the current state as the baseline, included traditional outsourcing models, incorporated & unincorporated joint ventures, and subsidiary models. These were thoroughly tested through the economic appraisal and were then balanced by removing any optimism bias and sensitivity analysis to find the ideal solution to take forward.

Results

We jointly produced a detailed 160+ page Outline Business Case (OBC) using the 5 case HM Treasury Green Book model, provided detailed analysis, and proposed recommendations to the board. A number of subsequent iterations were worked up for various audiences around the organization and the parent organization, as the model developed traction.

Board approval was given to the OBC with a request made to take the proposition formally out to the market under an OJEU procurement. Due to the scale and complexity of the proposition, the OBC was then taken up through the governance process before going to a BEIS Minister for final approval.

This was groundbreaking and game-changing in the industry and for the commercial function.
For more information about supply chain transformation, browse our services here.