Opportunity Assessment and Cost Reduction - Contract Miner

Lachlan Brown
Heavy Industry
Cost Reduction
June 4, 2024

Client Problem

The client had recently acquired the Downer Mining East Coast Assets and required legacy contracts to be reviewed and a plan put in place to tender and sole source with suppliers to develop new contracts. The client also required a review and recommendation fora fit for purpose procurement function.

Caliba Solution

Caliba was engaged to complete a full review of the businesses’ requirements, historic goods and service spend, current supply contracts, and current procurement team structure. The client required an opportunity assessment report for the cost reduction potential in developing new contracts, and a fit for purpose procurement team structure.

Caliba interviewed 23 client key stakeholders to develop the contracts cost reduction plan and to propose a new procurement structure. The cost reduction plan involved the delivery of 12 projects with the savings to fund the development of the new procurement team.

After executive approval of the 12 projects, Caliba was engaged to implement 8 tenders and 4 sole source negotiations to deliver circa $7m in ongoing costs reductions for the business. At the same time critical supplies have been secured for operations, and contracts put in place to manage on-site contractor risks.

The new procurement team was resourced in parallel as savings hit the bottom line.

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