International Company Saves in Multiple Cost Centers
This international company is comprised of 21 affiliate companies across North and Latin America. Our client manufactures, markets, and provides services for a broad spectrum of industries including photographic, medical imaging and informatics, pharmaceutical, regenerative medicine, and biopharmaceutical contract manufacturing. Industrial segments include data storage, electronic materials, chemicals, industrial testing products, and graphic arts products and services.
ETP was asked to review the company’s expenses for Wireless Telecom Services, Workman’s Compensation Insurance, Energy Costs relating to Taxes and Tariffs, and Bank Fees. The ETP team found savings in all of those expense categories that will help the Company continue to fulfill its mission.
Market Knowledge, Proprietary Tools, Project Experience, and Implementation Assistance.
Our consultants were able to gather extensive and detailed information from suppliers and solution providers. We weighed all vendor responses based on several criteria critical to the client, including quality, availability of service, management tools, and price-change notification policies.
We also reviewed existing contracts for improved pricing, incentives, and discounts. We assisted in correcting errors and implementing new pricing after contract signing to ensure savings.
With over 8,000 device users, we found the Company was on an outdated wireless plan. By changing to a new program that was in line with today’s usage needs, costs were reduced by over $20/month/device. We accomplished this without changing from any of the current providers.
We evaluated the Workman’s Compensation Insurance Policy for a division. Our investigation found that over 90% of the employee classifications were not correct. We filed for refunds in each state where premiums were paid and recovered over $2.3 million in overcharges. Also, we hired a new broker, issued a new policy from a competing insurance company, and saved them $226,700, or 9% over the current proposed policy from the existing broker.
Upon reviewing the energy invoices for all of the company’s locations, we noticed they were paying sales tax in a manufacturing facility in Texas. We performed an onsite energy study and determined they qualified as sales tax exempt. We recovered $422,000 in overpaid sales taxes and removed the charges going forward. We also discovered tariff rate errors upon reviewing other properties in the real estate portfolio. Six properties were on the wrong rate tariffs. We contacted the local utility, and they changed the locations to the correct tariffs. The Company saved $686,000 annually in reduced energy costs.
The remaining category reviewed was Bank Fees. We gathered all of the most current statements and requested additional detail from each bank where they had operating accounts. We discovered their banks were overcharging them $112,000 annually. This provides for a 28% reduction of their bank fees going forward.
International Company Expense Reduction Project Summary
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