Background

The client budgeted $50MM in annual spend for Harwood Timber Mats used in Operations & Maintenance and Capital Projects. Historically, many pricing arrangements existed for the provision of Timber Mats and related moving services. Work was awarded based on several “competitive bids”. A should cost model was developed to understand the input costs of a Mat and profit margin. Additionally, the model calculated labor, transportation and equipment costs to complete the work. This knowledge was then applied to the variety of pricing arrangements to determine competitiveness of bids.

Client Expectations

Reduce risk and delivery impact on Capital Projects. Perform work efficiently improve project schedule and timeline
Leverage spend and volume to garner increased discounts
Gain assurance commercial agreements were cost competitive and sustainable
Reduce overall cost of Timber Mats and associated movement & services

Project Planning 98%

Anaylitics 92%

Training 96%

Sourcing 98%

Project Scope

One of the Largest NA Midstream Companies, Work Distributed Amongst Unique Business Units in Canada & US, $50 MM in Annual Spend

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

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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.

Construction

Hardwood Timber Mats