Black Mountain Mining (Pty) LtdOperating Model – Business Improvement

Jacques Erasmus

Vedanta:- Head of Sustainability

27 May 2016

Association of Mine ManagersGeneral Meeting

Welkom

As an EXCO, where do you stand?

TacticalStrategic

3.1(a) Mine Manager 4.1 Senior Manager 2.a2 Owner Representative

Future - unknownPresent- certainty

Time Line

3

Strategic Context

ProcessStrategy & Culture

Systems, Processes & Mechanisms

Organisational Capability & Culture

People Capacity

• Safety leadership/behaviour• Performance focused (Team &

Individual)• Technically competent• Efficient / Cost conscious• Team based

• Safe and sustainable operations• Best in Class position• High performance, team based culture• Normative Management

• Employee Engagement & Lean structure

• Standard Operating Procedures• Performance Management

• Process, Sustainability & Marketing Development Leadership Staircase (including culture elements)

Integrated Projects Management Platform

4

Enterprise Risk Management

Suggestion Scheme

Near Miss Reporting

Change Management

Results Driven Office

Critical Controls

Vision & Targets

Projects Management Office

• Common Platform

• Using Sharepoint (Tracking) & Access

(Reporting)

• Project Managers Modules

• Project Managers update and control their

specific assignments

• Portfolio Managers Modules

• Portfolio Managers review and control portfolio

• Integrated Reporting Modules

• Customisable reporting to various parties

Innovation &

Technology

Operating Model Design Parameters

Business Improvement Cycle

5

Aspire/

Inspire

Analyse

Ideate

Identify (Investigate)

Implement

Measure

Formalise

Creating a culture of improvement

that inspires the people to seek new

and improved ways of doing things

Setting of goals to be achieved

Focus on finding the opportunities

Stimulate the generation of Ideas

includes both Ad hoc and Structured

idea generation

Focus on both individuals and

groups

inclusion of internal and external

parties

Specify the solutions

Investigate options

Prioritisation

Ensure Measurability

Action Plan

Resource Plan

Project Manage

Training

Wiring

Standardising

Reward/Recognise

Measure Against Project Objectives

Measure Against Business Intent

Process Review

Cost Review

Key Value Drivers

Benchmarks

Capacities and Constraints

Business Improvement Building Blocks

6

Business Intelligence

(Data Gathering and Analysis)

Performance Analysis

• Time and Motion Studies

• Data collation and review

• Benchmarking

Process Review (Bottleneck Identification)

• Process Flows

• Key Value Driver Tree Development

• Capacity & Constraints

Gap & VAS Analysis

• Volume Improvement Estimation

• EBIT Improvement Estimation

Ideation

(Solution Finding)

Structured Program

• Technology Review

• Benchmarking

• Root Cause Analysis

• Decision Analysis

• Risk Analysis

Continuous Improvement Program

• Suggestion Scheme

• Workshop engagements

• Meeting Comments

RDO

(Project Pipeline Management)

Project Prioritisation

• KPI Specification

• Benefit Estimation

• Resource Estimation

Project Planning

• Activity Specification

• Timeline Estimation

• Risk Identification

• Resource AllocationProject Monitoring

• KPI Tracking

• Activity Tracking

• Risk Tracking

Benefit Confirmation

Wiring (Formalise)

• Update of SOP’s, Training Material, Etc

• Process Reviews

Project Close-outs

• Documentation

• Sign-offs

Business Improvement Process Flow

7

Happens most of the time

Happens a lot

Almost never happens

Happens all of the time

Business Improvement Process

Bu

sin

ess I

nte

lId

ea

tio

nP

MO

/RD

O

Phase

Determine Key

Output Value Drivers

for the business

(Output KVDs)

Establish Baseline

Performance

Determine Targeted

Performance

(Internal – Bud, BDP

External – BIC)

Construct value

driver tree

Identify root causes

of shortfall

Produce/Adapt

implementation plan

for Initiatives

Implement Projects

according to plan

CI ideas

Reassess based on VAS

Monitor Impact Close Out Project

Capacity &

Constraints Analysis

Failure Analysis

Determine Key Input

Value Drivers for the

Bottleneck

Processes

Systems Bottleneck

Definition

Gap Analysis &

VAS

Identify

OpportunitiesDefine Initiatives

Determine Initiative

Value, Risk &

Complexity

Prioritise Initiatives

Project Development Platform

8

Key A

cti

vit

ies

Pro

cess

Ste

p

Structured

•Capacity & Constraints

Analysis

•Bottleneck Identification

•Performance Monitoring

•Strategic Reviews

•SWOT Analysis

•Process Reviews

•Etc.

Continuous

•Open Mind

•Brainwave

•etc

Ro

le

Pla

yers

Structured

•Brainstorming

•Research and

Development

•Mindmapping

•Etc.

Continuous

•Suggestions Scheme

•CI Sharing

•Meetings

•Etc.

Project Description

What will the project

deliver, by when

Scope of Work

•What will be done

•Implementation Strategy

•Milestones

Cost Estimation

•Material Cost

•Labour Requirements

•Benefit Estimation

•Financial Assumptions

•Savings/Gains

•Confidence Levels

Identification of

Opportunity

Generation

of Ideas

Project

Planning

Project

Approval

Project

ImplementationBusiness

As Usual

Validate

•Finalize benefits estimates

•Contract negotiation

completed (SC only)

•Implementation plan in

place (Ops only)

Authorise Project

•Assign Project Manager

•Approve Investment Plan

Implement, Track &

Report

•Execute implementation

plan (AO only)

•Track benefit delivery

•Finance validate benefits

numbers

•Audit benefit

•Report benefit

Sustain

•Update Policies &

Procedures

•Training of Staff

•Etc.

Close-out

Section Management

Section Staff

BI team

Section

Management

Section Staff

HSE

Finance

BI Team

Project Owners

Finance

BI Team

Project

Members

Project

Sponsor

BI Team

Project Sponsor

BI Team

Finance

Resp

Pers

on

Process

Owners

(Production,

Maintenance,

ect)

Project OwnersProject Manager

(Initiative Owners)Project Owners

PMO Roles and Responsibilities

9

PMO

Approve and sign-off all initiatives & projects

Hold Initiative Owners & Team leaders accountable for

results deliver

Monthly & Quarterly reviews

Precipitates Strategic Objectives to Functional

requirements

• Value drivers trees

• Capacities & constraints

• Flow sheets

• Benchmarking

• Gaps & prioritisation

Ensure Workshops are attended

Assign Initiative Owners to Projects

Ensure Projects are executed against plan

Manage assigned initiatives

Ensure delivery of targets

Detailed planning for prioritised initiatives

• Activities and deliverables (including timings)

Present plans, progress and analysis in relevant

workshops

HOD’s Section Managers

Project Managers BI Support

Provides Direction

• Setting of Aspiration

• Ensuring compliance to strategic objectives

• Develop KPA framework

Ensure adequate Resources

• Ensure people are releases to attend workshops

Review progress in module

• Ensure initiative owners are equipped and

capable to deliver

• Ensure work performed are inline with

expectancy

Facilitate development of fact base and assist with

analysis

Facilitation of Ideas and Options Generation workshops

• Facilitation of RCA’s where required

• Conduct Brainstorming Workshops

• Facilitate Expert Discussions where required

Assist with research/idea conception

Assist with Benefit Analysis/Justifications

Provide project management support to initiative

owners

• Project Planning

• Project Tracking

Track project pipeline in progress

Performance monitoring

Finance

Assist with Benefit Analysis/Justifications

Verify and sign off on Benefits achieved

10

What have we learnt?

•Variable in need of salt - a comprehensive People Solution: consider people as our major salt contributor. Looking after them needs to be the highest priority.

• IT Solution -Communication and culture changing tool, visually reflecting progress and motivating teams.

•Continuous improvement and Can Do Culture

•A structured approach to communication (includes management of change, meetings, branding, stakeholder engagement).

•Silos – Perceived non alignment of Exco as well as between centralised and decentralised services, are considered destructive.

Perception Survey

•Transformational leadership includes:

•Mechanistic

•Mining and making Zink

•Systemic

•Logistics, Admin, Systems

•Normative

•Corporate soul

•Norms

•Values

•Beliefs

•Strengths of character:

•Wisdom & Knowledge

•Courage

•Humanity

•Justice

•Temperance

•Transcendence

•As Leaders (and also), Managers, WE Influence and Guide Individuals and Teams, towards Understanding, Nurturing and Leveraging Diversity, to Achieve a Common Goal

•Heart (Care), Hand (Partner/Collaborate), Mind (Engage)

•Positive overall understanding of what High Performance Teams should look like and what will enable this (or restrict it)

•New definition of HPT should include the following elements:

•Team meeting targets (Goal Alignment)

•Renewal (Continuous Improvement)

•Individual and Team is healthy, growing etc. (Normative)

•Need for integrated people solution – too many initiatives

•Formal measurement of “soft” people elements lacking (Morale, Team and Individual Satisfaction)

•I-P-O not reflected in current measures.

•67% feel PDS has a High Performance Culture, but we have the potential to do more.

•Determine the balance between Concern for Production and Concern for People.

•CONTINUE themes:

•Communication

•Care for people

•Continuous improvement culture

•Safety culture

•Development

•Recognition

•START themes:

•Communication

•Development

•Building relationships

•Care for people

•Visible leadership

•Clear strategy

•Remuneration strategy

•Recognition

•Consistency

•Empowering

•Accountability

•Resilient & Competent Leaders

•STOP Themes

•Unfair treatment

•Avoiding accountability

•Instructive style

•Counter productive silos

•Unclear strategy

•Disempowering

•Over complicated systems

•Poor management of change

Normative Leadership HPT Survey STOP/START/CONTINUE

11

Normative Leadership Elements

12

Human Error:- Models and Management

The human error problem can be viewed in two ways: the person approach and the system approach. Each has its

model of error causation and each model gives rise to quite different philosophies of error management. Understanding

these differences has important practical implications for coping with the ever present risk of mishaps in clinical practice.

Summary points Two approaches to the problem of human fallibility

exist: the person and the system approaches The person approach focuses on the errors of

individuals, blaming them for forgetfulness, inattention, or moral weakness

The system approach concentrates on the conditions under which individuals work and tries to build defences to avert errors or mitigate their effects

High reliability organisations—which have less than their fair share of accidents—recognise that human variability is a force to harness in averting errors, but they work hard to focus that variability and are constantly preoccupied with the possibility of failure

13

PMO Roles and Responsibilities

Persons Approach:- The longstanding and widespread tradition of the person approach focuses on the unsafe acts—errors and procedural violations—of people at the sharp end: nurses, physicians, surgeons, anaesthetists, pharmacists, and the like. It views these unsafe acts as arising primarily from aberrant mental processes such as forgetfulness, inattention, poor motivation, carelessness, negligence, and recklessness. Naturally enough, the associated countermeasures are directed mainly at reducing unwanted variability in human behaviour. These methods include poster campaigns that appeal to people's sense of fear, writing another procedure (or adding to existing ones), disciplinary measures, threat of litigation, retraining, naming, blaming, and shaming. Followers of this approach tend to treat errors as moral issues, assuming that bad things happen to bad people—what psychologists have called “the just world” hypothesis

Systems Approach:- The basic premise in the

system approach is that humans are fallible and

errors are to be expected, even in the best

organisations. Errors are seen as consequences

rather than causes, having their origins not so much

in the perversity of human nature as in “upstream”

systemic factors. These include recurrent error traps

in the workplace and the organisational processes

that give rise to them. Countermeasures are based

on the assumption that though we cannot change the

human condition, we can change the conditions

under which humans work. A central idea is that of

system defences. All hazardous technologies

possess barriers and safeguards. When an adverse

event occurs, the important issue is not who

blundered, but how and why the defences failed.

14

Health Safety & Environment Management

Vision

To be the leader in Health, Safety & Environment Management.

To us, this means:

• To be a caring organisation for our employees and contractors

• We will not hurt ourselves or those working with us

• We will take care of our own health

Approach

• Each of us is responsible and accountable for working safely

• All will contribute towards constructing and driving our SHE plan

• We will use effective, practical systems to support our SHE plan

• We will learn from any incidents and accidents

• We will ensure we are competent to achieve our SHE plan

• We will ensure we are mentally and physically fit for work through ensuring

we follow the right lifestyle

Target 2020

Safety

• Zero Fatality

• LTIFR rate <1

• 100% compliance to VCCS

• Average work place safety rating >90%

• VSAP Score >85%

Health

• Nil new Occupational health diseases

• 95% of Employees have BMI of 35 or below

Environmental

• Gamsberg Offset implementation and

maintenance

• 100% compliance with BAP commitments

• 80% of waste recycled

15

BIC ModelWhat does best in class mean?

People

High integrity, values driven

Highly skilled

Passionate, committed and focused

Has the best interest of BMM Gamsberg at heart

Harmonious IR

Healthy DisciplineEquipment

Highest equipment availability

Highest equipment utilisation

Material

Regulatory compliant

Risk mitigation (Best suited)

Ergonomically designed

Environmental friendly

Environ-ment

Promote safe BIC production

Best system implemented

Design world class

Conducive to excellence (No

risk_fatigue)

Safety

VFL 100%

WP rating 95%

VCCS 100%

OHSAS 18001 no major findings

VSAP new projects 100%

LTIFR 0.25, LTISR 40, TRIFR 5, FIFR 0

(Low risk exposure, high maturity, good on & off the job safety , high

focus on leading indicators)

Occupational Health

BMI of 27 and less

Medical fitness pass rate 100%

(No HIV / Aids infections, no deterioration of lung function test,

no )

Occupational Hygiene

AQI (Silica exposure) of less than 0.3mg/m3

(no exposure to hazardous and or casogenic particulates, radiation,

lead, )

Environmental control

Fall out dust levels below:300mg/m2/day

Waste recycling volumes 80% of generated waste

Online ground water level monitoring

75% survival rate of rescued plants

(no net loss of biodiversity, no negative impact on ground water, No dust pollution, no hydrocarbon

spills,)

BIC SHE

Standards Desired Results

16

In closing

True empowerment – discussion not instruction. Mentor

& coaching programme particular to that project –

leadership programme.. manage a team of people.

Leadership – cultural flexibility, engage communicate, gives

their best takes a chance in people, to much control, allows

to develop, creates the environment to do their best,

leadership assessment

Listen - to your people use full skill set.

Relationships…personal

Keep it simple - to a set of meaning full rules, messages

fundamental issues – stop playing with risk matrixes –

focus on controls

And, …. Put on your gloves

Support emotional

transitioning

Implementation and continuous improvement

Foster creativity and spontaneity

Inspire continuous

learning and evolution

17

Questions

Together WE can

Your safety, my safety, our goal