Company Overview:

The company operates in the mining industry, where unlike traditional manufacturing firms, the major cost drivers are consumables such as explosives, fuel, lubricants, and drilling equipment. The highly variable nature of these operational costs made it challenging for the company to track expenses accurately, allocate resources effectively, and maintain profitability. This industry also faces difficulties in collecting operational data from remote and rugged locations, impacting the accuracy of cost analysis and reporting.

Challenges:

• Complex Cost Structure: Unlike typical manufacturing companies, the mining company had to account for multiple consumables that varied significantly in usage and cost, making it difficult to track operational expenses.

• High Cost of Operations: With a major portion of costs tied to operational expenses such as energy, maintenance, and consumables, the company struggled to control these costs effectively.

• Data Collection Barriers: The remote and harsh environments in which the company operated made it difficult to capture real-time operational data, leading to inaccurate costing and suboptimal decision-making.

• Lack of Integrated Costing and Reporting Models: The absence of a robust system to integrate different cost elements and operational data in a unified format hindered the company’s ability to perform comprehensive cost analysis.

Solution:

• The consulting team implemented Odoo ERP and customized solutions to develop a comprehensive costing framework and improve data collection capabilities for the mining company.

  1. Multidimensional Costing Framework:

     • Developed a multidimensional costing framework that consolidated various cost elements, including consumables, maintenance, energy, and manpower.

     • Configured Odoo ERP to capture, categorize, and report these costs in real-time, allowing the company to have a clear view of operational expenses and identify cost-saving opportunities.

     • Integrated automated data capture tools to gather consumption data for key consumables and track them across different mining operations.

  2. Enhanced Data Collection and Accuracy:

     • Leveraged IoT devices and mobile applications to capture data from remote sites, overcoming geographical and environmental constraints.

     • Utilized high-touch, low-tech solutions like manual entry interfaces and offline data collection tools to gather information from locations where technology penetration was limited.

     • Validated and synchronized collected data through Odoo ERP, ensuring that all cost and operational data were accurately recorded and reported.

  3. Operational Data Modeling and Analysis:

     • Created operational data models in Odoo ERP to analyze cost drivers and identify areas of inefficiency.

     • Implemented dashboards and reports to monitor operational performance, allowing the management team to make data-driven decisions and optimize resource allocation.

     • Established a feedback loop to continuously refine data models based on real-time inputs and operational changes.

  4. Cost Optimization Initiatives:

     • Implemented cost control measures, such as consumption tracking and predictive maintenance, to reduce excessive use of consumables and minimize downtime.

     • Identified high-cost operations and restructured workflows to optimize resource utilization and reduce operational expenses.

     • Developed a centralized cost monitoring system to ensure that all cost elements were accurately captured and aligned with financial goals.