Reduce A&E Subcontractor Services Cost

Business Issue:

The average A&E Subcontractor costs exceeded original targets by 34% increasing from an estimated $8,800 per site to $11,800. This gap of $3000 represents $10 million COPQ through year-end.

Process Problems

Results of Action

Reduce A&E costs to an estimated target of $6,000 per cell site or 50% by year-end 2001 for the remaining program sites, which, represents $30.5 million of annual cost savings. Cycle times for A&E subcontractor services will be optimized through process adjustments in order to align with original targets.

Tools Used

• Process maps
• Pareto Charts
• Cause & Effect Diagrams
• FMEA
• Hypothesis testing
• Simulation
• DOE