New Mine: Ready or Not?
Achieving Certainty in Operational Readiness
March 1, 2012
Cay Mims, Susan McClure and Channing Rollo
Transitioning a new mine from construction to operation requires a herculean effort. After years of preparation and millions, if not billions, of dollars of investment, commissioning and ‘going live’ require that hundreds of new processes, managers, employees, contractors and tools work together smoothly and effectively on day one. Therefore, it is critical to get the start-up conditions just right.
There is no shortage of new mine transitions on the horizon, according to the latest data from Raw Materials Group (RMG). The company points to population growth and economic development in emerging economies as key reasons for increased mine production, and new project investment. Moreover, RMG reports that the investment cost of new mines is also rising, for reasons ranging from equipment scarcity and lack of experienced staff to deeper orebodies and costly consumables. In addition, as asset investments get larger, the timeline for investor and stakeholder returns typically gets longer. Therefore, the sooner a mine achieves nominal capacity and reduces the cash conversion cycle, the better.
In start-up situations, regardless of industry, we typically find tremendous energy, enthusiasm and willingness to make a positive impact. However, optimism alone will not guarantee a safe and productive launch. As the deadline for initiating production approaches, how can mine leaders determine whether their operation is truly ready to go live? To follow, we share some best practices for measuring and ensuring full, sustainable operational readiness.
Are You Ready?
Before ‘flipping the switch’ on day one, it is essential to conduct a thorough and accurate assessment of operational readiness and risk. Techniques traditionally applied to assess existing operations can also be applied effectively in the start-up environment, with simple adjustments to allow for wider performance swings, lack of historical data and shorter measurement intervals. Key elements for examination follow.
- Roles and responsibilities: Identify any gaps and overlaps in roles and responsibilities that could lead to risk or waste. Distinguish between the duties of customer and supplier in all service-level agreements.
- Supervisor readiness: Identify the barriers and issues encountered by the individuals who control the resources: people, materials and time. Document any supervisory skill/behaviour gaps they exhibit when managing others.
- Operator readiness: Examine the barriers, issues and opportunities that front-line workers encounter on a minute-by-minute basis. Document any skill/behaviour gaps in their effective execution of tasks and processes.
- Training: Evaluate existing training programmes, and leverage any observed gaps in skills and behaviour in the development of additional training. While new managers and supervisors may have received management training in the past, they require constant coaching and updates to control developing systems.
- Culture readiness survey: Perform a cultural readiness study to assess executive and site leadership alignment and readiness for start-up. Map the status of the culture, and the extent to which support and additional communication may be required for management to achieve its goals.
- Safety: Assess the actual safety leadership systems, culture and work-area situation using benchmarks and checklists. Understand how safety policies and procedures are executed in the course of daily activities and behaviour. While the elements of a world-class safety system may be defined and exist at the corporate and head-office level, we often find in start-up situations that these systems are only partially implemented, or have yet to be effectively transferred and instilled in local workforces and contractors.
- Process mapping: Perform an end-to-end review of all processes, including value-stream process mapping and defining the state of core processes.
- Bottleneck calculations: Determine bottlenecks in each process using the mapped-out processes, as well as predicted, designed or benchmarked performance.
- Operational interface review: Observe the interface between all major processes. For example, identify variance and causes for variance in delivering mine feed to the process plant, leach pad or stockpiles (e.g., cycle times, ore quality and process issues).
- Production variance: Understand what barriers exist to maximum production. Such variances may be the result of unbalanced material flows (input/output), poor understanding of controls, inappropriate operator adjustments to controls, individual training and performance, poor quality/grade, or simply a lack of understanding of actual expectations and requirements.
- Plant or equipment variance: Examine output in a uniform manner and over time, ranging from seconds to hours, shifts and days. Use these findings to determine the total improvement opportunity in output by examining the variance between the average output and the best repeatable output demonstrated.
- Recovery variance: Examine recovery variances in detail, with actual data captured on a short-term interval basis (as short as possible). With this understanding, determine a reasonable recovery rate and strategies for minimising variances.
- Schedule attainment: Reveal hidden delays with an analysis of schedules and their attainment. Track key deliverables and objectives against time: how did the schedule for these move from plan to plan? Understand why plans changed and use these findings to prevent further schedule slippage.
- Shift change assessment: Develop an understanding of how supervisors manage operators and equipment at the shift change, and identify areas to eliminate lost time and improve performance. Improve the change process and increase productive time by determining whether there is a lack of effective communication between shift teams, resource co-ordination issues, performance pacing, misalignment of goals or training gaps.
- Readiness criteria: Evaluate whether your existing readiness criteria are tangible, utilised and effectively measured, so you can understand whether your asset is achieving operational readiness.
- System for managing: Evaluate the status and effectiveness of the tools management uses to operate the business, drive performance and measure progress against objectives. Define gaps in the existing systems for managing and identify new or enhanced elements required for full readiness.
- Standard operating practices and best practices: Analyse the comprehensiveness of standard operating procedures and identify best practices to leverage across the organisation.
Sustainability from the Start
As you assess your operational readiness, remember that the most motivated employees, and best new processes and systems, are doomed to fail without commitment and alignment. As a mine transitions, there must be a clear understanding around goals at all levels of the organisation. That foundation is critical for what we call ‘sustainability from the start’. Each functional team at your mine must understand the roles they play in achieving organisational success.
When you actually start production, you will depend on leaders at all levels of the organisation to deliver results. Regardless of their role, title or experience, your operation needs the talents and energy of every team member behaving as leaders in the jobs they perform. Sustainable success occurs when leaders at all levels receive the training and development they need to lead themselves, lead work and lead others. Providing knowledge and skill development, measurement and reinforcement as a continuous cycle supports success and drives sustainability.
Trust but Verify
As the big day approaches, a detailed operational readiness and sustainability critique will help to minimise risk and maximise immediate production potential. No one wants to stumble on opening night, so it is critical to identify the gaps between your current state and full readiness. In doing so, you may uncover additional safety, environmental, training or financial opportunities via on-time or even accelerated readiness.
After the assessment, your organisation must define and execute a detailed set of steps necessary to close the gaps, including timelines, governance, required resources, logistics and more. While the granularity of this last-mile exercise may seem onerous, it is the best way to achieve certainty in operational readiness. Greg Peacock, head of The Highland Group’s Mining Practice, summarises the returns: “Cost is key to control in the start-up environment, but the real value to investors is in cutting calendar time, getting product to market sooner, and ultimately reducing the cash conversion cycle.”
So, is your mine ready or not? Better to know for sure.