 |
 |
| Logistics Optimisation of a Mineral Sands Producer |
Context / Scope of project
A mineral sands producer with multiple sites and product lines required an extensive network of trucking, packaging and handling prior to exporting to numerous customers, both locally and offshore. The warehousing and highly manual packaging operation had double handling, introducing unnecessary additional costs resulting in a logistics expense of $35M per annum. During a time of global economic downturn, limited access to capital and with many existing contracts up for renewal, the mineral sands producer engaged PIP to help streamline their logistics network to generate rapid, sustainable savings.
Client achieved:
- Identified $4million savings per annum, achievable in the first year, at an NPV of $16-19million
- Minimal capital expenditure of ~$4-7million (further reduction possible through aggressive sourcing)
- Identified and mitigated against safety, financial, operational and transformation risks for the changes
|
|
|
|
|
What we did:
- Developed a detailed logistics cost model of current operations
- Developed an issue tree to define relevant analyses, working on a hypothesis driven approach rather than testing all permutations and combinations of logistics networks (saving time and resources)
- Gained input and logistics improvement ideas from all key stakeholders, both internal and external
- Analysed improvement ideas on an NPV, ROI and risk basis:
- Optimisation of warehousing footprint
- Low cost packaging: automation and offshore operations
- Removal of double handle points
- Mode and frequency of transport: Truck versus Rail
- Development of a clear aged stock strategy
- Combined improvement ideas based on the issue tree to define the optimal logistics network, resulting in $4M pa savings
- Conducted sensitivity analyses on preferred logistics networks
|
|
|
|
