S-031 - Cost Leadership - Winning in the Downturn
In challenging economic times for us in Oil and Gas, one of the difficulties facing the industry is falling margins while cost tends to increase. In this environment one important aim is to maximize short term cash generation without jeopardising health, safety and integrity of our activities – and without risking the long term viability of the business. Companies should consider making many small cost and efficiency interventions that can be implemented quickly and that require little or no capital expenditure, to stay ahead of competition.
At the heart of cost leadership are the principles of ASSE – Automate, Simplify, Standardize and Eliminate. It involves eliminating waste, simplifying work processes, standardizing methodologies and automating many aspects of work, thus freeing staff to perform more value-adding activities. Using ASSE principles can help most companies to make savings by streamlining processes and removing inefficiencies.
For example by having appropriate risk mitigation procedures in place, operators can enhance plant reliability and availability by targeting maintenance inefficiencies including contractor costs. In good times, inefficiencies will often creep in, but in tougher times these areas need to be challenged. Value can be found by improving smaller items that were previously overlooked.
By putting considerable effort into energy management, even in a low energy price environment, significant cost savings can be anticipated from energy related programs with little or no capital investment.
Improving cost discipline is one of the most important business imperatives during hard economic times. Streamlining operations will help to eliminate waste and reduce costs and ultimately boost production. As a service provider of first choice, Triple EEE has adopted its own fit-for-purpose, lean manufacturing principles, which are based on 30 years plus “grey hair” operational know-how and expertise, whereby the unnecessary steps in key business processes are removed while the vital activities are made more efficient.
To conclude, being ready for the next upturn is about focusing on what is important right now, one critical component is Cost Leadership, while at the same time not losing sight of the long-term strategic intent. Companies that use this opportunity to take performance to a new level will be in a strong position when the upturn arrives.
SEND ME AN EMAIL
Contact René Snoodijk
René SnoodijkGeneral Manager
Do you have questions about how we can help your company?
Send me an email and we’ll get in touch shortly.