OPERATIONS MANAGEMENT EXPERT OFFERS ADVICE TO IMPACTED ENERGY INDUSTRY COMPANIES
FOR IMMEDIATE RELEASE
February 2, 2015 (Edmonton, Alberta) – ProSolve Consulting, Ltd., an Alberta-based operations management and engineering consultancy specializing in productivity and Lean management, says organizations feeling the impact from the recent energy industry downturn can use this time to their advantage.
“The best time to make operational changes are during the slow times,” says David Hall, P. Eng, President of ProSolve Consulting. “Now that projects are being put on hold and offices are slowing down, this is a good time to reflect on how to improve the efficiency of operations, reduce costs when it is most valuable, without layoffs, and prepare for even greater profits when the industry starts to recover.”
Hall says organizations can do several things during this downtime to better position themselves in the future:
- Revise strategic plans
- Reduce your risks by making more effective use of existing resources and assets.
- Review expenditures and consider timing: Is this the right time to buy that new equipment? What other options do you have? Consider application of Productivity Principles to draw the most value from your existing resources. Returns can be achieved in weeks, which makes you more nimble to attack new opportunities.
- Review labour requirements: Do you reduce staff and run the risk of losing exceptional talent? Consider the people you have to get the current work done as well as to review current processes, document best practices and increase training to enhance manufacturing capability, system quality, and reduce waste.
- How much has your company invested in hiring and training people? You risk losing that investment if people are laid off. Consider how much it will cost you to replace and train new people when industry eventually recovers. Develop people to their full potential.
- Review working capital
- Consider your supply chain, current inventory levels, and purchasing plans in light of your lower revenue expectations. What can you return to vendors or sell at a reduced price while there is still demand, to return working capital back into cash?
- What commitments have you made to suppliers? Is there an opportunity to reduce the size of deliveries, and implement just-in-time strategies to match the timing of payments to the timing of collections from your customers? Your suppliers are as concerned as you are about the changing business environment. Partner with your suppliers and build trust so that you can rely on their support during slow periods.
- Consider where and how you store your inventory. Do you have a warehouse lease or agreement coming up that you can renegotiate in favour of leasing a smaller footprint? Effective inventory management can dramatically reduce operating expenses and reduce negative cash flow.
- Find new opportunities: We’ve all heard the expression “when a door closes, a window opens”. Consider thinking outside the box.
- Are there other markets into which you could sell your products?
- Are there other products your customers use that you could adapt and produce as well, using your existing capacity and infrastructure?
- What other products can you move through your distribution network?
- How else can you utilize your technology? What needs can your technology serve?
ABOUT DAVID HALL
A pioneer in Lean management in Canada, David Hall is the founder and President of ProSolve Consulting Ltd. David’s expertise in operations management consulting, industrial engineering, continual improvement, change management, design engineering and project management helps organizations be leaner, more productive, more innovative and more effective.
David works closely with organizations to analyze and optimize the systems and processes that drive their success and operational excellence with the end goal of sustained bottom line benefits. David has more than 40 years of professional engineering, consulting and business management experience. Using his proprietary model, he has redesigned many organizations, revamped processes, and re-imagined roles and responsibilities to maximize organizational effectiveness and profitability.
David has trained thousands of people in understanding quality and Lean continual improvement through his proprietary workshops and training seminars. David is a member, permit holder and past Councilor of the Association of Professional Engineers and Geoscientists of Alberta (APEGA). He also holds membership in the American Society for Quality (ASQ), the Society of Manufacturing Engineers (SME) and the Association for Operations Management (APICS).
David is a past Director of the Quality Council of Alberta (QCA). Recently, David was bestowed the designation of “Fellow — Engineers Canada” in honour of his dedication and exceptional contributions to the engineering profession in Canada. He was also bestowed the designation of “Honourary Fellow-Geoscientists Canada” in honour of his commitment to achieve professional excellence through exceptional contributions to the geoscience profession in Canada.
David Hall is available for commentary on any related stories. Please contact: