Bid Process Optimization

A directional drilling company faced the challenge of having more opportunities than their estimating team could effectively pursue, coupled with a low conversion rate of 10%. The company wanted to increase its throughput and therefore its revenue. The Company’s solution was to hire additional estimators. They brought this intuitive assumption to Five Wise. Our iterative process got deep into the layers of their operation. The distinct phase gates of the Five Wise system, designed to scrutinize assumptions and processes, revealed poor throughput to be a symptom of a real problem. Estimators, in an effort to process more bids, were using plugged numbers for many of the inputs, and were dedicating equal effort to every bid. The plugged numbers were assigned risk contingency because there was not time to get firm fixed quotes for 3rd party services or to confirm production rates. Because every bid got the same effort, each bid arrived at the crucial operations review stage with insufficient time for ops to verify rates of production or 3rd party costs, and each bid had to carry the gross contingency dollar amount assigned as a risk mitigation effort to each unverified item. This meant bids were going out the door more expensive than they needed to be, taking more time than they deserved in that unrefined state.

In addition, each bid, whether for a $1 million or $10 million contract with a high or low probability of success, was crafted from scratch, consuming equal time and effort. This lack of prioritization and standardization hindered their ability to focus on high-value opportunities and revenue growth. This company had both a Process and Plans root cause to their problem.

Once this irreducible truth was identified with the Five Wise System, the Company was able to address it with a targeted approach. Ops reviews were brought forward on high-value prospects to effectively price and reduce risk. This, along with a template system developed to categorize bids by work type with pre-filled, automated estimations for known factors like equipment allocation and labor costs, reduced the time to bid by more than half. Second, a prioritization matrix was introduced, plotting contract value against the probability of winning the contract and other market factors with a measurable impact on winning probability.

Low-value, low-probability bids were deprioritized, while high-value, high-probability contracts were targeted and got the attention they deserved. This strategic shift optimized resource allocation without requiring additional headcount.

The impact was transformative. By streamlining the bid process, the company avoided hiring costs and increased both their contract win rate and the average value of contracts secured, while securing profit margin on a per-job basis by intelligently mitigating the biggest risks.

This approach not only addressed immediate capacity constraints but also positioned the company for sustained growth by focusing efforts on the most lucrative opportunities. The combination of templated efficiency and data-driven prioritization redefined their bidding strategy, delivering measurable success: their conversion rate increased by 12% in the first year after implementation!

Warehouse Process Optimization

A company which processes customer orders sought to enhance profitability by improving per capita throughput rates. Traditionally, pickers retrieved items, and packers prepared them for shipping. To boost efficiency for small items, the company implemented a combined picker-packer role, expecting reduced touches and faster takt time. However, this change decreased per capita throughput and increased costs, undermining profitability. The company initially planned to improve training and develop software to direct labor, assuming these would address the issue.

A series of working sessions with Five-Wise examined data and assumptions to reveal a counterintuitive problem at the root of the symptoms: combining roles created variable flow rates, disrupting throughput planning and inducing a Braess Paradox, where adding resources reduced efficiency.

To resolve this, the Company introduced parallel flow paths. Small items were routed to a dedicated path where pickers also packed, streamlining handling. Larger or complex orders followed a separate path with distinct roles, maintaining consistent throughput. This approach stabilized flow rates and optimized labor allocation without additional headcount or complex software.

The parallel flow system increased per capita throughput, directly improving profitability. By addressing the root cause of variable flow rates, the solution eliminated inefficiencies and enhanced operational predictability. This restructuring not only resolved immediate throughput challenges but also positioned the company for scalable growth, demonstrating the power of targeted process redesign to drive measurable success.