AT A GLANCE

• Second largest global producer of refined nickel metal
• Integrated mining operations globally including
• Mining
• Ore refining
• Sales & Distribution

Financial Highlights

• 2.8 M Project Cost
• 12.9 M 12 month anualized savings
• 4.6 return on investment

Issues Highlights

• Passive supervisory interaction with employees
• Little to no accountability from managers to supervisors for attainment of production objectives
• No training plans for critical activities resulting in production delays
• Standards for mining activities were out of date
• No accountability for barrier resolution at the frontline supervisory and manager positions

Project Highlights

• Longhole mining production (Hoist tons) 43% improvement at project end and 51% improvement 1 year after project end
• Cut & fill mining production (Hoist tons) 27% improvement at project end and 33% improvement 1 year after project end

Client Objectives

• Increase productivity to 60% of engineered standards for all mining activities (combined tons hoisted)
• Reduce mining labor cost to plan
• Over time 37% reduction in premium miner labor hours
• Reduction of Mining crewing level to 102% of plan and 100% of plan 1 year after project end

The Project Approach

• Work with existing supervisors, managers and executives to develop floor reporting and barrier resolution behaviors
• Coach frontline management to engage employees for involvement in the production planning process and provide feedback on day-to-day obstacles
• Engage executives to set realistic production goals based on current engineered standards

Project Highlights

• Redesigned operating practices that include:
• Daily accountability meetings at all levels
• Incremental (every 3 hours) identification of production status and production barriers
• Twice daily reporting and accountability for short term production barriers
• Daily reporting of employee training status
• Standard rates for 70% of all mining activities were evaluated, validated or updated as necessary by project end

 

OVERVIEW

This leader in precious metal mining was a company that was victimized by their own success. Over the years, several mergers and acquisitions enabled them the opportunity to enjoy the benefits of favorable market prices for their product, limited competition from other regional mining organizations and a healthy balance sheet increasing margins on their product.

As market conditions began to change and margins eroded, they soon recognized the need to get back to the basics which made them an industry leader and to make this change quickly. Although they clearly recognized the need for change, they also recognized the difficulty of changing the culture of an organization over 800 people strong in the operating divisions alone in a way that was both sustainable and did not unfavorably interrupt current operations.

The engagement began with a frank discussion of operating objectives at the executive level of the organization with The AMS Group operating professional. This discussion also included a dialog of operating problems and concerns. This discussion enable The AMS Group to understand the needs of the organization. This also provided the opportunity for client executives to gain an intimate understanding of the Adept process and its people.

After developing a working partnership with The AMS Group, both organizations began the analysis phase of the engagement. The analysis unfolded over the next several weeks with the objective of identifying the root cause of operating barriers. With the assistance and guidance of the client, The AMS Group professionals were able to identify the absence of critical supervisory behaviors, such as the identification, measurement and taking action on operating barriers. Also, Mine Captains and Superintendents were not utilizing existing measurements and metrics to measure and gauge progress. All levels of management were not holding subordinates accountable for agreed upon goal attainment and there was little or no implementation of existing training plans. The client was the key to this process by validating the findings through their knowledge and experience.

At the end of this process, The AMS Group was able to quantify the impact of what was understood to be a systemic behavior deficiency within the clients culture. The cost in dollars of the lost production in excess labor and product not sent to the market place was substantial, over $10M annually at current labor rates. With a newly developed understanding of their operating culture based on the in-depth observations and data developed by the combined Client and AMS Group team and their understanding of the The AMS Group business case model, the client was able to confidently move forward to the next phase of the process.

Project Implementation

It was determined that the scope of the project would include production, maintenance and planning operations for 2 of the four active mining sites simultaneously over the course of an 8 month period. Additionally, the partnership agreed that success would be measured against improvement to the previous year's performance in the categories of production (tons hoisted) and labor cost dollars schedule attainment.

Operational improvements were focused on execution of existing processes by the workforce, as well as, development and implementation of revised work standards and a change in the workforce management behaviors of the first and second line management teams.

In each area, Supervisors and Foremen implemented new management tools that required short interval follow-up on work assignments. Additionally, work crews began to be loaded with a full day of measurable work based on long-range plans that are broken down into weekly buckets. Also, direct labor activities were revisited by the first and second line supervisors and foremen. New standards for working (Reasonable Expectations, RE's) began to be developed and utilized. Operating improvements also included:

• The management team developed and implemented an Operations Management System to identify behavior and process changes to improve productivity
• Managers and Supervisors developed, upgraded and utilized floor level metrics to measure work performance to newly revised mining standards
• Managers and Supervisors implemented Accountability Meetings (Shift Transition and Weekly Area Review meeting) to drive accountability for key metric attainment
• Revised overtime scheduling process from “blanket posting” to job specific posting resulting in 60% reduction in overtime hours
• Eliminated over usage of contracting services for non specialty jobs that can be performed by employees, 53% reduction in contractors on site
• Maintenance Supervisors and General Foremen cleaned backlog to eliminate “non value-added” work and identify accurate workload requirements, 23% reduction in total backlog hours
• Planners are now focusing on the execution of “planning” activities resulting in a 9% increase in ready-to-schedule backlog work and ground condition safe mining areas
• Implemented process change to the manpower planning process to determine  labor requirements based on the current standards and realistic expectations based on current mining conditions and levels of productivity
• Original workforce requirement were brought to 102% of plan (from 156% of plan)

Sustainability

At all levels, the management team took responsibility to maintain the momentum generated during the improvement process.  It became vital that the message sent to the workforce was one that communicated a permanent change in the organization's culture.  In order to guarantee perpetuation, the client's leadership built a process around Key Performance Indicators that can be used to assign accountability to key members of management and tracked over time to gauge improvement.  In fact, management soon became driven to improve the results that were gained during the engagement. Key mechanisms remain in place to ensure the sustainability of the process and foster future growth. Others have change and evolved as the business and operational events changed operating requirements. The new operating model has included the flexibility needed to keep pace with change. The process of self critiques ensured the sustainability of the operating system and operating results.

Summary of results

• The client realized a 4.9 to 1  return on their investment at the end of a 12 month period of measurement exceeding the projected expectation of 2.5 to 1 return
• Client sustained operating results beyond the end of the engagement as measured by their internal financial reporting
• Two subsequent partnerships with The AMS Group were successfully executed in additional business units including non production related operations
• The client was able to successfully implement similar culture changes in their organization without direct involvement of AMS professionals

From the clients view