February 2012

Room for improvement

Miners are picking up lean manufacturing tools to tune up operational performance

By Dan Zlotnikov

To improve equipment availability, starting in 2008, Suncor stripped down and rebuilt how it performed routine maintenance. The results are impressive. With the process revamped, the mine maintenance team has succeeded in shaving the time required for an oil change on a heavy-haul truck from 83 down to eight minutes.

This is one of many improvements that Suncor’s vice president of maintenance Raymond Floyd chronicles in his recent book, Liquid Lean: developing lean culture in the process industries, which tells the various ways that changes – sometimes very small changes – can add up to enviable gains. As one might imagine, Floyd is not the only one taking a hard look at how process can improve performance.

Tim Joseph, associate professor of mining engineering at the University of Alberta, cites the success of Australian Bulk Minerals (now Grange Resources) as another example of the impact that process improvements can have on mining operations. The company was taking a look at the maintenance process for the fleet of trucks at its Tasmania-based mining operation. They realized that every time a truck came in for service, it had to be washed of all the dirt it had accumulated over 500 hours of operation, a process, explains Joseph, that often took a full 12-hour shift.

“So, they said, ‘Why don’t we build ourselves a wash bay you drive through, just like a car wash, and wash off the dirt every time a truck comes in to refuel?’” he continues. The added cost of recycling the water and the few seconds lost at each refuelling cycle were more than made up for in shorter scheduled downtimes and greater availability for the fleet, Joseph concludes.

More and more companies today are cognizant of this and are working to make optimization an integral part of their strategies. And while the goal of these efforts – increased value – is shared across the industry, they can represent a dramatic departure from what has been the norm. The word “optimization” is not used in some companies, which prefer to describe what they do as “continuous improvement.”

Jesse Hall, director of continuous improvement at Suncor Energy, explains the distinction. “Optimization implies there’s a pre-existing condition, and as a one-time event you’re going to make it as good as you can,” he says. “I think continuous improvement implies that there is no fully optimized solution, that there’s always more, there’s always a better way.”

That is something Trevor Krawchyk, senior business improvement specialist at Barrick Gold, can get behind. Barrick, he explains, has developed a four-stage scorecard that the various operations use to self-evaluate their improvement efforts. But, according to Krawchyk, “We’ve always said, you’ll never achieve or retain Stage 3 [the top stage], because the day you think you have achieved it, you’ll become complacent and lose that traction. Someone with a mindset that believes he has achieved perfection will never achieve a continuous improvement culture.”

Training up

To ensure that Barrick’s various operations maintain that traction and keep improving their activities, the company employs over 80 full-time business improvement (BI) coaches. Drawn from management positions, the coaches take their posts for approximately two years. During that time, the coaches are responsible for “engaging the site leadership teams and the employees and identifying improvement opportunities, putting teams together, and facilitating those improvement projects through to completion,” Krawchyk explains. The coaches then generally return to their previous areas – usually at a higher level of responsibility – armed with two years of leadership experience facilitating improvement initiatives.

Because the coach position has high turnover by design, Krawchyk says, the Toronto-based corporate business improvement team and regional business improvement managers put significant energy into training coaches in improvement initiative techniques and methods. The coaches also communicate with each other on a regular basis, forming a close network through which they exchange knowledge and experience. This network has been instrumental in securing buy-in from all levels of the organization at a time of rapid growth: over the past nine years, Barrick has gone from 10,000 employees to over 20,000 and from nine operations to 26.

“We prefer to promote from within and bring Barrick people into the BI roles instead of using external resources so that there’s already a good relationship between the coaches and the employees at the mine sites,” explains Krawchyk. “We make sure we pick high-potential employees who have strong leadership capabilities and are good communicators, so there’s a credibility that’s already there when we do these types of improvements.”

Barrick has also taken steps to formalize its improvement efforts, says Krawchyk, who worked for Toyota in the 1990s, and they have followed the auto manufacturer’s example in implementing Kaizen workshops. The company collects data on the areas of greatest potential return on investment for their efforts, and then forms cross-functional teams consisting of operators, supervisors and technical specialists, who work together on possible solutions. Both Suncor and Barrick draw on Toyota’s lean manufacturing principles, which drive production teams to eliminate waste that ranges from surplus production to underused talent.

The process of formalizing the improvement efforts reaches straight to the top, adds Krawchyk. Barrick sets annual performance commitments for its entire senior staff, from the COO through regional presidents, down to the general managers of operations and their respective leadership teams. These include various measurements, but a few years back, Barrick added value creation to the list. The business improvement coaches are resources to support the operations in meeting their value creation targets.

“Continuous improvement is more ingrained in the culture now,” explains Krawchyk. “It’s systematized, versus being something that’s off on its own. We’ve made it part of our annual business cycle.” While Barrick does not disclose the annual savings resulting from these initiatives, Krawchyk says that the cumulative effect over the last several years has been substantial.

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