Overcoming Invisible Barriers to the Implementation of Improvement Programs

In the minerals business, like any other commodity-based business, management faces the daily challenge of holding down costs while the real prices of products are continually falling on an inflation-adjusted basis. Since the marketplace sets the prices, often without any premium attached for product quality, being one of the lowest-cost producers is the most viable competitive strategy. Continuous improvement is the mantra that can make the difference in terms of long-term survival of a mining company. Yet, this message has not always been followed, especially during periods of prosperity ushered by high commodity prices. More often than not, the need for improvement is only triggered by a crisis. This may be caused by events such as the onset of a severe economic recession, a prolonged oversupply situation due to an optimistic expansion of capacity during the period of prosperity, or simply falling profits alerting management to bring costs under control. At that time, there would be a need to implement a new cost-saving program, bring in a consultant to find ways to reduce costs, or re-activate an old program that had been shelved for some time.