Canyon Mining Corporation: Heavy Mobile Equipment Procurement

Abstract

Canyon Mining intended to purchase four haul trucks to use for heavy mining, and a team from Censeo Consulting Group must to identify a methodology to track cost changes over time for that purchase. The current project's primary objective was to estimate the year-over-year trend in factory manufacturing margins for these four pieces of heavy machinery. These estimates were crucial to Canyon Mining as contracts for heavy machinery lasted for five years and served as a baseline for future negotiations. Although the team arrived at 2008 cost figures for the four haul trucks, it still lacked insight into cost trends and accurate cost forecasting. Excerpt UVA-OM-1392 Rev. Apr. 15, 2014 Canyon Mining Corporation: Heavy Mobile Equipment Procurement As team members settled into their seats in a conference room in Washington, DC, everyone was ready to tackle the night's topic for discussion: a way for Canyon Mining to track cost element trends over time. After numerous plant visits, many phone calls to dealers, third-party manufacturers, and industry experts, Niraj Patel, Carolyn Wilson, and Walter Lee of Censeo Consulting Group were to identify a methodology to track cost changes over time for the four different pieces of heavy mining equipment that Canyon Mining intended to purchase. The project had been both interesting and different for the Censeo team. Censeo's business model was focused around work-life balance; its team rarely traveled, preferring to conduct virtual meetings and reserving travel for key meetings with high-level clients. This engagement, however, had required frequent on-site visits, including multiple trips to visit Canyon Mining in New Mexico, the suppliers' Illinois plants, and Houston, Texas, to interview senior industry experts. Although the project was more quickly paced than typical Censeo projects, the team was enjoying its complexity and uniqueness. . . .