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Heavy mobile equipment – global resources
(engagement carried out by people now employed by Partners in Performance) |
Context / Scope of project
Maintenance department spend was USD$1.5 billion per annum in capital, spares, and services. This spend was not coordinated across sites in South Africa, Indonesia and Australia. There was little use of best practice strategic sourcing methodologies and limited recognition of value creation potential from world-class supply practices. Variable market conditions (particularly in Asia) required extensive external market analysis and understanding.
Client requirement was that no site should be disadvantaged, regardless of global opportunity.
Client achieved:
- USD$150 million savings on capital, spares and services
- A globally agreed standard management methodology for maintenance and replacement
- A standard measurement and performance management methodology centred around Net Present Cost per Tonne
- An extensive use of improved demand management capability
- A qualitative resolution of Electrical versus Mechanical drive system benefit
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What we did:
- Aggregated spend across sites to increase incentive to suppliers
- Created appropriate segmentation model defining procurement in terms of product class, weight class, geography, and supply base
- Defined comprehensive Total Cost Model enabling detailed scenario testing of
- New technology capability
- Different site profile
- Unbundled procurement
- Implementation of new measurement metric, Net Present Cost per Tonne
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