CASE STUDIES

    - Municipal / Government

CLIENT PROFILE

Type: County Government

Population: 890,000

Annual Budget: $414,000,000

Education: Public school system serving 60,000 students, eight colleges, universities and a community college serving 29,000 students

Other: County has received more than 100 National Association of Counties Achievement Awards

FINANCIAL PROFILE

Total Maintenance Contract Spend: $1,523,000 (on selected equipment)

Hard Dollar Cost Savings (verified by reviewing current maintenance contracts): $365,520 / 24%

Projected Invoices to be Processed by SU: 2,846 (vendor invoices sent to SU for review and payment)

Administrative Savings: $142,300 (client verified internal cost of at least $50 to process invoice and remit payment)

THE ISSUE

The County was feeling pressure to reduce spending and the maintenance budget was considered a target for review. The County Executive felt the focus should be on Maintenance Contracts without disrupting the up time of the equipment. Although the Purchasing Manager was concerned about the recent rise in overall spend on maintenance the real issue was the loss of control and the mix of coverages. There were instances of same types of equipment with different terms and various pricing. There were situations of some departments with equipment covered by M/C while the same item in another area was handled by Time & Material. It became evident that each agency within the County was working independently and not benefiting from best practices. In addition there was no formal inventory of equipment which created one case of equipment being placed in storage as excess while another department required a similar item which they purchased.

THE SOLUTION

An important first step was to determine the mix of items on T&M, M/C, Warranty and In-house repair. In addition it was critical to review the types of equipment and the vendors needed to repair equipment. The most accurate way of obtaining this data was through a “Financial Analysis”. This study provided the data mentioned above and also revealed “out of scope” charges, which is the number one overlooked expense in a maintenance budget. The program solution was TELESERVE™ and the results were:

ü  Inventory control of equipment assets through tagging. (Asset Mgmt.)

ü  Management Reports which include:
     ü Inventory by Cost Center (asset tracking)
     ü Inventory by Vendor (reduced duplicate vendors)
     ü High Frequency Loss Reports (revealed problem equipment)

ü  Guaranteed hard dollar savings of 24%.

ü  Improved communication through single point of contact.

ü  Service Based Optimization (SBO): reduction of administrative burden,
     one purchase order to one supplier.

ü  “Warranty Watch” to track equipment coming off OEM warranty.
     (Budget Management)

ü  “Third Party Administration” (TPA) to provide preventative or repair
     service on an as needed basis. (Flexibility & Control)

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