Strategic Initiatives

Asset Optimization

Business enterprises are under intense pressure to achieve maximum efficiency and effectiveness. The winners will be those that can optimize the utilization of all assets, from entire processes to individual operations (trucks, excavators, shovels, production lines, etc.) as well as human resources. Asset Optimization is the process of improving the deployment of assets to achieve improved performance, increased utilization and lower costs.

Maintenance

Companies must try to achieve a balance between maintaining high equipment reliability and controlling overall maintenance expenditures. In many cases, maintenance costs are a significant portion of a company’s operating expenses. Poor equipment performance leads to downtime that decreases the efficiency of operations and can lead to early component failure, while potentially having a negative impact on the safety of the company’s workforce.

Energy Use Management

In today’s increasingly competitive business markets, organizations need to maximize their resources to minimize costs and increase profitability. Energy is a key cost component for many organizations that either gets ignored or seldom makes the priority list. Why? It’s a requirement in the process and is seen as a fixed cost for the business. Energy costs may exceed the costs in the typical areas of focus for cost reduction (i.e., labor, throughput, scrap, etc.). Energy cost reductions will reduce unit costs, plus improve the company’s commitment to the environment by reducing greenhouse gases and fuel consumption. Energy cost savings are typically a direct flow to the bottom line of an organization’s P&L.

Supply Chain

Supply chain optimization is the application of processes and tools to ensure the optimal operation of a company’s supply chain, which includes the optimal placement of inventory within the supply chain and minimizing operating costs (manufacturing costs, transportation costs and distribution costs).

Supply chain managers try to maximize the profitable operation of their overall supply chain. This could include measures like maximizing gross margin return on inventory invested, balancing the cost inventory at all points in the supply chain with availability to the customer, minimizing total operating expense (transportation, inventory and manufacturing), or maximizing gross profit of products distributed through the supply chain. It also addresses the general supply chain problem of delivering products to customers at the lowest total cost and highest profit. The challenge is trading off the costs of inventory, transportation, distributing and manufacturing.

Throughput and Cost

Three recurring themes in most companies are controlling operating expenses, decreasing inventories and increasing throughput. Concentrating on improving these areas is enabling many companies to compete more effectively in world markets.

Throughput, the number of good units of an item produced per time period, is the product of three components: productive capacity, productive processing time and yield. Increasing throughput is very challenging, as many managers do not have the appropriate background and experience to effectively address the issue. This is not to assume that controlling operating expenses and cutting inventories is not a challenge either. What is needed is a better method to address the issues of reducing cost and increasing throughput.

Corporate and Site Support Services

Corporate services are activities that combine or consolidate certain enterprise-wide needed support services which are provided based on specialized knowledge, best practices and technology; they serve internal (and sometimes external) customers and business partners. Examples of corporate services include finance, accounting, banking, tax services, market research, legal, call centers, customer service and marketing.

Information Technology

Companies have an abundance of IT solutions at their disposal. Typically, IT departments also must handle system development, upgrades, implementation and maintenance of many programs and applications. Many organizations have many IT projects in the works that are never fully completed or implemented, and the true costs and benefits are not fully known. IT projects are not managed by key project management principles and process. In short, cost and schedule overruns become the norm for most IT projects and solutions.

Step 2: Implementation Engineering℠