For the Aggregates and Mining Industry
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“The Sweet Spot”
A “Sweet Spot” is where a combination of factors suggests a particularly suitable solution and refers to almost anything that embodies an optimum combination of characteristics and qualities. As a result, it is the most efficient, useful, popular or the most profitable solution where competing factors produce an optimal outcome. – Definition derived from various public web sites
Pursuing the “Sweet Spot” in an aggregates operation requires a clear focus on those elements within the market and within the production process that limit or optimize profit. Specific details will be unique to each operation but the basic approach to quantifying them generally requires the following:
1. Establish Process Capability
Defining the “As-Is” is imperative. Measuring and recording process variables in short increments will define variance inherent to each segment of the process. Large variance may indicate lack of capability within the process or an inability to adequately control the system.
2. Project Market Demand
Monthly projections of expected sales for individual products is critical to effectively manage both cost and profit. Sales cannot occur if adequate inventory is not available. Without a properly detailed sales forecast there is no clear target for production to pursue, severely limiting ability to judge the effectiveness of current performance on achievable sales and profitability.
3. Improve Variable Cost
Managing performance, maximizing saleable tons and minimizing surplus inventory ALWAYS reduces cost & increases profit.
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