Productivity in asset intensive industry

Asset intensive industry faces declining productivity, labour shortages and high capital and operational expenditure in Australia compared to industry’s global competitors. Due to high demand of coal and high commodity prices, the recent ‘boom’ consisted of favourable conditions for investment and expansions of operations whilst masking inefficient work practices.
In current conditions, the demand from Asia has subsided and the commodity prices have moderated. Therefore, a typical response we have observed is drastic reductions to capital and operational expenditure resulting in longer-term implications.
Although, cost reduction and ongoing spend management does return to focus at times like these, cutting too deep and too fast could impede productivity and growth moving forward.
Safely improving productivity is in our experience a more sustainable approach to achieving cost reduction through doing more with less. In other words, delivering more output with proportionally fewer resources thereby lowering cost of production per unit.
To achieve simultaneous improvement in productivity and operating costs, focus on three core aspects of operations to establish sustainable benefits:
• Establishes more efficient processes that eliminate waste by:
• Optimising process flow
• Focusing on key operational levers.
• Develops new systems to reinforce behaviours by:
• Providing structures, tools and procedures that align capability with business unit strategy
• Enhancing the use of tools and resources available.
• Influences behaviours to increase performance by:
• Helping people to have clarity of roles and responsibilities
• Developing various single points of accountabilities.


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