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

Summary—106

A mining contractor undertook an initiative to identify whether there was an opportunity to reset his company’s cost structure to become more competitive. Because pending CAPEX was unclear, the company was unable to pinpoint priorities for making improvements in operations. Additionally, a significant proportion of the company’s assets were unserviceable but not fully depreciated, which contributed to annual losses.

We performed a detailed equipment analysis to identify the most economical life cycle for each equipment type. For particular products, industry research confirmed a longer life was possible. With our research, we were able to negotiate enhanced service agreements to ensure that the maximum life cycle could be achieved while acceptable utilization levels were still maintained. The net result was a 10% reduction in operating costs and a 45% reduction in CAPEX.

Challenges
Measuring equipment operating costs
Lack of a profitable disposal at the end of the equipment life cycle
Unable to create a competitive cost structure that would enable the company to win projects
Unable to support a mixed fleet due to high cost structure

Results
Predictable capital budget due to a new acquisition and disposition plan for equipment
50% increase in haul truck life cycle
10% operating cost reduction by implementing a new centerline cost and service model for every product
95% risk reduction with operating cost guarantees
Established a predictable cost based on an engineered maintenance strategy
Put in place a methodology for tracking performance to ensure achievement of that cost monthly
45% reduction in CAPEX, $100 million savings
  
Home Site Map
Loading