management of surface mines

8/6/2019 Management of Surface Mines

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THE MANAGEMENT OF SURFACE

MINES

NAME OF AUTHOR:

A.C. VAN DER WESTHUIZEN

Submitted as a partial requirement for the course POY 783

DATE: 14 MAY 2010


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ABSTRACT

THE MANAGEMENT OF SURFACE MINES

ALBERT VAN DER WESTHUIZEN

In a surface mining operation there are a number of core processes or systems that make up the mining

value stream. These processes or systems however cannot function effectively without the

contributions from service functions that provide specialised services in support of their activities.

In order for the mining systems to effectively deliver on their mandate, coordination between the

departments responsible for systems and sub systems within the mining value stream as well as

between these departments and service departments are paramount.

The purpose of this assignment was to review and analyse the management structure in a surface mine

taking into account both the departments involved in the main value stream as well as service

departments and how communication and integration between departments, processes and systems are

achieved.

The information and insights presented were obtained from literature study as well as from

observations by the author of organisations, including a surface mining operation, over the last 18years.


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TABLE OF CONTENTS

1. INTRODUCTION 2

1.1 Background to Assignment and General Information 2

1.2 Problem Statement 2

1.3 Objectives 2

1.4 Methodology 2

2. RESULTS FROM LITERATURE STUDY 5

3. RESULTS 12

4. ANALYSIS AND EVALUATION OF RESULTS 14

5. CONCLUSIONS 28

6. RECOMMENDATIONS 31


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LIST OF FIGURES

Figure 4.1 XXXXX Colliery organisational structure...p15

Figure 4.2 XXXX organisational structurep16

Figure 4.4.1 XXXXX Colliery mining value stream mapp17

Figure 4.4.2 Organisational structure driven by geographical and functional considerations...p18


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LIST OF SYMBOLS

XXXXX

CSG

GPS

HRDHS&E

IR

IT

JIT

JV

KPI

MBOMDW

MISMLM

MTPA

RBCTROMSIPOC

SLASMS

SOP

XXXXXX XXXXX XXX South Africa

Customer Sector Group

Global Positioning System

Human Resource DevelopmentHealth Safety & Environment

Industrial Relations

Information Technology

Just In Time

Joint Venture

Key Performance Indicator

Management By ObjectiveMission Directed Work teams

Management Information SystemMulti Level Meeting

Million Ton Per Annum

Richards Bay Coal TerminalRun Of MineSupplier Inputs Process Outputs Customer

Service Level AgreementShort Message Service

Standard Operating Procedure


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THE MANAGEMENT OF S URFACE MINES

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CHAPTER 1

MOTIVATION FOR THIS STUDY

Chapter 1 details the problem statement, objectives to be achieved and the methodology to be used.


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Chapter 1 Motivation for this study

1. INTRODUCTION

1.1 Background to Assignment and General Information

Surface mining operations, like all other organisations, have an organisational structure through which

the activities of the organisation are directed in order to achieve its primary and secondary objectives.

Although the core value stream processes are to a certain extent unique to a surface mining operation,

the service departments, and the ways in which they support the core functions, as well as how

communication, integration and coordination take place are similar to other organisations.

1.2 Problem Statement

Conduct a review and analysis of the management structure in surface mines and address the methods

by which a surface mine is managed. Specific emphasis is to be given to:

y Management and service departments

y The role of service departments

y The role of sub-system departments within mining

y How various departments communicate and integrate in terms of services provided and the

role in overall mine management.

1.3 Objectives

In order to address the problem statement as defined the following objectives were set:

1.3.1 Conduct literature study

1.3.2 Review management structure of a surface mining operation

1.3.3 Review role of support departments

1.3.4 Review methods used to communicate and integrate between departments

1.4 Methodology

In order to satisfy the objectives of the review the following methodology was followed:

i. Literature search a literature search was done focussing on:

a. management and organisational design principles and their application in

organisations


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Chapter 1 Motivation for this study

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b. methods used in organisations to achieve control, coordination, communication

and integration

ii. Case study XXXXX Colliery and XXXXX was analysed as a case study in order to

observe the practical implementation of the aspects researched during the literature study.


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CHAPTER 2

LITERATURE STUDY

Chapter 2 summarises the outcome of the literature study done on how organisations are structured,

the factors that influence the structure of a particular organisation and the methods that organisations

use to communicate and integrate the activities of various functions.


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Chapter 2 Results of literature study

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2. RESULTS FROM LITERATURE STUDY

2.1. Management Approaches

A management approach is the overall method of management which aims to enable all

employees to manage input factors in such a way as to achieve the desired output. Modernmanagement approaches consist of components from a variety of management approaches

developed and used since the start of the Industrial Revolution. These approaches can be

grouped into so called classicaland contemporary approaches.

Classical approaches include the following management approaches:

y Systematic

y Scientific

y Bureaucratic

y Administrative

y Human relations and resources

Classical approaches had serious limitations even when used jointly. The following

contemporary approaches developed over a span of approximately 50 years post World War

II as business leaders and planners sought to overcome the challenges of the modern

organisation:

y Quantitative

y Organisational behaviour and human behavioural

y Systems theory

y Contingency theory

2.2 Organisational structure

Organisational structure refers to:

y the way work is divided and

y how the organisation achieves coordination between various work activities.

The design of the organisational structure needs to take into account the following

principles:

y division of labour or specialisation

y distribution of authority


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y departmentalisation

y span of control

y line and staff

y

unity principle

2.2.1 Division of labour or specialisation

Division of labour or specialisation refers to the scope of individual tasks. A high degree of

specialisation in an organisation implies that work is broken down into relatively small

subtasks that are allocated to individuals and at which they can achieve a high level of

expertise through task repetition. This principle is the key advantage achieved from grouping

people in order to produce output. Automobile assembly plants are good examples of

specialisation.

2.2.2 Distribution of authority or delegation

Distribution of authority or delegation is the giving of the legitimate right to influence or

direct employee activities. Coordination problems not solved by standardisation require

escalation in order for resolution to take place. Furthermore, all work in an organisation

cannot be performed by the manager alone; he/she needs to accomplish goals through the

efforts of others.

Effective delegation depends on 5 major principles:

i.

Equal authority and responsibility: Employees to whom a task has been delegatedshould also be given the commensurate authority required to accomplish the task.

ii. Delegate to lowest organisational level possible: Tasks should be delegated to the

level at which employees with the right knowledge and training can act responsibly

on behalf of the organisation.

iii. Manage by exception: The manager should only become involved personally in

decisions when an exception to the work routine of the subordinate occurs.

iv. Tell the Whatand theHow when delegating: An effective delegator ensures that the

employee not only understands the whatthat needs to be accomplished when a task is

delegated, but also ensures that the subordinate understands how the task is to be

carried out.

v. The delegator remains accountable: Superiors do not escape responsibility for the

performance of subordinates once a task has been delegated.


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2.2.3 Departmentalisation

Departmentalisation refers to the way jobs are grouped together in an organisation in order to

accomplish work. As work units grow in size it becomes necessary to subdivide the

organisation into smaller work units so that unit managers are not overwhelmed by too many

subordinates. Several different bases exist from which to choose when setting up departments

e.g. function or purpose, territorial and product divisional. A 4 th type, the Matrix design,

overlays a project or product design with a functional design in organisations where complex

projects are frequently executed e.g. aerospace firms.

2.2.4 Span of control

Span of control is the number of subordinates who report to a given manager. Span of control

is impacted upon by the following factors:

i. Degree of interaction between personnel or units being managed.

ii. Degree of dissimilarity of activities being supervised.

iii. Incidence of new problems in the supervisors units.

iv. Degree of physical dispersion of activities.

v. Extent to which supervisor must carry out non-managerial duties and the demands on

his time from other people and units.

As the incidence of these factors increase, the burden of supervision increase and number of

subordinates that can effectively be managed i.e. the span of control, diminishes.

Span of control is a key consideration in organisational design when attempting to maintain a

balance between the number of hierarchical levels and the span of control i.e. tallness vs

flatness of the organisational structure. As the organisation grows in size and/or complexity,

hierarchical levels are often added in order to keep span of control at manageable levels. Tall

hierarchical structures however add considerable disadvantages in the form of high overhead

costs and complicated communication and decision making mechanisms.

2.2.5 Line and staff

Classical theory recognises that situations often arise where a manager does not have the

specialist knowledge in order to accomplish the task at the desired standard. Staff roles exist

in organisations to support the manager with specialist knowledge when required. A staff role

may only give advice; the authority and responsibility for decisions remain with line.


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2.2.6 Unity principle

The unity principle refers to the clear reporting relationship from the bottom of the hierarchy

to the top. Ambiguity and the possibility of conflicting instructions from different managers

are avoided.

2.3 Coordination in an organisation

The formalised, operating practices in the organisation provide it with a framework for

controlling the work behaviour and work expectations of employees. Written rules and

regulations transmitted through an organisational design do not however ensure coordinated

effort and the accomplishment of organisational goals. In order to achieve coordination,

managers need to employ a number of additional methodologies.

Coordination is the set of mechanisms a manager uses to align the actions of organisational

subunits in order to achieve the desired outcomes. The extent of coordination required is

driven by the amount of information that needs to be processed during task accomplishment.

Uncertain and changing environments increase the amount of information to be processed and

therefore the amount of coordination that is required.

Information processing capacity, as facilitated by coordination, needs to be developed in both

the vertical and horizontal dimensions.

y An increase in vertical coordination results in a decrease in the number of exceptions

to be resolved by the organisational hierarchy.

y An increase in horizontal coordination results in improved integration of workflow.

2.3.1 Vertical coordination mechanisms

i. Groups -by increasing group decision-making through the use of task forces, or so-

called collateral organisations comprised of people from different subunits, to identify

and solve problems that span organisational levels and functions.

ii. Direct supervision chain of command is the traditional means of establishing vertical

coordination through the actions of supervisors and managers.

iii. Standardisation of work processes in certain environments by using technology

results in highly standardised work processes that dictate the pattern of coordination

with very little interference required.


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iv. Standardisation of outputs seeks to specify the nature of the output through the use of

physical and economic standards. The emphasis of coordination shifts from the how

work is done to the output standards to be conformed to.

v. Performance appraisals are used to communicate organisational goals and

expectations and in order to direct individual performance in this regard. If used

correctly the process can support goal alignment and coordination.

vi. Management Information Systems (MIS) facilitate vertical coordination by providing

accurate, consistent and relevant information across the organisation for use in

decision making at various levels.

2.3.2 Horizontal coordination mechanisms

i. Direct contact is the simplest and least costly form of horizontal coordination and

describes the conversations that take place between functions or process owners when

a situation calls for an increased level of coordination.

ii. Liaison roles are formally established to coordinate workflow between two of more

organisational subunits. As organisations grow in complexity the need for liaison

managers tend to increase.

iii. Horizontal task forces are usually temporary structures set up to provide horizontal

coordination in situations where problems occur involving numerous departments.

Members from the affected departments are drawn into a task force in order to deal in

a focussed manner with the issue.

iv. Permanent teams to manage reoccurring workflow problems are used when

organisations find that horizontal coordination problems persist.

2.4 Control in an organisation

Control is the set of mechanisms used to keep action and outcomes within predetermined

limits. Control deals with the setting of work standards, measuring results against plan and

initiating corrective action. Management control systems can focus on methods of work i.e.

process controls or on the control of results of work i.e. objective setting.

2.4.1 Process control

Process control refers to the standardisation of task performance and is achieved through the

specifying of work methods and setting work standards.


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2.4.2 Results oriented control

Results oriented control refers to a system that achieves control by specifying the results to be

obtained by employees and their work units. Management by Objectives (MBO) is a widely

used example of such a system. MBO systems attempt to ensure the setting of specific

measurable goals, the monitoring of progress against towards these goals and the receiving of

rewards based upon the outcomes.

REFERENCES

Child, J. 1987. Organization. 2nd

ed. Harper & Row Ltd, London.

Dailey, R. 1990. Organisational Behaviour. 2nd ed. Pitman Publishing, London.

Gouillart, F.J. & Kelly, J.N. 1995. Transforming the Organization. McGraw-Hill, Inc., NY

Hrebiniak, L.G. 1978. Complex Organizations, 1st ed. West Pub. Company, NY.

Pinchot, G. & E. 1994. The End of Bureaucracy & the Rise of the Intelligent Organisation. 1st

ed. Berret-Koehler Pub., San Francisco

Robey, D. 1982. Designing Organizations. 1st ed. Richard D. Irwin, Inc., Illinois.

Stone, J.D. 2008. The development of a comprehensive, practical and integrated management

method with specific reference to the South African mining industry. PhD thesis. University

of Pretoria.

Tomasko, R.M. 1993. Rethinking the Corporation. 1st ed. Amacom, NY


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CHAPTER 3

RESULTS

Due to the nature of this assignment no field observations or measurements were conducted.


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Chapter 3 Results

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3. RESULTS

Due to the nature of this assignment no field observations or measurements were conducted.


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CHAPTER 4

ANALYSIS AND EVALUATION OF RESULTS

Chapter 4 discusses the application of organisational design and structure as well as how

communication and integration between core and support functions are achieved in a surface mining

operation.


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Chapter 4 Analysis and evaluation of results

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formal and informal links between employees and departments that ensure connectedness and

the alignment to a common purpose.

Figure 4.1 XXXXX Colliery organisational structure

4.2 Centralisation

Mining operations owned by large mining houses also tend to display a high degree of

centralisation, where the authority to make decisions are retained by top management. This

tendency is driven by mainly 2 factors:

y The requirements of the Mine Health and Safety Act together with the high degree of

regulation in place to ensure health and safety in the mining environment.

y The need of large organisations to maintain control and the attempt to reduce the

management effort required to manage a large number of disparate operations.

In centralised organisations employees follow uniform procedures and policies formulated

and enforced by higher management. Such an organisation also exhibit high levels of

formalisation with many written rules, regulations and procedures that guide employee

behaviour and decision making. Centralisation also tends to trigger standardisation where

variations in behaviour are limited through set work procedures and processes. In the surface

mining environment where the health and safety risk is high and where many of the controls

that mitigate identified risks are administrative i.e. rule based, in nature, centralisation

XXXXX

Colliery

Mining

Department

Drill & Blast

Section

Dragline

Section

Coaling

Section

Contractor Mini-

pit Section

Maintenance

Department

Track

Section

Tyre

Section

Instrumentation

Dragline

Section

HSE

Department

Health

Section

Safety

Section

Environmental

Section

Integrated

Planning

Department

Short Term

Planning Section

Geology

Section

Survey

Section

Control Room

Human

ResourcesFinance


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Fi 4.4.1 XXXXX Colli mi i val stream map

At a l5

65

l 2 process level 7 core functions can be furt8

er broken down into sub processes

such as topsoil stripping, burden stripping, burden drilling, blasting, etc. See fig. 4.4.1.

Although level 2 processes can be broken down into more detailed process steps atlevel 3 etc.

this is in the majorit9 of instances the lowest level to which work units will be sub divided

except forthe division into teams in orderto allow for 24/7 operations. For mining operations

with a large geographical span of control, each geographicall9 distinct area might have its

own similar structure. See fig. 4.4.2.

Functions that support the core functions are referred to as service or support functions and

include organisational functions such as Maintenance, Finance, Human Resources, Buying,

Stores, etc.

4.4. i i t t

The mining department is responsible for the total mining value chain including topsoil

stripping, soft burden stripping; burden drilling, burden blasting, burden stripping, coal

drilling, coal extraction and rehabilitation.

y Topsoil stripping the top layer of fertile soil is removed and stockpiled for use

during rehabilitation once the ore has been extracted. Itis idealto direct place topsoil

i.e. instead of stockpiling to place the topsoil in the position where rehabilitation is

already taking place and the soil can be used immediately.

Lvl

1Core: Expos

@re Core: Extraction

Lvl2

Topsoilstrip

Softburdenstrip

Burdendrill

Burdenblast

Burdenre A ove

Coaldrill

Coalblast

Coalextract

Mining service: Haulroad construction and maintenance

Mining service: Water management

Mining service: Geology

Mining service:Survey

Mining service: Control room

Lvl0 Core: Mining


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Figure 4.4.2 Organisational structure driven by geographical and functional considerations

y Soft burden stripping depending on geology, a layer of soft non-fertile soil may be

present below the topsoil layer that requires removal before the hard burden is

reached.

y Burden drilling the rock layer above the coal seam is drilled with pre-split and infill

holes according to a drill pattern that depends on hole size, rock characteristics,

burden thickness, etc.

y Burden blasting the drilled holes is filled with explosives and pre-split and

production blasts are set of using pyrotechnics or electronic detonators to shatter the

rock burden to a sufficient fragmentation for the next process. Casting of a portion of

the burden into the void is a desirable secondary outcome of this process.

y Burden removal the blasted burden is removed in order to expose the coal seam.

Various methods or a combination of them can be used including production dozing,

dragline or truck and shovel.

y Coal drilling once the coal is exposed the coal is drilled according to a pattern

design that depends on hardness, thickness, etc.

y Coal blasting explosives are pumped into the drilled holes and the coal block is

blasted to create a fragmented coal seam.

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y Coal extraction the fragmented coal seam is loaded onto haul trucks that transport

the coal to the run of mine (ROM) tip or to a ROM stockpile.

y Rehabilitation once all the seams have been mined out the resulting void is filled,

levelled according to contours set out in a rehabilitation plan, covered with a layer of

topsoil and seeded in order for natural vegetation to be re-established.

In addition to the activities that form part of the mining value stream there is a number of

mining support activities that need to take place in order to support these activities. Such

mining support services include water management, control room operations and haul road

construction and maintenance.

y Water management the management of water is of utmost importance in a surface

mining operation. Due to the nature of the operation i.e. the creation of a large hole

and the inescapable effect of gravity, water tends to accumulate in the area where

operations need to take place. Diverting water away and preventing it from entering

the pit is preferred, but is in even the best scenario only partially possible. Water in

the pit, accumulating at various low points needs to be pumped out and, due to the

fact that it is now affected water, needs to be managed by means of dams and usage in

order to prevent decanting into the environment. At XXXXX Colliery a dedicated

team is responsible for the laying of pipes and the positioning and operation of the

pumps used to clear the production areas of water.

y Haul road construction and maintenance ramps and haul roads are constructed as

part of the initial establishment of the mine. As the cut advances, ramps needs to

advance with the cut in order to maintain the optimal gradients and haul roads moved

as current routes become inefficient or mined through. The impact of rain and wear on

the haul road surface also takes its toll and is very dependent on the quality of the

initial construction. The placing of road signs, creation of roadside berms, etc. would

also fall into this category. The driver used to allocate responsibility for haul road

construction and maintenance can vary between the following:

i. most dependant user is the mining sub function most dependant on the quality

of the haul roads. In a surface mining operation this would most likely be the coal

extraction team. In this scenario the team responsible for the haul road also has

the most to gain from a quality outcome which results in a self-regulating system.

Sections not used by the responsible team might be neglected though.

ii. owner of equipment this principle allocates responsibility to the sub-function

that has operational control over the equipment used to execute the task. Control


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over the factors of production is key to this method of allocation. The same

advantages and disadvantages as per the previous scenario is however prevalent.

iii. dedicated team the equipment and so-called pit services functions can also be

grouped into a mining support services team that support the core mining

processes through the provision of a variety of activities that may include haul

road construction and maintenance, water management, etc. This scenario

supports specialisation through departmentalisation and allows for increased

focus.

At XXXXX Colliery a combination of the above options are currently in place. Ramp

construction is the responsibility of the coaling section, water management is done by

a dedicated team also reporting into the Coaling function and haul road construction

and maintenance is part of the responsibilities of the contractor mini-pit

superintendent. Allocating haul road activities to the contractor mini-pit

superintendent is mainly a consequence of the balancing of span of control and does

not necessarily deliver the best outcome. Equipment allocation that is aligned to this

distribution of responsibilities is only partially in place and requires some inter

function coordination for activities to run smoothly.

y Control room operations this function can play a significant role in the overall

coordination of activities and the efficiency and effectiveness of operations. The

effectiveness of this function is multiplied if staff is competent and effective fleet

management and communication systems are in place. Functions of the control room

include, but is not limited to:

y The monitoring of and reaction to increased cycle times, waiting times and other

changes in conditions that may require a reallocation of resources.

y The coordination and monitoring of the response to breakdowns on critical equipment

in order to ensure rapid response in terms of repair and return to service.

y The communication and coordination of out of normal situations e.g. hazardous road

conditions, lightning alerts, evacuations for blasting, response to injury or other

emergency situations, etc.

y The recording of production and other data used for the generation of the reports that

support decision making across the organisation.

At XXXXX Colliery the control room is responsible for the activities as described. The

control room has a number of resources to their disposal including a fleet management

system, radio, telephone, email and SMS communications, weather and lightning warning

systems, camera surveillance, SCADA, SAP interface, etc.


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to the fact that XXXXX Colliery is geographically concentrated it has a functional structure

with sections looking after the dragline, track equipment, tyre equipment, instrumentation,

facilities and electrical reticulation.

4.4.4 Health, Safety and Environment Department (HSE)The HSE department is the custodian of systems that manage the health and safety of

employees and the protection of the environment. It is important to note that even though they

are custodians of the systems, line remains accountable for adherence to these systems.

y Health the monitoring of factors that may have an influence on the health of

employees and the subsequent recommendation of corrective measures should

excursions exceeding the Occupational Exposure Limits as set out in the Mine Health

and Safety Act be noted.

y Safety - the safety function monitors the implementation and adherence to safety rules

and standards, ensure that safety risk management is carried out as per the Mine

Health and Safety Act and report on safety statistics. A safety program that is

proactive in nature and that focus not only on conditions but also on behaviour is

managed and adherence by the organisation is tracked in order to ensure adequate

coverage of all employees and all high risk activities.

y Environment this function monitors adherence to environmental laws as well as to

the Environmental Impact Assessment (EIA) conditions under which the mine is

operating and include factors impacting on water, air, soil, vibration, etc.

4.5 Service departments

4.5.1 Human resources

The Human Resource Department is a support function that delivers a range of services to the

organisation focussed around its workforce.

y Recruitment when vacancies occur in the organisation it is the HR departments role

to facilitate the recruitment process the processes such as advertising, short listing,

assessing, interviewing, appointing and on-boarding. It is vital that the customer

function remain involved in the steps as listed in order to ensure that the right

individual for the vacancy is identified and recruited.

y Human Resource Development (HRD) to ensure a skilled workforce that will

support the organisation in achieving its objectives employees needs to be trained and

developed in the right development areas. HRD covers a wide spectrum of training


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and development areas including skills, leadership, supervisory, health and safety, IT,

etc.

y Industrial Relations (IR) the IR function are the custodians of industrial relations

processes within an organisation. The main processes are the grievance process and

the disciplinary process. It is required from the IR function to remain impartial, to

maintain and update systems and procedures and to ensure that the process followed

in procedurally correct and fair.

y Remuneration the weekly and/or monthly payment of employee salaries is the

responsibility of the remuneration function. Payroll systems support the capturing of

hours worked etc. against which varying pay rates are applied for the calculation of

salary payouts.

4.5.2 Finance

y Management accounting the management accounting function is forward looking in

its approach and tracks and reports on the current performance of an organisation in

such a way that timely remedial action by managers is possible.

y Financial accounting the financial accounting function is responsible for drawing up

of financial statements, mainly used by persons external to the organisation, that

reflect the financial status of an organisation over set period of time e.g. a fiscal year.

4.5.3 Supply

y Procurement the need in the organisation for goods and/or services required as production or business inputs trigger a procurement response. The procurement

function manages the process of researching supply options for the good or service,

requesting and comparing prices and entering into a supply agreement for the good or

service.

y Stores organisations require goods such as spares and consumables at short notice,

usually much shorter that can be accommodated by the supply process although in

special cases such as Just In Time (JIT) systems this is achieved to a certain degree. A

buffer stock is held in a store to compensate for the lead time in delivery of goods

through the procurement process.

4.6 Communication and integration

In order for an organisation and in this case a surface mining operation to be successful, all

departments needs to be aligned to and work together in a coordinated manner towards the

organisational objectives. It is not sufficient for an organisation to have all the necessary


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functions in place in an organisational structure. Communication and integration within core

and support functions and between functions are crucial in order to ensure that the quantity,

quality and timing of delivery is realised.

According to the Collins Dictionary communication is the imparting or exchange of

information, ideas or feelings and to integrate means to make or be made into a whole.

When discussing communication and integration in an organisation it is impossible to not also

mention control and coordination since the concepts are so closely linked and interdependent.

Methods of coordination and control that organisations deploy were briefly discussed under

sections 2.3 and 2.4 of this assignment. I will therefore now discuss methods deployed at

XXXXX Colliery to ensure good communication and achieve integration between functions.

y Life of Mine and 5-year plans these documents provide a single version of the

mining operations over the life of the mine and over the next 5 years respectively and

provide a common base from which planning, business improvement and other

processes can take place.

y 2 year budget the budget provides a more detailed representation of the mining

operation over the next 2 years and is based on the Life of Mine and 5 Year plans and

contains details of the expected volumes, qualities and costs. All decisions in the

organisation are to be measured against and aligned to the achievement of the budget.

y Business plans the XXXXX business plan is the outcome of a planning process

where the management team deliberated and made decisions on key performance

areas to be focussed on, initiatives to be implemented and projects to be executed in

order to achieve the budget. Once the mine business plan has been formulated,

departmental business plans that support the mine business plan are developed in

each functional area. KPIs that measure the progress and performance in the

identified focus areas are identified.

y Mission Directed Work teams (MDWs) XXXXX Colliery use a system of MDWs

to ensure goal alignment, encourage function interaction and facilitate employee

involvement. Level 1 to 4 MDW teams cover the vertical cross section of the

organisational structure from operator level to management level. KPIs identified as

critical to the success of the business and the achievement of the budget is cascaded

down the organisational hierarchy in such a way that the KPIs at each level is aligned

with the organisational goals whilst still being line of sight for the team in question.

Teams have meetings at relevant frequencies and focus on corrective actions in

performance areas where targets are not achieved. Monthly Multi Level Meetings

(MLMs) bring representatives from all teams in a function together for presentations


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by each team on team KPI performance and innovations implemented. Teams need to

identify their customers and assess their satisfaction with the service provided by the

team. Corrective actions are required for issues identified through this process.

y Meetings a number of meetings that occur daily, weekly or monthly ensure cross

functional communication and integration. The following are a few examples:

i. Morning production meeting (daily) maintenance, mining and planning

functions meet to discuss safety, equipment and production performance over

past 24 hours and coordinate activities for next 24 hours.

ii. Morning maintenance meeting (daily) maintenance function meets to discuss

safety and equipment performance over past 24 hours and coordinate activities

for next 24 hours.

iii. Morning heads of department production meeting (daily) heads of department

meets to discuss safety and production performance over past 24 hours and

month to date and to coordinate activities for the week. Other relevant topics are

raised, discussed and decisions made.

iv. Planning meeting (weekly) mining, maintenance and planning functions meet

to review past performance and agree on production and maintenance schedule

for the following week.

y SIPOC The Supplier Input Process Output Customer (SIPOC) is a business

optimisation tool used on an ad hoc basis to improve workflow in an organisation. It

pays particular attention to the interfaces between processes, but also has a component

that focus on the process itself. The outcome of the exercise is a clear understanding

of the inputs required and the outputs that needs to be delivered and at what quality.

The outcome is usually captured in a series of Customer Service Level Agreements

(SLAs) that detail the expectations and commitments between parties. SLAs are a

requirement of the MDW system and are required for a team to move beyond a

certain maturity level.

y Standard Operating Procedures (SOPs) These documents describe the method in

which a task is to be done and supports the standardisation of tasks. The controls

selected to mitigate the health, safety and environmental risks inherent in a task

during the risk assessment process, would be detailed in this document. The use of

SOPs as the documented way of doing something supports integration between

functions.

y Process maps Both the activity of drawing up a process map as well as the process

map itself support integration and communication between functions. A process map

provides a clear understanding of the sequence of events to achieve a certain outcome


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and clarifies responsibilities for each process step. Error proofing is built into well

designed process maps making the process self regulating and reduces the need for

management intervention and therefore has a positive effect on span of control.

y Work groups and steering committees Ad hoc work groups and steering committees

are created to address particular problems identified or to ensure coordination

between functions during the implementation of cross functional systems or

initiatives.

y Reports The distribution of a number of reports that provide information on

progress against targets or adherence to work standards further ensure goal alignment,

communication and integration of functions.


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CHAPTER 5

CONCLUSIONS

Chapter 5 summarises conclusions to the objectives as set out in Chapter 1 based on the literaturestudy and review as documented in Chapters 2 and 4.


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Chapter 5 Conclusions

................................ ................................ ................................ ................................ ................................ . POY 78328

5. CONCLUSIONS

5.1 Conduct literature study

A literature study was undertaken into management systems, organisational design and

structure and the ways that organisations coordinate, communicate and integrate in order to

ensure alignment and the delivery on the organisational objectives.

Organisational design and structure determines how work is divided and the way that

coordination of activities takes place in an organisation.

Organisational designs differ depending on the design principle around which

departmentalisation has taken place for the specific organisation. There is no absolute superior

structure, only structures that suite a specific organisation better than others. The geographical

separation of business units, industry type, regulatory framework, etc. play a role in what

structure supports organisational objectives best.Irrespective of the structure of an organisation, communication and integration is required.

Some modern structures allow for the natural and informal flow of information whilst other,

more traditional structures require formal systems in order to ensure that communication and

integration occur.

5.2 Review management structure of a surface mining operation

The management structure of a surface mining operation is generally functional and

hierarchical in nature. Departments are set up along lines of functional responsibility withteams responsible for areas where they have specific expertise. Hierarchical levels of

management within departments allocate and control resources and intervene when issues occur

in processes that deviate from the norm.

Surface mining operations have a high degree of centralisation with most decisions being made

at senior management levels in the organisation.

5.3 Review role of support departments

Service departments in surface mining operations are also functional and hierarchical in nature.Service departments, with specialist knowledge in a specific field, carry out activities that

enable departments that are responsible for the mining value stream to be more effective.


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Chapter 5 Conclusions

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5.4 Review methods used to communicate and integrate between

departments

It is crucial for the activities of various core and support departments to be aligned towards the

achievement of the goals of the organisation. Organisational alignment is achieved through the

communication of the organisational objectives throughout the organisation both vertically and

horizontally. Delivery of these objectives requires the selection and integration of all

departmental activities in support of the organisational objectives.

Employees and departments in a surface mining operation use a large number of mechanisms to

ensure communication and integration. These mechanisms range from formal systems such as

planning and budgeting processes to ad hoc type processes such as work groups.


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CHAPTER 6

RECOMMENDATIONS

Chapter 6 contains recommendations to be considered in order to improve the functioning of the

surface mining operation.


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Chapter 6 - Recommendations

6. RECOMMENDATIONS

6.1. Lower level of decision making

Surface mining operations should through a process of training and coaching work towards driving

the level of decision making to lower levels in the organisation. Supervisory staff should beempowered to make the decisions required to ensure operational effectiveness and should be held

accountable for such decisions. Managers should refrain from becoming operationally involved at

levels where disempowerment of the supervisory level takes place.

6.2 Ensure alignment to organisational objectives

Engage in a sequential and systematic process of setting and cascading of organisational objectives in

a top down manner throughout the organisation. The management team should at the right time during

the business cycle engage in a systematic process to determine the critical success factors and critical

activities that will be required going forward in order to achieve the organisations goals. Once this

have been agreed upon, functional departments should engage in similar processes to decide upon

critical success factors and activities on a departmental level.

6.3 SLAs with service departments

Departments central to delivering on the value stream should, through the use of a SIPOC process,

indentify the inputs required from service departments and contract with them on the quality and

quantity of such inputs by indentifying KPIs. The outcome of such an exercise should be captured in a

Service Level Agreement and performance on KPIs should be reviewed on an appropriate frequency

to ensure compliance. The use of MDW can be central to such a process.

6.4 Use cross functional teams

Deviate from pure functional structures and experiment with cross functional teams in certain areas of

the business. Form teams that consist of both operational and maintenance employees that report into

a production supervisor or manager responsible for a certain operational activity e.g. burden drilling.

This structure encourages the alignment of objectives and may lead to improved production

performance.

management of surface mines

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