Colbún (Chile)

Colbún Finishes Rationalisation Plan

"The British consultancy firm, Knox D'Arcy, has carried out our plan for a cost reduction programme and improved process planning which has allowed Colbún to increase its productivity before raising private capital."

"A cost reduction of US$1 million per year will make it possible to reformulate Colbún's administrative and operative structure. This plan was designed by Knox D'Arcy, working for José Luis Mardones, the general manager of the Chilean State electricity generating plant. Knox D'Arcy has directed modernisation processes similar to this one in 10 other Chilean companies. The programme for reducing costs and improved planning began last July and has just finished with the report to the board of directors. Some of the most important achievements of the project are, in Mardones' opinion, a drastic decrease in overtime thanks to a better work schedule, the redesign of the administrative processes and the flattening of the company's hierarchy”.

According to Knox D'Arcy, one of the main objectives of the project was to generate a cultural change, which would allow Colbún to improve its position and competitiveness within its Industry.

Likewise José Luis Mardones emphasised the importance of the restructuring process, since it will increase the value of the company, which at present is implementing a Strategic Development Plan and considering the participation of private capital. For this reason, it is of the utmost importance to have a company which is efficient in its management, and this has been the key result of working with Knox D'Arcy.

"The cost reduction plan was implemented in the finance, commercial and administrative areas and consisted of significantly reducing lost time levels, redesigning supervisory positions, and the elimination of duplicated tasks, among other changes. For example, after implementing the new systems designed by the consulting firm, it was possible to reduce the management structure from five levels to an average of three, and this, according to Mardones, allows better work management, and therefore, greater efficiency. Just at the level of sub-managers, the project has made it possible to save more than 350 thousand dollars per year. With respect to the management of the generating power stations, productivity has increased by 22%.

This article above was published in the Chilean newspaper "El Mercurio".