Project Description
Background
Client is one of Canada’s largest service companies in the cementing and pressure pumping marketplace. More than half of all hydraulic fracturing horsepower and proppant (sand) pumped is managed through the client. Capacity shortages for 3rd party trucking services with pneumatic trailers was problematic, so ensuring continuity of supply at competitive rates to win and support additional business was challenging.
Client Expectations
Ensure continuity of sand hauling capacity from rail transload to the wellsite
Understand the cost implications of their private fleet hauling sand versus partnered third party carriers
Analyze the commercial structure of their agreements and assess current operating practices to unmask inefficiencies
Gain assurance that their new commercial agreements were cost competitive now and into the future
Minimize standby costs through governance, cost controls and rate reductions
Project Scope
2.6 Million tones of sand hauled
5,829 Employees, 678,000 Fracturing horsepower
Results
Client achieved a 7% price reduction in hauling rates, and 22% reduction in standby rates (in an inflationary market)
Dispatch protocols were updated to reflect 3rd parties for longer hauls, and private fleet for shorter hauls
Electronic billing with standby reports daily were required with anticipation to reduce unjustified expenses, and ease passing to customers (when applicable)
Price adjustment mechanism was included in the contract based on the should cost model – price transparency through contractual term
Thought Leaders
Sower & Associates has experience assisting clients in businesses as diverse as: oil & gas, retail, food service, injection molding, industrial coatings, plywood manufacturing, hospitals, county government, package delivery, insurance, industrial machinery, and universities. These case studies demonstrate how we adapt our unique blend of skill sets to so many different industries.
Wide Range of Services
Our consulting services are wide reaching and include: cost management model creation, cost model training, strategic sourcing project execution and training, logistical design, statistical process control training and implementation, training in approaches to problem solving, training and assistance in continuous quality improvement and total quality management programs, evaluation of customer satisfaction, innovation management, change management, and curriculum design.