The Results
Working with representatives from all process participants, we redefined the company's new build processes from plant design through customer acquisition and developed a complete system to support the four fundamental principles of new build management. The system was deployed in July of 2002. Since that time, the system has become mission critical to the company's new-build efforts and the results have been impressive. In 2001 the company employed ninety-five people in its new-build efforts. That year they built 150 miles of new plant at a cost of $47,000 per mile. Since there were no mechanisms in place to track the acquisition of new customers on newly built plant, and since many new-build addresses never made it to the billing systems, it was impossible to track new-build penetration. As a result, it was also impossible to measure the return on capital invested in new construction.
By contrast, in 2005, the company employed just twenty-three people in its new-build efforts. That year, they managed to build 370 miles of new plant at a cost of only $36,000 per mile. The per-mile cost saving at that rate of production amounted to $4,070,000 for that year alone. Additionally, because of improved address provisioning in the billing systems, serviceability calls have been reduced by 1000 calls per month. At $65 per call, that amounts to a savings of $780,000 per year. Finally, because of improved processes and tracking mechanisms, the company is now achieving customer penetration on new-build plant of 78% within eighteen months of plant activation.
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