TXU Power

1
TXU Power
We Have Learned From The Pioneers Of Productivity
Toyota Boeing GE Alcoa Sandvik
Date started 1950s 1980s Late 1980s 1996 Early 2000s
Original themes Toyota Production System (TPS) Lean manufacturing Redefinition of slow rate, highly complex assembly process Improve operations, enhance quality and lower cost Applying lean manufacturing to process industry Lead-time reduction Productivity Quality
Capability building system Corporate focus around The Toyota Way A management culture of high employee involvement and development Boeing Leadership Center with incorporated lean enterprise training Crotonville Alcoa University developed by APS corporate group Academy responsible for buildup and management of production system
Profile
Robust systems problem solving Very visual
efficient production processes Excited involved
workforce Managed by performance Common
production language tools
Key Success Factors
Which Will Drive Both Cost Leadership and
Operational Excellence
EBIT improvement relative to 04E 05-07 millions
235
Cost leadership initiatives

• Coal and nuclear OM
• Strategic sourcing
• Employee benefit expenses
• Contractor management
• Maintenance efficiency

180
2
125
Cost Leadership
1
Operational excellence initiatives

• Nuclear capacity factor
• Coal capacity factor
• Heat rate improvement

2
Operational Excellence
1
1 Excludes impact of dual nuclear outage 2
Excludes impact of steam generator replacement
2
TXU Power
And Increased Capacity Utilization
Which Will Improve Powers Financial Performance
Operator performance 04 Average MW achieved
Relief Operator
Primary Operator
x
x
2
3
4
5
6
7
8
9
10
1
Operator
Through best practice sharing between operators,
average capacity has increased by 9 MW,
corresponding to a 3 million EBIT opportunity
1 Excludes all conditions out of the operators
control (e.g., equipment failures, low Btu fuel)