Reducing costs through Continuous Improvement to manage cyclical downturns
Mr Biswajit Chanda (Change Management Consultant - Independent Consultant)
Continuous Improvement (CI) is a very effective way to manage cyclical downturn in the commodity oriented industry because the price is set by the market and always varying depending on the business environment. The companies need to have lower operating costs irrespective of the price level in order to maintain a viable operation. By always striving to be one of the lowest cost producers as the operating priority, mining companies would minimize the effects of the volatile macro-economic environment. The author was part of the iron Ore Company’s (IOC) pioneering efforts to establish a CI program during the mid-Eighties. He organized numerous sessions on the subject at various CIM conferences. The paper is drawn from the author’s over 30 years of experience in the area, including the involvement at IOC and familiarity of the initiatives of other mining companies. The presentation is based on examples from various case studies, stresses leadership and the need for the cultural change as the prime ingredients to the sustainability of a program. A successful CI based system, at the end, must enlist the participation and ownership of all stakeholders. It is the greatest strength a company can ever have.
