Consignment Case Study

Industrial consignment services for large energy utility provider

Our client

Project Type: Consignment
Industry: Energy & Utilities

Our client is a large North American energy provider with more than 70 generating assets. Their diverse fleet includes nuclear stations, hydroelectric stations, biomass stations, as well as thermal and wind stations.

To minimize the risk of failure and impact due to downtime, our client upgraded machinery and equipment on a routine basis, which generates a significant amount of used and surplus equipment.

To avoid production interruption, our client stocks a significant amount of maintenance, repair and overhaul (MRO) equipment and parts. As a result, our client produces surplus equipment and parts on an ongoing and inconsistent basis from each of their 70 operations.

Types of equipment sold on behalf of client

Our Client's challenge

Prior to engaging with NRI, the client listed out 3 problems they wanted to address:

Challenge #1

Low value items include: PLC-based controls, instrumentation (such as transmitters), as well as various valves. High value items include: Wastewater discharge treatment, boiler chemical treatment system, as well as various pumps.

Challenge #2

Most auction houses only perform a forced liquidation, or one-time large- scale sale. For this type of recovery model to work, our client was forced to collect surplus in a centralized location until it had enough material to attract a third-party auctioneer.

Challenge #3

Further, while our client housed an in-house asset recovery team of more than thirty people. Due to lacking the specialized marketing knowledge required for selling industrial equipment, their team achieved limited success.

How we helped

We offered our client a multi-faceted asset recovery solution focusing on maximizing their return on assets while providing a streamlined process for managing and storing their surplus equipment. This included:

1. A no-cost valuation on surplus assets providing the client with a clear picture on what the equipment value is on the second market

2. A multi-pronged sales solution, including consignment services, auction services and private treaty sales, designed to maximize exposure and reduce turn-around times

3. A streamlined logistics process for managing surplus, including logistics, dismantling and rigging services to transport and store equipment in our facilities

4.Consultation on special projects, such as facility closure and decommissioning, as well as strategies to minimize common second-market pitfalls

The results

After leveraging our expertise, our client:

More Value

Recuperated more than $1.6 MIL from consignment sales

More Efficient

Redeployed 28 members of their asset-recovery team made redundant by our services

More Space

Regained more than 211,000 square feet of storage