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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
3 MAC Consulting – Proprietary and Confidential
MAC Consulting
MAC Consulting was established in the 1990s, and has been assisting a number of blue chip clients to improve
4 MAC Consulting – Proprietary and Confidential
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
6 MAC Consulting – Proprietary and Confidential
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
7 MAC Consulting – Proprietary and Confidential
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
8 MAC Consulting – Proprietary and Confidential
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
9 MAC Consulting – Proprietary and Confidential
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
10 MAC Consulting – Proprietary and Confidential
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
12 MAC Consulting – Proprietary and Confidential
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
13 MAC Consulting – Proprietary and Confidential
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
14 MAC Consulting – Proprietary and Confidential
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
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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
17 MAC Consulting – Proprietary and Confidential
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
18 MAC Consulting – Proprietary and Confidential
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
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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
21 MAC Consulting – Proprietary and Confidential
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
22 MAC Consulting – Proprietary and Confidential
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
23 MAC Consulting – Proprietary and Confidential
Venetia mine: Measurements to eliminate waste showed immediate results on activities that effect profitability
New performance measures goes live
Source: DBCM CBI Journey
24 MAC Consulting – Proprietary and Confidential
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 ?
Source: DBCM CBI Journey
Conclusions
26 MAC Consulting – Proprietary and Confidential
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
27 MAC Consulting – Proprietary and Confidential
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