CASE STUDY- CAPACITY RELEASE
L3T WACO DRAMATICALLY IMPROVES BID COMPETITIVENESS BY IDENTIFYING AN ADDITIONAL 5 PERCENT IN CAPACITY RELEASE OVER COMPETITORS RESULTING IN A $500 MILLION BID WIN
In today’s highly competitive government contracting process, the winning bid’s cost structures are intensely scrutinized to extract all possible value. With new technology, analytics and continuous improvement, as well as a hyper competitive bidding environment, organizations need to ensure that their bid’s not only deliver the required value, but also demonstrate how their bids are superior to that of their competitors.
L3T Waco engaged SPG to assist with one such competitive bid for a highly competitive contract.
L3T Waco was in the final stages of preparing a major multi-year bid and asked SPG to help them to guide them on bid quality and competitiveness.
SPG analyzed L3T WACO’s bid to study its competitiveness. SPG’s review found that the organization’s proposed cost structures were higher than that of the competitor and resulted in both lower margins but also reduced flexibility. SPG conducted a cost reduction value accelerator to determine ways to maintain and improve value while reducing costs.
The value accelerator, led by SPG’s experts, identified numerous opportunities in operations that maximized total “wrench time” for the client. SPG’s strategies were implementable immediately resulting in a significant capacity release for L3T Waco as well as a significantly improved bid position.
Within a week of the effort, SPG’s recommendations gained implementation support at L3T Waco and were implemented.
These recommendations resulted in a 5 percent reduction in the cost of labor across the life of this 10-year project which saves 61,000-man hours annually. At the same time, we estimated that a minimum of 20 percent improvement in wrench time/capacity release could be achieved within 6 months by applying Lean principles to the shop floor - all done without a cost increase. Subsequently, the process used by SPG was leveraged to other programs across the organization and additional significant savings were also realized.
Our client highlighted our results in their bid and won a $500 million competitive bid which has transformed our client’s organization.