CAPEX

Capital is viewed as highly strategic in nature for all capital-intensive owner firms. Capital sourcing and the processes of capital project management and capital planning are very interdependent and therefore difficult to execute separately. Sourcing of capital expenditures is not a straight forward process. We can guarantee success as GEP embarks some of the most knowledgeable and innovative procurement experts in this category. 

Sourcing of capital expenditure differs a lot when compared to other categories: 

  • Type of capital project work varies greatly from year to year
  • Historic baseline does not exist, must look to planned future spending over the next 2-3 years
  • Different types of projects may have very different service and supplier capability requirements
  • In the service areas, engineering and construction, non-price considerations are the large drivers of total cost reduction
  • Internal project management processes will differ greatly for small vs. large capital projects
  • Equipment choice and design decisions can have a huge impact on spare parts inventory levels and operability/maintainability
  • High degree of user influence (internal engineering staff) required in selection of supply base

Through best practices and cost reduction approaches in three major categories, GEP ensures your company reaches an optimized solution when it comes to sourcing capital expenditure: 

Cost Reduction

  • Reduced costs through competitive bidding
  • Decreased labor costs through improved productivity and reengineered project processes
  • Reduced rework and scope/budget change orders
  • Increased value awareness and value engineering process

Cycle Time Reduction

  • Reduced coordination time required through consolidated supply base
  • Smooth start-up and commissioning
  • Decreased waiting period for realizing ROI through earlier start-up
  • Reduced capitalized interest costs

Quality/Customer Satisfaction

  • Well-planned start-up and commissioning
  • Performance measures and continuous improvement focus
  • Quicker access to capable resources through supplier
  • Improved safety performance
Learn more about GEP's expertise in CAPEX sourcing.CONTACT US TODAY