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May 19, 2003             

The Great Nuclear Fizzle at Babcock & Wilcox

Case Study In Manufacturing Strategy

Thus, then, in Strategy everything is very simple, but not on that account very easy.

--Carl von Clauswitz    


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The Great Nuclear Fizzle at Babcock & Wilcox

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In the late 1960's, Babcock and Wilcox already had more than 100 years experience with steam boilers for marine propulsion and power generation. When the company entered the nuclear power business, everything seemed to go wrong. The aftermath brought delivery delays, strikes, lawsuits, red ink and a bizarre suicide. B&W even managed to create new competitors in a market niche they had previously owned outright.

The conventional analysis of this classic case study brings forth a long laundry list of management errors, mistakes and miscalculations. Yet, this seems improbable for such an experienced and competent organization. How could they make so many mistakes in so many different areas?

Wickham Skinner first used this example in his 1978 book, "Manufacturing in the Corporate Strategy". He traced B&W's troubles to a single root cause: management had failed to identify the "Key Manufacturing Task". Everything else emanated from this simple omission. As Karl von Clauswitz noted, simple does not mean easy.

This issue of "Lean Briefing" initiates a series on Manufacturing Strategy and how it fits with Lean Manufacturing. You may download The Great Nuclear Fizzle along with teaching and discussion notes. It makes a great introduction for a classroom or management team. The case is a bit long, but entertaining and easy to read. This narrative first appeared in Fortune magazine.

Our next issue pursues the topic of Manufacturing Strategy with a discussion of The Focused Factory, another important insight from Wickham Skinner. See you then.

Quarterman Lee

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