CMC ramps up CapEx planning and approval for 500 projects annually

Rebar is the backbone of our built environment. It allows us to build everything from highways to hospitals. And wherever there’s rebar, there’s CMC — an early-stage construction solutions provider that’s the largest rebar manufacturer in the United States and a leading player in Europe.

With 11 steel mills and more than 30 recycling plants,  the company invests more than $250 million every year in maintenance and upgrade projects. “When you’re melting steel at 2,500°F, equipment wears out very quickly,” says Jason Jensen, CapEx Manager at CMC. “Replacing a furnace could cost $90 million over four years. So, it’s a very capital-intensive business.”

To keep its operations running smoothly, CMC plans and executes hundreds of CapEx projects every year. However, with spreadsheet-based planning processes, approval cycles were long and the company lacked visibility into project status and spend.

Accelerating capital planning and boosting visibility

Jensen found a way forward with Anaplan. “When I saw what Anaplan can do, I knew immediately that it was the solution we needed,” he recalls. With help from Anaplan partner Karta Consulting Group, Jensen’s team built a capital planning solution on Anaplan and trained 80 users within six months.

Today, CMC uses Anaplan to capture full costing and scheduling details for every capital project. Proposals are circulated to the appropriate stakeholders for approval using Anaplan Workflow, and senior leaders then select the project portfolio for the year ahead.

The Anaplan solution gives CMC’s decision-makers insight into in-flight projects, with live spend data from the company’s SAP Enterprise Resource Planning (ERP) system. “We can see how much we‘ve spent, how much we‘ve committed in POs, and our forecasts,” says Jensen. “We can catch projects that are going over budget and take action.”

Cutting months from the capital planning cycle

“Before Anaplan, we spent months building our capital plan each year,” Jensen recalls. “After converting to Anaplan, we actually reduced our planning process time to just a few weeks.”

With detailed and accurate project data, leadership can prioritize effectively with less back-and-forth with the business. As a result, it’s easier to assemble the right portfolio of projects to meet CMC’s operational goals while keeping CapEx under control.

Since adopting Anaplan Workflow, CMC has also reduced the approval process for individual projects from an average of 28 days to six days. This means they can manage more projects at a time and accelerate ROI. “The first year where we were fully immersed in Anaplan, we saw a 50% increase in the number of capital projects over the previous year,” Jensen says.” We‘re able to get our projects off the ground sooner, which improves the time that we will see the return on those projects.”

Faster approvals also help protect projects from cost increases. “When we get a bid from a supplier, we typically have 30 days to issue a PO at that price,” explains Jensen. “When approvals took 28 days, that didn’t leave us much time to execute. Now, with a six-day approval cycle, it’s much easier to ensure that we pay the price that was in the plan.”

CapEx planning on Anaplan met the different priorities of both finance and engineering at CMC. “At first, our engineering team was leaning towards construction management software,” explains Jensen. “But when they saw what Anaplan could do, they were convinced. None of the other vendors could match up to Anaplan.”