How Extractive Companies Can Reduce Their Operational Overheads

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By Dzhingarov

Some industries have seen some significant losses in profits thanks to lower demand on their products and operating restrictions this year, and none more so than extractive companies, who rely on their workforce to be in very close proximity to one another and highly available. The extractive industry is a varied one with many unique needs, so defining a way these companies can cut costs is very dependent on what their focus is. There are some overarching principles, however that can help reduce overheads no matter if you’re drilling for oil, fracking for gas or sluicing for gold.

Increase the Skill of Your Workforce

A team you can rely on to work better, quicker and more efficiently thanks to advanced and continuous training is going to produce better results than an unqualified or badly trained one. Spending some money to upskill your workforce with skills that align to the job they’re doing, particularly with skills related to the advancement of the industry will do well to increase productivity and thereby see better profits for your staffing spend.

Keep Staff Amenities Costs Low

Extractive companies are often remote, and that means that your workforce is going to have downtime between shifts or on off days for which you’ll have to provide food, accommodation and other amenities. There’s a good chance some of these expenses can be adjusted to save costs without compromising on what you’re providing to your workers. Small changes like lowering the water temperature in geysers or using cheaper meat in catering can make quite a big difference over months if you have a big team.

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Change Your Lighting to be Energy Efficient

Lighting is likely quite a hefty bill if you’re involved in the process of extracting valuable minerals, oils and gasses from the earth, particularly if you have mines that need to be lit up. If your lighting is inefficient or energy intensive, you’re going to be saddled with a large bill for old, energy hungry bulbs and spotlights, as well as a constant need to replace those that are burning out. Replacing these with newer lighting technologies like LEDs and smart lighting can save your extractive business more money than you’d probably realise. Companies can perform useful lighting audits and provide great recommendations to save on your lighting costs.

Consider Some Automation

If you can add even a small amount of automation to your workflow, you’re going to increase the efficiency of your operation even more. If some of your production assets can run during your workforce downtime, you’re getting more use from the expensive machinery. Remember you’ll be running these machines and systems longer, so they might need more maintenance to be replaced more often, so factor this in.

Of course, lower overheads mean less expenses and more bottom-line profit. It often involves spending money short term to allow these savings and lower costs to be realised and making changes like updating equipment or training your workforce might seem like an unnecessary cost, but the long-term benefits should become apparent quickly.