Oil producing company, Hess Corp. (NYSE:HES) has adopted a manufacturing process that was created by Toyota Motor Corp (ADR) (NYSE:TM).
Toyota Motor Corp (ADR) (NYSE:TM) came up with the bespoke process to boost production and at the same time, bring down the production costs. It was initially developed with the screaming oil prices in mind.
Hesh has come up with a similar strategy where the company incorporates the use of a process called Lean manufacturing. Very few companies currently use this method. The company has experienced changes so far since it initiated the use of the process.
Savings from each oil well in the company’s North Dakota well portfolio we recorded to reach $400,000 since the new process was installed. The method has also led to a slash in the time taken to drill a new well, thus contributing to improving efficiency for the company.
Greg Hill is the current president of Hess Corp. (NYSE:HES). In an interview, he said that the new strategy has opened new doors for the company. The company will also benefit from this company through optimization of the oil production processes and reduced costs. This strategy will help the company to survive the next five years with more ease.
Hill reported the profound effects of adopting the manufacturing strategy in detail. He said that the company had reduced its oil drilling time by more than 51%. The company was also able to convince its employees to incorporate the same method individually. They are to do this by evaluating that which worked, that which did not and then learning from the mistakes. The new changes will go a long way in generating efficiency from a personal level. This effect has phenomenal results when observed on a large scale.
The company will also benefit from the efficiency and reduced losses and more responsibility. Adopting Toyota’s manufacturing strategy has had profound effects on the performance of Hesh.
Overall, there is improved accountability, efficiency, and a more refined system that have all played a part in increasing the company’s profit margins.