- Evidence suggests that longer run sizes lead to increased overall equipment effectiveness (OEE).
- OEE is a measure of how effectively manufacturing equipment is utilised and is defined as a product of machine availability, machine performance and product quality.
- Increasing run sizes improves availability as a result of less change over time, and performance as a result of less operator inefficiency.
- North America facilities that previously ran at world-class OEE rates, have experienced lower OEE rates due to a move towards reduced lot sizes and shifting large volume production overseas1.
- Shorter run sizes resulted in increased changeover frequency which led to increased planned downtime and reduced asset utilization.
- As a result OEE rates dropped from 85% to as low as 50%1.
Global Advisors | Quantified Strategy ConsultingTinashe Madavo
Mining’s contribution to South Africa’s GDP has declined while financial services has increased its dominance
Mining is the only sector to have experienced an overall decline in contribution to South Africa’s GDP since 1993 with a negative CAGR of -1,3%.
The decrease in mining’s contribution to GDP has been a result of an increase in secondary and tertiary industries as well as a continuing decline in gold – and recently platinum – production over the years.
Mining companies have faced a myriad of obstacles including inadequate transport and logistics, electricity rationing warring unions and increasing labour costs – labour costs per kilogram of gold have more than quadrupled in the last decade.2
Going forward, government efforts in developing the downstream or beneficiated minerals industry could increase mining’s indirect and thus overall contribution to GDP.
Financial services however has grown from 17% of 1993 GDP to 24% of 2012 GDP and has outstripped growth of every sector bar communication.
Strategy Tools: SWOT analysis
SWOT analysis is a simple but useful framework for analysing an organization or individual’s strengths and weaknesses, and identifying the opportunities and threats that are faced1. As such, the tool can be used in both a business and a personal context. Fundamental to this tool is the analysis of both internal and external factors. For example, while strengths and weaknesses are often internal to and organisation, opportunities and threats tend to relate to external factors such as competitors’ actions and changing market dynamics.