A $40M annual CapEx budget that had nothing to do with actual demand.
Propane cylinder inventory sat in staging yards for up to 27 days with no control measures tying purchases to sales. Fixing the inventory process, not buying new equipment, was what unlocked the savings — one piece of a broader 3-year engagement with the same client.
Buying the same volume of tanks every year, regardless of what sales actually needed.
The lack of propane cylinder inventory control measures led to a consistent annual CapEx budget of roughly $40 million — set once and repeated year over year, independent of actual sales fluctuation. Tanks were sitting in staging yards for as long as 27 days before being deployed, tying up capital in inventory that wasn't moving. Before recommending any new equipment purchasing process, the real gap was visibility: nobody had a clear, current read on how much inventory was actually sitting idle.
Tie CapEx to actual inventory turnover, not last year's budget line.
We built visibility into staging-yard inventory levels and turnover rates, connecting the CapEx decision directly to how quickly cylinders were actually moving rather than a static annual figure. That let the business right-size purchasing to real demand instead of habit.
27 days of idle inventory became 5 — and a $20M one-time savings.
Cutting staging-yard dwell time from up to 27 days down to 5 freed enough working capital and purchasing discipline to produce an estimated one-time savings of $20 million in new tank purchases — money that had previously been spent on a fixed annual assumption rather than actual need.
This engagement also included a separate delivery cost fix, worth another $30M →
Spending on autopilot, not on actual demand?
A CapEx line that never moves is usually a visibility problem, not a budgeting problem.
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