Case study · Energy & Utilities
Midstream oil and gas company cuts $15.2M in expenses after rapid acquisitions
After a run of acquisitions, a midstream oil and gas supply and logistics company was top-heavy just as oil and gas prices collapsed. USC rebalanced spans of control, removed unneeded work and rebuilt field scheduling.
Results
$15.2M
in total expense reductions
$7.7M
reduction in operating expenditure
$7.5M
in savings from workforce restructuring
Savings combine workforce and operating expense reductions.
The situation
With oil prices halved and natural gas prices down, producers cut spending on moving their reserves, and the company's margins and revenue fell. A series of acquisitions had left it top-heavy in managers and overhead, and the squeeze quickly became a crisis.
What the assessment found
- Too many managers; spans of control from six to 25 people
- Work flows duplicated after acquisitions, never absorbed
- Field technicians losing time driving between sites
- Thousands of pipeline tasks without a clear schedule
How the work was done
Organization: balance spans of control
Used span-of-control diagnostics, organization charts and manager interviews to separate core from non-essential work and rebalance supervision.
$7.5M
in savings from workforce restructuring
Processes: remove what isn't needed
Mapped current processes and, with process owners, used lean methods to close gaps and fold unabsorbed post-acquisition work into the operating framework.
$7.7M
reduction in operating expenditure
Field: schedule by zone
Rebuilt the pipeline management operating system so technicians and operators work by work order in defined zones, cutting drive time while meeting regulatory requirements.
Lasting impact
The company emerged from its acquisitions as a leaner organization, with better oversight of workers, more effective measurement work and better scheduling.
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