Falling commodities prices, ever-increasing rail costs and the threat of a hostile takeover had put this leading chlorovinyls company under increasing pressure to reduce operating margins and increase EBITDA. As part of a broader savings initiative, senior executives had set a substantial in-year savings target for their supply chain operations. With no significant projects in place to meet their target, senior supply chain executives asked Maine Pointe’s industry experts to help identify and implement savings. Our focus was on identifying operational and procurement specific solutions to reduce costs and improve service levels with internal rail car repair resources and external rail car repair suppliers.
In an extremely constrained, highly regulated market, executives were concerned about the impact that increasing demand for rail storage, maintenance & repairs and limited supply was having on their business. Maine Pointe worked shoulder-to-shoulder with them to conduct a comprehensive review of their outsourcing strategy and design an operational solution which included:
Our client is now able to carry out standard repairs and maintenance, faster and cheaper, which has reduced the number of cars that are out of service at any given time. This led to an immediate rail car fleet reduction with the potential for an even greater reduction. Additionally, by reducing dependency on outside suppliers, our client’s negotiating position has been strengthened, allowing them to secure more favorable terms with service providers.
Our review of our client’s outsourcing strategy identified a substantial opportunity to carry out rail car maintenance and repairs in-house, which resulted in: