Case Study

Global Facility Review for a $20B Oil Field Services Organization

"An organization built by acquisition and continued siloed organizations led to a bloated facility footprint across a global organization"

Situation

  • A global Oilfield Services Organization was struggling to meet cost reduction targets
  • Years of independently operating Product organizations had led to significant overlap of facilities in many key cities and countries, over 300 facilities in total
  • A recent merger had presented the opportunity to review the existing facility footprint

Bespoke Solutions

  • Conducted a node analysis that identified customer location concentrations after collecting and compiling shipment data to determine customer locations
  • Gathered data in key areas of personnel cost, i.e. utility rates, lease rates, and headcount costs
  • Developed a model that projected shipments next year to each of their customer locations. This was used to determine distribution centers
  • Ran scenario analyses to evaluate combining multiple distribution centers, ability to close expensive centers, and build potential locations

Leading With Results

  • Completed scenario planning review of the various possibilities across lead time, facility costs, and distribution costs, identifying critical improvement opportunities and prioritized by timing and feasibility to complete with the management team
  • Reduced operating expenses by $1.2M annually (i.e. Salaries, Utilities, and Rent), while increasing warehouse capacity through the consolidation of several facilities into a lower cost state
  • Reduction in average lead time to 1.8 days, from 3.2 days, to customers through operational improvements
  • Avoided Supply Chain disruptions with diversified ports of entry
Case studies and expertise may represent projects and engagements performed by SLKone team members prior to their employment at SLKone
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