Materials and resources
As competitive environments go, very few sectors are as prone to greater fluctuations than basic materials and natural resources. The sector is characterised by a high capital intensity, strict requirements in terms of security and environmental protection and at the same time extremely low margins on products. Following the decline in raw material prices – oil being the most important example – the pressure on margins and the need to reduce capital expenditure and maximise system availability led to further operational pressure.
Major investment in recent years has resulted in significant increases in efficiency at many production sites. Service areas, on the other hand, have hardly changed despite considerably lower funding requirements.
An important mechanism for improvement in this respect involves the digitalisation and standardisation of processes and products, specialisation and consolidation of services, optimisation of procurement and utilisation of third party companies.
Properly applied, this can result in a higher level of operational excellence and cost leadership.