Timber Company – VP, Redwood Operations
How could the owner of the largest stand of old-growth redwood trees maximize its yield? What were the long-term price trends for this specialty lumber? Would it be better to harvest the timber now or in the future? Outcome: The project evaluated various analogs for old-growth redwood as well as potential future uses for clear heart timber. The closest parallel was determined to be black walnut, an extremely valuable and rapidly appreciating timber. Old-growth redwood was forecast to become a rare, specialty wood with increasing uses and an average price appreciation of at least 5% after inflation. As a result, the company elected to keep its stand intact for an extended period, ultimately selling the holdings for a large capital gain.

Mining Conglomerate – VP, Metallurgical Coal
Could the metallurgical coal division of one of Australia’s largest mining conglomerates justify an investment in an open pit mine in British Columbia? Would the cost structure of a new operation enable the firm to competitively serve the Japanese steel market with coking coal? Did the overall supply and demand balance justify a new mine? Outcome: The project modeled a new mine by analyzing existing operations. Costs for labor, capital assets, infrastructure, and royalties were factored into the feasibility study. The specific geography was factored into the analysis so that overburden, excavation, and refining costs were accurate. The supply and demand analysis indicated that a new mine was not a good idea at the time. However, another newly-opened mine of similar scale and capacity was acquired. The costs for this operation were within 3% of the model’s projections.

Oil Company – Corporate Planning Department
Could one of the world’s largest oil companies reduce its dependency on Middle East oil production by diversifying? What were the most important requirements for industry and company targets? How would the merged company be organized? Outcome: The project produced reviews of several targets (including Cargill, Weyerhauser, and Archer-Daniels-Midland). The candidates were presented to the Board of Directors. The firm was acquired by a competitor before a target was selected.

Forest Products Company – Group President, White Papers
Would the large forest products company be able to justify a $400 million investment in its white paper mill? Could new markets be identified with sufficient long term viability and regional economics? How well would the new market demand match the new source of supply? Outcome: The project validated the investment based on the significant growth potential of personal computer and networked office printers. 20 lb. basis weight communications papers were seen as the fastest growing white paper segment. A final piece of analysis established the value of a cut-stock converting operation with retail packaging of printer and reprographic papers.

Petro-Chemicals Firm – President
How could the integrated explosives and fertilizer operations of a large oil company be optimized for both of these diverse markets? Was the long term growth potential of both businesses worth further investment? What economies of scale were required to be successful? Outcome: The project evaluated the nitrogen/nitrate integrated production operations and recommended breakage of the integration model. The team developed a completely new way of procuring raw materials that permitted the resulting sale of the company’s ammonia plants. The company was able to remain in the top three explosives suppliers in North America.

Oil Company – EVP, Refining and Marketing
How could a fully-integrated oil company reduce excessive distribution costs that were restricting profits? How did the firm’s Fifty State market coverage and distribution strategy (i.e. erect signs and stations in all 50 states and sell the product coast-to-coast) affect its marketing and distribution costs? Could some geographic markets and channels be abandoned to improve profitability? What was the value of geographic market share? Outcome: The Task Force developed and began the implementation of recommendations across products, distribution, and regions. As a result, the company repositioned its product mix from low margin bulk crude to high margin Jet A aircraft fuel and home heating oil; invested in short haul specialty pipelines and divested two refineries; and shut down retail operations in 18 states. The Refining and Marketing operation saw its profitability grow by over 35%.