Operational Cost excellence and what it can do for your bottom line

If you are like most mining operations, you may well be overlooking a goldmine of opportunity to improve your bottom line.

Typically, cost is looked at from two perspectives:     

• Executive management focus on strategic improvement opportunities.
• Operational management focus on monthly cost performance.

Both approaches tend to miss the opportunity to deliver ongoing sustainable cost improvements – that is, an all of organisation approach to looking for ways to continuously improve the cost impact of daily activities.

Often known as Operational Cost excellence, this goes well beyond the once monthly cost performance review and challenges the whole team to find and deliver true “sustainable” cost savings.

What makes up a good Operational Cost excellence strategy?

• Commitment and leadership from management and continuous cost challenge.
  
  
• Understanding by both management and staff of cost structures and drivers of cost.
  
  
• Easy to use software to support access to, and visibility of, cost performance.
  
  
• Continuous process of reviewing and understanding cost variances, identifying improvement opportunities, feeding these back through the forecasting loop, and then evaluating achievement of improvements.
  
  
• Culture – engage staff in process of ownership and accountability for operational performance.

Creating a Cost Excellence culture is not as hard as it sounds!

Whilst the above might sound daunting, it is actually just another business process made up of a series of steps. Cost excellence is an ongoing journey which rewards all.

Ramesys Global has helped multiple clients in the mining industry with our proven business improvement methodology and powerful, easy to use software tools. Wherever you are on your cost improvement journey, we can help to guide you to the next steps.

In our experience ongoing annual savings can be as much as 10 – 15% of your cost base. This can soon add up to a very sizeable contribution directly to the bottom line.