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Working Capital Improvement

NEEDS-BASED RESULTS

 

Working Capital Improvement

SITUATION

Mining company facing a challenging market needed to reduce costs without impairing operations.

DRIVER GOAL

  • Improve working capital by $20 million.
  • Reduce costs by $40 million.

RESULT

  • Identified cost reductions totaling $53.9 million.
  • Estimated $90 million in cost reductions by year end and $198 million per year within 3 years.
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Case Study

Improve Working Capital & Reduce Vendor Management Costs

Issue

Having recently completed an initiative to increase working capital by capturing cash from Accounts Payable, a mining company sought to obtain additional benefits from its supply chain. Facing a very challenging market with declining commodity prices and margins, management needed to reduce costs without impairing operations. The company also had an excessive number of vendors providing similar products and services and an environment in which many of the contract service providers operated without the proper level of oversight.

Highland Approach

A detailed analysis concluded that immediate changes were needed in business practices and operating procedures. Accordingly, the team implemented and executed on a Vendor & Contract Management Strategy, which involved conducting a thorough review of all goods and services purchased by specific category and corresponding supplier and then focusing on the major contractors providing extensive and varied services at the major operating sites.

Actions Taken

  • Consolidated suppliers within each category, negotiated higher discounts on this incremental business, increased the volume of vendor managed inventory, and introduced a purchasing card option to finance and settle the transaction.
  • Reviewed contracts relative to the service deliverables, manpower and pricing requirements, enforced the content of the contract, restructured deliverables into identifiable and manageable components and deployed appropriate resources.
  • Partnered with client teams to implement a System For Managing vendors and related contracts, as well as major on-site service contractors.

Achieved working capital improvements of over

$15m

Highland quickly broke the issues into manageable pieces and then provided and implemented solutions that resulted in immediate savings.

Chief Operating Officer

Related Information

subject matter-based

Project Director

Working Capital

Hamid has over 20 years of experience as a management consultant. He has a wealth of experience in process and operational improvements, corporate strategic planning, development and deployment, global sourcing, supply chain management as well as working capital improvement experience (A/R, A/P, Contract & Vendor Management, Inventory, MRO/Materials & Supplies).

Senior Consultant

Supply Chain

Laurence has more than twenty years of industry and consulting experience in all areas of supply chain management – including inventory management and procurement – and in Total Working Capital management.

Project Leader

Financial Services

North America

Brandon is a senior project leader and consultant with more than 12 years of experience in helping financial services firms maximize revenue and control costs through continuous improvement. He specializes in implementing efficiency, service and quality process enhancements in Fortune 500 companies by utilizing Lean and Six Sigma principles.

Senior Consultant

Working Capital

North America

Joe is an innovative and versatile professional with over 25 years of solid experience building, growing and operating diverse, multi-faceted and geographically dispersed global high-growth organizations. He has an exceptional track record of managing projects that deliver credible and sustainable improvements in cash management, operations, service quality and cost.