Lean transformation in mining - Home - Lean Enterprise ... · The lean focus evolved over a number of years Lean became the focus after we questioned the sustainability of previous

Lean transformation in mining:a journey of discovery

Matt van Wyk

7 July 2011

2 MAC Consulting – Proprietary and Confidential

Content

➢Introduction to MAC Consulting and De Beers Consolidated Mines

➢Positioning the DBCM Lean Journey

➢The Lean Journey tipping point

➢Research findings

➢Venetia mine results

➢Conclusion


MAC Consulting

MAC Consulting was established in the 1990s, and has been assisting a number of blue chip clients to improve


De Beers Consolidated Mines

Established in 1888, De Beers produces roughly 40% of the world’s rough diamonds by value globally.

De Beers Consolidated Mines manages the mining activities within the borders of South Africa.

Kimberley Mines

Peace in Africa Voorspoed Mine

Venetia Mine

The De Beers Lean Journey


The mining challenge that faced the team

At the time of the project Lean in mining had no mature deployment in Southern Africa

1. Process complexity

2. Size

Batch Continuous

3 Entrenched habits


The lean focus evolved over a number of years

Lean became the focus after we questioned the sustainability of previous interventions

Business Model Review

2004 - 2005

Technical Limits Project

2006

Continuous Business Improvement

2007 - now

Process

PeopleSystem


The DBCM Lean Journey focus areas for the first 3 years

Building strong foundations critical for sustained value add and robustness

Continuous Business Improvement

Align all in DBCM to a common goal

Create teams where every person knows exactly what to do

Create an environment where people are safe to work, experiment and waste is exposed

Continuously improve by solving problems related to QCDSM deliverables


Anchor point: DBCM Operational Principles

Operation principles fundamental to guide leadership behaviour enabling improvement

•Right people, trained to do the right things right

• Integrated team-based front line

•Empowered and engaged front line employees

• Simple, standardised and visual control systems

• Informed and correct decision-making at all levels

• Safe clean and organised workplaces

• Standardised work processes

• Continuously improving

• A common goal that is understood and visible

• Focus on the core business of producing diamonds

One company, one goal

World class ways of

work

Right people doing the

right things right

We measure to improve


There were huge benefits to DBCM during the journey

45%

72%

91%106%

136%

53%

125%

41%

81%

106%

152%

198%

56%

133%

39%

105%

137%

180%

306%

211%

273%

0%

50%

100%

150%

200%

250%

300%

350%

2004 2005 2006 2007 2008 2009 2010 F03

Pre

ce

nta

ge

Year

DBCM % Improvement per employee per year against 2003 base

Tons treated Carats Revenue

The Lean journey tipping point


At the end of 2009 we reached a stalemate situation

The tip

pin

g p

oin

t

2009 2010 20122011 2013M

atu

rity

of

the

DB

CM

Wa

y o

f W

ork

Approach used to embed Lean

2008

University of Lean

Execution of Lean

Lean teams:

Educate

Push

Line leadership:

Pull

Execute

Take accountability


The management way of work still hampered the efforts

Frontline

Coaching

“It is easier to act yourself into a new way of thinking than to think yourself into a new way of acting”John Shook

Management directs

Change!!!

The traditional way Supportive leadership needed


Was “Lean Measurement” the catalyst to our problem?

Most fundamental management system

Other systems built on this foundation

MEASUREMENT

Major triggering mechanism

If right will transform If wrong will destroy

Michael Hammer, 2001

Research findings


Performance management was looked at systemically

Performance measurement requires a holistic approach where all aspects must work together to create the desired outcome

Outstanding Management

Transformational Performance Management

Outstanding Organisational Performance

Co

nte

xt

Focu

s

Inte

grat

ion

Inte

ract

ivit

y

Basic Performance MeasurementSpitzer, 2009


Research findings showed a low level of measurement maturity

These findings mirrored the Lean maturity assessment scores within DBCM (based on assurance audits)

Maturity Levels: DBCM

0

1

2

3

4

5

Finsch Mine Venetia Mine Voorspoed Mine Kimberley Mines

World Class Sophistication

Fitness Aw arenessIgnorance Lean Maturity

Senior Management Measurement Maturity Middle Management Measurement


This level of immaturity impacted on all layers in DBCM

Senior management

Measurement frequently talked about in meetings, used to rewards, but not

used to transform.

Middle management

Did not trust measurement system, “gaming“ the measures, bias towards own

silos.

Front line

Felt they can do more, but lacked management interaction and support.

The research indicated a systemic breakdown between layers and departments within the organisation

Transformational Measurement Questionnaire:

Senior Management Pareto Analysis

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Q17 Q2 Q20 Q1 Q9 Q4 Q3 Q6 Q16 Q10 Q14 Q11 Q12 Q15 Q19 Q13 Q5 Q8 Q18 Q7

Scores Average

0

0.5

1

1.5

2

2.5

3

16 31 12 11 15 40 25 7 38 8 2 6 44 1 17 32 13 23 9 18 24 33 3 19 45 20 48 14 5 49 28 42 22 36 39 26 30 4 50 10 27 41 47 34 21 46 35 29 37 43

Sco

re

Question Number

Questionnaire2: Transformational Measurement Maturity Assessment Scores of Middle Management

Good Fair Poor Score Avg Avg Score

Front Line Engagement Questionnaire - Front Line

Combined

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20

Good Fair Poor Tot Tot Avg


Per operation the measurement maturity differed

Although there was quite a large discrepancy in maturity levels between various operations, the

difference was that some operations took the outcomes seriously whilst others ignored the issues

Middle management measurement maturity: Venetia variation from

average

-25.00%

-15.00%

-5.00%

5.00%

15.00%

25.00%

Context maturity Focus maturity Integration maturity Interactivity maturity

Total VEN

Middle management measurement maturity: Kimberley variation from

average

-25.00%

-15.00%

-5.00%

5.00%

15.00%

25.00%

Context maturity Focus maturity Integration maturity Interactivity maturity

Total KBY

The Management of Venetia Mine decided to take on the challenge and use the outcomes from the measurement research to experiment with the transformational

power of a carefully constructed measurement system

Venetia Mine results


Management at Venetia adopted the following approach

Focus • Clearly define customer requirements

Align• Ensure outputs are clearly understood

Visualise• “See” the value stream that delivers outputs

Internalise• Agree on inputs required to ensure flow (QCDSM)

Support• Contract requirements from suppliers

The SIPOC approach was used to align measures, both horizontal and vertical, driven by leadership


A visual management system was created

Management attention was focussed on getting the critical measures understood and acted upon

GM KPI

MBA

Mining

Measures

1 .Waste mined Cut 3

2. Waste mined Cut 4

3. Kimberlite mined

Load & Haul

DM Q CS

DM Q CS

Measures

Shovel

1. Tons per load

2. Loads per hour

3. Shovel utilisation

Truck

1. Tons per load

2. Loads per hour

3. TKPH

4. Truck utilisation

Crew

1. Tons per load (Shovel & Truck)

2. Loads per hour (Shovel & Truck)

3. TKPH (Truck)

Operator

1. Tons per load (Shovel & Truck)

2. Loads per hour (Shovel & Truck)

3. TKPH (Truck)

Measures

1. Attendance

2. Skills Matrix

3. Overtime

4. Sick Leave & AWOP

5. Team dynamic survey

6. No of suggestions per

person

Measures

Zero Harm

1. To People

2. To Fellow Workers

3. To Company Property

4. To Environment

land, air, water

Measures

Shovel

1. Tons per hour

2. Total tons loaded

Truck

1. Tons per hour

2. Total tons moved

Crew

1. Tons per hour (Shovel & Truck)

2. Total tons moved (Shovel & Truck)

Operator

1. Total tons loaded (Shovel)

2. Total tons moved (Truck)

3. Tons per hour loaded (Shovel)

4. Tons per hour moved (Truck)

Measures

Shovel

1. Waiting time

Truck

1. Waiting time

Crew

1. Time utilisation (Shovel & Truck)

2. Cycle times (Truck)

Operator

1. Time utilisation (Shovel & Truck)

2. Cycle times (Truck)

3. Operator badges per month

4. Operator hours per badge

EXCO alignment and focus Front Line visualisation and focus

The visualisation and understanding at all levels were critical to ensure value adding action

Source: DBCM CBI Journey


Venetia mine: Measurements to eliminate waste showed immediate results on activities that effect profitability

New performance measures goes live



Financial impact at Venetia Mine sustained

CARI

NG F

OR

MYS

ELF

CARI

NG F

OR

OTH

ERS

CARI

NG F

OR

MYS

ELF

CARI

NG F

OR

OTH

ERS

CARI

NG F

OR

MYS

ELF

CARI

NG F

OR

MYS

ELF

CARI

NG F

OR

OTH

ERS

CARI

NG F

OR

OTH

ERS

2008 – R53/ton

@1041 t/h

2009 – R36/ton

@1756 t/h

2010 – R29.51/ton

@2483 t/h

2011 – R20/ton

@3400 t/h

2012 ?


Conclusions


The following points stood out from the lessons learnt

• Site leadership holds the golden key to Lean Deployment

• You cannot become great unless you understand what great looks like (VSM)

• Reaching the tipping point requires people wanting to do it for themselves

• Early results injects significant energy into a Lean Deployment

• A systemic measurement culture is the central nervous system of Lean

• People only buy into a deployment if they understand it in their own language

• Simplicity in measurement trumps sophistication every time

Many lessons were learnt during the journey. The following are some of the most significant for me:

There is no shortcuts in ensuring success. To get everyone to focus on improvement everyday requires hard work, a lot of energy and a very, very thick skin


Thank you!

Matt van Wyk

Senior Manager

MAC Consulting

Contact

8th Floor, The Mall Offices

Cradock Ave

Rosebank

Cell: +27 83 388 5604

Phone: +27 11 5371800

Email: [email protected]

www.macgroup.co.za

Documents

Lean transformation in mining - Home - Lean Enterprise ... · The lean focus evolved over a number of years Lean became the focus after we questioned the sustainability of previous