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