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Steel processor realises cost savings

US steel processor reported significant cost savings achieved through the Fabricators and Manufacturers Association working with Affiliated Power Purchasers International.

Chicago, USA-based high volume steel processor, Feralloy Corporation gained significant cost savings through Fabricators and Manufacturers Association, International (FMA)’s affinity partnership with Affiliated Power Purchasers International (APPI) In June 2004, Feralloy contacted APPI, an independent utility consulting company, to learn more about how the FMA Savings Solutions Programme could reduce the company’s operating costs.

With six locations throughout the USA, Feralloy recognised the potential for savings through APPI’s programmes.

APPI assists FMA members by identifying opportunities to reduce electricity, natural gas, water, waste management and telecommunications costs.

Although the Feralloy controller initiated some preliminary auditing of its utility services internally, the company did not have a dedicated staff person with the time to explore the wide variety of available utility options and pricing.

To address the issue, Feralloy sought a simple and cost-effective solution that would provide up-to-the-minute utility expertise and identify potential savings areas.

Feralloy determined that an APPI’s Savings Solutions audit would be an efficient and effective way to identify possible options.

Feralloy gathered recent bills from each participating location to get the audit process started.

APPI’s experts thoroughly reviewed the information and identified several opportunities for refunds and savings.

The research took two months to complete and included conversations with the various utilities serving the different facilities and discussions with Ferralloy’s financial and operations personnel.

The initial audit found a refund in excess of US$80,000.

Further research produced additional savings.

CFO for Feralloy, Jack Love, said that Feralloy are experts in its core business of steel processing.

He continued: "Although we are very smart about our buying decisions, sometimes we need input from other experts.

Spending the time necessary to find savings was worth every minute, and I would recommend the APPI Savings Solutions Program to other FMA members".

* About the APPI audit process – APPI performs an audit of current invoices for electricity, natural gas, water, waste management, freight, check processing, credit card processing, and telecommunications services as an FMA and Tube and Pipe Association, International member benefit.

APPI does the following.

* Identifies incorrect fees, billing errors, and overpayments.

* Analyzes rate structures and tariffs for savings opportunities.

* Corrects billing errors, and adjusts bills moving forward for immediate savings.

* Secures refunds on monies due from billing errors or incorrect rate structures.

* Evaluates alternate service providers and program options that reduce the cost of service.

* Monitors your accounts to assure billing integrity and savings.

The process is risk free, said FMA.

There are no up-front expenditures, hourly fees, or retainers.

APPI is compensated only when it demonstrates and delivers savings to the business.

There is no obligation until a company decides to implement APPI’s audit recommendations.

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