“With production, engineering and servicing facilities situated around the world, Bombardier Transportation looks to continuously optimize its supply chain and ensure efficient project and commodity management.
En-Pro has proven to be a reliable partner for Bombardier Transportation Canada identifying significant cost savings and cost avoidance opportunities which have been for us both beneficial and easy to execute.”
- Michel Julien, Project Administrator Specialist, Supply Management, BOMBARDIER TRANSPORTATION CANADA INC.
Managing the daily operations of a manufacturing facility is complex to say the least. Acquiring and applying the skills and knowledge specific to certain types of production methodologies, and the procurement of materials unique to the product being manufactured, leaves little time for anything else.
Understanding the energy markets, purchase options and differences in utility rates and regulations is, however, a grey area for those who do not dedicate their full attention to this discipline. After performing a review for a large aircraft manufacturer, we found that the utility rate being applied to their natural gas account was no longer appropriate. By structuring the right action plan, we arranged for implementation of an alternative rate structure and within a 12 month period the company reduced its natural gas costs by over $200,000.
In another instance, we found a large recycling facility was paying nearly 15% more for their bulk oxygen than they should be. After providing a strategy, they were able to alter their supply agreement and begin saving within just a few weeks of receiving our report. The net result after just one year was a realized cost savings of $132,000.
“This is the kind of expertise that En-Pro brings to the table. We provide the unknown information that allows each client to level the playing field with their supplier and acheive the lowest possible rate for each commoditiy. We do this without disrputing the existing supplier relationship as most often a change in supplier is not required. Often times the supplier is not even aware of the lower price options available in their marketing area.” - Adam Marshall - Energy Services Analyst
CASE STUDY - Timing is everything when it comes to opting for a price
“There’s a right time and a wrong time for manufacturers to lock-in a term price for natural gas,” says Deighton Jarrett, En-Pro’s Director of Energy Services, and a leading analyst who oversees En-Pro’s large roster of clients who buy significant quantities of energy and commodities.
“An important part of our work is to educate our clients about the right strategies that work in their favour and not for the benefit of the brokers or suppliers. Our clients are busy enough running their businesses, and often times, there are significant organizational changes that arise within these companies. We ensure that the adequate time is devoted to bringing individuals, who may be new to commodity markets, up-to-speed as quickly as possible.”
Understanding buying options and strategies that your company is involved in is critical. You should never be coerced into doing something too soon, before being given the right, objective insight and advice. After all, that’s what it’s all about – the right advice at the right time – especially when you are trying to manage a budget and not miss out on a buying opportunity.
A case in point: We work with an aeronautical equipment manufacturer, they are one of the best managed companies in North America, with well qualified people at every level of the organization. They chose to work with En-Pro, and agreed to have us review how they managed their energy and commodity purchases. During this time, they were being aggressively pursued by suppliers and marketers who were pushing them to enter into contracts and fix their commodity prices, while senior management were pushing to lock-in budget certainty. We introduced the best supplier option and strategy, and advised them to remain on a spot-based-index and wait to fix a price. After careful consideration our rationale made sense to them and they implemented our strategy and were later able to make a timely decision at the market’s low point – savings were significant and budget certainty was achieved. They were also able to work with an existing supplier while adding to and improving their supply agreement.
“After we analyzed their data and took a close look at all elements of the commodity supply equation, including the resolution of some volume balancing and transportation cost issues, we now have a successful working relationship with this company, and they are firm believers in the value we provide. Utilizing our strategies helped them to achieve the best supply cost and arrangement, satisfying management with budget stability, while achieving significant savings – we’re proud to serve the manufacturing industry,” added Jarrett.