struttman consulting
 
 
 
 
Client Results
Reduce Costs
  CC102
  CC104
Expand Revenues and EBITDA
  CC110
  CC115
  CC106
Grow Strategically
  CC111
Reduce Costs

Summary—102

The most important asset of a copper and gold producer was not meeting its production and earnings targets. Equipment utilization was at less than 50% and operating costs were almost double those of its nearest competitor. As the manufacturer and its equipment dealer both struggled unsuccessfully to close gaps, their relationship became increasingly strained.

To resolve their issues, we facilitated a strategic alliance between the manufacturer, the mine, and the dealer and established a cooperative model to coordinate cost reduction strategies. Within 18 months, the company achieved an annual savings of more than $60 million.

Challenges
High operating, repair, and maintenance costs
Low haul truck reliability
Severe haul road conditions
Lack of an effective equipment management plan or comprehensive repair strategy
No linkage between production, equipment, and materials management plans
Client and dealer working at cross-purposes to fix the issues

Results
$60 million in annual savings realized within 18 months
50% increase in haul truck availability
40% reduction in operating costs
50% increase in asset life
60 projects executed by cross-functional company teams
Outsourced repair and maintenance services
Replication of proven model across company’s global operations
100% achievement of production goals with no additional capital investmen
A positive environment of collaborative problem-solving with dealer
  
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