The Challenge

The client, who is a global mining giant with diversified interests in various commodities across the globe, had going concerns over its Africa asset after 10 years of losses. The miner needed assistance with its operational costs review with the view of unlocking some savings across various contracts held with multiple OEMs.

The client needed the services of a consultant to conduct a thorough review and analysis of their annual maintenance spend across various contracts managed by local and overseas OEMs. The task was to identify cost saving opportunities amounting to 15% of the total value of contract in order for the business to be a viable concern.

The Solution

Client shared their historical maintenance spend data for the last 36 – 48 months, enabling the consultant to conduct a thorough review and analysis of the data.

Spend data was cleaned and analysed in areas such as:

• Unplanned downtime
• Replacement components & refurbishments
• Planned shut / stoppages
• MRO spares (materials, parts) spend
• Consumables
• Personnel (local and expat analysis) spend
• Vehicles, Fuel, Maintenance and other HME spend
• RCA and Defect Elimination training
• Change Management support

Value engineering principles, benchmark data and cost improvement levers were deployed during the analysis, inclusive of:

• Quantitative analysis
• What-if scenario analysis
• Alternatives review

Results

Key notable results from the maintenance spend review stream included:

• 15% savings opportunities identified
• Contract negotiation strategies and levers for engaging the OEMs were developed for the mine for negotiations with the relevant OEMs
• Recommendations were provided on maintenance and inventory management best practices to lower
1. Unplanned downtime
2. MRO spares cost through a criticality linkage framework
3. High purchase of non-core vehicles (fit-form-function)