CAPEX

Capital is viewed as highly strategic in nature for all capital-intensive owner firms.

Category Management Software

Powerful, comprehensive category workbench

Learn More

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 straightforward process. We can guarantee success as GEP engages some of the most knowledgeable 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 for planned future spending over the next two to three 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 significant 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 part inventory levels and operability/maintainability
  • High degree of user influence (internal engineering staff) required in the selection of supply base

Capital Procurement Expertise at Every Step

GEP’s extensive expertise in strategic sourcing covers all the nuances of capital procurement including low-cost country sourcing, value engineering, feature benchmarking, payment structuring and Total Cost of Ownership (TCO) analysis:

  • Leveraging our extensive supplier database as well as live project-specific market research to put together the best possible pool of suppliers together for evaluation
  • Guiding package structuring for the project depending on business priorities, determining the optimal mix between time-efficient full turnkey packages and cost-efficient itemized BOM-based packages
  • Driving the creation of all RFP documents with a sharp focus on clear scoping of work, defining responsibility and accountability, getting visibility into supplier expertise and cost structures, etc.
  • Executing RFP process and leading supplier negotiations to arrive at best-value solutions for the project
  • Negotiating uniform, favorable commercial terms, contracting support and expediting support
  • Cost Reduction

  • Cycle Time Reduction

  • Quality/Customer Satisfaction

Cost Reduction

  • Reduced costs through competitive bidding
  • Decreased labor costs through improved productivity and re-engineered 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 focus on continuous improvement
  • Quicker access to capable resources through supplier
  • Improved safety performance

RELATED SERVICES

RECOMMENDED