Cutting Costs with Operational Excellence Using Lean Techniques

1. “HIGH EXPECTATIONS OF CUSTOMERS AND GROWING UNCERTAINITIES IN COSTS MAKES IT IMPERATIVE TO CUT COSTS WITH OPERATIONAL EXCELLENCE USING LEAN TECHNIQUES” Analytically examine this statement and explain importance of Lean in Today’s Global uncertainties. Along with the economical uncertainties, several market drivers are putting companies under strong pressure. Regulators are strongly encouraging companies to reduce their operating costs for regulated businesses (i.e. transport and distribution of power, gas, water, etc.). The retail sector is under high market pressure due to increasing customer churn rates, entry of new players in the field, and the rise of energy prices that amplifies pressures on their costs to acquire and costs to serve. In a market context requiring more flexibility, increased utilization of - often aging – assets is becoming an issue, especially with regard to CO2 implications for power generation. On the verge of facing a wave of retirements, the industry will have to determine how to perform better with fewer employees. While aiming at delivering financial results to shareholders and financial markets, companies are under growing scrutiny for “indirects” (i.e. support functions) and have to look at synergies and economies of scale. The current economic and financial context (less debt) mixed with reduced demand and different customer expectations, as well as sustainability challenges, leads to reinforced focus on adapting companies’ business models. Companies have to deliv at their best the values expected by all stakeholders with drastically scarcer resources (financial, environmental and human). Company considers that operational effectiveness and efficiency are the cornerstones of the challenge imposed by these unavoidable market drivers. Launching and maintaining Operational Excellence best-in-class management systems is a crucial way to release unrealized potentials within Energy and