Equipment Utilization Case Study: Broadband Service Provider

Today’s competitive pressures mean companies must get new products to market faster and more competitively than others to sustain and increase growth. That’s why every company must make the best possible use of existing capabilities, talents, and resources. This is the story of how one company is winning the battle to increase equipment utilization and ROI. . .with the support of award-winning asset management solutions and software.

The Challenge 

• The company was growing at a sustained rate of 11% year-over-year and this growth was accelerating demand for capital
• They needed to contain costs without impeding growth to enable investments in new business lines.
• Management had no facts about how effectively their equipment was being used, they just knew there was an insatiable demand for it.
• At the core of the problem was a culture that had developed a practice of hoarding the assets that they needed. This was exacerbated by annual test staff growth of 10% to 15%.
• Maintenance and repair decisions are made in a vacuum – driving costs higher as equipment was being repaired and maintained that was not required or had a suitable replacement in their existing inventory.
• Sente’s initial baselining indicated:
  • Equipment Utilization: 17.8%
  • Non-standard equipment:  74%
  • Database accuracy: 64%

The Solution

• Sente performed a Blueprint and Financial business case for a Test Resource Management Solution.
• Sente installed Scireo® software across the enterprise to support key processes required to drive equipment cost savings in the labs.
• The software was implemented using “The Sente Way” methodology which produced the increase in equipment utilization necessary to drive cost and cycle time improvements through effective new metrics/incentives. 
• Trust built across the organization that these new processes for managing the labs would provide them the resources they needed when they need it and sharing and collaboration increased.
• Sente’s Technology Alignment and Capacity Alignment practices were used to optimize the capability and size of the inventory to match the company’s mission requirements and test schedules.
• During the first DCMA audit after the implementation of Scireo®, the property management team is completing their audits 60% faster than in the past and they are now receiving praise from government auditors for the accuracy of their inventory and the rigor of their practices.

The Results: Tripled Equipment Utilization

The company-wide implementation of the TRM solution led to several rapid, significant improvements, most notably:

• Asset Utilization increased by 3.3x (in Lab) ; 2.8x (overall)
• Break-even occurred in the first 90 days of operation/ implementation
• Average Capital Budget reductions: 37%
• Average ROI: 413%
• Average Annual Contribution to “Income from Operations”: 2.4%