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Tactical mine management Dessureault, Sean 2002

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TACTICAL MINE MANAGEMENT By SEAN DESSUREAULT B. Eng., McGill University, 1997 M . A. Sc., University of British Columbia, 1999 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY In THE FACULTY OF GRADUATE STUDEIS (Department of Mining and Mineral Process Engineering) We accept this thesis as cojifb^ming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA December 2001 © Sean David Dessureault, 2001  In  presenting  degree freely  at  this  the  available  copying  of  department publication  of  in  partial  fulfilment  University  of  British  Columbia,  for  this or  thesis  reference  thesis by  this  for  his thesis  and  study.  scholarly  or for  her  I  of I  gain  that  agree  may  be  It  is  representatives.  financial  requirements  agree  further  purposes  the  shall  not  be  that  the  for  Library  permission  granted  by  understood allowed  the  an shall for  of  AAI'A'IP^  O^SA  The University of British Columbia Vancouver, Canada  DE-6 (2/88)  tA\\jS'<^  fftf^ss  that  without  J  make  /•> c o s nj-; i "  it  extensive  head  permission.  Department  advanced  of  copying my  my or  written  ABSTRACT  This thesis proposes a methodology that creates the core components of a tactical mine management system (TMMS) that adapts, for mining, the new information technology and management techniques that have proven to be successful for other industries. The resulting T M M S is intended to provide the motivation and means to make improvement initiatives through the use of modern  management  techniques that takes into account the particularities of the mining industry, operations, and culture. This work is considered important as tactical management in mining now has the opportunity to take advantage of the management technology currently available to other businesses.  The methodology was developed through investigations into the history and use of production management in mining and other industries. The particularities of mining were explored to define the issues a potential management system needs to address.  The proposed methodology is organised into  four development phases that each produces one of the four core components of a T M M S .  The first  phase develops a systems plan, whereby the evolution and implementation of the management system components are planned. The second phase involves the building of a data infrastructure appropriate for the use of modern management techniques in mining. The third phase designs a set of measures for evaluation of employee and mine process performance. The fourth phase establishes procedures in which the performance measures can be used to motivate and enable improvement initiatives.  Field studies over a two year period were used to develop and evaluate the T M M S methodology at several INCO Limited mines in Sudbury, Ontario. The T M M S methodology resulted in establishing the four key management components that subsequently led to motivating tactical mine managers to initiate improvement initiatives and the development of more complex management components.  These  initiatives were undertaken using modern management techniques such as simulation and activity based costing. The results revealed that an effective T M M S can be created using a methodology that takes mining's technical and cultural characteristics into account.  ii  T A B L E O F C O N T E N T S  ABSTRACT  "  TABLE OF CONTENTS  »'  LIST O F FIGURES  v  LIST O F T A B L E S  viii  LIST O F A C R O N Y M S  ix  ACKNOWLEDGEMENT  xi  CHAPTER 1  1  :  INTRODUCTION  1.1  RESEARCH APPROACH  6  1.2  HYPOTHESIS  6  1.3  RESEARCH OBJECTIVES  7  1.4  CONTRIBUTIONS  8  1.5  THESIS STRUCTURE  8  CHAPTER 2  C O N C E P T S A N D ISSUES O F T A C T I C A L M I N E M A N A G E M E N T  11  2.1  DELINEATING THE SCOPE OF THE T M M S DEVELOPMENT METHODOLOGY  12  2.2  UNIQUENESS OF T H E MINING INDUSTRY  17  CHAPTER 3 3.1  MECHANICS OF THE TACTICALMINE MANAGEMENT METHODOLOGY  SYSTEMS PLANNING P H A S E  36 37  3.2  BUILD D A T A INFRASTRUCTURE PHASE  3.3  DETERMINE MEASURES PHASE  3.4  BUILD M A N A G E M E N T INFRASTRUCTURE PHASE  85  3.5  USING T H E SYSTEM PHASE  98  3.6  SYNOPSIS OF MECHANICS OF THE T M M S METHODOLOGY  CHAPTER 4  45 :  APPLICATION OF T H E T M M S M E T H O D O L O G Y A T INCO  63  109 115  4.1  BACKGROUND  116  4.2  SYSTEMS PLANNING PHASE  128  4.3  D A T A INFRASTRUCTURE PHASE  140  4.4  DETERMINE MEASURES PHASE  152  4.5  BUILD M A N A G E M E N T INFRASTRUCTURE PHASE  166  4.6  USING THE SYSTEM  170  4.7  SYNOPSIS OF T H E APPLICATION OF THE T M M S METHODOLOGY AT I N C O  181  CHAPTER 5  CONCLUSIONS AND RECOMMENDATIONS  185  5.1  SUMMARY OF THE INVESTIGATION  185  5.2  SIGNIFICANT CONTRIBUTIONS AND ORIGINALITY OF THIS THESIS  186  5.3  CONCLUSIONS  187  5.4  RECOMMENDATIONS FOR FUTURE WORK  196  APPENDIX A.  DEFINITIONS WITHIN T H E SCOPE O F W O R K  200  A P P E N D I X B.  ORGANISATION OF W O R K  210  APPENDIX C  ISSUES IN T A C T I C A L M I N E M A N A G E M E N T  215  iii  APPENDIX D.  THESIS EVOLUTION  247  APPENDIX E . FOUNDATIONS OF PRODUCTION M A N A G E M E N T  252  APPENDIX F.  278  ESTABLISHING A TMMS F R A M E W O R K  APPENDIX G. M A N A G E M E N T TECHNIQUES WITHIN A TMMS  iv  294  LIST OF FIGURES  FIGURE 1 -1: THE LOGIC OF THE PHASES OF THE T M M S METHODOLOGY  3  FIGURE 1-2: THESIS STRUCTURE AND FLOW  9  FIGURE 2-1: CONCEPTUAL BREAKDOWN OF WORK, NOMENCLATURE AND EXAMPLE.  15  FIGURE 3-1: FIVE PHASES OF THE T M M S METHODOLOGY  37  FIGURE 3-2: CLASSIC VERSUS MODERN SYSTEMS DEVELOPMENT LIFE CYCLE  2  38  FIGURE 3-3: POSSIBLE SYSTEMS PLAN, SHOWING A TACTICAL MINE MANAGEMENT SYSTEM EVOLUTION  :  44  FIGURE 3-4: SYSTEMS PLANNING PHASE COMPLETE  45  FIGURE 3-5: REALITY DATA NOMENCLATURE  47  FIGURE 3-6: FLAT FILE USING PARTIAL FILE RECORD OF EQUIPMENT LIST, EXAMPLE FROM THE CREIGHTON MINE  48  FIGURE 3-7: BASIC PICTOGRAPHIC COMPONENTS OF THE ' E - R ' DATA MODELLING METHOD  49  FIGURE 3-8: DATA MODEL OF LINK BETWEEN INCENTIVE CONTRACTS AND PRODUCTIVE UNITS  50  FIGURE 3-9: E - R COST DATA MODEL  52  FIGURE 3-10: LINKING INPUTS AND OUTPUTS BY PROCESS  53  FIGURE 3-11: SIMPLIFIED PROPOSED PROCESS MAP FOR AN UNDERGROUND HARDROCK MPNE  56  FIGURE 3-12: POSSIBLE CAPACITY ELEMENTS FOR MECHANICAL CAPACITY  56  FIGURE 3-13: HIERARCHY OF CAPACITIES  58  FIGURE 3-14: DATA INFRASTRUCTURE COMPLETE  63  FIGURE 3-15: GENERIC PROCESS INPUTS AND OUTPUTS  66  FIGURE 3-16 MINING EXAMPLE OF PROCESS INPUTS AND OUTPUTS  66  FIGURE 3-17: POSSIBLE MINE TACTICAL ACCOUNTABILITY STRUCTURE  76  FIGURE 3-18: INFORMATION VOLUME IN PROPORTION TO MANAGEMENT LEVEL  79  FIGURE 3-19: DETERMINATION OF MEASURES  85  FIGURE 3-20: MANAGEMENT INFRASTRUCTURE DEVELOPMENT  87  FIGURE 3-21: FLOW OF INPUTS AND OUTPUTS BETWEEN MANAGERIAL ACTIVITIES  88  FIGURE 3-22: U S C / I N C O 1993 PRODUCTION MANAGEMENT SYSTEM FLOW  93  FIGURE 3-23: PROPOSED MANAGEMENT PROCEDURAL INFRASTRUCTURE  96  FIGURE 3-24: BUILDING MANAGEMENT INFRASTRUCTURE PHASE COMPLETE  98  FIGURE 3-25: USING THE SYSTEM  99  FIGURE 3-26: PRODUCTIVITY AND PROGRESS PERFORMANCE MEASURE FOR G F A  102  FIGURE 3-27: INDICATIVE PRODUCTIVITY GRAPHS  103  FIGURE 3-28: RAMP ACTUAL PROGRESS COMPARED TO PLAN  103  FIGURE 3-29: HIERARCHICAL PROCESS MAP FOR DEVELOPMENT PROCESS  104  FIGURE 3-30: USING THE SYSTEM RESULTING IN IMPROVEMENTS FOR MINING AND T M M S  108  FIGURE 4-1: CALCULATION OF BONUS FOR A MINER ON CONTRACT  117  FIGURE 4-2: EXAMPLE OF RATES AND INCENTIVE CALCULATION FOR DEVELOPMENT  118  FIGURE 4-3: WEST MINES UPPER MANAGEMENT  119  FIGURE 4-4: M I M S MODULES AND THEIR IMPLEMENTATION DATES AT I N C O  122  FIGURE 4-5: COST TRANSACTION IDENTIFIER  123  FIGURE 4-6: SHORT-HOLE UTILITY SLIP - EXAMPLE OF MCCLEAN BOLTER OPERATOR'S SLIP  125  FIGURE 4-7: FIVE PHASE STRUCTURE OF T M M S  128  FIGURE 4-8: HIGH-LEVEL PROCESS MAP USING COLEMAN/MCCREEDY EAST AS AN EXAMPLE  131  FIGURE 4-9: I N C O 1999 MANAGEMENT SUPPORT SYSTEMS PLAN  132  FIGURE 4-10: I N C O 1999 TACTICAL LEVEL MANAGEMENT SYSTEMS SUPPORT PLAN  132  FIGURE 4-11: WORK HIERARCHY - SOLITARY PROCESS GRAPHIC CONCEPTION OF WORK HIERARCHY PRIOR TO 2000. 133 15  FIGURE 4-12: DAILY MANAGERIAL INTERVENTION  134  FIGURE 4-13: WEEKLY MANAGERIAL INTERVENTION  134  FIGURE 4-14: STANDARD WEST MINES SYSTEMS PLAN, FEBRUARY 2001  136  FIGURE 4-15: IMPACT OF THE SYSTEMS PLANNING PHASE WITHIN THE CONTEXT OF THE T M M S METHODOLOGY  139  FIGURE 4-16: ACTIVITIES WITHIN THE DEVELOPMENT PROCESS AND ASSOCIATED PROCESS-BASED ACCOUNTS  141  FIGURE 4-17: ACTIVITIES WITHIN THE FILLING PROCESS AND ASSOCIATED PROCESS-BASED ACCOUNTS 141 FIGURE 4-18: WORKPLACE PROCESS OUTPUT MAP WITH ZOOM ON PRODUCTION DRILL-BLAST-MUCK CYCLE 142 FIGURE 4-19: DATA MODEL LINKING PRODUCTIVE UNITS TO THE CORRECT PROCESSES vi  144  FIGURE 4-20: DATA MODEL LINKING PURCHASES, LABOUR CHARGES, AND WORK ORDERS TO PROCESSES  144  FIGURE 4-21: LINKING PRODUCTION AND COST RESPONSIBILITY IN DATA MODEL  145  FIGURE 4-22: SUPERINTENDENT DAILY REPORT FOR JANUARY 4 , 2001  147  TH  FIGURE 4-23: PRODUCTION DATA SOURCES AND INFRASTRUCTURE AT I N C O ONTARIO DIVISION FIGURE 4-24: ERROR MONITORING FOR PRODSTATS SLIP  148 150  FIGURE 4-25: IMPACT OF THE SYSTEMS PLANNING PHASE WITHIN THE CONTEXT OF THE T M M S METHODOLOGY  152  FIGURE 4-26: NORMALISED UNITISED PROCESS COSTS TRENDS  154  FIGURE 4-27: PERFORMANCE MEASURE TRENDS FOR S3 - EQUIVALENT NI COST / LB  157  FIGURE 4-28: PERFORMANCE MEASURE TRENDS FOR S3 - OVERALL MONTHLY PERFORMANCE  157  FIGURE 4-29: SECTION OF S2 PERFORMANCE MEASURES PROCESS MAP.  159  24  FIGURE 4-30: DEVELOPMENT S2 PERFORMANCE MEASURE TRENDS  161  FIGURE 4-31: WEST MINES REPORT MENU FOR CREIGHTON MINE  164  FIGURE 4-32: WEB-BASED REPORTS FOR CREIGHTON MINE  165  FIGURE 4-33: THE IMPACT OF DETERMINING MEASURES  166  FIGURE 4-34: IMPACT OF BUILDING MANAGEMENT INFRASTRUCTURE  170  FIGURE 4-35: HISTORICAL DELAYS AND WORK THROUGHOUT SHIFT  173  FIGURE 4-36: GRAPH OF HISTORICAL CREAN HILL TRUCKING DELAYS  174  FIGURE 4-37: DATA MODEL LINKING PS7, PRODUCTION, AND COST RECORDS  177  FIGURE 4-38: SIMPLIFIED PROCEDURE FOR THE DEVELOPMENT OF AUTOMATED SCHEDULING/BUDGETING TOOL  178  FIGURE 4-39: SCREEN CAPTURE OF BASE INFORMATION ENTRY IN EXCEL SHOWING DRILLING DATA. 178 FIGURE 4-40: SCREEN CAPTURE OF PS7GANTT CHART AT 2550 LEVEL, 1970 & 1930 WORKPLACE. . 179 FIGURE 5-1: RELATIVE SIGNIFICANCE OF MANAGERIAL SKILLS  vii  195  LIST OF T A B L E S  TABLE 2-1: APPENDICES OF SUPPORTING RESEARCH  12  TABLE 2-2: MINE MANAGEMENT AND WORKFORCE CULTURAL COMPARISON.  28  TABLE 3-1: POTENTIAL T M M S COMPONENTS  43  TABLE 3-2: CHARACTERISATION OF IT PROVIDERS  55  TABLE 3-3: GENERAL INPUT DATA  59  TABLE 3-4: GENERAL SUGGESTED OUTPUTS DATA  60  TABLE 3-5: TIME-FRAME FOR DECISIONS AT DIFFERENT MANAGEMENT LEVELS  78  TABLE 3-6: IMPROVEMENT PROCESSES  90  TABLE 3-7: DESCRIPTIONS OF SOME COMPONENTS IN THE 1993 I N C O MANAGEMENT SYSTEM  94  19  TABLE 3-8: EXAMPLE OF FOREMAN'S COMPARATIVE RATES  :  101  TABLE 3-9: PERFORMANCE INFORMATION COMPARED  105  TABLE 3-10: COST COMPARISON  106  TABLE 3-11: DEVELOPMENT RATE COMPARISON  106  TABLE 4-1: TACTICAL MANAGEMENT HIERARCHY AND JOB FUNCTION IN THE ONTARIO DIVISION  120  TABLE 4-2: SUMMARISED DESCRIPTION OF ONTARIO DIVISION MINES  120  TABLE 4-3: THE FIRST 20 PROCESS BASED ACCOUNT NUMBERS  124  TABLE 4-4: SUMMARY OF ETHNOGRAPHIC RESULTS  127  TABLE 4-5: ACTIVITY BASED COST RESULTS FOR 6 MONTH TIME PERIOD FOR CREAN HILL MINE  154  TABLE 4-6: PERFORMANCE MEASURE FOR MINE SUPERINTENDENTS AT I N C O WEST MINES, JULY 2000. 156 TABLE 4-7: S2 LEVEL OPERATING TACTICAL MANAGER RESPONSIBILITIES  158  TABLE 4-8: PERFORMANCE MEASURE DESCRIPTIONS  160  TABLE 4-9: SCOOP MAINTENANCE COSTS PER UNIT PRODUCED  162  TABLE 4-10: COMPARISON OF DEVELOPMENT AREAS IN CREIGHTON DEEP  171  24  24  TABLE 4-11: HISTORICAL PERCENTAGE EXPENSE ELEMENTS FOR TOP HAMMER DRILLING PROCESS ... 180  viii  LIST OF A C R O N Y M S  Activity Based Costing Activity Based Management Analytical Hierarchy Process Business Process Design Business Process Redesign Computer Aided Design Computer Aided Software Engineering Continuous Improvement Critical Success Factors Entity-Relationship Enterprise Resource Planning General Foreman Global Positioning System Graphical User Interface Human Resources Integrated Computer Aided Manufacturing Definition Zero Industrial Engineering Information System Information Technology In-the-Hole (drill) Just-In-Time Key Performance Indices Mine Information Management System Materials Resource Planning Process Innovation for Mining Systems ix  Programmable Logic Controller Production Management Systems Analysis and Design Technique Statistical Process Control Soft Systems Methodology Theory of Constraints Total Quality Management Tactical Mine Management Tactical Mine Management System Vertical Retreat Mining West Mines Complex  ACKNOWLEDGEMENTS  I wish to take this opportunity to acknowledge the support provided by the following:  Mr. Glenn Lyle for the support, direction, funds, effort, hardware, experience, trust, ideas, encouragement, opportunity, and constructive criticism throughout my time at INCO. The Lyle family for the friendship and home opened to a stranger undertaking a project across a continent.  Mr. Alan Akerman, for facilitating the INCO funding and the opportunity to complete this work in a mining operational environment. Acknowledgement is also due to NSERC for its funding assistance through the IPS program.  Mr. Rick Godin, Mr. Robert Booth, Mr. Denis Deschamps, Mr. Gary Gagnon, Mr. Jon Gill, and all the INCO West Mines Complex employees that facilitated the research, provided data, and a forum for this work.  UBC Committee members Mr. William Stanley, Mr. Kenneth Matthews, Dr. W. Scott Dunbar, and Dr. Rimas Pakalnis for their input, understanding, tolerance, and time in reading the many drafts of this work. Dr. Vassilios N. Kazakidis (Laurentian University) for his guidance and friendship.  Dr. Malcolm Scoble, for his inspiration, encouragement, technical help, and friendship.  Not least, my wife, Omaia Dessureault for her support consistent, personal sacrifices, patience, tolerance, effort, and encouragement to complete this work.  xi  Chapter 1 :  Introduction  Tactical management, the control of all aspects of the operation not beyond a scope of one year, in underground hardrock mining operations has not significantly changed in the past fifty years. Systematic or optimisation improvements in underground mining have primarily focused around exploiting economies of scale instead of modifying the mining system itself.  1  The production management system  is the heart of the mine yet most education and research in mining is dedicated to peripheral and strategic issues such as rock mechanics, metal markets, the environment, ventilation, mine design, automation, and equipment.  As the real value of most mineral products continue to fall, the survival of the mining  industry in the 2 1 technology.  st  century will require fundamental changes in both technical and managerial  These two sources of innovation allowed other business sectors to remain profitable. The  manufacturing sector has primarily focused on the production and control system along which their products gain value. This focus on the production system has resulted in the development of technology and management techniques that can improve productivity, quality, and profitability.  This thesis  examines the successes of manufacturing to advance the development of tactical mine management.  This thesis proposes a methodology based on process management and accountabilities that creates the core components of a tactical mine management system (TMMS) that adapts for mining the new information technology and management techniques that have proven to be successful industries.  for other  Mining's unique cultural and technical particularities necessitate the retooling of new  management technology. The core components of the methodology to create a T M M S include; first the definition and acceptance of an evolutionary plan, whereby both management and production systems can be continuously improved; second, a centralised integrated data infrastructure which can enable these changes; third, a set of performance measures that account for mining's organisational and workplace culture; and finally, a managerial infrastructure that enforces the proper use of the management system.  1  Information technology (IT) is the key enabler for modern management techniques. The potential for IT 2  was recognised in a recent survey of mining industry leaders, by the R A N D Institute, which concluded that information and communications technologies represent the most critical priority for mining research and development. The study acknowledged that much data already exists in most operations but that it is 3  under-utilised. Knowledge management is the means by which such data can be converted into valuable information.  Human factors were also identified by the mining leaders as playing a key role in the  usefulness of the information. Humans, and the culture which influences their behaviour, are becoming "more critical to the success" of the technology that would lead to more optimal production systems.  3  Prior anthropological studies and the experiences of this thesis research indicate that the mining workplace culture has a dual nature: a management/engineering and a worker culture.  4  The mining  production system also has a dual nature because it lies somewhere between an ongoing construction project and a hybrid batch-continuous manufacturing system. Mining processes also vary according to the nature of the workplace where the work is undertaken. Any application of information technology or management technique will need to take mining's unique culture and particular production system characteristics into account.  The T M M S methodology was developed by first identifying and analysing modern management techniques, the industries that spawned them, and the factors leading to their success.  The  characterisation of current mine production management systems also identified their most pressing deficiencies as well as the differences compared to those industries that have been more successful at controlling production. These differences were considered when the proposed methodology was designed to incorporate the best available management techniques.  Developing a T M M S for all underground  mines was not considered feasible, as the culture, workplace conditions, and processes are unique to virtually every mining operation. In the communication of new management techniques, the developers typically present general guidelines or a methodology whereby the key components of the new technique are discussed. This approach is used in this thesis, where a methodology to create the key components of a T M M S is proposed. The T M M S methodology is a procedure that would produce a tactical management  2  s y s t e m f o r an u n d e r g r o u n d h a r d r o c k m i n e i n c o r p o r a t i n g I T , the best a v a i l a b l e m a n a g e m e n t t e c h n i q u e s , k e y d a t a e l e m e n t s p a r t i c u l a r to m i n i n g , a n d m i n e - s p e c i f i c c u l t u r a l issues.  This T M M S  development  m e t h o d o l o g y w a s a p p l i e d and r e f i n e d in f i e l d studies a s s o c i a t e d w i t h three o p e r a t i n g I N C O L t d . m i n e s in Sudbury, Ontario, over a two year period.  T h e p r o p o s e d m e t h o d o l o g y o n l y p r o v i d e s the d e s i g n o f the d e v e l o p m e n t p r o c e s s f o r the c o r e c o m p o n e n t s of a T M M S .  T h e use a n d success o f the T M M S d e p e n d s on e v o l v i n g the m a n a g e m e n t s y s t e m i n p a r a l l e l  w i t h the m i n i n g s y s t e m .  T h e m e t h o d o l o g y ' s l o g i c is o r g a n i s e d in f o u r d e v e l o p m e n t phases a n d o n e  o p e r a t i o n a l p h a s e . T h e f o u r d e v e l o p m e n t phases p r o v i d e the steps a n d issues that are pertinent to e a c h stage o f T M M S  development. design  The development of  phases are c o m p o s e d o f s y s t e m s p l a n n i n g ,  performance  infrastructure  building,  infrastructure.  T h e d e s c r i p t i o n o f the o p e r a t i o n a l phase offers r e c o m m e n d a t i o n s o n i m p l e m e n t a t i o n a n d  m a i n t e n a n c e o f the m a n a g e m e n t s y s t e m . proposed methodology.  SYSTEMS PLANNING  SCOPE;  measures,  F i g u r e 1-1  and  establishment  of  a  data  management  is a g r a p h i c a l r e p r e s e n t a t i o n o f the l o g i c o f the  It reappears t h r o u g h o u t the thesis to l i n k the l o g i c to the issues d i s c u s s e d .  BUILD D A T A INFRASTRUCTURE  K DATA k  DETERMINE  INFO )  MEASURES  BUILD MANAGEMENT INFRASTRUCTURE  ORGANI- N SATION a ' .'NEED /  USING T H E SYSTEM  (IMPROVE MENT  Figure 1-1: The logic of the Phases of the TMMS methodology. T h e d e v e l o p m e n t o f a n y c o m p l e x s y s t e m m u s t b e g i n w i t h a p l a n , t h e r e f o r e , the development  of a T M M S  i n v o l v e s l a y i n g out the s c o p e , d e v e l o p m e n t ,  first  phase i n the  and implementation  of  the  c o m p o n e n t s o f the m a n a g e m e n t s y s t e m . A t e m p l a t e f r o m w h i c h a T M M S c a n be j u s t i f i e d , p l a n n e d , a n d i m p l e m e n t e d is d e v e l o p e d based o n s u c c e s s f u l r e e n g i n e e r i n g m o d e l s u s e d in other i n d u s t r i e s . e l e m e n t s o f this phase are to first e s t a b l i s h m a n a g e m e n t support f o r c h a n g e . c h a r a c t e r i s e the c u l t u r e a n d m i n i n g s y s t e m .  T h e s e c o n d e l e m e n t is to  A r e e n g i n e e r i n g t e a m that w i l l d e s i g n the  s y s t e m m u s t then b e , b u i l t , e d u c a t e d , a n d i n s p i r e d .  The core  management  T h e use o f s y s t e m m o d e l l i n g , p r o c e s s v i s u a l i s a t i o n ,  p l a n n i n g , a n d c r e a t i v i t y t o o l s facilitate these a c t i v i t i e s .  3  The proposed methodology recognises that the information systems in mines are not designed for modern management techniques, therefore the second phase of the methodology involves the design and implementation of a data infrastructure that would allow the development of process-based management techniques with data elements that are particular to mining. Database design, data and systems modelling, and data collection mechanisms are issues relevant to the design and implementation of a data infrastructure. Other key issues addressed by the proposed methodology are mining's particular need for greater data integration, tracking of workplaces, and lack of automated on-line production data collection.  The third phase of the methodology involves designing the measures that convert the data into information that can measure performance, diagnose processes, and be used in the application of management techniques as improvement initiatives that require process information. These performance measures use the capabilities enabled by the integrated data infrastructure built in the second phase of the TMMS methodology. Since most modern management techniques focus management's attention on the core processes that generate value, the most basic measure is a comparison between the costs (inputs) and products (outputs) of each core process. Activity based costing (ABC), is a management technique used in many industries to undertake such a comparison and is discussed as it would be applied in the development of a TMMS. ABC differs from the commonly known 'standard costing' in that the ABC process costs include the overhead and support expenses that a process consumes.  Performance  measures, accountability structures, targets, and rewards are effective mechanisms to control behaviour of the managers and workers. Designing such measures must take the organisational culture into account. The cultural and technical issues of establishing the measures within a TMMS is discussed as the primary focus of the third phase of the methodology. Performance measures for management allow for greater accountability and should motivate managers to improve processes to align with the company's objectives.  Diagnostic measures would also allow managers to identify sub-optimal processes that  require improvement. Other measures may be required while undertaking process improvements that  4  may be solution-specific. The techniques and issues in the development of ABC, performance, diagnostic, and solution-specific measures are discussed as the third phase of the methodology.  The fourth phase of TMMS development involves the design and implementation of management infrastructure to motivate the personnel within the particular culture of the mine to maintain and improve the production system. Organisational design, a field within Industrial Engineering, can be used to develop the meetings and procedures that would guide such behaviour. Organisational design is used in the fourth phase of the TMMS methodology to design such meetings and procedures. The meetings required for a TMMS would include performance reviews, improvement initiative design sessions, goal setting and planning, and an auditing function that ensures that the TMMS remains effective.  The methodology's four development phases should produce the core components of a TMMS, namely the justification, data infrastructure, performance measures, and management infrastructure. These basic components must ensure that the operation's culture is taken into account and that the required data infrastructure to apply modern management techniques is established. The operational phase of a TMMS consists of undertaking the procedures as laid out in the fourth phase of development (management infrastructure). Performance data is collected and converted into information such as performance or diagnostic measures. A series of meetings and analyses as stipulated in the management infrastructure, evaluates the performance of employees and either rewards for constructive behaviour or encourages improvement which should take the form of improvement initiatives. When undertaking improvement initiatives, the data infrastructure facilitate the use of modern management techniques, which usually require process-based information. Examples of both the development and operation of the TMMS are discussed.  5  1.1  Research Approach  Between January 1999 and December 1999, the author undertook a background review of the management techniques adopted in all industries. This identified the key management techniques and infrastructure requirements necessary to employ those techniques. A review of tactical management in mining operations identified the deficiencies of both infrastructure and standard management systems. A methodology was designed to develop the core components of a T M M S that would eliminate the issues of current systems and enable the benefits of modern management techniques.  Throughout the later half of 1999, a search for an industrial sponsor with an operating mine willing to implement changes in their tactical production management systems resulted in the opportunity to collaborate with the INCO Ltd., Ontario Division. Further refinement and application of the T M M S development methodology began in January 2000 and continued until November 2001 at Ontario Division' West Mines Complex.  The mines within the study included Coleman/McCreedy East,  Creighton, and Crean Hill. The work was completed under the academic supervision of Dr. Malcolm Scoble and assisted by Dr. W. S. Dunbar, Dr. Rimas Pakalnis, Mr. W. Stanley, and Mr. K . Mathews. Industrial supervision was accommodated by Mr. G. Lyle and Mr. A . Akerman of INCO Ltd.  1.2  Hypothesis  Tactical mine managers currently have less ability to control, forecast, and monitor the production system than their contemporaries in other industries. The unique culture and dynamic production systems of mining have a limiting effect on the use of modern management techniques.  The perceived need for  better control, new information and communications technology, and the knowledge management needed to gain value from that information has focused attention toward tactical management.  Other industries  have gained great advantage from implementing new management techniques that appear to be adaptable to mining.  This thesis therefore addresses the fundamental need for an organisational development  6  methodology to establish a TMMS in operating mines that permits the successful application of modern management techniques.  Several basic assumptions that are not directly discussed in this work are the necessity of a viable orebody, skilled and motivated workforce, functional safety program, and appropriate strategic planning. A large, high-grade, orebody can mask deficiencies in management, as well as provide sufficient funds for effective employee training. The importance of training the employees in the technical and social skills needed for effective management cannot be understated. The effectiveness of the TMMS resulting from the application of the proposed methodology depends on the level of skill and training of the employees at the mine.  However, tactical management systems can provide some direction for  management training programs and increase the effectiveness of strategic planning. For example, a gap in technical knowledge may be revealed during the implementation of an improvement program where managers must apply statistics or process mapping techniques. Information at a strategic level would be improved as aggregated tactical-level information similarly improves.  1.3  Research Objectives  It is the purpose of this thesis to advance the effectiveness of tactical production management systems for mining. This is accomplished by developing a methodology that produces the core components necessary for the use of modern management techniques. These components provide the basic infrastructure for a Tactical Underground Mine Management System. The emphasis has been placed on issues concerning tactical mine production, management techniques, culture, and information technology.  The objectives of the study are to: •  Explore the history and intricacies of modern production management techniques  •  Determine how mines are currently managed at a tactical level  •  Characterise how the management systems of a mine differ from other industries 7  •  Consider how modern management techniques can be applied in a mining system  •  Develop a methodology that would allow the creation of a TMMS that would lead to the application of modern management techniques  •  1.4  Evaluate the applicability of the proposed methodology in mining operations  Contributions  Major contributions made by this thesis are considered to include: •  A discussion of the issues of current tactical underground mine management  •  A concise review of the evolution of modern management techniques and current mine management.  •  An analysis of the differences between the tactical management of a mine and that of other industries  •  The development of a methodology that uses modern management techniques to facilitate the creation of the core components of a TMMS that itself is capable of using modern management techniques. The contributions within this proposed methodology include: The establishment of a reengineering model based on the successes and failures of other models The framework of an integrated mining data infrastructure The identification of performance measures and issues for mining  •  An exploration of the cultural issues of a mining operation in terms of its impact the production system.  •  The first thesis on the development a modern framework for tactical mine management that considers new information technology, modern management techniques, and the mining culture.  1.5  Thesis structure  The thesis is structured as follows:  8  Chapter 1: Introduces the topic and discusses the major contributions, research approach, and describes each chapter. Chapter 2: Discusses the key concepts o f this thesis and how the issues discussed in the appendices relate to this work. Chapter 3: The mechanics o f a T M M S : clearly defines the phases and issues o f the methodology to produce the core components o f a T M M S . Chapter 4: The proposed methodology that was applied at several I N C O mines.  This chapter reviews  aspects relating to its impact and implementation. Chapter 5: Draws conclusions and outlines recommendations for future work.  A series o f appendices provide a description o f the background research that was required in the development o f the T M M S methodology. Figure 1-2 shows the structure o f the thesis. A s can be seen, chapters 3 and 4 are the core o f the work. These two chapters are organised according to the five phase logic as seen in Figure 1-1.  CHAPTER 1  Introduction Methodology Contributions Structure  CHAPTER 2 _  _K ^  CHAPTER 3  Key issues and conclusions of background research  CHAPTER 4  for Application and the impact of hid development of methodology at aTUMMS INCO Ltd.  Methodology  '  CORE  OF  CHAPTER 5  Summary Conclusions Future Work  THESIS  Figure 1-2: Thesis structure and flow  Hustrulid, W i l l i a m A . and Jan-Olov Nilsson. "Automation and Productivity Increases at L K A B , Kiruna, Sweden." Ann. Gen. Meeting, Can. Inst, of Min., Met., and Pet. May 2-5, Montreal, Quebec, C D R O M , 9p 1  Davenport, Thomas H . Reengineering Business School Press. 1993. 2  work through Information  Technology,  Boston: Harvard  Peterson, D . J., LaTourette, T. and J. T. Bartis. " N e w Forces at Work in M i n i n g : Industry V i e w s o f Critical Technologies." R A N D institute online report. M a r c h 23rd, 2001. http :/www. rand. org/pub l i c a t i o n s / M R / M R 1234/ 3  9  Rouse, Michael J and Usher Fleising. "Miners and Managers: Workplace Cultures in a British Columbia Coal Mine." Human Organization Journal of the Society for Applied Anthropology. Vol. 54, No. 3, Fall 1995, pp.238-248  4  10  Chapter 2 Concepts and Issues of Tactical Mine Management Chapter 1 introduced the background to this research. It elaborates further on the issues and core concepts within tactical mine management. This thesis deals with the management of mining operations. These complex systems have both concrete characteristics such as technology, activities, procedures and materials, as well as esoteric concepts such as employee motivation and culture. This is a subject with very little prior study and many likely divergent precepts of the status of mine production. T M M requires research not only based on mining engineering but also on information technology and management science. This work is based on a critical review of prior and current mine management research and development, together with the observations made by the author whilst working in several underground mines in Canada.  The chapter begins by limiting the scope of this work by only considering the tactical management of underground hardrock mines. The purpose of this work is to develop a methodology that produces a TMMS which incorporates successful management techniques used in other industries. Many of these techniques are not directly applicable to mining due to cultural and technical differences. The second section of this chapter highlights some of the important differences between mining and other industries. The detrimental effects of these differences can be compensated for, once understood.  The most  important difference between mining and other industries is cultural. Incorporating issues of culture in tactical management is a key aspect of the TMMS proposed by this research. An analysis of culture is presented within the discussion of the differences between mining and other industries. Considering the complexity of the concepts and issues within TMMS, additional definitions and analysis used to develop the methodology are included in the Appendices. Most of the Appendices are based on research required to develop the methodology.  Table 2-1 summarises how this supporting research contributed to the  development of the TMMS methodology.  11  Table 2-1: Appendices of Supporting Research. Appendix Name Appendix A: Definitions within Scope. Appendix B: Organisation of work. Appendix C: Issues in Tactical Mine Management. Appendix D: Thesis Evolution. Appendix E: Development of Modern Production Management. Appendix F : Establishing a TMMS Framework. Appendix G: Management Techniques in Development and Use of a TMMS.  2.1  Description of Investigation  Contribution  Discusses the key concepts within the scope Provides clarification and formal of work including a work hierarchy, culture, definitions of the key concepts within and soft/hard technology the scope of work. Discusses and provides further examples of Provides clarification and formal the organisation of work as discussed in definitions of key concepts in many Chapter 2. modern management techniques Critically examines the current deficiencies Provides a generalised list of issues typical to the mining industry. Considers that should be addressed through an only published and public material. Does not alternative management system in discuss the industry leaders in these topics. mines Describes how the tactical management of Shows how the idea is original and mines was identified by the author as a key will eventually contribute to the issue from observations of the limited successful implementation of advanced success of automation in mines. technologies into mines. Provides a history of the development of By analysing the development of modern production management for all modern management systems in industries including a section that focuses comparison to those used in mining, exclusively on the development of mining the differences between mining and other industries can be identified. Also production management. introduces successful management tools. Distils a reengineering framework for mining Provides the reasoning behind the systems from successful reengineering methodology's development. Also models. Lists the prerequisites of a mining lists the prerequisites of a mine prior to operation to successfully implement the the application of the TMMS TMMS methodology. Clearly defines a methodology. TMMS framework. Provides descriptions and examples of the Provides those unfamiliar with modern management techniques used in the management techniques examples of development and use of TMMS. Also such techniques within the context of provides a list of management techniques the TMMS. that are enabled by establishing a TMMS.  Delineating the Scope of the TMMS development methodology.  This work deals with a methodology that is intended to be applied to underground hardrock mines. The methodology develops the core components of a tactical underground mine management system. These core components include a systems plan, data infrastructure, measures, and management infrastructure. Experience from other industries indicates that issues of workplace and regional culture must be included in any management system. Technology must also be considered in tactical management systems as 12  management science, information technology, computers, and automation/mechanisation, and applied sociological science will continue to expand the abilities of management in controlling and improving production systems. There are many complex issues and concepts within this scope that are explored and discussed in the Appendices. The important concepts, which help limit the scope of this work, are summarised below: •  Limiting the analysis to underground hardrock mines;  •  Disassociating the management of the mill from that of the mine;  •  Exclusion of strategic and safety issues;  •  Classification of a work hierarchy;  •  Modern management techniques.  2.1.1  Hardrock  Underground  This work is confined to hardrock underground mines as they are technologically and successfully tactically managed in different ways from softrock and surface mines. Softrock mines may use highly mechanical and continuous processes where shearing or tunnelling machines produce a near-continuous flow of material. The abilities of tactical managers in surface mines are also different from underground mines as the extraction methods, technology, workplaces, and machines are significantly different. The recent development and use of Global Positioning System (GPS) technology and dispatch systems, for example, allow surface mining processes to be monitored and optimised automatically in real-time.  2.1.2  Mine to Mill  This thesis also makes a distinction between the mine and mill. The operation of a mill is very similar to processing industries, such as chemical or petroleum plants. Much of the operation is process controlled using computers where the operating variables are well known and understood.  Mines require the  flexibility of a construction project and use processes that are as methodical as manufacturing processes. Therefore, only mining operations are considered in the TMMS methodology. Scheduling or quality 13  issues stipulated by the mill are included in the scope since the mine's product is an important variable in the milling process. The mine's customer, the mill, should provide the product specifications required.  2.1.3  Tactical  This research also only considers tactical issues.  Tactical mine management, deals with issues or  procedures that sustain day-to-day or month-to-month production. The scope of tactical management decisions would not normally extend beyond one year. For purposes of comparison, strategic management involves the decisions that affect the long-term results of the mining system or industry. Major changes in the mine that will affect fixed costs, long term productivity, workforce relations, metal markets, communities, or the economy are all issues that can be considered strategic. These types of changes will most likely require capital and corporate involvement.  Safety systems are already well established in most operations.' Tactical management systems cannot be disassociated from safety issues, for example, performance measures for mine managers frequently have a measure of the safety record over the period of evaluation such as lost time accidents. However, since safety systems are already well studied and include considerations for mining culture, no additional analysis of safety issues is included in this research.  2  2.1.4  Organisation  of Work  This thesis deals with work management.  Work classification is a term relating to organising work.  Figure 2-1 shows is a linguistic mechanism of organising work into a hierarchy common to many modern management systems. The example used here shows how several tasks can make up an activity, several 3  activities make-up processes, and all processes are considered part of the system. As work is organised into increasingly lower/detailed actions, the issues involved in managing the work components change. For example, managing at the task level is undertaken by the miner. A miner is typically responsible for operating the drill in an efficient manner so that the tasks of collaring the hole through to moving the drill 14  are undertaken as quickly as possible within the quality constraints.  Comparatively, activities are  managed by the foreman. For example, foremen must ensure that the workplace is set-up appropriately, that the drill is ready at the appropriate time, that the drilling is undertaken efficiently and properly, and that the drill set-up is dismantled on-time. Issues of supervision, quality, and schedule pervade managing at the activity level whereas issues of physical productivity are key at the task level. Appendix B provides an in-depth discussion of this work classification system along with additional examples.  Mining Production System  System  HRHHi Acli\il\  Production  Production  Drilling  Blasting  Aclivin  1  •  .\cti\it\  Task  Sill Development  Task  Task  Collar hole  Task  Drill holes  Pull Rods  Change Rods  Move drill  Figure 2-1: Conceptual breakdown of work, nomenclature and example.  2.1.5  Modem  Management  Techniques  Modern management techniques have been developed to help achieve organisational goals.  These  techniques may be considered to be part of industrial engineering, yet also known as operations management or management science. These techniques can be mathematical or organisational in nature. For example, linear programming algorithms can help optimise logistical problems through integrative mathematical calculation. Organisational improvement tools such as Reengineering, Activity Based Costing (ABC), or the Theory of Constraints (TOC) can improve the management organisations so that the systems, processes, activities, or tasks are improved.  systems of  Successful modern  management techniques developed for and by other industries, may not be applicable to mining due to  15  technical or cultural differences.  The ability for mine management to control and improve the system  through modern management techniques would be achieved if these techniques were applicable to mining. The components of the TMMS proposed in this thesis allows for the application of modern management techniques.  Some modern management techniques such as ABG and reengineering are used in the methodology as discussed in the next chapter. ABC is a technique to calculate the total cost of producing a product. The total cost should include all raw material, labour, equipment, maintenance, and overhead costs. The inclusion of overhead and support costs is what distinguishes this method from the better known standard or unit cost. For example, these overhead and support costs can include the expense of delivering the raw materials and/or transporting workers to the workplace for a particular process/product. This type of accounting requires a significant amount of production and cost data so that the costs can be accurately distributed to the appropriate process and/or product.  4  ABC was feasible only once IT made cost  aggregation affordable. Another modern management technique that is enabled by IT is reengineering.  5  Reengineering is an organisational design methodology that uses a team of experts within an organisation to aggressively redesign the processes to conform to the strategic goals. This method advocates the use of IT in automating clerical work and improving service functions.  6  Appendix G provides descriptions and hypothetical examples of the types of management tools used in the development of a TMMS. This management system is designed to establish the information and management infrastructure required to use modern management technique to improve the production system of a mine. Therefore, modern management is used in both the development and use of a TMMS.  2.7.6  Synopsis of Limiting the Scope  In summary, this work is limited to the establishment of a methodology for developing tactical management systems for underground hardrock mines. Limiting the scope in this manner allows a  16  breadth o f w o r k s u f f i c i e n t f o r a s i n g l e t h e s i s . A m p l e s c o p e e x i s t s f o r s i m i l a r a n a l y s e s o f s u r f a c e a n d / o r softrock tactical mine management systems.  2.2  Uniqueness of the Mining Industry  T h e k e y r e a s o n m o d e r n m a n a g e m e n t t e c h n i q u e s r e m a i n u n u s e d in m i n e s is the d i f f e r e n c e s that e x i s t b e t w e e n m i n i n g a n d those industries w h e r e the t e c h n i q u e s w e r e d e v e l o p e d .  M o s t m o d e r n operations  m a n a g e m e n t t e c h n i q u e s w e r e d e v e l o p e d in the m a n u f a c t u r i n g o r s e r v i c e i n d u s t r i e s . D i f f e r e n c e s b e t w e e n m i n e s a n d f a c t o r i e s , o r other b u s i n e s s e s , c a n be c o m p e n s a t e d b y r e c o g n i s i n g then c i r c u m v e n t i n g o r a c c o m m o d a t i n g those d i f f e r e n c e s . T h e d i f f e r e n c e s b e t w e e n m i n i n g a n d other i n d u s t r i e s are d i s c u s s e d in the f o l l o w i n g s e c t i o n . T h e p u r p o s e o f this d i s c u s s i o n is to d e t e r m i n e h o w these d i f f e r e n c e s w o u l d i m p a c t the u t i l i s a t i o n o f the t e c h n i q u e s .  2.2.1  Construction  The mining  production  construction  project  Project or  s y s t e m has a d u a l  and a hybrid  Factory? nature  batch-continuous  b e c a u s e it  is s o m e w h e r e b e t w e e n  manufacturing  system.  an  ongoing  M i n e s are s i m i l a r  to  c o n s t r u c t i o n projects as m o s t h e a d i n g s a n d stopes are interrelated a c c o r d i n g to a p l a n n e d s c h e d u l e . F o r e x a m p l e , a r a m p m u s t be d e v e l o p e d in o r d e r to b e g i n p r o d u c t i o n m i n i n g b y a c e r t a i n date so that the m o n t h l y p r o d u c t i o n q u o t a is met, m o n t h s , e v e n y e a r s in the future. A n o t h e r t i m e - d e p e n d e n c y e x a m p l e is w h e r e a large b l a s t h o l e stope m u s t be b a c k f i l l e d before the adjacent stope c a n be b l a s t e d . T h e p r o d u c t i o n s c h e d u l e is as i m p o r t a n t in a m i n e as it is f o r a c o n s t r u c t i o n project.  O t h e r factors w h i c h are c o m m o n to  b o t h the m i n i n g a n d c o n s t r u c t i o n i n d u s t r y are: •  reliance on skilled workers for virtually every process;  •  s i g n i f i c a n t e n g i n e e r i n g d e s i g n r e s o u r c e s are n e e d e d o n a d a i l y b a s i s ;  •  equipment mobility.  17  Factories do not require as much labour, daily design engineering resources or equipment mobility. Furthermore, a factory has far more flexibility in the assembly of a product. For example, raw material and work-in-process inventories can be stockpiled or purchased elsewhere in the event of a breakdown of a key process.  Mines are similar to factories in that mine processes are cyclical and the quality of work impacts on the costs and value of the final product. An example of the cyclical nature of mine processes is the series of activities within the development process, namely drill, blast, muck, support, which are repeated for years in the development of a ramp. The mucking cycle when mining a stope can last months, while the crushing process can remain unchanged throughout the life of the mine. Like a factory, these processes are designed to be repeatable without great variation. If the infrastructure, equipment, and procedures are maintained and are of good quality, then the processes should not vary to a significant degree, with the exception of workplace constraints.  Therefore the manufacturing management techniques where  workflow is studied and optimised, can be applied to mines.  Techniques that focus on process  integration, where the outputs of an upstream process are aligned with the inputs of a downstream process, are also extremely useful in mining.  Quality is not as great a concern in mining as it is in manufacturing.  Most mines are equipped or  designed to withstand outputs of poor quality. For example, many mines have secondary breaking mechanisms if blasting was of poor quality, or extra mucking horizons if an inexperienced equipment operator cannot achieve the required production from a particular stope. However, like manufacturing, these lapses in quality induce extra costs. For example, poor drilling frequently causes either blocky muck or dilution. Oversize muck increases mucking and crushing costs. Dilution reduces the value of the ore.  Techniques where quality is closely measured may not be as useful in mining as in  manufacturing but may still lead to significant improvements.  18  In conclusion, a mine can be seen as an on-going construction project that uses cyclical batch processes to create the infrastructure required for mini-factories (stopes) where hybrid batch-continuous materials handling networks move and process the product (ore) to the customer (mill).  2.2.2  Workplace  An important difference between mines and factories is the added complexity of the workplace, where the performance of identical processes in different workplaces (location) can vary significantly. For example, the mucking process at one draw-point may contend with different operating parameters than the mucking process in a different location such as added tram distance, road conditions, or muck size. Similarly, production drilling in one area of the orebody may be different from the production drilling in another part of the orebody where the rock may be harder or have many detrimental geological structures. Ground conditions can also close-down workplaces. Workplaces not only impact the process outputs but may also pose safety concerns. For example, some areas within deep underground mines have additional safety constraints where the procedures may be altered due to ground conditions. In comparison, in manufacturing, drilling a hole in a piece of metal with the same machine on one side of the factory can be compared to the performance of drilling the same size hole in a piece of metal on the other side of the factory. This component is a key added data element that should be monitored in a mine's production information system (IS).  Many modern management techniques use comparisons between similar  processes in order to track performance, or identify and plan improvements.  The additional element of  workplace would be required for the use of such techniques in the improvement of a mining system. Several aspects of the workplace would directly affect the managerial decisions and resulting performance including the mining procedures, timing, progress, quality, and maintenance costs. Information about these various aspects would be important in tactically managing the mine's various workplaces. The complexity of this information would necessitate the level of data integration found in many centralised information systems.  19  Most data elements in factories would be required for the management of mines, such as: •  Supplies / raw materia) and work in progress;  •  Procedures / instructions;  •  Machine / equipment availability;  •  Manpower / labour.  2.2.3  Comparisons  with Other  industries  Construction and manufacturing are not the only industries from which new management techniques can be taken and modified for mining. Retail, engineering services, and agricultural industries all have management techniques that may be useful to mining. Retail industries are experts at ensuring that inventory is always on-site yet minimised. Minimisation and control of the inventory of raw material in mines would improve the bottom-line and relieve congestion at key bottlenecks.  Mining requires  continuous engineering to design the new workplaces, to track and control active workplaces, and to maintain the infrastructure (ground conditions, drainage, ventilation) in mined-out areas. Engineering firms have applied management techniques that ensure timely and high-quality design. The agriculture industry have expertise in land management and surface drainage from which mining may benefit. As the use and benefit of IT in other industries progresses, mine managers and researchers should keep abreast of developments for potential application and advantages.  2.2.4  Labour  Currently, mines require personnel for virtually every underground and surface mining process except hoisting and conveying in some mines. Researchers are in the process of automating the various processes that make up the production system, however, these systems are far from being widely available commercially. Increased automation would reduce the issues in today's mines that relate to workers. The discussion below highlights the factors within the mine that are affected or exacerbated by the intense use of labour. ' '  7 8 9  20  Dynamic working environment: Decision making at lower levels of management have greater effect on workers. Mid-shift changes due to ground or equipment failures frequently change the daily plan, which can also affect the workers. For example, mid-shift line-up changes may cause reduced morale and productivity (through travel time) or injuries (because the operator is not familiar with the dangers in that workplace). Cultural behaviour: The degree to which the culture of the workplace affects productivity is increased with added dependence on labour. Cultural effects are discussed later in this chapter. Incentive schemes: Incentive schemes are used to control worker performance in operations. Unfortunately, many actions that are counter productive are rewarded by out-of-date or poorly designed incentive systems. Incentive systems are typically inflexible and difficult to alter.  10  For  example, a development round requiring less holes but resulting in increased over-break and damage may be preferred by some miners as it would require less time to drill. The miner would attempt to reduce the total cycle time if the incentive systems rewarded workers exclusively for total footage driven, without reward for quality. Humanflexibility:Active tactical management requires a flexible workplace. Humans are not as flexible to change work processes or rates as robots working in factories. Human fallibility: Much of the value of production information is at some point, influenced or processed by workers. Human involvement in data collection, process, or analysis can induce errors. Manufacturing uses Programmable Logic Controllers (PLCs) and networked sensors that provide the data far more accurately than the labour intensive data gathering used in mines. Human variability: Miners may execute their work tasks differently. For example, production drillers may set up their workplace prior to longhole drilling in a different way resulting in different production rates or levels of organisation. Mechanised processes - human logistics: In analysing the cycle time to advance a drift one complete round (development advance), more time is spent setting-up equipment, fetching raw material (such as bolts, steel, and explosives), and dismantling the set-up than the time spent drilling  21  or bolting. ' 11  12  The efficiency of modern machines and increasingly effective operator-assist  technologies have improved the core drilling and bolting tasks. The organisation and efficiency of setting-up workplaces, assembling the raw material, and timing of break periods (all logistical functions) remains the responsibility of the miners who have limited training in logistical optimisation.  These issues can be compensated by training a more flexible workforce and incentive system, education in logistics optimisation tools, deliberate and gradual implementation of better management systems, and/or increasing the level of automation.  Management techniques developed in semi-automated  factories will not be as applicable in a mining environment since the human induced variability will be more pronounced. For example, in the application of the Theory of Constraints, the standard deviation of the capacity of a process is an important parameter. A higher degree of variability will inevitably be introduced when humans are the key components of a process instead of a numerically controlled machine.  The impact of culture on a mine's productivity is amplified by the increased labour requirements. The cultural differences between mining and manufacturing transcend simply the impact of increased labour requirements, as the cultures themselves are different. Worker relations are deeply integrated with labour and cultural issues as the culture of management has a direct baring on the resulting attitude of the worker. An example of the effect of management culture on worker culture is discussed below, where disciplinary action was imposed on a worker who parked his vehicle 3 minutes before the end of the shift despite having worked through lunch. The workers were disaffected by this disciplinary action on their fellow worker and therefore unmotivated to contribute any extra effort for the company for several months following the incident. The reliance on miners for every process makes labour and the cultural interaction that governs its behaviour of utmost importance in the management of a mine.  The  importance of people is confirmed by Stanley: "You can have the most modern, technically sophisticated  22  equipment in the world, but i f it is run by an unmotivated, uncaring workforce, you w o n ' t be able to compete in today's w o r l d . "  2.2.5  Cultural  13  Differences  A s discussed earlier (chapter 1 and above), culture is a factor with potentially the greatest impact on productivity.  It is also the most difficult to manage.  The cultural differences between mining and  manufacturing have a direct bearing on the implementation effectiveness o f technology techniques.  15  14  and managerial  M a n y inter-related factors that generate a unique mining culture are rooted in the industry's  long history, in particular (as discussed in Appendix E ) : •  union militancy;  •  philosophical shifts in management thinking;  •  world markets;  •  miner de-skilling;  •  safety issues;  •  mining communities.  A s many o f these issues deal with historical events clouded by political/economic censorship and are more esoteric in nature, a specific scientific approach comparing mining and manufacturing culture is not feasible.  However, a discussion on the workplace culture within mine operations is necessary and  provided in the following sub-sections.  2.2.5.1  Mine Management  Runge has characterised mining culture as quiescent due to the successes o f the past. H e characterises mine management as acting on "gut feeling", relying more on experience than scientific analysis in making decisions, and using the rules of the past since they have proved successful. These characteristics are divergent from today's management business climate a s :  23  16  •  A set of rules can be completely erroneous, endure for a long time and yet still yield excellent results for day-to-day application. Runge uses an analogy of how the Ptolemaic system (flat earth) continued to be used for navigation even after the Copernican system (round earth) was well accepted. Hence, as business conditions and precepts change, so should management.  •  Experience is valuable only to the extent that the future conforms to a pattern of rules that have applied during the formulation of that experience. Therefore the expertise developed may no longer be applicable in an era where market conditions and business concepts are different.  •  Current mining paradigms should be challenged. Mining companies typically use guidelines to keep innovation low (in-the-box) when hiring consultants. Innovation will therefore usually come from outside the industry.  Runge suggests that mine management and executives should consider challenging mining paradigms. In general, Runge is calling for more flexibility in mine management. The issue of mining's risk aversion to new technology prompt the common adage: "Miners like to be first to be second."  17  Investigations in  Appendix C and above are interpreted characterisations from experts within the mining industry that may be perceived as critical. A more objective scientific assessment of mining culture is best undertaken using the specific science that analyses culture: anthropology.  2.2.5.2  Anthropological View  Anthropology is the study of cultures. Anthropologists undertake scientific comparative studies to determine how peoples of the world are similar and how they are different.  18  They are engaged in issues  relating to contemporary society, such as health care, human rights, law, industry, urban development, environmental management, and global population. One of the few scientific studies of the cultural elements of a mining workplace that mentions productivity issues was undertaken by Rouse and Fleising , an anthropologist studying a British Columbia coal mine. The anthropologist spent several 19  years living in the community of Elkford, working at the mine and at various other jobs, all in close contact with the mine employees. The overall conclusion reached by the ethnography (documented 24  anthropological study) was that it would be difficult to find two more contrasting cultures, interacting in such close quarters, as the organisational cultures of management and workers in mines. The degree to 19  which the two cultures differ, yet must work together, create an environment possibly unique to mining.  The following discussion borrows heavily from the Rouse and Fleising study and anthropological theory. The goal of this discussion is to show the unique nature of the mining culture, but also to understand the cultural motivations in a mine so that appropriate managerial techniques can be instituted allowing for increased productivity. The discussion describes the management culture, the workforce culture, and then concludes by summarising the effect of the interaction between the two cultures. Rouse and Fleising uses a cultural model from Schien which postulates that culture has three levels: artefacts and creations, values, and basic assumptions.  20  Artefacts and creations refer to the physical and social environment  including technology, art, behaviour and symbolism. Values are the groups' ideal state of being, their "should be" state. Basic assumptions are the non-conformable , non-deviable foundations of culture which "pre-consciously inform notions about the reality of time, space, human nature, activity, relationships and humankind's relationship to the environment."  20  The difficulty in change management  is modifying these basic assumptions.  2.2.5.3  Management / Engineering.  Rouse and Fleising identified the top-down nature of the mine management hierarchy (is discussed in Appendix C) and the fact that the management culture in mining is really a manifestation of the culture of engineering, as most mine managers are engineers. The basic assumptions of engineers is summarised by the concept of order.  Engineers impose order into potentially chaotic situations through a method  described as "authoritarian rationale," they are inclined to closure, oriented to mastery, focused on facts, analytic, collegiate, structured and respectful of rules.  21  The respect for rules, authority, and structure  manifest themselves in the penchant for engineers to document. Rouse and Fleising noticed that careful records are kept of activities, policies, and production with the intention of using that information for future improvements. Rouse and Fleising noted an example of the strict following of roles: when a truck 25  operator suggested a solution to a problem, the foreman replied: "You are paid to drive, not think". Other elements of engineering culture noted by Rouse and Fleising include: •  19  any activity, solution, or plan that appears to proceed without a set of clearly elucidated expert knowledge is met with suspicion;  •  engineers require active intervention, where any decision is better than no decision;  •  abilities necessary to facilitate the objectives of the organisation are highly valued. For example, the pit foremen with great tactical management skills were highly regarded;  •  the relationship between engineers is characterised by a strong competitive nature. Rouse and Fleising noted how this competitive nature among the engineers at the mine grew to a point of dysfunction until a senior management intervention brought about a team-building program;  •  a lack of trust toward the workers manifested itself by the assumption that the workers required constant supervision. This may also explain the popularity of incentive systems especially for underground mines. "The difficulty in supervising people in underground mines requires that they be given extra motivation to work hard."  22  The overall cultural element among engineers was labelled as "order". Through the strict control of the environment, direct action, while following rules, the engineers are able to establish a sense of "order" on potentially chaotic environments.  2.2.5.4  Mine Workers  The central cultural element for mine workers is "security". Not to be confused with safety, security relates to the need for the stability of employment and the continuation of a lifestyle. This need for job security is a historical legacy prior to the labour movement where workers had little job protection. Rouse and Fleising notes that the job security enjoyed by today's workers have far more security and remuneration than their forefathers. From personal interaction, the anthropologist noticed a complex risk analysis undertaken by the workers when confronted with a potential conflict. Workers calculate factors such as their financial and social situation, general state of the economy and prospects for employment, 26  strength of the union, and amount of support they can expect from other workers and the community.  23  The need for security also finds expression in resistance to change. Rouse and Fleising noticed that virtually any change introduced by management without in-depth consultation with the union is viewed with suspicion. This can be attributed to the history of the industry (discussed in Appendix E), where technological or world market changes had significant effect on employment stability.  Basic assumptions of trust, forgiveness, and solidarity are strong between workers. Anthropological comparisons with 'kin groups' is a characteristic of workers within a union. The observation that within the worker culture, 'kin groups', separated by job functions, is also evident as plant, maintenance, and mine workers have even closer ties with each other. Reciprocity also plays a major role within the basic assumptions of a worker, where increased work should result in rewards or forgiveness. Rouse and Fleising uses the example of a worker who cut his lunch-break in half to clean-up the turn-around area by a shovel (the area around a shovel where a haul truck would turn around can typically get littered with muck that falls off trucks during the loading process).  19  At the end of the shift, the operator who cut his  lunch short, parked his vehicle 3 minutes prior to shift end, bringing condemnation and a documented disciplinary action by the foreman. The worker believed that he ought to have been forgiven for this minor infraction as he helped the mine during his lunch-break. For a period of time, few workers would provide any extra help for the company citing that particular incident.  2.2.5.5  M a n a g e m e n t - W o r k e r Interaction  The difficulty of mine management becomes apparent considering the contrasting nature of these two cultures. The dependence on skilled operators in every mining process further compounds this issue. However, by acknowledging the necessity to maintain a sense of security for the workforce and a perceived state of order for management, management systems can be designed to address these cultural needs. The methodology for the development of a TMMS described in this thesis was written for management/engineers, thereby using documented and structured theories from experts and focuses on using past knowledge for future benefit. The obvious engineering nature of the thesis should not detract 27  from the necessity to acknowledge that workers and functions which they complete will change as a result of the application of this methodology.  Therefore worker representatives should be included in the  activities of T M M S development.  Ethnography, the fundamental research method of cultural anthropology, has techniques that characterise culture.  Some knowledge of ethnography would be useful for those designing a T M M S as cultural  differences between mines vary and must be considered. The theory and application of ethnography was used in the development of the methodology and results presented in the next two chapters. The T M M S methodology was partly developed at operating mines where the workplace culture and dynamics between management and hourly workers varied significantly between mines.  Rouse and Fleising's model of the cultural conflict within mines is a common characteristic of the industry and can be used as a starting point for further cultural characterisation. comparison between management and workforce culture.  Table 2-2 is a  The methodology described in this thesis  should only be implemented when taking the unique cultural situation in mining (the management-worker interaction) into account.  Table 2-2: Mine Management and Workforce Cultural Comparison. Cultural Domain 1.  Identities and environments  2. Nature of reality: bases for decision making 3. Nature of time 4. Nature of human nature 5. Nature of human activity 6. Nature of human relationships  7.  Central concept  Management Culture  Workforce Culture  Role based identities. Environments are those that have potential impact on the mine. Structural hierarchy Objectively determined reality. Potential impact requires decisions  Identities based on friendship and work/community status. Environments based Reality subjectively determined. Past impact warrants decisions  Present that facilitates the future Hardworking, committed, individualistic, competitive Proactive, interventionist  Past that informs the present Hardworking generous, trusting, forgiving, communal (with each other) Reactive  Outside relations based on competition inside based on rolecentred hierarchy and competition for promotion Order  Outside relations based on tradition, cooperation/ consensus. Inside based on friendship, consultation, participation. Reciprocity paramount Security  28  Once these differences are taken into account, the following conclusions can be made: •  Proving that a particular plan w i l l work by collecting data and undertaking calculations or simulations w i l l be an effective mechanism to sell change to management but not to the workforce.  •  A n y endeavour that includes altering how the workers function should have direct involvement with the workforce;  •  The variables in the worker's "risk calculation" (financial and social situation, general state o f the economy and prospects for employment, strength o f the union, and amount o f support they can expect from other workers) w i l l have a direct bearing on the willingness o f the miner to participate or submit to change. A management system should consider these needs within a T M M S ;  •  Reciprocity is extremely important as miners expect to be compensated for increased effort. may  be the cause for the prevalence o f incentive (bonus) schemes.  This  Rewards should also be  considered i f miners choose to participate in the development and application o f improvement initiatives.  The  next chapter describes ethnography and how it may be used in the development o f a T M M S .  Ethnography is also used to characterise in the field the culture o f the workers and managers/engineers, as detailed in Chapter 4.  2.2.6  Comparing  Culture between Mining and Other  Industries  N o published comparisons o f mining and manufacturing workplace culture were found.  However, in  published reports o f reengineering efforts in other companies, several examples comparing cultural flexibility were identified.  24  Increased cultural flexibility allowed greater benefit from  management techniques.  29  modern  The dual nature of mining may also be unique to mining. An important difference between mining workplace culture and that of other industries is the importance that culture has on the productivity of the overall system.  Mines rely on human involvement for every process (an aspect shared with the  construction industry) and therefore the workforce and its behaviour is a fundamental ingredient in improving the mine production performance.  2.2.7  Information  A vailability  Manufacturing, retail, and service industries are very familiar with the use of information. Being heavily automated, the manufacturing industry requires detailed information about the processes in the factory in order to control inventory, quality, and throughput. The widespread computerised control of many of the machines within a factory provide industrial engineers with the information and control needed to apply the management techniques. For example, the retail sector closely tracks buying behaviour and buyer statistics for marketing purposes and inventory control. Bar-coding and the computerised inventory ordering systems allow the retailers and manufactures to cut costs and offer their customers the lowest possible price. Service industries such as Engineering consultants can be networked allowing concurrent engineering, speedy communication and better technical service to their customers.  The availability and structure of the information is a critical difference between these industries and that of mining. IT is a central focus for many of these companies.  25  IT is not mentioned in modern mine  management books or in a mining company's mission statements (see infomine.com). According to the 26  aforementioned RAND report (Chapter 1), mining leaders believe that mine operations are producing more data than ever before yet the data remain largely unused.' The missing element is effective knowledge management which is the ability to turn data into action. The same leaders believe that IT is one of the critical technologies for the future of mining. Considerable amounts of data in mines is available but the extent to which that data provides knowledge is limited. Knowledge management is a  .30  key aspect to modern management techniques which typically use IT and management procedures to improve the cycle time or quality of both processes and products.  As the importance of IT continues to grow in other industries, mines will continue to recognise IT's importance. The cost of collecting and processing data into information is quickly being reduced through computer networks, integrated databases, sensors on mobile equipment, and wireless communication technologies.  2.2.8  Equipment  Reliability  Mining equipment has low reliability compared to the machines in manufacturing plants which can consistently produce quality products for months without requiring maintenance.  Paraszczak et. al.  insists that the reason for such low reliability is in the methods of maintenance records keeping, the abusive nature of mine processes on equipment and the mining environment. The author also discusses how the focus of management in mines is on very short term production targets, not managing maintenance for long term productivity. The authors list the differences between mining reliability and those of other industries:  27  •  Reliability is a relatively misunderstood concept;  •  Unlike other industries, mining has no safety regulations stipulating a certain level of system reliability;  •  Mine equipment manufacturers do not deliver large quantities of equipment so substantial testing is not affordable.  Most mining equipment manufacturers also have little access to equipment  maintenance records; •  No standard method of collecting maintenance data exists;  •  Mines typically use measures that do not adequately reflect the necessary reliability statistic. For example, engine hours are used on LHDs where the real cost drivers of maintenance are tonneskilometres;  31  •  The low profit margins and high equipment costs in mining companies necessitate the need for less equipment;  •  Poorly structured mine costing systems rarely allow for the calculation o f equipment costs.  2.2.9  Natural  28  Bottlenecks  Underground mines suffer additional bottleneck constraints such as a shaft or adit. Particularly for deep mines, the delivery o f raw materials and the hoisting o f ore and rock create difficult logistical constraints rarely experienced in manufacturing.  Storage space underground is also expensive as voids to store  inventory are expensive to construct and material is frequently damaged due to the harsh wet environment. R a w material delivery techniques such as JIT and M R P are therefore more challenging to implement.  2.2.10  Remote  locations  Factories can be built in locations close to their suppliers or customers whereas mines must be built where the deposits were formed. There are several practical and cultural issues related to remote locations. A n example o f a practical issue is that additional costs must be incurred through long distance transportation o f the bulky raw materials and product. A cultural challenge induced by remote location is the difficulty o f finding and keeping a well-educated and diverse group o f experts.  2.2.11  Synthesis  of Uniqueness  of Mining  Systems  The above discussion highlighted some o f the most important elements that make mining unique and create complications when implementing best practice production management techniques. important characteristics include: •  Lack o f information infrastructure;  •  Importance o f acknowledging the influence o f workplace;  32  The most  •  Skilled labour and relatively small monitoring ability;  •  Unique dual culture o f engineering/management and workers;  •  Poor equipment reliability, bottlenecks from constrained workplaces, and remote locations;  •  Similarities with both the construction (scheduling importance) and manufacturing  (repetitive  processes);  The above characteristics should be considered in designing a T M M S for mining based on production management techniques developed in other industries.  The methodology presented in the remainder o f  this thesis aims to incorporate the unique aspects o f the mining system into the core components o f a TMMS.  ' Peterson, D . J., LaTourette, T. and J . T. Bartis. " N e w Forces at Work in M i n i n g : Industry V i e w s o f Critical Technologies." R A N D institute online report. March 23rd, 2001. http:/www.rand.org/publications/MR/MR1234/ 2  Leeming, J R . "Engineering a Culture Change." M i n i n g Technology, V o l . 79 no. 915, November 1997  Brimson, James A . N e w Y o r k , 1991 3  Activity Accounting: An Activity Based Costing Approach, John W i l e y & Sons Inc.:  Kaplan, Robert S. and Robin Cooper. Cost & Effect: Using Integrated cost systems to drive profitability and performance. Harvard Business School Press, Boston, 1998 4  Davenport, Thomas H . Reengineering work through Information Business School Press. 1993 5  6  Hammer, M i c h a e l and Champy, James.  Technology. Boston: Harvard  Reengineering the Corporation: A manifesto for business  revolution. HarperBusiness, N e w York, 1993 7  Goodman, Paul S. "Examination o f the Design o f Bonus Plans in Underground M i n i n g . " Human  Engineering and Human Resources Management in Mining. Proceedings o f the Bureau o f M i n e s Technology Transfer Seminars, Pittsburgh, P A . July7-8, 1987; St. Louis, M O . , July 15-16, 1987; San Francisco, C A , July 21-22, 1987. (Pittsburgh P A . : U . S . Department o f Commerce) pp. 106-116 8  Peters, Robert H . " M i n e r Absenteeism: Consequences, Causes, and Control." Human Engineering  and Human Resources Management in Mining. Proceedings o f the Bureau o f M i n e s Technology Transfer Seminars, Pittsburgh, P A . July7-8, 1987; St. Louis, M O . , July 15-16, 1987; San Francisco, C A , July 2122, 1987. (Pittsburgh P A . : U . S . Department o f Commerce) pp.95-105 9  Althouse, Ronald and James A Peay. "Facilitating Supervisory Performance: A Workshop Approach."  Human Engineering and Human Resources Management in Mining. Proceedings o f the Bureau of Mines Technology Transfer Seminars, Pittsburgh, P A . July7-8, 1987; St. Louis, M O . , July 15-16, 1987; San Francisco, C A , July 21-22, 1987. (Pittsburgh P A . : U . S . Department o f Commerce) pp. 128-137  33  IU  Goodman, Paul S. "Examination o f the Design o f Bonus Plans in Underground M i n i n g . " Human  Engineering and Human Resources Management in Mining. Proceedings o f the Bureau o f M i n e s Technology Transfer Seminars, Pittsburgh, P A . July7-8, 1987; St. Louis, M O . , July 15-16, 1987; San Francisco, C A , July 21-22, 1987. (Pittsburgh P A . : U . S . Department o f Commerce) pp. 106-116 Renstrom, Arne, N i k l a s Frank, Lena Anderson. "Improved mine production by enhanced production control." Mining Millenium: Proceedings 102nd Ann. Gen. Meeting, Can. Inst. Min. Metall., M a r c h 5-10, Toronto, Ont. 2000, C D - R O M . 11  12  V a r y , John. "Crew Performance Optimization: A move towards process Control o f the M i n i n g C y c l e . "  Mining Millenium: Proceedings 102nd Ann. Gen. Meeting, Can. Inst. Min. Metall., M a r c h 5-10, Toronto, Ont. 2000, C D - R O M . Stanley, W . E . " U s i n g Y o u r Best Resource." Gold Mining 87: 1st Int. Conf. on Gold Mining. N o v . 2325, 1987. Vancouver, British Columbia. . C O . Brawer ed. Littleton, Colorado: Society o f M i n i n g Engineers, pp. 227-237. 1 3  Dessureault, S., Scoble, M . , and Mathews, K e n . "Factors Controlling the Success o f M i n i n g Technology Development and Implementation." Mining Millenium: Proceedings 102nd Ann. Meeting, Can. Inst. Min. Metall, M a r c h 5-10, Toronto, Ont. 2000, C D - R O M . 14  Gen.  Dessureault, S., Scoble, M . , " A Study o f the Synergy o f N e w Technology, Business Tools, and Information to Optimize M i n e Production". Int. Jnl. of Surface Min., Reclamation and Environment. Summer 2001 21p 15  Runge, Ian C . Turning Unprofitable Mines into Profitable Mines. Presentation to the Australian Inst, o f M i n . and Met., Aug98. February 16 , <http://www.runge.com/capital/excerpts/ausimm.htm> 16  th  Peterson, D . J . , LaTourrette, T o m , and James T.Bartis. " R A N D studies critical issues and Technologies in mining." Mining Engineering., March 2001, pp. 24-30 17  Sawdey, C . What is Anthropology? Department of Anthropology o f the National M u s e u m o f Natural History. M a y 13 , 2001. <http://www.nmnh.si.edu/anthro/whatisan.htm> 1 8  lh  Rouse, M i c h a e l J and Fleising, Usher . "Miners and Managers: Workplace Cultures in a British Columbia C o a l Mine. " Human Organization: Journal of the Society for Applied Anthropology. V o l . 54, N o . 3, Fall 1995, pp. 238-248 1 9  Schein, Edgar H . , 1997  2 0  Organizational Culture and Leadership. San Francisco, C A : Josey-Bass Publishers.  B r o w n , John. "Professional Hegemony and Analytic Possibility: The Interaction o f Engineers and Antorpologists in Project Development." Applied Social Science for Environmental Planning, W i l i a m M i l l s a p , ed. Boulder C O : Westview Press, pp. 37-59, 2 1  2 2  M c D o n a l d , Douglas and Richard Poulin. "Gainsharing inventive plans and mining: A n introduction."  Bulletin of the Can. Inst, of Min., Met. and Petro, M a r c h 1995, V o l . 88 N o . 988, pp.92-94 Knapp, A . Bernard and Vincent Pigott. "The Archaeology and Anthropology o f M i n i n g : Social Approaches to an Industrial Past." Current Anthropology. V o l . 38, N o . 2 . A p r i l 1997. pp.300-304 2 3  Teng, J T C , V . Grover and K D Fiedler. "Developing Strategic Perspectives on Business Process Reengineering: From Process Reconfiguration to Organizational Change." Omega, International Journal of Management Science, 1996, Vol.24 no.3, pp. 271-294 2 4  34  " Davenport, Thomas H. and Laurence Prusak. Working Knowledge: they Know. Boston: Havard Business School Press. 2000 2 6  Cavender, B.  How Organizations Manage What  Mineral Production Costs: Analysis and Management. Colorado: S M E 1999  Paraszczak, J , Kallio, P. and Honkanen J. "Setting reliability standards for underground mining equipment." Bulletin of the Can. Inst, of Min., Met. and Petro. October 1998, vol. 91, no. 1024, pp. 73-78 2 7  Mine Maintenance Management. Mine Maintenance Seminar, June 16-18 1997, Seminar Notes. University of Alberta. 2 8  35  Chapter 3 Mechanics of the Tactical Mine Management Methodology  The previous chapter reviewed the key differences between mining and other industries. The research used to justify and develop the T M M S methodology is documented in the appendices and chapter 2. These investigations include a description of the historical and technical development of production management.  Production management in mining is reviewed separately because the operational  constraints, goals, and culture are different. Information technology is identified as a management tool that has been well exploited by other industries and could potentially benefit mining.  This chapter reviews the theory, reasoning, and procedure of the methodology. The methodology aims to use IT, modern management techniques, and incorporate cultural issues. The resulting T M M S should be flexible and increase management's control of the production system.  It should also identify areas in  which tactical managers should receive training. The methodology is organised into five distinct phases: •  Scope/systems planning: this phase ensures that the system is adaptable for the future by laying out a preliminary design of the future management system taking into account anticipated technology and corporate goals.  Constraints that could be built into the management system can be avoided by  envisioning the long-term evolution of IT and management systems; •  Build data infrastructure: the application of data modelling is used in this phase organise the various data sources, once identified;  •  Determine measures: Measures are the key to good performance management and the building block for information used in operations management techniques. Accountability measures induce the need to improve resulting in improvement initiatives.  This phase develops these measures and  accountabilities; •  Build management infrastructure: The use and maintenance of any management system requires organisational design. This phase designs and implements appropriate procedural mechanisms to ensure the effective management of the system;  36  Using the system: Findings on how to use, maintain, and further evolve the system together with hypothetical examples are addressed in this phase;  Figure 3-1 shows the structure of this chapter (the same structure is followed for chapter 4 and in Appendix G). As can be seen, each phase is discussed separately.  This chapter presents the theory for  each phase. These concepts can be perceived as a general guideline, procedures, and methodology for tactical mine managers interested in creating the core components of a T M M S .  Figure 3-1: Five Phases of the T M M S Methodology.  3.1  Systems Planning Phase  A strategic plan for the evolution of technology and management systems is of key importance to the long-term effectiveness of these systems.  1  component.  The establishment of a T M M S includes a systems planning  Figure 3-2 shows the difference between classic and modern systems life cycles, from  current systems theory.  2  The additional step of systems planning is required due to the intense  complexity of IT and business issues. Systems pass through this life cycle from top to bottom where the basic building blocks at each level are people, data, activities, networks, and technology. As the business issues are defined and developed into a technically functional system, the system becomes increasingly more detailed. As the purpose of this work is to define a new tactical mine management system, planning the evolutionary life of the system is important.  37  Business Issues  Building Blocks: People Activities Networks Technology  Technical Issues  Classic life cycle  Modem Life Cycle  Figure 3-2: Classic versus Modern Systems Development Life Cycle  2  The purpose of the systems planning exercise is to envision a management system of a mine that automatically induces the need to improve the operational processes. Therefore the intended "end-inmind" is to produce procedures, IT infrastructures, measures, and accountability that would institutionalise and facilitate improving operational and managerial processes. The TMMS is a process of evolving management systems into an increasingly more powerful tool for positive change. In order to initiate such an evolution, the general path of growth for the system must be envisioned. The ensuing discussion relates how to reach achieve a vision, the tools that can help, what to do with the output, and examples of such visions.  3.1.1  Preparation  The preparation process should not take longer than a few weeks. The most difficult step is the inspiration step as front-line and service managers will be asked to abandon management systems that mask mistakes and accountability to a system of clear accountabilities and increased management participation within the production system. It should be mentioned that absolute unconditional support from team participants is not a prerequisite. Management systems which evolve over time and that are  38  not too intrusive at the outset, can gain acceptance over time.  The most time consuming step will be  training since some managers may be unfamiliar with modern management techniques.  3.1.1.1  T e a m forming  Management should always be a team effort, even when redesigning management systems. redesign team is usually made up of experts within the various core functions or processes.  3  The  A typical  redesign team would have the following members: •  Operations: exemplary foremen, and the supervisor of the foremen, sometimes known as general foremen, mine captains, or shift-bosses. Some outstanding operators may also be included.  •  Engineering: chief engineers or engineering supervisors that deal directly with the operations personnel.  •  Maintenance: central managers of maintenance.  •  Mill: these are usually the customers and may have input constraints that should be considered.  •  IT department: a representative from the IT department is a key yet often overlooked participant on reengineering teams. They can provide expertise on the capabilities and limits of IT.  •  4  Outsider: consultant, researcher, or academic, that is not part of the culture of the operation, yet can provide fresh perspective or management expertise.  3.1.1.2  Education  Once the team has been formed, the participants are educated in IT and best practice management techniques. An in-depth literature review, as undertaken for this thesis is not necessary; a simple crosssection of some of the key papers listed in the endnotes would suffice.  39  3.1.1.3  Inspiration  During team formation and the education process, the team leader, preferably the most senior team member, should communicate the benefits of undertaking such a process.  These are Change  Management issues that are important but too large to be covered in the scope of this work.  5  3.1.2  Visualisation  Once the preparation steps are complete, the current and future mining and management systems must be visualised. The challenge of visualisation is to be able to not only mentally formulate a future end-state system, but to create one that can be communicated to current and future management. The visualisation process begins by establishing a common vision of the required management inputs for the operation. As these needs would differ between operations, a general guideline on visualising is discussed in this subsection. Visualisation is aided by tools that pictographically represent system components and their inter-connectivity.  3.1.2.1  Visualisation T o o l s  The communication method used is not as important as the ability to efficiently represent processes in the mining system. Various process description techniques exist, including: •  Flowcharting;  •  Process mapping;  •  Cross-Functional mapping;  •  Soft Systems Methodology (SSM);  •  Structured Analysis and Design Technique (SADT) ;  •  Scenario analysis;  •  Systems thinking (Senge's);  •  Brainstorming .  6  7  8  9  10  11  12  40  These tools should be used to roughly map out the current processes within operational and service systems. In mining, the likely lack of familiarity of these tools would necessitate the use of the simplest methods such as process mapping and flowcharting. S A D T is one of the most complete and structured tools but may be unfamiliar with mine employees. These methods are described in Appendix G.  3.1.2.2  Understanding the Current and Required Management System Components.  Graphical representation of the system aids in understanding how it functions.  In building a common  understanding of the current and needed management systems a consensus must be reached among the team designing the T M M S . A series of group meetings where the reengineering team seeks to understand and characterise the mining system is undertaken in this phase. A further benefit of increased understanding and documentation of the system is risk mitigation. Through increased understanding of the constraints and behaviour of the system, managers would better understand how to deal with random obstacles to production goals. Once a consensus is reached, the technical and social systems in the mine should be documented using the visualisation tools. The list of questions below can be used as topics of discussion to uncover the key systems and mining processes in group discussion.  The first series of  discussions should be directed toward understanding the technical and social goals of the organisation (and how a T M M S can help accomplish those goals): •  How does the mine control the social/labour component of the operation?  •  What do the internal and external customers want - what and how do they measure their inputs?  •  What are the core processes in the mine (what is the value chain of the operation )?  •  How are the strategic directives interpreted into action?  •  How effective are the mine's supervisors?  •  Are the accountabilities within the management structure clearly defined and understood?  •  What are the key positive and negative characteristics of the organisation's culture?  •  What is the return on equity and unit cost?  13  14  41  •  What foreseeable technological developments will occur over the next ten years in both mining methods and supporting technology and how would they be managed?  •  Are the existing systems designed or did they evolve without a clear path?  Once the long term objectives have been established by answering the questions above, a more proactive approach can be taken. The initial key aspects that must be analysed to design a tactical management system are: •  Understand and measure the inputs and outputs of the operational and managerial processes;  •  Understand the needs of workers in terms of supervision, motivation, and participation;  •  Understand the current workplace culture and the management systems that would be required to achieve the desired workplace culture;  •  Understand the influence of managerial structure on the quality and effectiveness of the various functional departments;  •  Understand the inputs and outputs of the strategic management systems.  3.1.2.3  Final Product: the Evolutionary Plan of the TMMS.  The output of the visualisation is a general plan of the evolution of the management system. Once the long-term and key tactical management requirements are identified, a plan to implement specific management components is laid-out. The core component requirements of any T M M S remains the four components as described in this chapter (a plan, data, measures, and management infrastructure), however, the specific mechanisms that achieve the results vary by mine.  Table 3-1 suggests some  possible mechanisms by which the core of a T M M S is established. Note that some of these components may already exist to some degree in an operation.  As each component is developed, the necessary  management infrastructure is established so that the T M M S is immediately functional. The issue of fully implementing each component independently, is clarified in section 3.4.  42  Table 3-1: Potential T M M S Components  TMMS Component Auditing tool  Development phase Data Infrastructure  Description  Unitised costing  Data Infrastructure / Performance Measures Performance Measures  Ability to link the unit of output with the inputs which it consumed. Basically, integrating all data through database links.  Informed Process Based Budget  Capacity Analysis  Performance Measures  Process Production Monitoring  Performance Measures  Unit Process Control  Performance Measures  Real-time Optimisation  Using the System  Process Optimisation  Using the System  Equipment Rationalisation  Using the System  A mechanism to easily diagnose the validity and accuracy of the core data is necessary since sensor data or to a greater degree, key punch data, may have incurred errors. The ability to easily correct faulty data is also important.  Typically used to determine a high-level tactical manager's performance targets. Corporate strategic planing usually requires a mine to forecasts its costs and production on an annual basis in some detail. This information is then passed upward for corporate strategic planning. The strategic managers can then use the budget as the performance measures for the high level tactical managers (superintendents) Ability to calculate the capacities of the activities, processes, or system. For example, analysing productivity by workplace location, worker, piece of equipment, etc.... If planning and control functions are managed by process, information related to day-to-day progress according to plan should be collected for the key processes. These numbers can be aggregated for accountabilities at higher management levels. Unit process control technology can provide log data that acts as raw data. As a management system, these unit control tools such as PLCs are more automated and technical in nature. These systems are typically automated and therefore infrequently require additional input other than design constraints. However, if specific goals such as blending or asset optimisation algorithms are available, additional information and management systems may be required. Similarly, if operators are not following orders, disciplinary intervention may be required. Therefore real-time optimisation is a management system whereby pertinent information is delivered to the front-line supervisor in real time. Optimisation using algorithms frequently require statistical information. For example, when analysing mechanical performance, mean time between failure (MTBF) and mean time to repair (MTR) are common variables used for optimisation. Determining the costs of a piece of equipment (repair, lease/depreciation) as a factor of its productive units (Example: $/bolt installed). This can be used to help equipment acquisition or retirement decisions.  43  3.1.2.4  S y s t e m s Plan E x a m p l e s  Note that many of the management systems discussed above are evolutionary in that they use output derived from other management systems. The systems plan is intended to map out the general evolution of the various components of the T M M S . Figure 3-3 is an example of the evolution of a T M M S .  Input data  -data  data-  I  data-  cost /  Cost control  I-  data a c c u r a c y  JL input consumption  — •  Output data  data  Distributed & Unitized Costing  process units  Progress monitoring  I  1  unit costs  Productive rates +  +  Informed Process Based Budget  Capacity Analysis  1  I  Capacities  accountability (S3-S2)  i  +  Management performance measures  process «—  based 1  mine schedule  Informed Mine Scheduling  incentive to improve  i Management improvement initiatives  Figure 3-3: Possible Systems Plan, showing a Tactical Mine Management System Evolution.  It must be reiterated here that the management system and evolution proposed above is not applicable to every mine. The above is simply a suggested T M M S evolution. Different mines may formulate different evolutionary paths because mines cany vary by equipment, methods, cultures, and various other important factors.  The systems plan developed for INCO Ontario Division West Mines is presented as an example  in Chapter 4. Other systems plans exist and are being promoted from IT providers such as S A P .  44  15  3.13  Synthesis  of Systems  Planning  The systems planning phase is simply the process of mapping out the development of a T M M S .  Mine  personnel would likely be unfamiliar with this 'reengineering' type process and the process mapping tools needed.  Therefore a process of preparation is required where the appropriate T M M S design team is  selected and educated. This is followed by a visualisation process whereby the goals and evolution of such a system are defined and documented. Figure 3-4 shows that the systems planning phase outputs or defines the scope of a T M M S so that the design team and IT suppliers can forecast future data needs and management resources. The next step involves building the data infrastructure component needed for a TMMS.  SYSTEMS"PLANNING  SCOPE  BUILD DATA INFRASTRUCTURE  N  DATA  DETERMINE MEASURES  KINF01  BUILD ORGANI- * MANAGEMENT SATION a INFRA' NEED / STRUCTURE  USING THE SYSTEM  |IMPROVEMENT /  N  Preparation • team forming, education, inspiration Visualisation • systems mapping, plan system components  F i g u r e 3-4:  3.2  Systems P l a n n i n g Phase C o m p l e t e  Build Data Infrastructure Phase  When establishing data infrastructure a distinction should be made between the tasks which mine management is expected to undertake and those that an IT supplier (internal or external) should undertake. Once again consider Figure 3-2: Classic versus Modern Systems Development Life Cycle. The phases at the upper levels of the triangle are the responsibility of the mine operation. IT network and service providers should not be expected to develop the business plan. Neither should mine managers be concerned with the design and construction of databases. However, mine managers should be aware that data collection within the production and service processes is a key concern.  45  IT management and  maintenance is an entire field o f study best left to experts but collecting the data and choosing what data to collect is the responsibility o f the mine employees. When IT suppliers help the operation implement the system, education on how to maintain the information should also be provided.  Managers should be aware o f some data modelling theories so that the appropriate core data is collected in a format that can be used in relational databases. Therefore a brief review o f relational databases is required. Types o f IT and suppliers are briefly discussed in this section. The suggested data required to populate the selected database w i l l also be listed.  3.2.1  Relational  Database  A data model is used to select data appropriate for a relational database with the flexibility to supply information to the planned management systems.  Relational database theory provides a mechanism for  describing data. M i n e managers do not need to be experts in database design, however, by understanding the basics o f database design, deficiencies in the database can be avoided. The basic concepts o f data modelling are provided in the following subsections.  3.2.1.1  Basic Nomenclature of Data  Data is described within the database design, on three different levels o f abstraction: reality (real world), metadata (information about data) and actual data.  1 6  Reality is the organisation itself, typically a  collection o f people, facilities, objects, and procedures that are organised to satisfy particular goals. A n entity is an individual object, concept, or event that the organisation wishes to collect data about.  An  entity class, also known as entity sets or types, is a collection o f entities sharing common characteristics. A n attribute is a feature o f an entity that is desirable to record. Each entity must have a unique property called an identifier. A n association is a relationship between other entities within the same class or that span classes. Figure 3-5 provides a diagrammatic example o f data within the realm o f reality. The figure shows how an entity class could be a group o f people who are all employed by the same company.  46  Entities within that company may be employees. To identify a particular employee a name would be used as an identifier. Several employees may have an association to each other such as their common position as supervisors.  Entity C l a s s :  Identifier  Association: management  Figure 3-5: Reality Data Nomenclature  Metadata is information about the data being collected. Metadata is stored in the organisation's data dictionary or repository. For each entity class in the real world, there is usually one record type defined in the metadata realm. A data item is the smallest named unit of data in a database with meaning to the user. An example of a data item would be Employee-Name or Employee-Number. The synonyms used within the company are located in the data dictionary (e.g.e: LFLD, scoop, scooptram, loader, are all used to describe a load-haul-dump machine).  A data aggregate is a collection of data items that have  associations. For example, Last-Name and First-Name, are both data items that can be aggregated. A record is a collection of data items and/or data aggregates.  For example, for an entity class called  Scooptram, one might choose to define a record type called Scooptram Record. A key is a data item used to select one or more records. A primary key is a data item that uniquely identifies a record and is equivalent to the identifier in the realm of reality. A secondary key is a data item that identifies several records that share the same property.  47  Within the data realm, data occurrences are records that contain data item values, describing a particular entity.  For example, within a particular mine, there are 200 mobile machines in the mobile machine  entity class, meaning there are 200 mobile machine record occurrences in the database, yet only one definition for this record type in the metadata (only one definition of mobile machine). A file is a named collection of all occurrences of a given record type, for example, the mobile machine file at a mine consists of 200 mobile machine records. A file can be visualised as a table as seen in Figure 3-6, also known as a flat file.  Data Items Data Names  Records -  l__  - Equip No  Equipment Name  Equipment  Description  Equip Type  18411  Locomotive  L O C O M O T I V E D I E S E L 337 S U R F A C E ( S C R A P P E D )  LC  18917  Longholedrill  ITH B O O S T E R C O M P R E S S O R #405 7000L  CP  19016  Jumbo  J U M B O C M S C J - 2 H #551 2 B O O M (OOS) 3400L  DR  19183  Boomtruck  B O O M T R U C K , R B L #208 ( S E E E X T E N D E D T E X T )  TR  19199  Boomtruck  S C I S S O R B U L K L O A D E R #558 7200 L E V E L  AM  19202  Fueltruck  F U E L T R U C K #469 - 3 S H A F T (OOS)  TR  19279  Compressor  C O M P R E S S O R TWISTAIR A U X . H S T 9 S H F T (OOS)  20901  CP  Compressor  B O O S T AIR C O M P R E S S O R #394 7200L  CP  I Primary Key  /  Secondary Key  Figure 3-6: Flat File Using Partial File Record of Equipment List, Example from the Creighton mine.  An association is a relationship between two data entities in a model. The various types of associations include: One-to-one association: For any point in time, each value of data item A is associated with zero or exactly one value of data item B. For example, for every employee (serial) number, exactly one miner's name is associated to it. One-to-many association: For any point in time, each value of data item A is associated with none, or many values of data item B. For example, for every miner's employee number, none, or several incentive contract numbers can be linked. Many to many association: For any point in time, each value of data item A can be associated with many values of data item B and vice-versa. For example, several crews can be under various incentive contracts simultaneously.  48  3.2.1.2  Data Models  It is important to make a distinction between data models and data flows. Data models depict the internal, logical relationships between the data regardless of who is handling the data or what is being done to it. Data flow shows how the data is handled within the organisation such as who handles the data, where it is being stored, and how it is being manipulated.  17  Pictographic nomenclatures are used to represent data models.  Many were developed as computer  assisted software engineering (CASE) tools. Figure 3 - 7 shows the main components of a simple data model representation scheme called Entity-Relationship (E-R). This is presented so that an example of a mining data model can be understood. E-R diagrams will be used to show how data can be integrated into forming information. Figure 3 - 8 is a mining data model showing how the incentive contracts are linked in a possible database with the productive units that would be used in the calculation of a bonus incentive. From the E-R diagram, it can be seen that the production records record units produced and where those units were produced. The amount of production that is allocated to an operator is calculated by linking to the production record to the workplace where the work was undertaken and equipment that the operator used to produce the unit.  As can be seen, entities can be associated through common data items or  relationships.  Figure 3-7: Basic Pictographic Components of the 'E-R' Data Modelling Method.  49  Figure 3-8: Data Model of Link between Incentive Contracts and Productive Units  There are considerably more theoretical aspects to database design, construction, and management than those presented above. Hierarchical and network databases are also widely used and relational database theory is far more complex than described here. This discussion is intended to show how data inputs need to be identified by both mine management and database designers. It is important to understand that computer database specialists should not be expected to be experts in mining while mine managers should not be expected to be experts in databases.  3.2.1.3  Relational Productive Process Database as Critical Infrastructure  In the construction of a relational database, data models are created. Brown-field (already opened and operating) mine sites will already have databases that were developed for particular functions such as: •  Maintenance work-order records;  •  Purchasing records;  •  Production records;  •  Accounting transactions;  •  Geographic/Geological Information System;  •  Personnel records / training.  50  These databases were designed for their intended users. Data models were constructed using a systems plan that did not include the T M M S .  Their data models are appropriate for their intended applications.  For example, purchasing records are archived in databases to undertake monthly cost summaries and GIS is used to formulate strategic plans. It would be difficult, in most current mining operations, to associate a particular production record with the accounting transactions that paid for the work done.  Few mines have designed and implemented a production database.  Production information is typically  collected using a file processing mechanism where one or more technical staff collect statistics on daily or weekly production performance.  This information is input into spreadsheets.  Various calculations,  usually left to the discretion of the technician, are made for incentive purposes and for tracking the progress of the mine plan. Off-the-shelf, mining-specific production and cost database tools do not exist. Hence, most mines would require a production and cost database to be constructed.  Cost databases  derived from accounting software may already exist; however, relational links to the unit of production which consumed the cost rarely exists. Figure 3-9 provides an example of a cost data model. When the cost data model in Figure 3-9 is seen alongside Figure 3-8, it would be difficult to directly link the costs of the unit of work produced. The only common data item is the D A T E and the only common entity is OPERATOR. Additional data items need to be added to either the cost data model or the production data model so that a closer link can be made.  For example, if the supplies ordered are attributed to the  C U R R E N T PROCESS data item in the production data model, a more direct link is created between the costs of those supplies and units of production that were output from the process.  51  Name  ' Geographic '\ •^Responsibility ,-'  Employee #  Name  date oidered  Units ordered  Figure 3-9: E-R Cost Data Model. Although rare in mining, centralised production databases may exist where automated monitoring and control technology (example: mine dispatch systems) has been implemented. Mines frequently keep records of production but infrequently design the production data as needed for a relational database.  18  This lack of standard results in data measures that vary over time and is therefore not trustworthy. This tendency is understandable since, as discussed in Appendix C, detailed production records have no formalised use in mine management. Therefore a core component to a TMMS is a process based production statistics database. The process based production database should be designed using the basic relational database theory discussed previously. As each mine is unique and mine nomenclature varies, a specific production database may be created for each mine. Speculatively, as production databases become more important in mining operations, a standard measure may be created in the future. This would benefit mines as processes and productivity statistics could be effectively compared between mines. IT suppliers will also begin to provide off-the-shelf IT infrastructure more amenable to TMMS.  By designing the database using data definitions, similar or identical data items can be linked between disparate databases. Equating similar data items from various sources would allow the integration of data between systems such as accounting, personnel, and maintenance. Through closely linked process inputs  52  such as accounting and maintenance, to the process outputs such as tons or footage advance (development output), a process based relational database is created.  Figure 3-10 shows how the process based  relational database is created by integrating output data with input data. Linking costs to production has been traditionally undertaken at a high-level where absolute outputs such as total tons produced at the mine is compared with absolute inputs such as total dollars spent. The ability to link outputs to inputs at a lower level allows far greater flexibility in analysis and visibility of the efficiency of the processes.  INPUT Databases  OUTPUT Databases and records  Figure 3-10: Linking Inputs and Outputs by Process Integration can occur during the design phase of the production database. By ensuring that entities can be appropriately linked, various facets of process inputs and outputs can be analysed.  For example,  equipment costs can be linked to a piece of equipment. Equipment in turn can be linked to a particular amount of production. Therefore, the equipment cost component of producing a unit of production can be determined.  This unit equipment costs per unit of output measure was used at the INCO Ontario  Division as discussed in chapter 4. From a database linked in this manner, the productive output by piece of equipment can be compared to its maintenance costs. This comparison is far more accurate and simple when the information is linked in a database than when individual spreadsheets are combined every time the analysis is needed.  53  3.2.1.4  Flexibility  An integrated relational database would be capable of integrating the appropriate data for any analysis if a well defined systems plan was formulated. However, some changes may be identified that could improve the database. Therefore a key advantage would be the ability to easily change the data definitions and data models so that new data items can be added allowing more options for management systems. For example, consider a group of managers that would like to compare the life of the tires of scoops operating in a particular area with the number of hours grading that particular area. A missing data element may be needed such as the location of where the grader operates. A flexible system should allow the easy creation of a data item called hours and area graded in the records for the grader reports. Unfortunately, some databases are proprietary or difficult to edit in such a manner. Furthermore, brown-field mine sites typically have IT infrastructure for geological and accounting data from off-the-shelf application providers without the capability of sharing between applications. The issue of IT providers is important as much of the technical expertise in building IT infrastructure should be provided by in-house or contracted experts.  3.2.2  IT  Providers  IT providers can be loosely classified into 3 types.  Table 3-2 provides comparisons between the  subjective classification. Note that the best IT supplier with a reliable product will still fail if the mine and its management is not willing to undertake the considerable changes typically needed to gain value from IT.  54  Table 3-2: Characterisation of IT Providers  | Characterisation Off the shelf  Modular  Advantages • Simple & cheap • Frequently without programming bugs  Disadvantages • Too general  •  •  Option to purchase only those modules that are deemed useful Mining specific available Proven in industry  • • Full System  •  Those that can offer such systems are experienced Usually can be integrated throughout organisation  •  • •  • • • • • • • •  •  3.2.3  Suggested  Examples Microsoft Access™  No mining specific support Will require substantial effort from the operation and consultants to construct the infrastructure Modules may not easily integrate Difficult to learn  MINCOM™  Expensive, limited support Good for large companies Difficult to implement Integration efforts must continue and be maintained Bug prone Very expensive & complex Difficult to implement as major operating and management changes are required  SAP™  Often beyond the scope of understanding  Data to Collect  As mentioned previously, a systems plan and a detailed process map are the key requirements needed to determine what data is needed and therefore included in the IT infrastructure.  Since each mine is  different and systems plans can vary, not all data items are required or available.  Similarly, not every  process map is identical.  The theory and practice of process mapping is discussed in Appendix G ;  however, a process map is presented here to show how the inputs and outputs for the data infrastructure can be identified. This subsection then lists some suggested data items that would be needed.  3.2.3.1  Process Map  A process map can help identify the workflow, the input and output components, and interaction between the processes. As each mine is different, no generic mining process map would be applicable to every operation. Figure 3-11 is a generic process map for underground hardrock operations. These are the core  55  processes in an underground mine that are managed for maximum efficiency. Therefore information about these processes will be required. Note that a far more detailed process map would be needed to identify the inputs and outputs from key processes. Capacity maps can also help identify data items that may be important to track in order to manage capacity as called for in the systems plan in Figure 3-3 (capacity analysis listed as one of the components in the evolution).  Backfill Stope Development  Production Drilling  Load & Blast Ring  Muck out stope  L  Crush / Convey  w  SERVICE P R O C E S S E S Maintain Equipment Frontline Mine Management: Monitor Performance & safety, initiate productivity changes Engineering: guide production (mucking), produce layouts (development & drilling) Logistics: maintain workplace, level, and underground inventories  Figure 3-11: Simplified Proposed Process Map for an Underground Hardrock Mine Mine-wide Influences: M e c h a n i c s Availability Captive nature of the levels P M maintenance schedule  Level-based Influences: T y p e of equipment on level N u m b e r of equipment on level M e c h a n i c a l repair infrastructure Communications  (physical & data;  infrastructure  Work place-based Influences: difficulty of operation method of operation by operators  Figure 3-12: Possible Capacity Elements for Mechanical Capacity.  56  Hoist  Figure 3-12 shows how entity relationships between equipment and aspects such as maintenance schedules, workplaces, and levels can be created. Linking entities such as a piece of equipment and the captive level may be deemed important if the database is used to calculate the productive capacity of levels. The aspect of location as an entity in mine databases is an important distinction that should be discussed further.  Figure 3-13 shows how the capacity of inputs such as equipment (mechanical capacity), raw materials (supplies capacity), and labour (manpower capacity) affect the output of a particular workplace. Cumulative workplace capacities have influence on the levels on which they are located. As discussed in chapter 2, tracking the workplace is unique and extremely important in mining. Different workplaces within mines have varying constraints such as ground conditions, or values, such as grade. Therefore the production databases must include data items related to workplace. It can also be seen that the output of one process, such as development, is a workplace. Therefore in order for a particular stope to be mined, a workplace must be created, then the drilling and mucking processes must mine that stope. The costs of mining that stope and the costs related to producing that workplace could be calculated if: •  A relationship is defined in the data model between different workplaces;  •  A relationship is defined in the data model between the workplace and the processes which consume or are undertaken in the workplace.  For example, a particular sill drift could be consumed by a  particular stope once the production drilling has finished. The costs to produce that sill pillar should then be associated to that stope; •  Records of the inputs, and outputs of the processes are entered into the database.  57  Figure 3-13: Hierarchy of Capacities  3.2.3.2  Proposed Data Items  Some information is traditionally already integrated to some degree. For example, productive units are often associated with a particular date. Knowing the date and the number of men employed on that date, the accounting transactions that paid those miners on that day can be known. Therefore the number of labour hours roughly needed to produce that unit of production can be calculated for that date. Unfortunately, this level of information is far too general to provide information on a process level. Therefore process-level measures need to be collected and the data inputs and outputs need enough detail to be associated with each other. This will result in an IT infrastructure suitable for a modern mine management system. It is suggested that a common data item such as process and date be used to integrate data between and among inputs and outputs.  Table 3-3 provides suggestions for various input data items that would be useful to collect and Table 3-4 provides useful output data items.  Many of these were noted to be important during the on-site  construction of an IT infrastructure at the Crean Hill mine, as discussed in chapter 4. Note that the common data items are dates and process. Many of these data items may already be collected in some mines. The systems plan and process map in mind can be used to identify missing data. These missing elements will complete the data infrastructure required. Automated data collection technologies are an important consideration as increased monitoring options are becoming available. However, considering 19  58  the innumerable options available to mines presently, a discussion of the technology or supplier options is beyond the scope of this work. Similarly, descriptions of specific tools that can be used to identify data requirements is not within the scope of this discussion but literature on the topic is available.  20  Table 3-3: General Input Data  | Classification | Description/Concerns Cost Typically, data on cost transactions are collected by the Transactions accounting department for every item paid for. Each transaction will require one or more relationships to other entities, for example based on process, piece of equipment and/or worker. Labour Input  Some statistics on labour are already recorded for incentive purposes. However, these should be linked more directly to actual outputs thereby requiring data items such as workplace and process (for a particular date). Tracking more information on labour will also facilitate supervision as manpower and equipment damage analyses can be made.  Maintenance  Maintenance systems are already well established in the mining industry. What remains are data items that link the pieces of equipment with what was produced and who operated it.  Engineering Input  Keeping track of engineering time and effort is rarely undertaken in operating mines. However, consulting companies however, require engineers to closely track their time.  Workplace  Linking workplaces is standard within mine plans. For example, a haulage drift has to be developed prior to a crosscut. Additional data items that link workplaces together would be beneficial such as, the dates when the workplace was worked on and the processes undertaken would allow the sunk costs of a particular workplace to be calculated. Furthermore, logistics processes can also be linked to workplaces and levels. For example, maintenance costs on the bottom of the ramp can be directly attributed only to the workplaces that would use that section of the ramp.  59  1 Possible Data Items • Amount paid • Person ordered • Process to be charged • Expense element type • Supplier information • • • • • • • • •  Data about operator Hours worked Hours of delay at face Date worked Process and workplace on date Incentive contract #'s  •  Equipment # Work-order # Processes linked by date Date of work-order  • •  Engineer name Time spent on process  •  Outputs  •  Date  • • •  Process Mine plan data Logistics information  Table 3-4: General Suggested Outputs Data  | Classification Operating Processes  Description/Concerns Operating processes are already measured to some degree. Workplace location and specific measures of the types of supplies used, and delays and conditions encountered would enrich process outputs.  Support Processes  Support processes such as engineering or logistics are difficult to track in terms of both inputs and outputs. Specific outputs such as number of drifts surveyed may not be useful to collect and micromanage. Furthermore, recording engineering output may be an intemperate cultural shift as managers are typically former engineers and would be disdainful of measurement.  Strategic Outputs  Revenue information, cost of capital, ore impurities, and environmental costs may be related back to processes or system that produce them. For example, consider a particular mine within a multiple mine, single mill network. The value of the ore shipped to the mill may be awarded back to the mine as a measure of its value generated which would be affected by the processing costs.  3.2.3.3  Possible Data Items • Date • Process • Material consumed • Workplace location • Delays • Productive units • Time consumed • Date • Process • Units produced?  • • •  Time period of revenue Mine-attributed value Environmental discharge  Identified D a t a S o u r c e s  Once the data requirements have been identified, the sources of data can be sought-out.  It is preferable  for all raw data to be immediately entered into the database and in the appropriate relational structure. Many mines already have multiple data sources, some for single purposes. For example, in the INCO Crean Hill experience, drilling data was used exclusively for the calculation of incentives.  When  planning personnel wanted to know the amount of drilling that remained in a workplace, they would ask the operator, who would count the remaining holes and feet on the printed layout design while underground. A common data source would eliminate the discrepancies between these two systems. Typical data sources should include: •  Financial transactions;  •  Bills of lading;  60  •  Invoices;  •  Mill reports;  •  PLC data;  •  On-line monitoring;  •  Operator slips/reports.  3.2.3.4  D e s i g n D a t a Entry M e c h a n i s m  Once the database has been designed, data models defined, and various data sources identified, a mechanism is designed that ensures the information is entered accurately and on-time. If the data is entered into the system using sensors, wireless communications, or computer systems, mines will require electrical/electronic engineers and IT professionals.  IT suppliers such as Modular Mining have  underground equipment monitoring technology, pre-programmed to provide productivity data.  21  A  formal mechanism that ensures that the data is collected is required if hand-written slips are used. It was evident from the field studies at INCO that such a mechanism would require the following components: •  Training operators on how to fill-out the slips correctly;  •  Collecting the slips;  •  Auditing the information;  •  Entering the information into the system on time and accurately.  3.2.4  Final considerations  for Data  Infrastructure  As is discussed above, it is important to collect and integrate as much information as possible for maximum flexibility for the long term. Determining the data sources then altering the output to conform 22  to the design of a relational database is a key step toward establishing a data infrastructure. Ensuring the data is entered on time, accurately, and in the correct format are operational issues for which change management are needed. From the research at INCO these were found to be the most important issues in building a data infrastructure.  The efficiency and effectiveness of the data is dependent on the data 61  definitions and faithfulness to which the data conforms to the data model. What has yet to be discussed is . the cost of collecting that data. Looking for inexpensive data alternatives is important when developing IT infrastructure. For example, the cost of directly tracking the actions of each miner would be far more complex than monitoring the activities of a piece of equipment equipped with sensors and wireless communication. The political and cultural considerations of closely tracking the activities of individuals may also be detrimental. Trade-offs between data reliability, accuracy, cost, and workforce stability will undoubtedly be made.  The data integration is the key to modern IS . Data models and process maps are tools that allow IT infrastructure designers to ensure that the data is integrated. The complexity of these systems increases the importance of training employees on how to provide, manipulate, and use the data. True benefits of IT can emerge only if considerable investment in training is made.  23  A clear set of standards is also  important for training and integration purposes as these systems will require maintenance and growth with time. •  24  These and other issues are discussed by Pervan in considering mine IT requirements:  25  Management and workers are busy so the time it takes to collect, input, and process data should be minimised;  •  Data output (not input) should be tailored to fit individual users;  •  The ability to extract, filter, compress, and track critical data is important;  •  The system should provide on-line status access, trend analysis, exception reporting and "drill-down" abilities;  •  User friendliness;  •  Graphical, tabular and textual data presentation;  •  More research on IS in mining, less on specific applications.  Trend analysis, data compression, managerial time, and process outputs are mentioned above. Reviewing raw data is time consuming and frequently ineffective. Throughout this subsection, the importance of integrating data through relationship was stressed. The use and presentation of integrated data becomes 62  powerful when measures are tailored for managerial accountability and when the data is manipulated into information that can be understood and acted upon. The process of determining specific measures is discussed next, as seen in Figure 3-14.  SYSTEMS PLANNING  BUILD DATA INFRASTRUCTURE  SCOPE  Preparation • team forming, education, inspiration  Visualisation • systems mapping, plan system components  • • • • 1  DAI A  DETERMINE MEASURES  INFO  BUILD MANAGEMENT INFRASTRUCTURE  ORGAN I- ' SATION & • NEED /  USING THE SYSTEM  IIMPROVEA MENT J  Design Process map Design data model List data requirements Find Data Sources Organise & manage data collection  Figure 3-14: Data Infrastructure Complete. The 'build a data infrastructure' phase includes several steps where the processes are mapped, a data model is created, data requirements uncovered, and data sources are organised and managed. A process map is used to determine the data requirements and define the data dictionary from which the data models can be built.  Once the data requirements are known, the data sources can be found.  Then the  mechanisms needed to collect the data and populate the database are designed and managed. The costs of maintaining the infrastructure should be considered. For example, if it is far cheaper to have operators fill-out slips by hand than instrument all pieces of equipment with sensors, then perhaps the loss of accuracy in human-data entry can be tolerated.  3.3  Determine Measures Phase  Designing the measures for a tactical mine management system first requires a system plan and an IT infrastructure.  The system plan guides the types of measures to produce and the IT infrastructure  provides the basic data to calculate the measures. The determine measures phase of the methodology provides the guidance and theory necessary to establish the measures needed for the TMMS. The three types of measures required in the development of a TMMS include: •  performance measures linked to management accountability; 63  •  diagnostic measures that can identify sub-optimal processes;  •  measures that are developed specifically for improvement initiatives.  Activity based costing (ABC) measures are basic process measures that are derived from the process based IT infrastructure. The T M M S data infrastructure phase discussed previously recommends the creation of an IS that integrates process inputs with process outputs. This is similar to A B C where inputs are directly attributed to process outputs. A B C measures are used as the most basic measure from which most performance measures are derived. Issues of design, theory, and application of A B C and the other three types of measures are detailed in this section. How the information is compiled and processed is as important as how it is presented. When reporting on processes, it is important to present the information in a clear, simple, and consistent manner and to have comparatives.  26  Measures are designed with a specific intent. Understanding the audience and their goals is a good first step. The measures pertinent to one set of managers or application may not be applicable to another set of managers or in a different application. For example, the performance measures of superintendents would be different from those of a front-line foreman.  Similarly, historical cycle-time information may be  useful in the simulation of processes but not useful in developing improved logistical procedures. Therefore measures are designed for both a specific audience and intent.  The following subsection will discuss these issues within the context of A B C , diagnostic measures, performance management, and effective measurement communication strategies.  3.3.1  Activity Based  Costing  A B C is frequently incorrectly referred to as a tool to aid pricing products for manufacturers with multiple product lines.  27  Further in its development, management experts identified that A B C can be used for  64  process management and accurate budgeting. ABC is now recognised as a tool for measuring performance, diagnosing sub-optimal processes, and in decision making.  28  Activity based costing (ABC) is a management technique that organises costs according to the processes in which the costs were consumed. In ABC, costs traditionally lumped together as 'overhead' are distributed to operational processes according to cost drivers that correlate to how those processes consume the overheads. For example, in the design of a large production blast in a Vertical Retreat Mining (VRM) stope, several days of a planning is required, whereas in a narrow vein cut and fill stope, no direct engineering intervention is required.  The added engineering requirements for the V R M  workplaces could be added in an ABC measurement system.  A substantial IT infrastructure is required to develop an activity based cost system. Information about costs and the processes that consumed them have to be directly linked. The previous section reviewed how process outputs can be linked with process inputs through data modelling and relational databases. The 'Build IT Infrastructure Phase' also discussed the importance of tracking the workplace. The TMMS IT infrastructure should be designed to facilitate the creation of ABC for mining systems.  It may be important to mention the difference between process and activities as discussed in Chapter 2 (and in Appendix B) and as represented in Figure 3-15 and Figure 3-16. Note that processes are a conglomeration of activities.  Manufacturers, with considerable IT infrastructure and experience at  implementing such advanced management tools, have the capability to track at the activity level. Mining does not yet have the ability to track at the activity level, hence, for the time being, mine measurement systems will be constrained to process based costing. Although, in an effort to avoid confusion, processbased costing for mining will continue to be referred to as ABC.  65  C C C £  Labour Supplies Equipment Other Process outputs  ") ) ~)  ^ ^  Process  (  Productive unit , Secdnda'ryJ'outputM*^  Figure 3-15: Generic Process Inputs and Outputs  Miner's pay & benefits Fuel, oil, filters, etc... (• Unitzed equipment costs ( Value'of input process outputs  Mucking  Miner's pay & benefits" rods, bolts, screen, power Unitzed equipment costs (•Value.of input process outputs  Development  $/tonmeter  # of tons mucked empty stope  feet of advance waste rock .,  ^  $ / ft  Figure 3-16 Mining Example of Process Inputs and Outputs. ABC is described in Appendix G along with other important management techniques. This subsection simply suggests that a key measure is the unit cost of key processes, suggesting that outputs and costs should be organised according by process. Many mines can already track their unit costs for some key processes such as dollars spent on haulage or drilling.  Few are capable of tracking according to  workplace, equipment, specific date, or operator in a consistent and automated fashion. Adding the costs of support processes and overhead would also be difficult using current IS design. Costs can be effectively investigated when unit measures are developed using the IT infrastructure suggested in the TMMS methodology.  Figure 3-15 shows the integration of mine inputs and outputs from an operational process. The greyed outputs and inputs are measures typically unfamiliar to mining. Compiling the value of other processes including traditionally  'overhead' type costs such as engineering inputs, secondary blasting,  reconditioning, and depreciation is not traditionally included in mine costs. Secondary outputs, are also 29  rarely tracked. An example of secondary output is the rock resulting from drift development. The rock can be considered a benefit in mines requiring rockfill, or as a cost in mines that must hoist rock.  66  Figure 3-16 shows the same diagram using mining specific examples. These basic measures assume that all costs and productive units for a specific process are measurable and tracked. These costs may be directly proportional to a particular unit of production such as feet drilled, tons hauled, or skips hoisted. However, some costs may not be proportional to the productive unit traditionally measured. For example, a mine may measure the productive unit from the mucking process using 'tons delivered' as the cost driver. However, upon closer analysis it becomes evident that mucking costs are a factor of both tons and distance hauled. Furthermore, mine process outputs vary dramatically. Drift development costs vary according to design and support requirements. Haulage costs vary according to distance, grade (on ramp), weight, and other operating conditions. The flexibility of investigating factors such as location, material type (ore or rock), or operator are key to the successful use of ABC in mining. This flexibility is available using the TMMS IT infrastructure.  ABC is far more simple in manufacturing. Manufacturers assemble standard products and need identical outputs, therefore identical products would have the same cost. Manufacturers do not require the added information of location, equipment capabilities (if equipment varies within the same fleet), ground conditions, etc...  Mining's inherent variability due to factors such as location or geology raises further concerns with tools which were developed by and for the manufacturing industry, namely diagnostic tools, used to identify sub-optimal processes by statistical analysis (example: statistical process control).  Comparing  performance is also complicated by the inherent variability in mining processes as target (goals) must be carefully chosen for managers within the same mine but operating in different areas. Furthermore, unitised costs alone cannot be used as a measure as production targets are central to the performance of a mine. For example a mine may have the lowest cost per foot drilled yet only have drilled 10 feet per month. Therefore volumetric measures are still needed. Despite these numerous limitations, ABC and process-based IT infrastructure can still be used as building blocks for measures that are informative.  67  compelling, and functional. The issues of diagnostic, performance, and solution-resolving measures are discussed next.  3.3.2  Diagnostic  Within the context of this work, diagnostic measures are tools which can be used to determine if a process is operating sub-optimally. Mathematical tools, such as statistical process control, are used to determine the stability and consistency of processes. The highly variable nature of mining systems reduces the effectiveness of these tools however, using more detailed process information, the effectiveness can be improved. Process indicators are similar diagnostic measures as they monitor key input variables that impact on downstream processes. By monitoring these indicators, remedial action can be taken to optimise the upstream or downstream process. The use of mathematical diagnostic tools and process indicators are discussed in this subsection.  3.3.2.1  Mathematical Diagnostic T e c h n i q u e s  Roberts suggests the use of statistical process control (SPC) tools for mining, as used in the manufacturing industries.  30  These tools are only applicable to mining processes which mimic  manufacturing processes: where a consistent product is produced over an extended period of time. SPC requires a statistically significant number of data points in order to ascertain the level of stability in a process. For example, a process such as conveying, or crushing, with a constant source of feed, could be analysed using SPC. The productivity at a particular heading may not be analysed using SPC as work at a heading strongly depends on varying factors such as the daily mine priorities, geology, distance from shaft, and equipment type.  For mining, measuring the consistency and quality of output could be used as a diagnostic tool. Measuring the variability in fragmentation may be indicative of sub-optimal drilling or blasting practices.  31  Slump test can be used as an indicator of sand/pastefill quality. These measurement tests  68  may already be used in mine operations. The inclusion of the raw data or results of these tests in the IT infrastructure would ensure consistency and records that could be used for further analyses.  3.3.2.2  P r o c e s s Indicators  Process indicators are diagnostic measures that are used to optimise processes downstream or preventatively, upstream. For example, fragmentation analysis at a crusher would be a process indicator that would allow a S A G mill operator to adjust operating conditions for optimal milling, resulting in a downstream solution. Feedback from the same process indicator would allow the blast designer to vary the design upstream.  Automated technology has been developed which can sense variability in operating conditions of mining processes and suggest changes to optimise output. For example, in surface mines, sensors on rotary blasthole drills can provide information about the material being drilled, such as spacial location, hardness, and geological structure. This information can then be used to optimise blast design or mill recovery.  More research is needed to develop indicators that can identity processes in difficulty,  especially underground. resemble is useless.  32  Measuring a process without understanding what an 'optimal' measure should  Therefore targets or accountabilities must be established.  The science of  performance management can help design the targets for which management can use to improve performance.  3.3.3  r Performance  Management  Performance management has been described as "the often-overlooked key to organisational success."  33  Performance management must have carefully designed goals, frequent reviews, respected rewards, and measures that vary between manager type and managerial level. Performance management is the area where organisational workplace culture can be modified to improve the overall system performance. Foote  52  uses an analogy to show the importance of several aspects of performance management.  69  He  compares two workers performing somewhat similar tasks. One worker, 'Jim' , must remove items from a conveyor using a forklift, which requires some skill. Although the pay and benefits are good, it has become mundane. When Bob's performance is evaluated quarterly and falls below company standards, he is reprimanded and asked how he will improve performance.  When performance is above, the  supervisors tell him to "keep it up". Foote then compares Jim's work environment with Bob's, whose 52  task is to put items into a basket for a different company. Bob's job is much more difficult as the basket is small and elevated ten feet off the floor. However, when an item is placed into the basket, a point is put on a board where everyone can see it. When Bob's performance falls below standard, his boss provides information and training to help him improve. His boss also provides rewards such as metals and trophies when performance excels. Bob is not even paid for his efforts and undertakes the physically strenuous work happily.  This analogy is comparing the similarities and reward mechanisms between sport and work. Elements that make sports appealing are clearly defined rules, immediate feedback on good performance, and help when performance falls below standard. Performance management is the technique used to organise and implement mechanisms which use these elements to improve.  It is often a systematic, data oriented  approach to managing people that clarifies rules, provides feedback, issues adequate training and steers results toward organisational needs.  3.3.3.1  Activity B a s e d P e r f o r m a n c e M a n a g e m e n t  The first step in developing performance measures is to define the rules and objectives. The link between corporate mission statements such as "Copper company X Y Z will be the lowest cost copper cathode producer, with the highest return on equity..." and front-line management is unclear and ambiguous. Measuring the successes of management at the front-line based on final products or corporate objectives is ineffective as there are no identifiable links between action at the face and copper cathodes. By linking output performance measures, also known as metrics, with activity based costing, a front-line manager  70  would be able to definitively point to performance through productivity analysis, profitability analysis, trade-offs, and decisions.  Traditional organisations are misled from knowing their true product profit margins due to misallocations of direct and indirect costs.  34  Corkins claims that activity based costing or activity based  management (ABM) increases the visibility of measurement systems and can help organisation remove waste, engender a sense of profit, and align capacities.  Therefore A B C is a key component to any  performance measurement system for management. However, as the responsibilities of managers vary, so should the process measures assigned to a particular manager. responsible  Therefore those managers who are  for the outcomes of particular processes should be measured on those processes.  Accountability is defined as being responsible for someone or some process.  3.3.3.2  35  U n d e r s t a n d i n g a n d Controlling Culture  It is suggested that some basic understanding of the workplace culture should be characterised during the systems planning phase. However, a more detailed analysis is required to build systems that would direct changes to the culture. The two core components of the T M M S that control culture are the performance measures and management systems. Accepted strategies that steer (control) culture suggest the creation of a clear set of organisational accountabilities, performance measures, education, and formal yet flexible management infrastructure. Prior to the selection of specific techniques for control, a basic understanding of the current workplace culture should be established.  The following discussion describes some  techniques for the characterisation and strategies for control.  Anthropology is the science that seeks to understand and characterise culture. Behaviour of individuals is a product of both psychology and organisational culture. Management systems seek to steer a worker's behaviour toward the organisation's goals.  Therefore anthropology is intimately linked to creating  effective management systems. Psychology is too individualistic to be an effective tool in the design of management systems in mines that have many employees.  71  Ethnography is the technique that anthropologists rely upon for the most accurate characterisations of culture. Ethnographers participate in the cultures under investigation in order to gain insight into cultural 36  practices and phenomena.  Useful and reliable notes documented throughout this research process  typically constitutes the major part of the data on which later conclusions will be derived. Other data sources include site documents and interviews.  37  Questionnaires and surveys are considered to be highly  unreliable as the covert aspects of the culture are frequently omitted. Ethnography is explained in more detail in Appendix G.  In general, this is simply a tool from which to uncover the nature of the  organisation so that systems and/or action can be implemented to mitigate the negative while promoting the positive.  The following concepts of culture illustrate the complex dual nature of organisational dynamics that complicate efforts to characterise and manage organisations:  38  •  Culture contains both conscious and unconscious patters of shared, learned behaviour acquired by experiences;  •  Culture has both overt (obvious, visible customs) and covert (less obvious, hidden) ways of behaving;  •  The two sets of expectations are the ideal (expected) and real (actual) behaviours;  •  Cultures can have different viewpoints from an insider and outsider;  •  Culture forms and constrains sets of adaptive and resistance strategies.  Understanding the contrasting elements of organisational culture listed above are a key first step to changing or taking advantage of culture. These contrasting elements can be determined using a variety of cultural assessment models. organisational culture: •  For example, Ibarra suggests using the following model to analyse  38  Organisational Heritage: determine the major events in the organisation's history that have had influence on the present;  •  Organisational Structure: analyse both formal and information organisational structures and groups;  72  •  Political System: identify the critical path of decision making, strategic planning and power both real and ideal;  •  Environment: analyse the physical arrangement, design, community location, and regional/national influences;  •  Communication/language: analyse how culture is transmitted through symbolic or linguistic systems;  •  Demographics: examine the human components of organisational culture;  •  Subculture Types: analyse and categorise subcultures as identified by insiders;  •  Change Systems: review adaptive strategies for change and adversity and to seek out the formal and informal innovators and entrepreneurs in the organisation.  Note that several of these elements can be directly controlled. Organisational structure, the political system, and some aspects of the environment, demographics, language, and change systems can be modified by changing the management systems. Other aspects such as organisational heritage and communication cannot be directly affected by changing the management system.  In designing a  management system, the elements of culture should be understood and characterised for the company so that the appropriate control strategy is applied.  Many strategies to control culture exist and are used throughout all industries. Senge suggests using a process of identifying key leverage points that act as catalysts of behaviour.  39  Through education or  incentive systems, these catalysts are removed (in negative behaviour) or promoted (for positive behaviour). This rich and complex method is called "Systems Thinking," and is further described in Appendix G . Blanchard and Bowles suggest a three-part strategy for boosting morale, clear 39  accountability, and rewards, in a change management technique called "Gung-Ho!"  40  Cooper and  Markus suggest abandoning expensive training and education programs that are not directly applicable to the structure management system.  41  Instead, Cooper and Markus suggest using five techniques that  include group meetings, role-playing, and hypothetical redesign of the production system. 73  There are many strategies available yet the most effective strategies typically have the following key aspects: •  Clear accountabilities, performance targets, and rewards  •  Unambiguous measurement  •  Education/training  •  Morale boosting, coaching, team-participation  •  Formal and informal flexible management structure  •  Characterisation and comprehension of the actual and ideal organisational culture  42  From the general characterisation of mining culture in chapter 2, it can be seen that the accountabilities and performance measures for management and workers would differ due to their contrasting nature. For example, the engineers require order while the workers require security. Clear accountabilities and management structure provides order. From Table 2-2: Mine Management and Workforce Cultural Comparison. , it can also be seen that engineers/managers have an "objectively determined reality" 19  meaning that unambiguous measurement would be welcome. proactively to improve performance.  These measurements can be used  Managers are considered to have a "competitive" and  "individualistic nature, therefore, team-building training and measures that would not result in destructive competition may be areas of interest in mine management systems. However, in spirit of competition, managers of equal managerial level could have a common measure from which their performances can be ranked. In conclusion, a TMMS design should incorporate cultural issues specific to a particular company or mine.  3.3.3.3  Accountabilities  Accountability is the most important issue in the design of performance measures.  The formal  management hierarchy and responsibilities are the key building blocks from which accountability can be designed. The time-frame of management decisions and volume requirements also vary according to the 74  management hierarchy. The issues and methodology for designing accountabilities are described in this subsection.  PROCESS BASED M A N A G E M E N T STRUCTURE  Traditional hierarchical (vertical) management structure usually does not allow clear accountability for processes, as discussed in Appendix C. For example, the managers of operations and maintenance are typically at odds as operations are directed to produce ore while the goal of maintenance is to provide availability and reliability.  These are often competing objectives.  Horizontal organisations have  managers that would be responsible for an entire process and all its support activities. For example, at the INCO test sites, operations managers directly supervise short-term planning engineering staff and technicians. This allows engineering services to be completed to the specifications and schedule needed by operations. Modern management techniques usually suggest this horizontal type of organisation, where single managers are responsible for a single core process.  43  F R O N T - L I N E SUPERVISION - ORGANISED BY W O R K P L A C E  Process management may not be facilitated in mining due to its dispersed workplaces. It may be difficult for a front-line supervisor to be the manager of the "drilling" process as the headings undergoing drilling may be geographically dispersed throughout the mine. If supervisors were accountable for specific processes, the majority of their time would be spent travelling between headings. This is why front-line supervision in mines should continue to be organised according to geographical areas.  ACCOUNTABILITY AND FUNCTION ARE NOT NECESSARILY COMPLEMENTARY  Management structure and accountability structure does not always have to be identical. For example, the Musselwhite Mine uses an accountability structure that is process based while the functional structure is organised according to functional departments.  44  Clear accountabilities, goals, measurement,  communication and training are all stalwarts of Musselwhite and good accountability management.  75  DEFINING ACCOUNTABILITIES Well  defined  accountabilities  are  essential.  I f there is confusion  among  front-line  supervisor  accountability, variance in decision making between cross-shifts or within different areas o f the mine w i l l induce waste. Figure 3-17 proposes a possible accountability structure for the various managerial levels. Note that accountabilities can be clarified using: •  Job descriptions;  •  B y setting goals on a process level;  •  Training.  SUGGESTED ACCOUNTABILITY STRUCTURE It is beyond the scope o f this work to design a standard accountability structure as each mine w i l l tend to have a unique culture and operational parameters. Job descriptions can be designed to suit required accountabilities and needs. This task is facilitated using organisational design. This discussion simply emphasises the importance o f clear accountabilities o f managers within a tactical system.  Position Superintendent  General Foreman Engineering - tactical support Front-line (foreman) Engineering - tactical outputs Miner  Accountabilities •  M i n e ($/unit output) for entire mine  •  Responsible for $/unit o f final product  •  Responsible for those below  •  Accountable for integrating strategy with tactical imperatives.  • •  Unitised process level ($/unit output) Engineering: Providing technical support in planning and improvement initiatives Accountable to individuals above Responsible for those below  • • •  Activity-level and process level ($/unit output for crew)  •  Engineering: Providing tactical technical outputs (example: layouts)  • •  Accountable to individuals above Responsible for those below  •  Task-level work  •  Accountable to individuals above  •  Responsible for providing accurate information  Figure 3-17: Possible mine tactical accountability structure 76  Figure 3-17 shows how the front-line, supervisor would be accountable for optimising activity and process level work. For example increasing mucking rates in his area by having the road graded. The foreman would be measured on the productivity of the crew he/she is supervising. These measures would be easily tracked using the IT infrastructure proposed in previous sections. Foremen are responsible for a work area and a particular crew. Several foremen may be accountable for the same area but on cross shifts.  Similarly, foremen can be on the same shift yet in different areas. Crew reporting is well  established in mining as incentive systems are typically organised by work crew. The responsibility to ensure co-ordination between cross shifts and over a geographic area would fall on the second-line supervisor, also known as the general foreman or mine captain. This individual will also be the first manager accountable for costs. Foremen usually use the same equipment and draw supplies from the same inventory. This common resource pool makes it almost impossible to track inputs on a crew by crew basis as technology does not yet exist to record specific consumption of raw material, equipment availability, or labour by workplace and time. Geographical regions within a mine may have captive equipment, local inventories, and control points where inputs and outputs can be monitored with accuracy. These second-line managers are therefore the individual that issue the orders coming from the tactical engineering outputs, namely the blast and drift layouts.  Technical support for process  improvements, may also be supported by engineering technicians. These second level tactical managers are therefore responsible for: •  Co-ordination between cross-shifts;  •  Co-ordination between crews of different regions;  •  Cost control at a local level;  •  Implementing engineering schedules.  The second level managers (general foremen) are accountable to the next and final level of tactical management. The final level of tactical management is the superintendent, also known as mine manager. These individuals must co-ordinate the activities of the various general foremen so that the mine's 77  production is predictable, and within budget. This individual must interpret strategic goals into tactical goals and action. This is the last level of tactical management and the longest time-frame for tactical decisions.  M A N A G E M E N T ACCOUNTABILITY T I M E FRAMES.  Each level of management has different time-scopes. Table 3-5 provides the approximate time-frames for each management level. Performance feedback should be provided according to the time-frame of the management level. For example, the time-frame for the second level of management is a week to a month; process unit costs should be reported once a month. A monthly report of key unitised process costs can be issued to this level of management showing the effectiveness of co-ordinating the work between crews. For cost control purposes, a weekly review of supplies ordered or equipment repairs can be provided. A weekly summary of the output of key processes can also be provided indicating where management efforts should be focused to meet the monthly quotas.  Table 3-5: Time-frame for Decisions at Different Management Levels Management Typical names Level  Examples  Time-frame  3  Workflow Level  • •  Superintendent Mine manager  • • • •  $/ton shipped total costs total revenue mine safety  •  System  Month to Year  2  • • •  $/ton of area $ / ft drilled area tons / man-hour % index planned Drill ft. / day crew Tons mucked by man Workplace utilisation Ft / day Tons mucked / hour % re-muck  System Process  Month to Week  • • •  • • • • • •  • •  1  General Foreman Mine Captain Second-line supervisor Foreman Shift-boss Front-line supervisor  • •  Process Activity  Week to Day  • •  Activity Task  Daily  • Base employee  • • •  Miner Operator Worker  • • •  78  INFORMATION V O L U M E .  The information volume requirements vary according to management level.  On a daily basis, miners  require only the production and workplace objectives (called a line-up).  Foremen require more  information as they must allocate miners to specific work areas, compare miner and crew productivity, and determine supplies ordering requirements. General foremen and superintendents require far more information than any other manager as they must optimise the processes and all their inputs and outputs. As management level continues to increase into strategic areas, information requirements begin to reduce. Senior executives require only aggregated information such as mine profitability and market projections. Figure 3-18 shows how information volume would vary between management level (developed from conversation with Bill Stanley, July 21 , 2001). st  President Vice President Superintendent General Foreman Foreman Miner \*  INFORMATION V O L U M E  *\  Figure 3-18: Information Volume in proportion to Management Level  SYNOPSIS O F A C C O U N T A B I L I T I E S  Training in accountabilities and developing clear job descriptions is vital. A miner must be trained for the various equipment he is expected to use throughout the shift for both safety and efficiency reasons. Similarly, management must be trained on the various tools that will be applied throughout the day for both safety and productivity management. Training in management, especially at the tactical level is rare in many mines. ' 45  4 6  While job descriptions provide clear guidance on job responsibilities, quantitative  measurement also plays a key role in establishing accountability.  47  By providing quantifiable feedback,  managers can know how effective they are. The measures must also conform to the time-frame for which  79  the manager is responsible. The feedback should include targets, also known as comparatives so that managers understand the level of effort that is required for each area of accountability.  3.3.3.4  Comparatives, Targets, and Goals  A key aspect to effective use of measures are targets or goals. Accountabilities provide what should be measured while setting targets ensures that the efforts are in the right direction. In-depth studies of the social and industrial-psychological value of goals are numerous.  48  Setting process based targets for  managers should be a key step in developing performance measures for a TMMS. For example, the goal for a general foreman may be to reduce his production drilling process by ten percent from the cumulative average of the past 6 months. Since the measures are based on accountability, the goals should also be within the sphere of accountability of the manager. For example, a foreman supervising a crew of miners should not be measured on the effectiveness of maintenance. However, the number of repairs due to operator abuse can be measured for the foreman, along with a goal to reduce the amount of 'damage' maintenance work orders. Therefore a manager's goals should be aligned with his accountabilities and area of influence (a manager should only be measured or asked to improve what he controls).  Goals alone do not improve performance. "The most important reason for setting goals is to create additional opportunities for reinforcement. Having a common goal gives a team a common purpose".  49  Other benefits include improved communication and enforced data collection.  Several management techniques can be used to determine appropriate goals. Regardless of the tool used, 50  setting behaviour goals or action focused goals are still governed by two important considerations: making goals challenging and attainable.  Goals should be challenging since individuals have been  observed to slow or stop performing when they reach their goal.  51  Setting the goal unattainably high  results in negative reinforcement and decreased motivation for the future performance. Finally, each level of the organisation should be responsible for setting its goals and objectives (with consultation with the immediately superior level). '  52 53  Sources of information for setting goals can include: 80  •  Performer's past history;  •  Performance of peers;  •  Industrial engineered standards;  •  Budget;  •  Participation by the performers (setting their own goals).  3.3.3.5  Rewards  As mentioned previously, feedback, rewards, or reinforcement is a key element in setting goals and performance measurement. There are generally two types of rewards: extrinsic and intrinsic. Extrinsic 54  rewards are money, promotion, or fringe benefits.  Mining is very familiar with extrinsic rewards as  incentive systems are commonplace. Intrinsic rewards are when employees experience a state of internal motivation, and self-fulfilment through work.  55  Motivational theories all recognise the benefits of  rewards.  56  3.3.3.6  Performance Measurement Management Techniques  Some modern management techniques aid in the design of performance measurement systems. The Balanced Scorecard is a modern management technique that involves several types of measures including: financial, customer, internal business process, learning and growth. These measures are derived from the vision and strategy of the company. This tool is a highly evolved system that may be 57  too complex for the current state of mine management as the IT infrastructure and ideals of customer measures, and other 'soft' issues are not yet well established in most mines. Appendix G describes this performance measurement management technique.  3.3.3.7  Synopsis of Performance Management  The analogy comparing the performance management systems of sport and businesses at the beginning of this subsection highlighted the importance of clearly defined rules, immediate feedback on good  81  performance, and help when performance falls below standard.  Clearly defined rules for production  systems are identified by analysing the cultural requirements for motivating the employees, and educating and setting targets for each manager's set of accountabilities.  Immediate feedback is provided by  measuring the manager according to his/her accountabilities. Both extrinsic and intrinsic rewards should be awarded when goals are met. Training requirements, additional resources, or improvement initiatives would be identified depending on where the manager fails to achieve the specific targets.  3.3.4  Solution Resolving Measures  Solution resolving measures are the calculations and analyses of the raw data within the IT infrastructure that are subsequently used in management techniques in improvement initiatives. For example, consider a manager that would like to improve the materials delivery system underground by instigating a just-intime (JIT) initiative. In this case, solution resolving measures would be material consumption rates in underground headings, delivery times, and delivery capacities. These measures are to be calculated from the data infrastructure. These measures are also only undertaken in an as-needed basis. Skills at database querying languages and a well organised and well understood IT infrastructure are necessary to produce these types of measures. Technical staff will need to be become familiar with the types of improvement initiatives available, their information requirements, and the tools used to extract such information from the IT infrastructure. Internal or external industrial engineering experts and management consultants may be required for some improvement initiatives. Appendix G provides a list of management techniques that could be applied to processes as improvement initiatives.  3.3.5  Presentation of the Measures  An issue common to all these measures is how the measures are presented.  Information presented as  trends over time, Pareto charts, and bar-graphs are some of the most effective, simple, and common presentation formats. The presentation should be clear, simple, unambiguous, and have easy drill-down ability (where more detailed information about a displayed item can be readily summoned). 82  Without proper presentation formats and adequate simplicity, confusion leading to frustration and eventual abandonment of a measurement based tactical management system will occur. There are several examples of performance reporting tools being abandoned due to inappropriate and user-unfriendly reporting mechanisms at the INCO Limited test sites, as is discussed in Chapter 4 and Appendix C.  The scientific study of human factors is a field of research encompassing sensation, perception, systems design, engineering anthropology, bio-mechanics, human reliability and communication. Coe presents a 58  thorough yet simple review of human factors in technical communications that would be helpful for those responsible for building the Graphical User Interface (GUI), applications, and reports.  3.3.6  Final Considerations for the Determining Measures  59  Phase  A B C measures are the first to establish when developing a T M M S . If the IT infrastructure is organised according to process, this is a relatively simple task.  Performance management is the most important  and direct use of measures. Devising a performance management system using organisation theory would immediately follow the creation of an A B C measurement system. A B C is an acknowledged ideal source of measures.  Managers are capable of being true 'business managers' as a sense of profit can be  engendered by measuring outputs alongside inputs. Devising a performance management system based on processes would also provide an opportunity to clearly align accountabilities to processes. Accountability provides the framework for the performance measures for all types and levels of management. A suggested accountability model presented in this section (Figure 3-17) identified secondline managers, those responsible for optimising mine processes, as the primary tactical manager with direct accountability for costs. Unit costs should be reported alongside production volume measures. Budgeted amounts of production allow the manager to fulfil the required quotas while unit costs ensure that the work is done efficiently.  Other measures may be developed if quality issues are deemed  83  important. For example, drill-hole surveys or secondary blasting costs and frequencies may be measures of the drilling and blasting performance.  Goals can be used to direct action but are primarily used as enforcers of positive behaviour. Making goals challenging and achievable provide employees with the psychological need of challenge and success.  Rewards are also effective  positive enforcers that are part of successful performance  management systems. Entire disciplines are dedicated to the study of performance management.  Mine  managers should be aware of at least the basic issues related to employee motivation and performance management, especially when designing measures for a tactical management system.  Performance measures and targets should induce the need to improve, resulting in improvement initiatives. The last type of measures discussed in this section are solution resolving measures, which are those constructed on an as-needed basis in improvement initiatives. These are short term analyses using either pre-constructed performance measures such as unit costs (ABC), or core data within the IT infrastructure.  In summary, Figure 3-19 shows the proposed procedure that should be followed when determining and developing measures.  The A B C measures are used as a base from which to build performance  management, diagnostic, and solution specific measures. Performance management measures are based on the job responsibilities and confirm accountability of managers at various levels of work. Targets are set to motivate these managers to improve their performance and rewards lauded on those that do. As discussed, there are several purposes for developing these measures: •  Motivates improvements (through setting goals, measuring performance, and holding people accountable);  •  Helps managers understand their accountabilities  and processes (by reviewing performance  information and setting goals); •  Identifies sub-optimal processes (through trend analysis and diagnostic tools);  84  •  Facilitates improvement initiatives (by measuring aspects of the system that may be causing harm).  SYSTEMS PLANNING  ISCOPE  "BUILD DAI"A INFRASTRUCTURE  Preparation • » team forming. • education, inspiration • Visualisation • * systems mapping, plan • system components .  DATA"  Design Process map Design data model List data requirements Find Daia Sources  Organise & manage dais collection  DETERMINE MEASURES:'  INFO  BUILD MANAGEMENT INFRASTRUCTURE  ORGANI- > SATION &' NEED /  USING T H E SYSTEM  (IMPROVEMENT  • A B C measures •Performance Mgmt. •Accountability structure, targets & rewards •Diagnostic •Solution specific  Figure 3-19: Determination of Measures  Ensuring that the managers will participate in a tactical management system will require structured rules, procedures and timelines, usually in the form of meetings.  Through these meetings, progress toward  goals are reviewed, identification and derivation of improvement initiatives are undertaken, and rewards are received and given.  3.4  Build Management Infrastructure Phase  A systems plan lays out the development of the capabilities of a tactical management system. Developing an IT infrastructure provides the raw data needed in the management system while measures provide the required information. In order to make use of the tactical management system, actions must be taken by managers to review the information, make decisions, and derive solutions.  The field of study dedicated  to the development of management procedural infrastructure is Organisational Design.  60  Some of the tasks of developing and maintaining the T M M S should be undertaken by others.  For  example, the IT department can be expected to undertake the data collection, and maintenance of the IT infrastructure and software applications that derive the measures. Managers should be expected to spend time looking at performance and cost information, reviewing performance of subordinates and being reviewed themselves. The 'Build Management Infrastructure Phase' of T M M S development is where the  85  activities that will be undertaken by the managers are designed.  This section reviews the types of  meetings and activities that benefit front-line productivity and should be instituted as part of the tactical manager's functions. As was reiterated before, all mines are different; therefore, a specific mechanism for all mines is not discussed. The types of meetings, the basic measures used in those meetings, and specific examples of management infrastructure are provided. Prior to discussing these issues however, the timing of the design and implementation of the management infrastructure require clarification as is indicated in the discussion of the systems planning phase.  3.4.1  Timing of Management  Infrastructure  Development  Establishing the management infrastructure is directly related to the plan as laid out in the systems planning phase. Figure 3-3 shows an example of a systems plan where several management components are built in the development of a T M M S . Table 3-1 provides some explanation of the various components of the T M M S .  Note that for every component developed and implemented, the required management  infrastructure is developed prior to establishing the following component. Figure 3-20 shows how the data infrastructure and performance measures phases of T M M S development precede the establishment of the management infrastructure required for each T M M S component. For example the 'informed process based budgeting' component (as discussed in Table 3-1) is designed to produce the performance measures for the superintendents. The first step in constructing this component would involve a detailed plan of how the process based budget will be built. The next step is to ensure that the necessary data is available. The performance measures would then be established, and in this example, the budget is created. Finally, regularly scheduled meetings where the managers review the performance measures are designed and instituted. For example, the meeting will follow a set agenda where the actual performance is compared to the target and a list of remedial actions is documented. In this particular example, the superintendent compares the budgeted performance against the actual performance for that month. Directives to his subordinates are then planned and communicated.  86  Yes  Detailed Plan for Component  Develop data requirements  Develop required measures  Develop management infrastructure  M o v e to next c o m p o n e n t -  F i g u r e 3-20: M a n a g e m e n t Infrastructure Development  According to most change management theory, complex management systems should be implemented incrementally. ' 61  6 2  Similarly, the T M M S components should also be implemented incrementally.  Therefore the 'develop management infrastructure' phase is undertaken throughout the development of the T M M S .  3.4.2  Types of Meetings / Managerial Activities.  Managers must participate in the T M M S by preparing for and partaking in group meetings.  These  meetings or managerial activities are classified into four broad groups: coaching sessions, solution identification , planning, and auditing. Within a single encounter, a group of managers may measure performance, identify solutions, and set goals from which to measure the success of the improvement. Therefore the term 'meeting' refers to a "meeting of the minds". Figure 3-21 shows a flow of inputs and outputs occur where the outputs of one meeting are used in the proceeding meeting.  For example,  consider that a manager does not fulfil his assigned targets when his performance is reviewed.  This  visible, quantifiable gap in performance induces the need to improve through active managerial intervention. A process of determining a solution to the performance challenge is undertaken. Once the solution has been identified, the improvement initiative is planned and quantifiable measures are designed to track the impact of the undertaking.  During a subsequent coaching meeting, both regular and  improvement initiative measures are reviewed, renewing the cycle anew.  Once the improvement target  has been achieved, the improvement measure no longer requires monitoring. Therefore the outputs of one type of meeting are used as inputs in other meetings. The four types of meetings or managerial activities  87  mentioned  above are discussed in further detail in this section in terms of their primary purpose,  responsibility, and frequencies.  Figure 3-21: Flow of Inputs and Outputs between Managerial Activities.  3.4.2.1  Coaching - Performance Review  As was discussed in the performance management section, quantifiable performance should be reviewed frequently and as soon as possible, following the work that had been measured. The primary purpose of a coaching meeting would be for a manager to review the performance of one, or a group of subordinates. The meetings should be held as frequently as the measures would allow. Table 3-5 listed the management time-frame for the various management levels. These time frames also relate to the frequency of calculation and review of the performance measures. For example: •  a foremen should review the unplanned delays and achieved production with his crew daily, or even during the shift;  •  a general foreman should review the key metrics with his foremen on a daily basis;  •  a superintendent should review the costs of the key processes once a month and production once a week with the general foremen.  88  The meeting should not simply be a process of reporting the results.  The meeting participants should  discuss how the results were achieved and any potential issues that might come up. Indicating special conditions why the goals were met or surpassed will institute simple changes that can lead to incremental improvements. More long standing issues can also be raised as a potential opportunity during the solution identification meetings.  3.4.2.2  Solution Identification and Planning  Solution identification meetings are when the tasks, activities, processes, and systems are actively improved.  These meetings are where an improvement initiative is planned, and progress on its  implementation is reported. The foundation of these types of meetings are the assumptions that: •  A l l mines have operating problems which can be corrected;  •  The real cause of the problem must be identified before any changes are made;  •  Employees within the mine should assist in improvement initiatives;  •  The culture of management/engineering in mines is proactive and interventionist and therefore should welcome improvements as part of their duties (as discussed presented in Table 2-2).  These meetings can be more flexible in their scheduling depending on the focus of the ongoing improvement initiatives.  For example, if the improvement initiative of a redesign group is at the task  level, more frequent meetings can be held. Similarly, the project should be implemented sooner. The meeting participants depend on the level at which the work is being redesigned. Again, Table 3-5 is used as a template: if the work is being redesigned at a task level, the experts of that task should be part of the redesign team. In this example, miners and foremen would be the main participants in redesigning tasks to be more efficient. IT experts or other technical support members should be part of most improvement initiative design teams. The mechanics of the meetings are identical to those suggested for Total Quality Management (TQM) or Continuous Improvement (CI) endeavours.  Table 3-6 provides a summary of the  steps, purpose, and tools of these meetings. Most of the tools described are simple and easy to learn. 89  63  Table 3-6: Improvement Processes Stei)  Purpose / Action  Tools  1  The purpose is to select the problem to be investigated.  Flow charts, process maps, and performance measures are the tools which can identify problem areas. Suggestions from participants within the production system are also an excellent source of information  2  Describe current work component  Using Pareto Charts, flow charts, and similar descriptive tools the problem and work component (task, activity, process, or system) should be described.  3  Determine most likely cause  4  Develop solution and action plan  Tools such as fishbone diagrams, force field analysis and spreadsheet tools can aid team members to overlook the symptoms of a problem and identify the root cause. Solutions to problems can be solved using management techniques, technology, or through changes in the system. These changes must be planned and justified, especially if increased spending is needed.  5  Implement the solution / action Pj Review and Evaluate Results a n  6  7  Reflect and Act on successful improvements  3.4.2.3  Change to any system at any level will be met with resistance. Proper implementation procedures should always be taken into account. 64  Results can be tracked through periodic review of the core performance or specifically designed measures. Team members should be commended for successes. Failures should be investigated diplomatically. The lessons learnt should be documented and extended to other areas of the organisation if successful. Steps should also be taken to make the improvements permanent.  Planning  Planning meetings in mining are typically held with both operational managers (foremen, general foremen) and technical personnel (engineers, maintenance co-ordinators, etc.). The general purpose of the meeting is to forecast and plan for tactical issues in the near future. Components of such a meeting can include analysis of the capacity and trends of the system and forecasting performance. Planning meetings are well established in mining as the engineering staff is typically in frequent contact with the front-line management.  A basic example of planning meetings is crew line-up meetings where the  explicit instructions for the shift are explained by the foreman to the crew.  90  3.4.2.4  Audit  Audit meetings are the means by which the tactical management system is maintained and its evolution monitored.  A quarterly meeting is proposed, where the tactical managers assess the successes and  failures of the TMMS. Solutions to the deficiencies identified are planned and assigned to be resolved by tactical managers and/or IT support staff. As with any system, maintenance cannot be under-emphasised. The systems plan is the blue-print for the management system. The impact of the implementation of TMMS components should be evaluated in audit meetings. The decision to further evolve the TMMS can be made in an audit meeting.  3.4.3  Examples of Management  Infrastructure  Two examples of management infrastructure are discussed in this sub-section. The first is a tactical management system designed by the Universal Schedulers Consulting (USC) group for INCO Limited mines. The second example is a management infrastructure suggested for the systems plan suggested in Figure 3-3.  3.4.3.1  INCO Management System  A tactical management system was developed for Coleman, Creighton, and Crean Hill mines over a two year period ending in 1993.  65  Figure 3-22 shows the tactical management system in terms of meetings  and management techniques. Table 3-7 describes some of the components of the system. As can be seen, the system is complex and designed in detail. It is described in a Management Systems Manual.  The system required very large amounts of information, generated from raw data collected throughout the workday. Operators were required to keep track of all delays, productive units, and materials consumed in the production schedule review. These raw data elements were compiled in a spreadsheet and analysed daily. The system was developed over two years where capacities for each process were calculated and  91  summarised into a benchmark matrix. The matrix would be used to compare worker productivity on a daily, weekly, and monthly basis. Not represented in Figure 3-22 is the continuous improvement process that was suggested to be run in parallel. 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VH  £ 2  t3  o  OH  CD  o  tD 43  °t ^>  i>  — H  2f  cn  T3 CU  J"fj  c  2 '5b Hs CD JS JS  CU  °- 3  t50  o  es  -o "a o  tu  3  =  tu  ^s  Q  CU  C  •S •£  tu  cx-a .23 a 43 J oo  C  60  "3  CT)  43 *3  S  oo  tu  > 3  VH  3  —  VH  oo tu  B g 6 CT) a, « Pr o x>2 43 c>0  CD  u  H  a .3 ."3 -b  =3  Is 1s  &  o  —  ,o  <+H  -a  CTJ  e  *-«—i \ri  tu  2 ^  Matr  s  -o c ,2 C  43  s B  O  Bene  HI  c  '+3  Forei Tren  H-» S  s o  ro  CD  e3  '• <D  cn °(i 2  The system was developed through a 1.5 year process where USC consultants undertook time studies. The use of the system was discontinued a few weeks after it was completed (as reported by all foremen who were present at that time). There were several reasons for the discontinuation of the system. The most important was a change in upper management support. A new mine superintendent, not present during the initial justification of the project, was promoted into the position a few weeks after the system had been completed. The system had lower-level management support such as foremen and general foreman because the management system clarified their functions, reduced the amount of waste, and made operators more accountable for delays. Lack of training and IT support were the second main cause of discontinuation. The foremen were inadequately trained in the necessary management techniques, statistics, and spreadsheet tools needed to create the graphs and undertake the daily, weekly and monthly analyses. A computerised IT infrastructure was not yet available, therefore the data was collected on paper forms and entered into various dispersed spreadsheets. Cost information was omitted for lack of availability and perceived importance. The system was implemented as a fully operational, integrated tool. There was no gradual progression into an increasingly more complex yet effective tool. Miners did not support the system as it required substantial amounts of time to complete the daily forms. From this experience it is concluded that a TMMS needs: •  IT infrastructure;  •  Gradual introduction of measures and methods;  •  Stepped evolution of the system into more complex elements;  •  Cultural considerations such as training requirements.  3.4.3.2  Suggested Management System  Figure 3-23 represents a suggested management procedural infrastructure within the TMMS systems pi an outlined in Figure 3-3. The process begins with the mine plan being filtered into short term  mine  production targets. This allows the calculation of the required productive units using the capacity analysis and process map. This also helps define performance targets for all levels of management. The frequency of meetings relates to the management and work level. For example, for task and activity 95  management, a daily or weekly meeting reviewing performance, the plan, and improvement initiatives should be undertaken between the operators and foremen. A scheduled series o f regular meetings can be set up so that individuals meet with required information-in-hand at a specified time.  The element unique to all components is the link to the IT infrastructure and common measures at a particular level o f management.  Calculations, analysis, reports, and information distribution  facilitated through the ubiquitous IT infrastructure.  are  The standard measures are used as the medium o f  communication between levels o f management and components o f the system. For example, i f the short term plan reports the productive unit as drill footage, the unit costs should be reported as dollars per drill footage, and the performance review should  report the progress and targets o f the drilling process in  $/foot and footage to date.  Capacity Analysis  Compile Targets  / I  1  Regular Meetings  T h e s e meetings vary in frequency and participants depending on the level of work investigated.  A s needed  Note that most elements are automated through the IT infrastructure  Figure 3-23: Proposed Management Procedural Infrastructure  96  3.4.4  Final Considerations for Management Infrastructure Development  Phase  Traditionally, tactical mine managers were not expected to undertake regular analyses, be quantitatively accountable, or use improvement tools.  45  Instituting mechanical procedures will help motivate these  individuals to learn the skills needed to participate in such a system. Good implementation practice dictates that such cultural shifts should be undertaken slowly and in a step by step fashion. Organisational development theory can help design good management infrastructure and suggestions on how to structure the meetings themselves. Basic meeting guidelines include: •  Understand that the meeting is a process of planning and review;  •  Start on time;  •  Start with introductions (if new people are present);  •  Review the agenda;  •  Ensure everyone participates;  •  Set and comply with ending time;  •  Maintain decorum, enforce rules of good behaviour;  •  Have a meeting chair;  •  Completely resolve matters before moving on to the next topic;  •  Ensure that the targets of the meeting have been met;  •  End with a review of the decisions reached and assignments made;  •  Schedule next meeting.  Some of the 'best practice' in other industries may not work well in mining. For example, in reviewing performance, public speaking may be required. Fiedler mentions how front-line supervisors in mining typically dislike presenting to peers. This demonstrates that for every management activity or 66  managerial decision, the cultural implications must be considered and planned for.  As discussed  previously, a conceptual mapping tool called Systems Thinking can be used to anticipate the effects of a behavioural system and identify appropriate countermeasures.  50  97  As with all other steps in the development of a tactical mine management system, the best strategy is evolutionary. The management infrastructure should be developed alongside the components as laid out in the systems plan. Therefore the number and complexity of meetings and management activities should increase as quickly as can be tolerated by management.  Figure 3-24 shows how the phases of systems  planning, data infrastructure construction, measures determination, and management infrastructure have been discussed. The figure also lists the core components of the organisational design that ensures that performance is reviewed, system issues are identified and solved, the performance targets are accurate, planning issues addressed, and that the T M M S is maintained.  The management infrastructure lays out  the activities that employees within the mining system must undertake.  Each meeting is designed to  produce a particular result that is used in another part of the system. The final outputs from the T M M S should be a more active and informed front-line management and measurable increases in mining system performance. The first four phases discussed are the steps to be undertaken and issues to be considered when developing a T M M S . However, in order to clarify how this system would work, the fifth and final section of this chapter describes how the completed T M M S would function using a hypothetical example.  SYSTEMS % PLANNING -  SCOPE  Preparation • ream forming, education, inspiration Visualisation * systems mapping, pian system components  BUILD DATA INFRA- . STRUCTURE  • • • • •  [DATA*  Design Process map Design data model List data requirements Find Data Sources Organise & manage data collection  .-.DETERMINE MEASURES  •^INFO;'-  • A B C measures •Performance Mgmt. •Accountability structure. targets & rewards •Diagnostic •Solution specific  .BUILD ORGANI- N 'MANAGEMENT SATION & INF • NEED / STRUCTURE  USING T H E SYSTEM  IIMPROVEr. t MENT  Organisational Design: • Measure - coach - review performance • Solution identification • Planning - set goals • Audit system  F i g u r e 3-24: B u i l d i n g M a n a g e m e n t Infrastructure Phase C o m p l e t e  3.5  Using the System Phase  Management can begin using the T M M S as soon as the data infrastructure, performance measures, and management infrastructure have been implemented. The system will undergo a state of change that will 98  involve implementing added components according to the systems plan as managers become more acquainted with this new type of control and visible accountability. This final section briefly touches on some of the implementation issues that need to be considered when establishing a T M M S . Figure 3-25 shows how the T M M S ' series of meetings induce a need to change, determine and plan that change, refine the targets to monitor the.change, and audits itself. Changes to the T M M S are undertaken through the auditing task where the four phase methodology is once again used to either alter the existing components or implement additional management components.  I m p l e m e n t next m a n a g e m e n t s y s t e m c o m p o n e n t a n d / o r alter c o m p n e n t s  SYSTEMS PLANNING  BUILD D A T A SCOPE)  V  INFRASTRUCTURE  K  DATA.)  7  DETERMINE MEASURES  K  ' INFOi)  /  BUILD MANAGEMENT INFRASTRUCTURE  ORGANI-X SATION,;&  )  NEED  /  Figure 3-25: Using the System  3.5.1  Implementation Issues  Performance visibility is the most immediate difference between traditional management systems and the type of T M M S developed from the methodology. The move from a highly subjective and qualitative performance to a highly quantitative and active management is a fundamental cultural shift that will require a strong implementation strategy. Management system implementation strategies are discussed  99  by many authors, as can be seen in the reference summaries in the appendices. that in order to be successful:  Bashein et. al. suggest  67  •  Start small  •  Conduct personnel transformation training  •  Design improvement initiatives around growth opportunities rather than cost cutting  •  Provide training in management techniques, personal empowerment, and teamwork ;  •  Communicate frequently about the opportunities that exist in change;  •  Initiate easily achievable projects leading to visible acheivements initially;  •  Actively involve IS and HR specialists in all aspects of the system.  3.5,2  Using the TMMS  The first four sections of this chapter reviewed the procedure to follow and issues to consider when developing a T M M S .  This subsection provides an anecdotal hypothetical example of using the T M M S  once the above methodology has been followed. In this example the following is assumed to exist:  •  Systems plan: several components of the systems plan have already been implemented. Further components have yet to be identified.  •  Data infrastructure: a data infrastructure of productive units, their indices of quality, and cost data organised according to the process;  •  Performance measures: information is available and understood relating to performance measures and targets for each manager. Furthermore, an automated capacity-assessment tool has been provided listing the expected performance rates for every heading and that was also used for planning purposes;  •  Management infrastructure: series of procedures and meetings is organised whereby managers review their performance measures, identify potential solutions, and plan for those improvements and for upcoming production constraints.  100  3.5.2.1  Foreman - Coaching Example  Table 3-8 provides the foreman with estimated rates that his miners should be able to achieve and was calculated from time studies and historical data. For example, the development Jumbo operator should be capable o f drilling two rounds in a single day and the mucking rate from a V R M stope should be about 30 buckets per shift. In the daily line-up meeting in the morning, the foreman lines-up his men according to the mine priorities as laid out in the engineering mine plan. Throughout the shift, the foreman visits the various headings and inquires about the progress o f work. For those areas behind the assessed rate, the foreman discusses the reasons for the gap in productivity. They discuss possible solutions and the day's safety issue. For those headings that are ahead o f anticipated production, the foreman takes note o f how added productivity was achieved. Rewards and praise are lauded on the men who showed initiative while coaching those who were behind. foreman's area.  A t the end o f the shift, the production data is compiled for the  Information related to the equipment, workplace, and process (in-process work) is  communicated to the foreman on the next shift in the same area. He also orders items for the material stores that need to be replenished, charging the appropriate items to the process where they are consumed. For example, bolts and screen are purchased for the development processes and I T H drill bits for the longhole drilling process. The production statistics for the day for all the foreman's areas are entered into the information infrastructure, allowing the mine's daily performance to be measured.  Table 3-8: Example of Foreman's comparative rates  Process  Equipment  Design  Development Development Mucking Mucking Mucking  Jumbo 671 (2boom) Jumbo 791 ( l b o o m ) Scoop 114 - 8yrd Scoop 1 1 4 - 8yrd Scoop 225 - 1 Oyrd  5x4 4x3 Stope 4800A Stope 4800B Stope 4800C  101  Expected Performance Rate I 3 rounds / shift : 2 rounds / shift ! 30 buckets / shift ! 20 buckets/shift ! 18 buckets / shift  Resulting Expected Mine Performance 33 feet adv./shift 22 feet adv./shift 300 tons/shift 200 tons/shift 216 tons/shift  3.5.2.2  General Foreman -Improvement Initiative Example  The General Foremen (GF) review their performances with the Superintendent in the weekly meeting. General Foreman A (GFA) displays his performance over the last 30 days showing costs and productivity, as seen in Figure 3-26. Seeing the gap in performance, the Superintendent challenges GFA to perform better and requests that a plan of action be presented in the next meeting scheduled in one week.  Running Cumulative Advance - Last 30 days 400  Days  Figure 3-26: Productivity and progress performance measure for GFA. All GFs have information related to the productivity trends for the individual shifts, workplaces, and equipment utilisation.  Figure 3-27 and Figure 3-28 shows that a high-priority workplace, a ramp  development, is consistently below its rated productivity and the trends show that it will not be completed by the due date on the mine plan. The operator comparison graph shows that the crews on the three cross shifts working in the area have virtually identical performance rates, indicating that worker productivity is not the issue. Similar graphs show that equipment availability is also not the issue causing the poor performance. Analysis of the delay information shows that "no material" is also not the problem. However, mucking and bolting processes seem to be taking far longer than what should be expected from  102  capacity analysis. This information is readily available for comparison using the database tool's G U I for which the G F s are trained.  Running Cumulative A d v a n c e - Last 30 d a y s - All development H e a d i n g s  140  Other Workplaces  0,120 o |ioo ! >  80  !S  60 3 E E 40 3 o 20  j _  - -*  m -  *  \ Ramp  0  i  1  1—  10  15  20  i  i  25  30  35  -DaysAct.-Ramp  -Act.-Drift A  •Plan-Ramp  Figure 3-27: Indicative Productivity Graphs.  Running Cumulative A d v a n c e - L a s t 30 d a y s - R a m p  120  0  20  40  Days  Figure 3-28: Ramp actual progress compared to plan  103  - Plan-Drift A  GFA discusses various options with his foremen on possible reasons for this lack of productivity. The discussions reveal that the ramp heading is plagued by a long travel time, de-watering issues, bad ground conditions, and long distances between the storage areas and the face. Every time a round is taken, considerable over-break occurs due to a weak zone (ground condition), resulting in poor quality walls and back that require more time to muck-out, support, and eventually recondition. After a few minutes of discussion, it is assessed that taking 8 foot rounds instead of the standard 12 foot and increasing the number of perimeter holes would significantly reduce the damage and perhaps speed-up bolting. A process of shotcreting is undertaken after every 100 feet of advance. It is estimated that there is 10% additional overbreak when a 12 foot round is taken. Therefore a proportional amount of additional shotcreting will be required to maintain the standard quality of drift. The surveyors and geologists indicate that the weak zone will persist for another 48 feet.  With performance and cost information  readily available, the new plan can be easily compared against the status quo.  CO CO LU  Development  O O a:  >-  > hP <  Prep face  —  •  Set-up Drill  •  Drill  —  •  Tear-down  CO  <  CO  ;<  Get Material  | |  ^  Set-up Bolter  Bolt  Figure 3-29: Hierarchical Process Map for Development Process  104  Tear-down  A redesign group consisting of a foreman, the best development and shotcrete crews, a technician familiar with the IT infrastructure, and the GFA is assembled and given the task to design and help implement the improvement initiative. Using the simplified process map, the group assigned to plan the improvement identifies the tasks which will be changed. Using the historical and planned performance information, the new rates for the alternative process can be calculated. Table 3-9 compares the standard process with the new process. The general foreman is accountable for both unit cost (ft. advance being the primary cost driver) and meeting the mine plan's deadlines. Table 3-10 shows that the alternate plan results in a better unit cost. Table 3-11 shows that the alternate plan does not result in an increase in development rate. Therefore, the decision becomes a trade-off between costs and meeting the schedule, although, considering that only three additional shifts are needed in the alternate plan, slightly altering the development method seems to be the best decision.  Table 3-9: Performance Information Compared Time (hrs)  Activity  Task  Drill  Prep  Current 0.5  Set-up  0.5  Drill  2.5  Tear-down  Alternate  Comment for alternate  0.5 Same 0.5 Same 1.75 8 ft but more p. holes  0.5  0.5 Same  Load  all  2  2 Same  Mucking  Mucking  3  2 less muck  Bolting  Get Material  1.5  Set-up  0.5  Bolt Tear-down Total cycle time Including delay & shift chang Drill steel length Bootleg Total advance  4  1 more material needed 0.5 Same 2 easier and less back  0.5  0.5 Same  15.5  11.25 hours  5  4 shifts  12  9 feet  1.5  1 feet  10.5  8 feet adv.  105  Table 3-10: Cost Comparison Factor  Current  Manpower costs for development crew of 3  Alternate  600  Cycle time per round  5  Manpower costs per round  2944  Unit  600 $ / shift-crew 4 shifts / round 2466 $/round  Manpower costs by foot of advance  280  308 $/ft. adv.  Remaining (equipment, materials, & overhead)  700  700 $ / ft. adv.  Total unit cost ( G F performance measure)  980  1008 $/ft. adv.  Shotcrete costs Process cost (surface area is cost driver) Perimeter of back & walls Total shotcrete costs  15  15 $ / f t  50  45 ft  743  Unit c o s t s for final drift  1723  2  2  675 $ / ft. adv. 1683 $/ft adv.  Table 3-11: Development Rate Comparison Factor  Current  Rate  Alternate 2.1  Unit  1.9 feet / shift  R e m a i n i n g adv.  48  48 feet  Total time  22  25 shifts  The following week, in the meeting with the superintendent, GFA lays out the plan as designed by the improvement team. The tradeoff between the rate and costs are weighed and the superintendent helps make the decision with the General Foreman. The cost targets for the month will reflect the 1683 $/ft adv. for the 48 feet remaining. The minor gap in productivity is excused as the resulting solution reduces cost. The superintendent and GF identify that overbreak could be a concern in other areas and request that surveyors measure overbreak for each round and that information is automatically entered into the workplace database so that long-term monitoring of drift quality can be undertaken. The meeting moves onto other concerns.  106  3.5.2.3  Auditing Example  Management has requested that a measure of overbreak be monitored long-term as part of the workplace database. Additional toping added to the database.  measurements will be required. Data items of height and width will be  Additional procedures are then put in place for when surveyors measure  development drifts. Surveyors are asked to record 4 additional tope measurements for each round. A query is programmed to compare the designed and actual dimensions of drifts on a quarterly basis for upper level managers. A diagnostic query is programmed to run every time the development dimensions are updated and creates an exception alert when areas of overbreak exceed an acceptable amount. The workplace database is connected to the performance database, therefore the query tool can report which operators drilled the rounds exceeding the allowable overbreak.  The foreman can then coach that  operator on taking more care when drilling the outlying and perimeter holes.  The quarterly reports  provided to upper-level managers can be used to coach the appropriate foreman to take more action on the issue of overbreak, or reward individuals for keeping overbreak under control.  3.5.2.4  Example Synthesis  The example above shows the cycle of meetings as seen in Figure 3-21.  Once a gap in performance  expectations is identified, tactical managers are coached into finding solutions.  Active management  intervention seeks out possible causes, using process based performance records that can be compared according to workplace. Using the available standardised process map, historical performance measures, and accepted process costs (and cost drivers), the solution(s) are justified and planned. New targets are set to conform to this change in plan. From Table 3-5, it can be seen that this is an example of an activity-process level change at the general foreman level across a timeline of 1 week to 1 month. The auditing aspect of the surveying shows how the T M M S can be expanded as needed by augmenting the data infrastructure (added toping data), designing measures (measuring by workplace and operator), and meetings (induced exception meeting for the foremen and quarterly overbreak review by upper managers).  107  Using the system is relatively simple if the T M M S is designed correctly. The methodology as proposed in this chapter is intended to result in a T M M S that conforms to the requirements of modern tactical management systems. To reiterate, the purpose of this thesis is to develop a methodology that can create a T M M S which greatly expands the abilities of tactical managers in mines. These managers should be able to hold their subordinates quantitatively accountable, have tools to aid in identifying, planning, and implementing solutions, and improve the T M M S . The core components that allow this to happen are: •  Determining what is needed, (visualising).  •  Collecting raw data into an IT infrastructure using processes as the focal point of design (automated through IT)  •  Converting the data into measures thereby creating information (automated through IT)  •  Instituting an organisational design whose objective is to design a tactical quantitative management system.  •  In using the system, improvements to the mining system are made, along with the auditing functions that induce a new but involved cycle of augmenting the data infrastructure, designing new measures, and instituting management intervention.  Figure 3-30 shows this process, along with a rough time-scale needed to undertake the initial T M M S development.  Improvements induced by deficiencies identified in the auditing function, can take  anywhere between one week to a few months.  SYSTEMS PLANNING 3 Weeks  SCOPE,  BUILD DATA '• DATA! INFRASTRUCTURE 16 W e e k s  DETERMINE MEASURES  INFO  9 Weeks  BUILD MANAGEMENT INFRASTRUCTURE 4 Weeks  Figure 3-30: Using the System Resulting in Improvements for Mining and TMMS  108  3.6  Synopsis of Mechanics of the TMMS Methodology  The research objective in this thesis is to determine the core components in a T M M S .  The five phases  presented in this chapter provide the theory and reasoning behind each o f the phases o f development and use.  The systems planning phase provides the human infrastructure needed to form the T M M S . There are two main products o f the planning phase. The first product is a team that is educated and inspired with enough resources to undertake the complex design and implementation o f the T M M S .  The second product is a  plan o f a series o f management components that would ensure an adequate IT infrastructure, sufficient measures, and complimentary management systems.  The series o f components should include the  creation and maintenance o f an IT infrastructure, the use o f measures in management systems to inspire performance improvements, while the last components are mechanisms for improving the production system.  Developing the IT infrastructure requires the designers to understand the needs o f the basic technology used in information systems. Data models, collection mechanisms, and databases w i l l need to be created. The methodology discussed in this chapter provides the basis necessary for IT infrastructure designers to appropriately design and construct the data requirements.  Developing measures require a substantial understanding o f cultural and motivational issues.  The  discussion and examples o f anthropology presented in this chapter should facilitate the creation o f measures that can aid in steering cultural behaviour toward an active pursuit o f appropriate improvements in the production system.  Establishing management infrastructure allows the measures to be reviewed, discussed, and acted upon thereby changing behaviours. Organising meetings or adding items in pre-existing meetings enforces the  109  use of the performance measures, and requiring decisions or improvements to be set in such meetings enforces the desire to improve.  One of the key benefits of this methodology is the ability to use modern management techniques. The components of the TMMS are frequently modelled on these techniques. For example, establishing a TMMS component such as 'capacity analysis' or 'process optimisation,' (as seen in Figure 3-3 and Table 3-1) can be established by the continuous use of the Theory of Constraints. This methodology uses formal management techniques to design measures and management infrastructure.  Management  techniques can also be used in improvement initiatives inspired in the use of the system. Therefore management techniques are used in both the development and use of a TMMS.  Tactical managers in the manufacturing industry are trained in these tools as the central component of their education as Industrial Engineers.  Unfortunately, mining engineers do not include industrial  engineering as part of their education (perhaps a brief introduction of operations research). Appendix G reviews some basic management techniques that may prove useful in a TMMS.  Scoble, M.. "Strategic Planning for Advanced Mining Technology." Int. Jnl. Mineral Resources Engineering, Imperial College Press, London, Vol. 6, No. 3, 1997, pp. 97-116. 1  Whitten, Jefrey I., Bentley, Lonnie D., and Victor M . Barlow. Systems Analysis and Design Method. 3rd Ed., Boston: Irwin 1994.  2  Mertins, Kai, Peter Heisig and Oliver Krause. "Integrating business-process re-engineering with human-resource development for continuous improvement." International Journal of Technology Management. 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June 1 , 2001. <http://www.sap.com/solutions/industry/mining/pdf/SAP_Mining_solution.pdf> 15  st  McFadeden, Fred D., and Jeffrey A Hoffer. Database Management. Cummings Publishing Company Inc. 1991. 723 p.  3 Ed., New York: Benjamin  16  Harrington, Jan L . Relational Database Design Clearly Explained. Professional/Academic Press. 1998. 286p. 17  rd  New York: A P  Allen, L J. Implementing Quality in the Technical Computing Environment - A Case Study from Pasminco Mining - Broken Hill. 25 Conference on the Application of Computers and Operations Research in the mineral Industry. Brisbane 9-14 July 1995 pp.479-481. 18  th  Richard, Paul L . "Effective Production Monitoring In Open Pit Mines: Beyond the Technology." Proceedings of the 100 Ann. Gen. Meeting of the Can. Inst, of Min. Met. and Pet. Montreal, 1998, C D R O M , 8p 1 9  th  Aldowaisan, Tariq A . and Lofti K. Gaafar. "A Framework for developing technical process reengineering designs ." Computers in Industrial Engineering. Vol.32 no.3, pp.657-670 2 0  Modular Mining Systems. Dispatch ® Underground. June 7 , 2001. <http://www.modularmining.com/modular/products/underground/> 2 1  th  Amram, Martha and Nalin Kulatilaka. "Disciplined Decisions: Aligning strategy with the Financial Market." Harvard Business Review. January-February 1999  2 2  Flores, Maria A . "Tricks for Teaching Old Dogs New Tools: Training Users in a Reengineering Environment.'" Proceedings of the 44 Annual Conference of Theory and Research 1997 pp.318-321 2 3  th  Devine, Micheal and Ian Brogen. "Information Technology Planning: Critical for Implementing Advanced Manufacturing Automation." A UTOMIN 6: 6 Canadian Symposium on Mining Automation, Oct. 16-19, Montreal 1994 pp.239-356. 2 4  th  Ill  Pervan, Graham P. "Implementing and Sustaining Executive Information Systems: Influencing Factors in a Mining Industry Context." Proceedings of the 28 Annual Hawaii International Conference on System Sciences of the IEEE, 1995 pp. 101-109. th  Frost, Bob. "Performance Metrics: How to Use them and How to Get More Leverage." Magazine. Feb 16, 2001. <http://www.pbviews.com/magazine/articles/young.html> 2 6  Perform  Baiden, Greg and Louis Zanibbi. "The Application of Activity Based Costing in a Mining Environment." Telemin 1, 5 International Symposium on Mining Automation, 1999, Sudbury Ontario, CD-ROM 2 7  th  Cooper, Robin and Regine Slagmulder. "Strategic Cost Management: Cost Management for Internal Markets." Management Accounting, April 1998, pp.16-17 2 8  Caspari, John A . Allocation of Investment Cost to Operational Expense: a TOC Approach. 28, 1999 <http://users.aol.com/capariO/toc/RCO.htm>  2 9  Roberts, Malcolm. "Australian coal - the need for discipline." Australian 1999 p. 10-13 & July 1999 pp.14-16  3 0  November  Journal of Mining, June  Hawkes, P. "Using Simulation to Assess the Impact of Improvements in Drill and Blast on Down Stream Processes." Proceedings of the Mine to Mill 98 Conference, Brisbane Australia, October 11-14 1998, pp.209-217  3 1  Peterson , D. J., LaTourrette, Tom and James T. Bartis. New Forces at Work in Mining: Views of Critical Technologies. R A N D Institute. 2001 (also available online: http://www.rand.org/publications/MR/MR1324/) 3 2  3 3  Industry  Kaydos, Will. "Managing by Measuring Performance." Quality Digest, March 1993, p.40-46  Corkins, Gary. "Activity-Based Performance Measurement." Perform Magazine. <http://www.pbviews.com/magazine/articles/activity_based.html> 3 4  Dictionary.com "Accountability." Webster's Revised Unabridged Dictionary. <http://www.dictionary.com/cgi-bin/dict.pl?term=accountability> 3 5  February 16, 2001  January 4, 2001  Hall, Barbara. "What is Ethnography?" Department of Anthropology, University of Pennsylvania. May 23 , 2001. <http://www.sas.upenn.edu/anthro/CPIA/METHODS/Ethnographv.htm> 3 6  rd  Chiseri-Strater, Elizabeth and Bonnie Stone Sustein. Field Working: Reading and Writing Upper Saddle River, N.J.: Blair Press. 1997. 3 7  Research.  Ibarra, Robert and Joyce Thompsen. "Mining Organizational Culture: Critical Knowledge Areas and Breakthough Concepts." Innovation in Technology Management - The Key to Global Leadership. PICMET '97: Portland International Conference on Management and Technology, 1997. pp.349 -352. 3 8  Senge, Peter M . , The Fifth Discipline: Doubleday. 1990 3 9  The Art & Practice of The Learning  Blanchard, Ken and Sheldon Bowles. Gung Ho! 1998  4 0  Organization.  New York:  New York: William Morrow and Company Inc.  Cooper, Robin and M . Lynne Markus. "Human Reengineering." Sloan Management Review, Summer 1995. pp. 39-49  4 1  112  Schaffer, Robert H. The Breakthrough Strategy. Cambridge, M A : Ballinger Publishing Company, 1988 4 3  Jacob, Rahul. "The Search for the Organization of Tomorrow." Fortune, May 18, 1992, pp. 93-98  McKenzie, M . , W. Brass, S. Waring, P. Babulic and D. Kroll. "Musselwhite Mine Benchmarking Study: "A Model for People Management"." January 25 , 2000 Benchmark Study. INCO Division Web Information. August 2, 2000. <http://sud intranet/benchmarking/>  4 4  th  Althouse, Ronald and James A Peay. "Facilitating Supervisory Performance: A Workshop Approach." Human Engineering and Human Resources Management in Mining. Proceedings of the Bureau of Mines Technology Transfer Seminars, Pittsburgh, PA. July7-8, 1987; St. Louis, M O . , July 1516, 1987; San Francisco, C A , July 21-22, 1987. (Pittsburgh PA.: U.S. Department of Commerce) pp. 128-137 4 5  Bell, Cecil H . "The Hecla Story: Organizational Development in the Hard-Rock Mining Industry. " Human Engineering and Human Resources Management in Mining. Proceedings of the Bureau of Mines Technology Transfer Seminars, Pittsburgh, PA. July7-8, 1987; St. Louis, M O . , July 15-16, 1987; San Francisco, C A , July 21-22, 1987. (Pittsburgh PA.: U.S. Department of Commerce) pp.138-148 4 6  Bascur, Osvaldo. "The Industrial Desktop - Real Time Business and Process Analysis to Increase Productivity in Industrial Plants." Proceedings of the 2nd International Conference on Intelligent Processing and Manufacturing of Materials, Honolulu, Hawaii, 1999, pp.829-837.  4 7  Cooper, Betty. "Goals: The Driving Force Within Organizations." Center for the Study of Work Teams. CSWT Papers. January 29, 2001. <http://www.workteams.unt.edu/reports/bcooper2.htm>  4 8  University of North Texas,  Daniels, Aubrey, C. Performance Management: Improving Quality Productivity through Reinforcement. 3 Ed. Tucker, GA: Performance Management Publications. 1989. 4 9  Positive  rd  Cooper, Betty. "Systems Thinking: A Requirement for all Employees. " University of North Texas, Center for the Study of Work Teams. CSWT Papers. 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(Pittsburgh PA.: U.S. Department of Commerce) pp. 149-153 6 6  Bashein, Barbara, Markus, M . Lynne and Patricia Riley. "Preconditions for BPR success and how to prevent failures." Information Systems Management, Spring 1994 pp.7-13.  6 7  114  Chapter 4 Application of the TMMS Methodology at INCO  In the development and application of the original reengineering concepts, both Hammer and Davenport, the pioneers of reengineering, did not derive the reengineering methodology in isolation.  1,2  They had  observed and analysed what some companies had accomplished by restructuring their organisations using IT. In the development of the management methodology proposed in this thesis, a general framework is devised, then improved through successive applications at several mining operations.  The general  framework for this work was developed from personal experience, extensive literature review, and analyses of management techniques and field projects at mines. Chapter three described the methodology that was implemented at various mines whose impact is discussed in this chapter. The primary purpose of this chapter is to describe the results of applying the methodology and the of impact a modern, IT empowered TMMS. It is based on the field work conducted in underground mines in the Sudbury area.  The consideration of cultural issues is a key aspect which distinguishes the proposed TMMS development methodology. Workforce behaviour is a factor influenced by the history and community of the area and management philosophy. This chapter considers the history of the Sudbury area and INCO Limited. INCO is Canada's second largest mining company and its Ontario Division is based in the Sudbury region. The production, management, and past tactical management improvement initiatives within the Ontario Division are reviewed. A history of the recent developments of IT infrastructure is also discussed since it prompted the interest by INCO in the TMMS methodology. There are three underground mines in the West Mines Complex: Creighton, Coleman/McCreedy East, and Crean Hill. Work for this thesis has been undertaken at each of these three underground nickel mines. The pertinent information about each of these three operations and of the West Mines Business Strategy unit is discussed.  This  background information will conclude by briefly describing the research project and collaboration with INCO. The remainder of the chapter will follow the five phase structure used in the previous two chapters, where the individual project steps, procedures, impact, and results will be laid-out.  115  4.1  Background  The following background will establish the long history of INCO which in turn explains some of the cultural characteristics of the metal producer. The background begins by detailing the origins of the company, then describes some of the cultural characteristics.  4.1.1  Origins  INCO was formed under the name Canadian Copper Mining company in 1883 by an American named Samuel K. Richtie to build the Murray copper mine in Copper Cliff (now a suburb of Sudbury). The 3  nickel in the ore was considered a contaminant until the 1890s when a market for nickel was established upon the discovery that it could be used for manufacturing steel armour plate. Consequently, INCO has its roots in the Sudbury region. Through aggressive investment and marketing, INCO held a monopoly for nickel until the 1970s, where a series of market downturns and strikes allowed competitors to break the monopoly, which was never regained. At its largest, the company would eventually have operations 4  in Ontario, Manitoba, Guatemala (now terminated), Indonesia, and processing facilities in the United Kingdom and the United States.  INCO currently employs 10,143 people world-wide. In 2000 the  company had listed assets of $US 9.676 billion, net sales of SUS2.917 billion and net earnings of $US 400 million.  4.1.2  Organisational  Culture  Overview  Two contrasting cultures, management and labour, were characterised by Clement in the book Hardrock Mining: Industrial Relations and Technological Changes at INCO . According to Clement, the tactical 4  management between INCO Divisions is reported to have different cultures. This may reflect the different forms of worker resistance to change that exist at their various regions of operation, namely Sudbury (Ontario Division), Thomson (Manitoba Division), and Indonesia (PT INCO). This is also indicative of the flexibility of management culture as it changes to attempt more effective workforce 116  coordination mechanisms.  Clement also mentions that a tradition of antagonism has existed between  workers and management despite changes to worker rights since the early 1980's. The incentive system, 4  established in the 1970s, is the mechanism used to motivate workforce. The current incentive system is based on time and resulting production.  The incentive system is organised by contract. The productive units for each contract are measured and managed by the mine surveyors. The total amount of productive units is calculated for the month, along with the number of hours of work for each miner on a particular "contract". Rates are set where a specific amount of productive units are expected to be completed in a set time. Figure 4-1 shows the calculations undertaken for a miner's bonus. Figure 4-2 is a numerical example of some of the activities within the development incentive contract. There are many rated activities within the inventive system (distributed through a 1 inch binder). All the units have to be collected by the incentive administrator, typically a surveyor, and entered into a DOS based computer mainframe program.  n  Contract allowable hours = } (number of productive units) x (rated number of manhours per productive unit) f  Percent performance =  contract allowable hours total manhours changed to contract  xlOO  Incentive earnings in percent of base wage = (percent performance - 75) x 0.4 Total incentive earnings = incentive earnings in percent of base wage x total $ of wage earned  Bonus for Miner = x  hours charged to contract for Miner total manhours charged to contract  x  x total incentive earnings  Figure 4-1: Calculation of Bonus for a Miner on Contract  5  117  Rate Descriptions  # of Units  Rate  Resulting Allowable  (Manhrs/unit)  Manhours  Install Bolts & Screens (unit= # of bolts) 1.5 ft bolt & screen  56.000  0.240  13.440  2 ft bolt & screen  42.000  0.275  11.550  6 ft bolt & screen  419.000  0.390  163.410  8 ft bolt & screen  220.000  0.440  96.800  98.000  0.525  51.450  Remove - 4 inch and under  80.000  0.041  3.280  Install - 4 inch and under  30.000  0.021  0.630  8 ft epoxy resin b&s Install Vitaulic Steel Pipe (unit = feet)  | *** other work codes and units *** total resulting manhours  1002.94  Actual Manhours charged  695  percent performance  144  Incentive earnings in percent of base wage  27.6  total wages earned for contract  16368.51449  total incentive earnings  4517.71  Figure 4-2: Example of Rates and Incentive Calculation for Development  6  The numerical example above shows the detail of production information necessary to calculate incentive reporting. For example, the type, length, workplace, and miner must be known for every bolt, screen, and pipe installed. The issue of data collection will be discussed further in the context of INCO's current IT infrastructure.  The work culture of INCO's management and workforce has been studied in depth by Clement and other 4  authors. It is understandably a politically sensitive topic, aspects of which may be inappropriate for this research.  The basic components of its front-line culture appear to be the autocratic nature of its  management and the militancy of its union.  Further discussion of cultural issues in the context of how a  T M M S may help to accommodate cultural considerations, is within the limit of the scope of this work. This project deals with the development of a T M M S across the West Mines Complex: therefore, cultural issues will be discussed only when they pertain to the development and use of a T M M S .  118  4.7.3  West Mines Complex  The West Mines Complex (WMC) is comprised of three mines and two service units each headed by a superintendent. Figure 4-3 shows how a centralised maintenance unit co-ordinates activities between the different operating plants. The business unit has only two employees and is responsible for co-ordinating human resource activities and evaluates and implements new business/management techniques. tactical management hierarchy consists of four levels.  The  Table 4-1 summarises each level in terms of its  main functions, variances, work levels, and time frame. The codes, such as S2 (abbreviation for stratum II) for general foreman level, signify the level of promotion, authority, and pay-scale of the managers. For example, a Chief engineer would be considered an S2 while a Senior engineer, an SI. Table 4-2 summarises the key production, manpower, and equipment issues of the operating mines in the West Mines Complex.  Manager Mine Supt. Coleman & McCreedy East  Mine Supt. Creighton  Mine Supt. Crean Hill  Figure 4-3: West Mines Upper Management  119  Service Superintendant Business Services  Service Superintendant M T C E Supt.  T a b l e 4-1: T a c t i c a l M a n a g e m e n t H i e r a r c h y a n d J o b F u n c t i o n i n the O n t a r i o D i v i s i o n  Level  Description  W o r k level  Time  Code  Variances  1 to 5 years  S4  •  1 month to 1 year 1 week to 1 month  S3  S2  • • •  Operating Logistics Maintenance  1 day to 1 week  SI  • • •  Operating Project Services (maintenance, electrical)  frame  Manager  One manager per complex  Superintendent  One per mine  General Foreman  One per geographical area or service  Foreman  One per work crew, several cross-shifts per geographical area  Manages several mines (multisystem or complex) Managers a group of foremen at the system level Manages a group of foremen, at the subsystem or process level Manages a group of miners, at the activity or task level.  • •  Mining Surface plants Services (example: I T , Mines Research)  Table 4-2: S u m m a r i s e d Description o f O n t a r i o Division M i n e s .  Mine  Creighton  Coleman/McCreedy  Crean Hill  East  Age  100 (celebrated it centenary this summer)  Shift Schedule  Workforce  Median Age of Workforce Remaining Mine life Mining Methods  Daily Tonnage  13 (from latest opening, has areas 70 years old)  10 hour shifts 4 day work week (mine down for 3 days) Over 300 hourly 50 contractors 30 management West Mines headquarters 48.7  10 years (3 different mines sharing a common infrastructure) 10 hour rotating  Over 200 hourly 20 management  40 hourly 13 management  45.4  52.5  50+ years  25+ years  1 year  Cut and fill VRM Slot-slash Uppers 4500  Narrow vein cut and fill Cut and fill  Modified cut and fill VRM  4500  1500  120  10 hour rotating  4.1.4  IT Infrastructure at the West Mines Complex  As mentioned previously, when the T M M S development methodology is implemented in brown-field sites, a pre-existing management and information infrastructure may already be established but not function as effectively as desired. A history of projects that intended to improve management techniques may also exist whereby managers may be already familiar with particular techniques.  This subsection  describes the IT and management infrastructure at the West Mines complex that had been implemented prior to the commencement of this project.  In the early 1990s, management was given training in T Q M tools and provided with a booklet on how to apply T Q M in the workplace. After a few initial successes, the T Q M initiative was considered to be too 7  labour intensive (the meetings and education process took too much time) and soon abandoned. A second management improvement scheme was undertaken, this time at the West Mines Complex (then known as Levak Complex), where a detailed tactical management system was developed through a management consulting firm, Universal Schedulers (discussed in Chapter 3,  Section 3.4.3.1).  The management  system was abandoned for lack of upper management support due principally to the excessive manual data collection and processing requirements.  These events demonstrate how some managers became  familiar with management system reengineering.  The lack of data infrastructure was also clearly  identified.  In the mid-1990s, INCO had identified the need to update their IT infrastructure and decided to buy M I N C O M ' s ™ Mine Information Management System (MIMS).  The system began as a maintenance  management system but would eventually be composed of financial, production statistics (Prodstats), and materials inventory modules. Although available, a human resources module was not purchased as it did not fully meet their human resources (HR) needs. INCO uses an HR computer system that was developed in-house in the early 1980s.  Figure 4-4 shows the five modules in relation to each other and their  implementation dates.  121  HUMAN RESOURCES Future?  7 [  Figure 4-4: MIMS Modules and their Implementation Dates at INCO.  8  The need to undertake research and development of new IT and management techniques was identified by late 1998 following a successful application of A B C in financially justifying a new narrow vein copper mine. A new chart of accounts based on mining processes was developed whereby the materials, labour, and equipment costs for a particular process were charged against an unique process based-account. In this system, each financial transaction would be charged against an account that represented a particular process.  This financial transaction would be recorded in the Mine Information Management System  (MIMS) relational database using the process based account as an 'identifier' (see Chapter 3,  Section  3.2.l's discussion on relational databases). Figure 4-5 shows the basic components of each financial transaction's identifier. Figure 4-5 is an example of a cost transaction for Crean Hill mine, as presented by the first two digits (Crean Hill=13, Creighton=17, and Coleman/McCreedy east = 10).  The  responsibility indicators are the following two digits, the first representing the general foreman and the second foreman. The process is represented by the last three digits, in this example the development process (005). It is important to mention that every mine has the same process numbers to which they charge. For example, a Creighton transaction identifier would be 1765025 (17=Creighton, 65=general foreman and foreman id, 025 = process identifier for In-the-Hole (ITH) drilling). Over forty unique processes were defined.  This list of accounts is referred to as the process-based chart of accounts. 122  However, no process map was created from which these processes could be visualised. This created discrepancies between mines and the accounting system in how people interpreted the account descriptions when charging costs. Therefore initially, virtually every foreman charged costs differently. As will be reviewed later, one of the steps involved in building a data infrastructure included redefining the data models so that the database would more closely mirror reality and would be consistent across the WMC.  11  oo i  T ~T  1  —  Responsibility  /  S2 (G.F.)  \  Process  S1 (Foreman)  Expense Element  Figure 4-5: Cost Transaction Identifier Table 4-3 shows the first 20 process based accounts as of early 2000. The creation of a new senior position, Superintendent of Business Systems, was the direct action undertaken by WMC management toward identifying and implementing new management techniques. Encouraged by the possibilities of process based management, an attempt was made to fully implement the ABC management technique. This experiment identified that ABC was incapable of functioning in a mining environment without integrated production information.  123  Table 4-3: The First 20 Process Based Account Numbers  Process # 005 010 015 020 025 030 035 040 045 050 055  Process Description Develop Lateral Development Raises Diamond Drilling Prdn Mining Cut and Fill Prdn Drilling ITH  | BProcess # Process Description 060 Truck Haulage Diesel 100 Hydraulic Backfill Syst 110 Rock Backfill 115 Barricade Constr Backfill 120 Supplies Distribute Acct Prdn Drilling Top Hammer 125 Supply and Person Hdlg Prdn Blasting Bulk 130 Underground Constructs Secondary Blasting 135 Recondition Conventional Scoop Tram Mucking 140 Ramp and Roadway Mtce Scoop Tram Re-Mucking 150 Cable Bolting Track Tramming  While upgrading MIMS in preparation for the Y 2 K roll-over, INCO decided to purchase and develop the Prodstats system. Prodstats is an equipment based system where operators record all production, delay, and equipment status information onto a slip that is completed at the end of every shift. Figure 4-6 is an example of a short-hole/utility slip showing the production, delays, workplaces, equipment, and operator for that shift. A n operator must complete a slip for every piece of equipment used throughout the shift. The slips are entered manually through a graphical interface into MIMS. The system takes that data and populates various relational databases that track equipment meter hours for maintenance and supplier contracts. Many data elements are recorded, including: •  task type;  •  workplace;  •  type and number of raw materials consumed;  •  productive output;  •  time to complete;  •  delay types and times;  •  equipment used;  •  operator identification;  •  frontline supervisor (foremen).  124  PRODUCTION C O D E S  LOST  HRS  TASK TYPE  BLASTING DELAY  DB  S0LTIN3  N O LINES /:PRINTS  OL OA  ORIUING  NO  MATERIALS  M I N E UTILITIES B O .  DP  W O R K P L A C E N O T AVAIL.  DW  REWORK  DR  B O ELECTRICAL  ME  B.O.  MH  HYDRAULIC  mono,  ESiLLHOLE  LUNCH-/MEETINGS:  NL  RKAR  REASSIGNMENT  NR  OPERATOR  OP  REPAIRS  TIRE C H A N G E S  OT  WASH  O W  EQUIPMENT  UBIS  9910  27  OPERATED  4.5  CABLESO'J  UNIT TYPE  NT  HOURS  MEASURE  I'filAU  MP  OH  3980  tSIIT  TYPE  SLHMC'.S  MM  OP6R H O S E REPAIRS  UNilT-:  :  TYPE  (WSERWCeS MVt  PLANNED  TRAVEL TIME  TSSK  BIASIIMS  BO. MECHANICAL MAINTENANCE  WORKPLACE  :  SHXSET MFCH SDlT KSLLKJU  (HO) T O T A L H O U R S O P E R A T E D -  TOTAL LOST PROD HRS TOTAL SHIFT  HOURS'  10-0  PLANT  663  JL3_  20  02  01  06  PIPING  HOUR METER  •.tinr/inif  SERIAL #  U S E R ID  DIV  END START  PREOP,'FUEL,'LUBE  ftp  vtNrnr-t  WORKPLACE PREP  RW  VLNI *JL"L  TOTAL LOST PROO, HRS  JEEPS  --IdfJJLtTY"  X LIFTS J DRILLS  |  DEV. SLIP  SUPERVISOR  Figure 4-6: Short-hole Utility Slip - Example of McClean Bolter Operator's Slip  Several slip types record all activities undertaken throughout the mine. Material movement slips record source and destination locations. Utility slips record the activities of short-hole drills such as jumbos, bolting machines, and jacklegs. Production drilling slips record footage drilled, ore/waste contacts, drill bits and rods used, drilling location, and compressor used. All activities within the mines are recorded in this matter, including backfilling activities on surface.  The Prodstats System records all production information while the financial MIMS module records all cost information. Both Creighton and Coleman have implemented the Prodstats module. All the mines in Ontario division have implemented the process based accounts. At the end of 1999, no direct integration between the various MIMS modules existed; therefore, production data was reported independently from the costs. S4 and S3 managers at INCO decided to initiate a collaborative research project with UBC whereby the TMMS methodology would be implemented. The project was intended and has improved the accuracy, use, and value of the various information systems available at in the WMC. In summary, the pre-existing IT components prior to the application of the TMMS methodology included a process based chart of accounts, an HR/incentive system, and the following MIMS modules: •  Financial/cost transactions database 125  •  Maintenance database  •  Production statistics database  •  Logistics/materials stock system  4.1.5  Ethnographic  Results  Throughout the project, from early 2000 through to late 2001, an ethnography was undertaken of the INCO W M C culture. The material collected includes email messages, interview notes, a journal, internal reports, and meeting minutes. Table 4-4 provides a few cultural characteristics that may be considered in the development of the T M M S . Note that in some situations, the discussion of cultural characterisation may not be appropriate for a public forum.  The development of management systems that address  cultural issues may require confidentiality, as some cultural characteristics may be perceived as politically sensitive. The issues discussed here are tempered for the public medium which this thesis serves. The table discusses cultural elements according to the cultural characterisation model suggested by Ibarra as discussed in Chapter 3.  9  For each cultural element, some observations are discussed in the 'Findings'  column. The 'Management System Components' indicate the key components or accentuation necessary for the T M M S to comply with the INCO culture.  126  Table 4-4:  Cultural Element Organisational Heritage  Summary of Ethnographic Results  Findings INCO has been mining in the Sudbury area for over 100 years. A long history fraught with strikes, layoffs, and environmental issues has created a complex culture with many incidences that impact on the behaviour of INCO employees. The most discussed issue over the duration of the study was the performance measurement systems for both management and worker.  Organisational Structure  Table 4-1 provides the official management hierarchy. Some of the front-line supervisors are former miners and therefore are more concerned with "security" than "order" as discussed in the previous chapter. Strong mathematical and engineering background may be concentrated at higher levels of management  Political & Economic System  The annual budget, ostensibly based on the mine plan and costs, is compiled for each mine and sent to the corporate office for strategic planning. The budgets are used as performance measures for the superintendents. Little trust is placed in these measurement mechanisms at a tactical level as the compiled costs and plans frequently change. There is no direct discussion of the effect or morale of workers. Supervisors and worker put forth many valuable ideas but there is no human/technical resources or management infrastructure to bring about the suggested changes. The Sudbury area is one of the most important mining areas in Canada. INCO is also undergoing a labour shortage. These two issues factors create a very 'secure' environment for workers.  Environment  Demographics  Change Systems  Subjecting an ageing workforce to training and education in new computer and management systems may prove difficult. For example, a clerk with 34 years at INCO (employees can retire after 30 years) indicated that he did not want to learn the Prodstats system and instead retired. No rewards for positive management behaviour currently exist. Management training is more philosophical and motivational rather than technical. For example, management workshops such as "Breakthrough by design" (based on Schaffer) is a motivational program where managers are encouraged to engage in improvement programs. Specific tools, IT, or management systems are not discussed, the focus is on action. 10  127  Management System Component Highly complex system therefore the management system should be occasionally reviewed for effectiveness based on cultural specifications Additional training in modern management technology may be required  A measurement mechanism for tactical managers will have to change with the mine plan. Morale or cultural issues will need to be addressed. Infrastructure to enable improvements is required. Labour will continue to be have strong maladaptive ability potential Most calculations will need to be automated. A change in demographics will improve a modern system's impact Positive performance awards should be designed for managers. Both technical and motivational training should be provided and encouraged to be applied.  4.1.6  Synthesis of Background  The chronology of application of the TMMS methodology at INCO illustrates the flexibility needed to build management systems and how the methodology was applied at the various mines. A detailed chronology of the application of the TMMS methodology at INCO is provided in the appendices. A review of the application and impact of the methodology is discussed within the five phase structure as laid out in the previous chapter and in Figure 4-7. Therefore for each phase of development, the methodology, results, and impact will now be discussed.  SYSTEMS PLANNING  SCOPE  BUILD DATA INFRASTRUCTURE  K  DATA  V  DETERMINE MEASURES  INFO  BUILD ORGANI- V MANAGEMENT SATION & INFRANEED / STRUCTURE  USING THE SYSTEM  IMPROVEMENT  Figure 4-7: Five Phase Structure of TMMS  4.2  Systems Planning Phase  The systems planning phase is intended to create the blueprint for the management system taking into consideration the needs of the operating system. The procedure consists of preparation and visualisation steps.  4.2.1  Preparation  When preparing for designing a systems plan, a team needs to be formed, educated and inspired to undertake a reengineering of the current management systems. Visualising consists of understanding the needs of the operation and requirements, and the possibilities and limitations of modern management techniques.  When INCO West Mines Complex initially conceived of redesigning its management  support systems, a change team was formed that consisted of: •  Cost engineer; 128  11  •  Accountant;  •  IS manager;  •  Maintenance MIMS programmer (out-sourced from WMC maintenance department for the project as a MIMS expert);  •  the Business superintendent as the project manager and leader;  •  Chief geologist;  •  Chief engineer;  •  Project engineer  •  Academic/management technique consultant (author).  Other team members would eventually join the change team including a GF, project foreman, mine superintendent, and project manager from the WMC Business Systems unit. For every mine where components of a TMMS were implemented, a process of educating stakeholders in TMMS methodology and modern management techniques was undertaken. For example, in the initial stages of the Crean Hill TMMS development, the consultant presented the purpose and benefit of the TMMS, the systems plan and reviewed some basic management techniques.  The project sponsor and leader, the mine  superintendent, then expressed his support for the project with the intention of gaining buy-in from the other tactical managers. Once the preparation phase was complete, then the steps of high-level process 12  mapping and management systems planning began.  4.2.2  Visualisation of the Systems Plan  The visualisation step consists of first analysing the current management system. This is undertaken through process mapping and other forms of analysis including ethnography. The first topic in this subsection is the procedure used and results of characterising the management systems at the INCO mines prior to the development of a TMMS. The second topic is the procedure and results of formulating a systems plan. 129  4.2.2.1  Characterisation of Current Systems  The current tactical management systems need to be assessed so that any redesign can incorporate functional components and eliminate inappropriate aspects of an existing system. Characterisation begins by defining current processes through consensus of all tactical managers within the system. A common comprehension of the current system is achieved through discussion, visualisation, and documentation. The issues to characterise include: •  Work, material and information flows;  •  Accountabilities/responsibilities of the managers;  •  Cultural limitations / relationships.  High-level process maps were drawn to identify key output, information, and material flows. These highlevel process maps were essentially systems-level maps (note the hierarchy of work definitions in Chapter 2 and Appendix B) identifying the best areas to apply tactical management control or improve understanding. Specific mining processes that produce ore and service processes that produce equipment availability (maintenance) or engineering outputs (engineering) are delineated.  The maintenance functions at INCO are well defined, because the IT infrastructure provided by M I N C O M is originally a maintenance system.  Significant user experience also aids the maintenance  service since the MIMS maintenance module has been in use since 1994.  A reengineering of the  equipment fleet management system had been undertaken several years earlier and had resulted in a structured equipment management system.  13  The West Mines Complex (WMC) has a centralised  maintenance management hierarchy as seen in Figure 4-3, where a maintenance superintendent is of equal managerial status to the operating superintendents. Inventory issues were organised on a divisional level because Ontario Division has a centralised purchasing and warehouse group that handles most of the raw materials management.  Intimate supplier relationships exist between INCO and local suppliers due to  INCO's large market presence and proximity to the regional distribution centres in Sudbury. These close relationships further simplify materials ordering. Inventory, supplier, and maintenance issues at INCO 130  are possibly not typical in mining, the process maps developed for INCO would therefore not necessarily be appropriate for other mining companies.  Figure 4-8 shows the high-level process map for the Coleman/McCreedy East mine. It can be seen that a single S2-level tactical manager is responsible for each service and mining area. maintenance S2 reports to a Complex S3 manager, not directly to the mine S3.  However, the  The logistics S2 is  primarily responsible for delivery of material underground and for mine infrastructure, such as the hoist or crusher. As discussed previously, traditional inventory issues are dealt with at a Divisional level. Once the necessary education, team forming and high-level process mapping was undertaken, forming a more accurate systems plan could begin. The high-level process map was developed in discussions with the S2-Ievel manager(s) where the accountabilities for each area were discussed and delineated. The information flows between the various production and service areas were identified.  Maintenance  Mine A r e a a)  Technical Support  1  Muck to  (Coleman)  Crusher  Mine A r e a 2 (Main O r e B o d y )  Muck t o  Mine A r e a (153 Ore  Kiruna 2  N  service.  Chutes  Body)  .5! £ 3 CD  Logistics  Figure 4-8: High-level Process M a p using Coleman/McCreedy East as an Example  Figure 4-9 shows the original strategic systems plan for management support devised by INCO personnel. Figure 4-10 shows the tactical management systems plan that was derived from the strategic IT outlook.  131  The only extent to which the mine had been conceptually mapped prior to the application of the T M M S methodology is shown in Figure 4-11.  P r o c e s s Control (data from operating s y s t e m entered online & manually) "0  3-  MIMS  Purchasing  Maintenance  A d H o c Viewing & Reporting  Financial  i  P r o d Stats  Khalix  Financial  14  Prodstats  - improve data quality  • improve data quality  - align the chart  • complete implementation  of account with p r o c e s s e s . Combine  Unit costing  T r e n d s Calculation C o s t removal mechanism  Develop business Forecast Model /  OLAP Database  A n a l y s i s & Modelling  (Strategic planning software)  Figure 4-9: INCO 1999 Management Support Systems Plan.  metrics  simulator  Profitability model  Benchmarking  Figure 4-10: INCO 1999 Tactical Level Management Systems Support Plan.  132  3  i_  Database  I—  s  15  Intra net  I  W o r k Hierarchy  Special tools required to analyse below process level  Chart of Accounts Details to Process Level  Figure 4-11: Work Hierarchy - solitary process graphic conception of work hierarchy prior to 2000. 15  The systems plans shown in Figure 4-10 were later refined following a more detailed study of the current tactical management system at the W M C that was undertaken as part of the T M M S application. A n in depth study of the management infrastructure at the W M C and particularly at Crean Hill revealed few instances of structured management intervention dealing with the production system. From an analysis of the Crean Hill conference room weekly schedule over 3 months, 87% of the hours spent in meetings related to non-production issues such as environment, safety, and labour relations.  The tactical mine  management system at Crean Hill prior to T M M S implementation had 3 formal meetings related to production:  •  Pre-shift planning meeting: A daily meeting between the S2 and Sis where the work for the upcoming shift is planned;  •  Weekly production meeting: Weekly meetings between all tactical managers and engineering staff to discuss upcoming production issues;  •  Bi-monthly planning meeting: A meeting of all tactical managers to discuss the future long-term production issues.  Figure 4-12 shows the daily pre-shift planning meeting between the day-shift foremen, general foreman, and maintenance foreman. As can be seen, the only information used is the previous shift foreman's log report.  The log report is a legislated requirement where the foreman must record the workplace and  equipment hazards at the end of every shift. Unfinished work or work in progress is also communicated  133  through these means.  The log is simply a small paper notebook where the foreman summarises the  necessary points in an unstructured format.  Information  Purpose  K n o w l e d g e of workplace  Bremen's  f  Venue  a n d equipment condition  Participants nts  Daily Meeting w  ~1 hr  G o a l / Result  S1 Line-up d e c i s i o n s S2  log  F i g u r e 4-12: D a i l y M a n a g e r i a l Intervention  The second formal management intervention is the weekly production meeting. The main purpose of this meeting is to communicate to all tactical managers and engineering staff the overall progress in hoisted tons achieved the previous week in comparison to the monthly target.  The secondary purpose is to  communicate safety and divisional issues. No other past performance is discussed.  In  1999,  Coleman/McCreedy was the only mine reporting costs to their general foremen by process. During their weekly production meetings, costs are also discussed.  Information  Month-to-date Hoist information (compiled fronjisuperintendent report)  Purpose  16  Venue  General assessment of compliance to scheduled  Participant^  Eng.  minactaducJiaD  /Aui utomatically generated PM schedule  /List of Outstanding Major Projects  Equipment inspection and PM schedule  Subjective assessment of remaining scheduled task!  p.coiJu5iLon.urjits...  Mtc  Communication of Equipment availability  Weekly Production Meeting ~2hrs  Attempted inducement or: reminder of current ioutstanding products i  S2 O p  S3 ^ Safety considerations in active workplaces  All  fList of contracts and leases  , Idea from S 1 s on likelyhood of accomplishing priorities as laid out  S1s ^Engineer's personal assement of priorities  Goal / Result  Safety considerations at other mines • Complex update  f Attempted inducement or reminder to reduce contracting burden  ' Miscelaneous issues * General Impression on current month's shipped tonnage (performance)  Pertinent information from S3 meeting  Keep staFfnformed of*"i Complex - divisional issuer-  F i g u r e 4-13: W e e k l y M a n a g e r i a l Intervention  134  A planning meeting (termed the "Pizza-pop" meeting), attended by all tactical managers every second month is held where the long-term mining plan would be discussed. Other topics of discussion include: changes to the mines-crew allocations, equipment overhauls, environment, and labour relations issues.  The superintendents of the W M C participate in weekly and monthly performance reviews.  A variance  meeting was held on a monthly basis where the superintendents would compare their performance and cost targets with their actual performance. Weekly superintendent meetings are also held weekly where divisional safety, environmental, and corporate issues are communicated.  This discussion is intended to characterise the existing management systems. As these were the only structured meetings dealing with production issues on a regular basis, it can be seen that within this management  system,  integrated input and output information was not required.  Process  level  improvement initiatives are also not considered important as no clear accountability existed in which to pressure managers to initiate improvements.  The issues to be discussed as listed in chapter 3 section 3.1.2.2, and the cultural characterisations were discussed among the reengineering team, tactical managers, and workers during informal meetings throughout the T M M S application between late 1999 and late 2001.  4.2.2.2  Formulation of a Systems Plan  A systems plan is formulated through discussion among the team. The issues identified by analysis of current systems and ethnography are considered in the design of the new management system.  For  example, the original management system did not have complete budgeting procedures, production reviews, or explicit management performance measures.  Weakness in the current data infrastructure  would also necessitate auditing functions to ensure data validity. Figure 4-14 shows the systems plan proposed for the West Mines tactical management by early 2001. As can be seen, the cost and production  135  reporting tools already existed to some extent, although tactical managers considered the data to be untrustworthy . r  A n auditing mechanism was required to gain the trust o f the users o f the data. Once the production and cost information was sufficiently accurate, the information would then be integrated at the process-level. This step w o u l d also automatically create the distributed and unitised costs.  Establishing the data  collection mechanisms, accuracy, and integration can be considered the 'Data Infrastructure Phase'.  Non-value a d d e d but n e c e s s a r y in the short term  Cost Reporting tools  Auditing tools  Production Reporting tools  Data Infrastructure  data accuracy  ±  Distributed & Unitized Costing  I unit costs  Informed Process Based Budgeting  I accountability (S3-S2)  Information  •  information  Informed Mine Scheduling  Performance Measures  1 targets & accountability (S1- worker)  i w  -  Management performance measures  I incentive to improve  Using the System  i  w  Management improvement initiatives  Figure 4-14: Standard West Mines Systems Plan, February 2001  136  Once process information has been developed, various management components can be developed. As discussed above, INCO has used the annual budget as the performance targets for superintendents! An annual budget was developed using the unitised cost and annual mine plan. A mine schedule based on actual performance rates of the processes (calculated process capacities based on performance) is developed for performance measures for lower-level managers (S2s and Sis). Other process based performance measures are developed so that specific core processes can be investigated. Although not shown, the systems plan takes into account the unfamiliarity of the lower-level managers with technical analysis and computers. These measures will need to be created automatically and have the capability to be printed. The development of these components can be considered to be the 'develop performance measures' phase.  As discussed in chapter 3, the establishment of management infrastructure is undertaken throughout the evolution of the TMMS. For each component, the required management infrastructure necessary to drawout the required outputs is established before the next component is developed. For example, review and planning meetings are developed and implemented for the "Management Performance Measures." These meetings will result in the improvement targets and measures necessary to ensure there is sufficient incentive to improve the mining system being managed.  4.2.3  Impact of Systems Planning  Phase  The methodology to develop a systems plan as discussed in Chapter 3 was used for each mine. Each INCO mine in the WMC underwent a tactical management change over the course of this project. Tactical management changes were initiated by both West Mines Business Systems unit and local mine personnel. Not every mine chose the same systems plan. Figure 4-14 is a systems plan devised as a standard for the West Mines Complex so that a.standardisation of TMMS can eventually be evolved for all mines. However, each mine developed and accepted the various components at their own pace and with different rates of success. 137  Within the preparation step, each mine allocated appropriate tactical managers and technical personnel to a redesign team that was given a brief education session reviewing process mapping techniques, A B C , and operations management tools. Forming teams and providing education at each mine had varying degrees of impact.  For example, tactical managers at Coleman/McCreedy East wanted to apply  operations management techniques immediately, including process mapping, process based cost reporting and work crew analysis. These system components were designed and implemented by various tactical managers with technical backgrounds (the tactical managers, mainly GFs were former engineers). Comparatively, Crean Hill did not immediately embark on improvement programs following the systems plan because the mine was understaffed by five full time positions.  The tactical managers on site had  relatively little technical background (the tactical managers were former miners). Therefore the impact varied depending on the resources available.  High-level process maps were drawn clarifying where tactical management systems either did not exist or were functioning poorly.  Mapping out these processes demonstrated the variances in understanding  between the tactical managers. For example, some considered ground support as part of the development process whereas others considered it as separate. Areas of overlapping accountability were also identified as some managers incorrectly considered a process to be the responsibility of another manager.  17  For  example, at one of the mines in the fieldwork the general foreman of the Main Orebody (production area in the mine) had incorrectly assumed that the maintenance costs on the Kiruna Chutes (part of an electric truck haulage system) were the responsibility of the Logistics G F who manages the Kiruna trucks (these accountabilities have since changed).  After lengthy discussions, it was confirmed that Kiruna chutes are  the responsibility of the manager who sends the muck to the chutes, therefore the operating foreman (not logistics foreman) is responsible.  This is an example of where the impact of this phase resulted in  clarifying accountabilities.  138  When undertaking a systems map, the mistakes of the past were identified in terms of why some improvement initiatives failed. Reviewing the reasons for why management system developments failed is an important aspect of systems planning. For example, a lack of data infrastructure, measures, and management support were given as key causes to the failure of the 1993 Crean Hill management system mentioned in Chapter 3.  18  Generating a systems plan allowed the Business Strategy unit to see the importance of a common management system between the various mines. A Process Based budgeting system had been requested by all mine superintendents for several years.  19  This resulted in the allocation of dedicated resources on  the project once the process based costs had been developed. Therefore the most important impact of the systems planning phase was to highlight the importance of undertaking the development of a T M M S .  Figure 4-15 shows the systems planning phase's key impacts within the context of the methodology's application.  Once the first systems plan has been created, work is started on developing the data  infrastructure.  SYSTEMS PLANNING  1  1  SCOPE  BUILD D A T A INFRASTRUCTURE  DATA'  DETERMINE MEASURES  K  INFO V  BUILD MANAGEMENT INFRASTRUCTURE  ORGANI > SATION & NEED , /  USING T H E SYSTEM  [IMPROVE-X MENT /  inspiration clarification of roles reviewing mistakes of the past clarification of steps showed the importance of developing T U M M S s  Figure 4-15: Impact of the Systems Planning Phase within the Context of the TMMS Methodology.  139  4.3  Data Infrastructure Phase  Building a data infrastructure is generally comprised of five steps.  The first is to gain greater  understanding of the processes through detailed process mapping. This is followed by the creation of a data model where data items are related to a process through textual and graphical definition. Once the data requirements are listed and sources for that data are found, then a mechanism of data collection and management must be put in place so that the data is entered in a timely and accurate manner. These steps are reviewed in the context of the application at the W M C .  4.3.1  Process  Mapping  Ontario Division had purchased and implemented the M I N C O M enterprise resource system called MIMS. The accounting module in this system was designed to be generic so that a common chart of account (list of account numbers) could be used by all mines. No process map or publicised definition were available at any of the mines and therefore some disjunction existed between the chart of accounts and the processes as understood by the foremen using the accounts.  The initial process mapping activities  consisted of clarifying the mining system in relation to the chart of accounts and between tactical managers. Production outputs measures from the Prodstats system did not exist at that time, only raw data was available. Prodstats data was being entered into the system and remained unused.  Detailed process mapping was undertaken at all three mines. The Coleman process maps were primarily focused on cost data accuracy since the mining methods and outputs were homogeneous within each mine area (as seen in Figure 4-8). Figure 4-16 shows a small section of the 'AS-IS' process map down to the activity level for the development process.  The numbers below the activity names represent the account  number associated to that particular process. Figure 4-17 shows the backfilling process used in the Main Orebody mining area.  Note how several activities within the same process have different account  numbers. This disjunction between processes as understood and the process-based account structure had to be corrected by a means of data definitions (discussed later). 140  t Access/Drift Face prep  Access/Drift Drilling  005/135  Access/driff Ld & Blst  f Access/driff Muck&cond.  005  005  1  r  Access/driff Bolt&Screen 005  Muck to Drill 005  Figure 4-16: Activities within the Development Process and Associated Process-based Accounts  Clean floors  Fill Prep.  Drainage  Pour Sand  none  100/110/115  160  100  V  J  V  )  Figure 4-17: Activities within the Filling Process and Associated Process-based Accounts Process maps to clarify productive outputs and workplace discrepancies were also created. Figure 4-18 shows a zoom-in of a large process map of the various workplaces at the Crean Hill mine. The process map required the representation of level, workplace, process, and cost account number. The workplaces were listed in smaller boxes on the left while the cost account number was on the right. This mine was unique in that a single general foreman and foreman were responsible for all the varied processes. Crean Hill has captive equipment and uses a variety of mining methods and processes, depending on workplace. Once process maps from various viewpoints were established, data models that best represented the processes had to be designed.  141  F 1  —  Boart Drilling  WP.-1906  Blast Next S e t of  Load Uppers  WP.-1170 030  Rings  W.P.-190O  M u c k to O r e p a s s manual / remote  W.P-1900  WP.-2020  Ore remaining -E3  -E3 KXXXXXXXXXXXXXXXXXXXXXXYYYYYCT  .J  _J  B B B H  Figure 4-18: Workplace Process Output Map with Zoom on Production Drill-Blast-Muck Cycle.  4.3.2  Data Modelling  As was discussed previously, most of the data modelling had already been completed when INCO implemented their process-based accounting system and Prodstats systems. Linkages between the costing databases and production databases did not exist prior to mid-2000.  Common attributes between  production and cost data items had to be identified. It was decided that the most appropriate work level at which the linkages would be formed was at the process level, because the account structure represented processes. The data attributes that cost transactions and production slips had in common included: •  Responsibility: both costs and unit of output were directly linked to a particular foreman and general foreman.  •  Period: both cost transactions and production records contained dates, however, purchases and consumption of the inputs purchased did not occur on the same day. For example, if a foreman ordered a pallet of shotcrete, that shotcrete would not be consumed for almost a week as the shotcrete 142  had to be delivered to the mine site, then transported to the work face. Therefore it was decided to link the cost transactions for a month to the productive units of that month. •  Equipment:  one of the cost database identifiers included equipment number. Each productive unit  was also attributed to particular pieces of equipment since the slips were equipment based. Therefore the repair costs could be linked to a particular piece of equipment, that in turn was linked to a process.  Using E-R data modelling diagrams (described in section 3.2.1), the equipment and transaction links are shown in the following two figures. Figure 4-19 shows how the Prodstats slip information is linked to the process by the task type and equipment number. Figure 4-20 shows how purchase requisition (ordering materials) and labour charges are charged to an account that represents a process. Every piece of equipment in Ontario division is allocated to an account number so that any work order charged to that piece of equipment is automatically charged to the correct account. This proved to be difficult when equipment such as scissor-trucks are used for multiple processes, however further breakdowns can be made using the task and activity information from the Prodstats data. Links not shown include the similarity in the date or periods of time or the link of responsibility of a particular foreman or general foreman. For example, a particular unit of production can be attributed to a foreman or general foreman through the Prodstats identifier shown in Figure 4-21 (note: 'beat' refers to the geographical, equipment, and workers for which a particular manager is responsible). Purchases by that foreman or GF are allocated directly the GF responsible. Therefore a general foreman's productive units and process costs can be linked.  143  Figure 4-19: Data Model Linking Productive Units to the Correct Processes  Figure 4-20: Data Model Linking Purchases, Labour Charges, and Work Orders to Processes Data models and process definitions were created for all processes. The data dictionary was distributed to all foremen in the Foremen's Cost Charging Reference Manual.  20  As mentioned previously, the  information systems at INCO were well designed for their particular uses. The MIMS modules were designed for the departments that used the information. For example, the MIMS financial module was 144  organised and designed to suit the specifications of the accounting department.  Similarly, the  maintenance module was designed for the needs of the maintenance planners. Integrating the data from these disparate systems was difficult as none of the databases were designed using a common process map. Therefore when undertaking the process mapping and data dictionary, several missing data items were identified. Creighton and Coleman did not have many data gaps. Crean Hill, however, did not undergo Prodstats implementation since mine life was, at that time, only one year (it has varied between one and three years several times since). As a result there was no Prodstats information at Crean Hill prior to November 2000.  1 0 0 1 9 2 5 1 1 4 2 5 0 9 7 2 0 0 1 1 0 0 Plant  Div Complex  Beat  (mine)  *  Level  Method  Zone  Responsibility Ist-G.F. 2nd-Foreman  1 1 1 1 1 Beat  Workplace  1  Process Expense account* Element  Figure 4-21: Linking Production and Cost Responsibility in Data Model.  4.3.3  Find Data Sources  As mentioned, many of the data sources at Coleman and Creighton were already established as all cost and production information was being entered into MIMS. Therefore there was no need to find or develop data entry mechanisms for these two mines. Crean Hill had MIMS but not Prodstats. Through mid to late 2000, a stand-alone production database was created and maintained using hand-written forms that were transferred to a large Excel database which was imported into the Prodstats database. Most Prodstats analysis is undertaken using the CorVu  21  software application. These "daily superintendent  report" forms were completed at the end of every shift by the foreman. Figure 4-22 is an example of the 145  form in digital format showing the production for January 4 , 2001. B y early 2001, management at Crean th  H i l l were convinced that Prodstats should be fully implemented at Crean H i l l and a process o f implementation was commenced.  146  January Development Level  W.P.  Footage  6-4  Backfill  4-2  total  Level  Tons  Sandfill 6-4  W.P.  4-2  total  2550 1750 sill  0  2500  2020  0  4240 Ramp 0  0 0  3840  0 2670  0 0  0 0  total  0  4200  0  Backfill  Tons  Rock as fill Production  Tons  Blasted  W.P  Level  6-4  4-2  4240 S T O R Level  W.P.  6-4  4-2  total  1000  940  0  2800  1906  0  3450  1220  0  3980  2705  0  4200  2636  0  4200  2670  0  0  0 0  total  0  0 0  Level  W.P.  c 0  ITH Level  Drill #  6-4  2550  4-2  2550 608 ITH 3840 611 ITH  0  total 0 240  240 Footage  Mucked  Development 6-4  100  0 0  Drill Ore Tons  total 100  Boart Level  4-2  Drill*  6-4  4-2  total  2550 999 BRT  172  1750 sill  0  1000 558 BRT  272  0  0  0  4240  Ramp  0  Remaining  Feet Open  total 172 211  In  483  Passes  0 0  total Dev. Ore  0  0  6-4  Pass/level  4-2  #1 O P A S / 3 1 0 0 L Ore Tons  Mucked  #2 O P A S / 3400L  Bulk W.P.  Level  #3 O P A S / 2800L 4-2  6-4  total  #4 O P A S / 3 1 0 0 L  1000  940  72  170  242  2800  1906  300  650  950  3450  1220  3650  2550  4200  2705  0  4200  2635  0  0  0  0  0 140  Level  140  512  total Bulk  Rock W.P.  820  6-4  0 0 total rock tons  4-2  0 30  Ore Tons 6-4  30  4-2  0 66  0 0  3800  9701  0  0  0  0  0  0  0  0  0  0  total cars shipped  0 0  total 0  0  3800 #5  4-2  Ground  total  2635  0  total  Loadout  Mucked  3980 S T O R  total  4-2 66  6-4 30  0 0  6-4  Ore Skips  total 30  0 0  W.P. 4200  I  Rock Skips  Shipped  0 0  Retram Level  1332  Hoist  Tons Mucked  4200 downramp 0  #5 O P A S / 3650L  0  Figure 4-22: Superintendent Daily Report for January 4 , 2001 147  0  Figure 4-23 shows the core data infrastructure at INCO Ontario Division for process based production data. Labour is charged directly by a foreman in an early 1980s computer application called 'timekeep'. This application calculates the number of hours each miner has worked throughout a week. It is linked to the MIMS mainframe as a cost transaction in the accounting database.  Equipment and supplies are  charged using applications within MIMS. The P L C and wireless links are currently limited to the hoist and Teleremote equipment in Creighton. The information is translated into MIMS data and entered without human interference. Most of these data entry systems had already been established prior to this project. However, the accuracy of the data was an issue that was directly related to the implementation and management of these systems, as discussed next.  OUTPUT - PRODUCTION  INPUT-COSTS Labour  C h a r g e d by "..foreman  Timekeep mainframe  wircloss Linked  Equipment costs  Key-punch  MIMS  By W o r k ordor  On-board equipment monitoring Operator Slip  Hard-wired  SuppMes  O r d e r e d by foreman  PLC  Excel-CorVu  Supt. Daily  N rep. (Crean Hill only)  Figure 4-23: Production Data Sources and Infrastructure at INCO Ontario Division  4.3.4  Organising  and Managing  the Data  Collection.  Data collection issues are important to note as other operations may face the same challenges in implementing systems where operator input is required. Research at INCO has shown that the difficulty of data collection was at first convincing the operators to fill out the slips and hand them in. Data entry was also an issue since light-duty miners of local 6500 (injured miners unable to undertake physically strenuous work) were used to enter the data. Miners would be more apt to audit or interpret the data as 148  they understood the various processes underground. This caused problems as the union of office workers (local 6600), according to their job descriptions, should have been entering the data. Unfortunately, these individuals were unable to audit the information as they typically have no underground experience. Foremen were also unwilling to enforce the need for every miner to hand in slips or correct information as the importance of the information remained unrecognised (these issues were addressed and are reported in internal INCO reports). The main leverage points were found to be first, management support for the system, and second, using the information provided for calculation of incentive payments.  If the  operators did not hand in slips, that production was not counted toward the incentive contract. By letting the operators know that the information was being used to calculate incentive reports, the slips were entered on time and with far more accuracy.  Initial overestimation of production was countered by  maintaining occasional audits on production progress and correcting incentive values and payments. The foremen had to be trained to audit the information.  As mentioned previously, a key output of the Coleman process mapping exercise was to re-train the foremen and general foremen on how to properly charge costs.  All mines had to undergo retraining  procedures for their foremen: •  Coleman in January 2000 through the process mapping exercise  •  Crean Hill using the foreman' charging manual and training sessions  •  Creighton using an altered version of Crean Hill's foreman charging manual and a PowerPoint presentation.  Auditing processes for all mines also had to be invoked where the general foremen and superintendents used auditing tools to review the charges made over a period of time. Incorrectly charged items would be pointed out to the foremen. An auditing mechanism also aided in improving the accuracy of the Prodstats information.  By tracking the type and number of errors on the Prodstats slips, foremen were held  accountable for the accuracy of the slips their crews returned to the data entry personnel. Figure 4-24  149  shows one of the two graphs used to monitor the errors. This graph was reviewed in the weekly production planning meeting.  Week 3 - March 29th, 2001  Number of Errors Number of Slips  total number of errors number of slips  / #  This Week  4?  / ^  • Past Average  <# #  #  ^ #  ^  ^  ^  ^ #  / 4? ^  #  #  Date  Figure 4-24: E r r o r monitoring for Prodstats slip  4.3.5  Impact of Building the Data Infrastructure  Much of the data infrastructure was well developed at INCO Ontario division prior to the application of the TMMS methodology (known at INCO as the Process Innovation for Mining Systems project). Although, the conceptual linking of inputs with outputs along process lines did not exist. Substantial process mapping and process definition was undertaken to ensure a consistent interpretation for a particular process throughout the WMC. The data sources and collection mechanisms were also well established. However a key missing element was an auditing component to enforce the accuracy.  The specific impact of the build data infrastructure phase was: 150  •  Creation of process maps and definitions enabling process based linkages to be created.  •  Increased understanding among the design team and tactical managers about the systems for which they were accountable.  •  The construction of a data model that facilitated the linking of outputs and inputs (creating the data models simplified the task of programming the links using query language in the CorVu database application).  •  Formulation of an auditing process to enforce data accuracy.  The first impact of outlining process maps was to enable the creation of a standards or data definitions of processes. The second impact of process mapping was to engender a greater understanding of processes among the tactical managers. Talking about processes revealed the differences in understanding between the various processes. The impact of creating data models was to facilitate the programming of queries and tables within the database so as to conform more closely to reality.  This phase resulted in building a better data entry infrastructure that is more reliable, timely, and accurate. The impact of improving the entry system is the trust of managers to use the data. The first permanent use of the Prodstats system was to generate automatic incentive reports to replace the lengthy process of counting and surveying work, undertaken by the inventive administrators.  22  The overall impact of the build data infrastructure phase was to create a reliable and accurate source of data from which to build measures. Systems Plan is to 'Clean the data'.  Figure 4-10 shows that the first step within the original INCO Completing the process mapping, data modelling and auditing  process was an instrumental step in gaining the trust of the tactical managers, thereby completing the 'clean-data' component of the original systems plan. The three components of the W M C systems plan (Figure 4-14) was also accomplished by building a data infrastructure. Figure 4-25 shows the impact of these steps within the context of the T M M S methodology.  151  As was mentioned the core impact was the  ability and trust that in turn obtained the permission to begin developing performance measures upon which the tactical managers would be evaluated.  SYSTEMS PLANNING  SCOPE V  • inspiration • clarification of roies • reviewing mistakes of the past • clarification of steps * showed the importance of developing TUMMSs  BUILD DATA INFRASTRUCTURE  DATA  DETERMINE MEASURES  mm  BUILD MANAGEMENT INFRASTRUCTURE  ORGANI- \ 1. -. NEED /  St  USING THE SYSTEM  |IMPR©^Ej MENT  • increased understanding of processes and activities • trust in data • ability to create process based measures  Figure 4-25: Impact of the Systems Planning Phase within the Context of the TMMS Methodology  4.4  Determine Measures Phase  The previous chapter reviewed the four steps or types of measures that should be created from process based data. Activity based costing measures provide basic measures comparing the inputs needed to produce a unit of output. Establishing performance management is an important step because it motivates the managers to improve the operation, measure job performance, and enforce accountability quantitatively. Diagnostic measures gauge the health of a process or system. Solution specific measures can be easily created or called for if managers understand the processes and data infrastructure. Solution specific measures are also used in the many operations management techniques available. These measures were created for all WMC mines. The following subsections provide the results of the determining measures phase of the methodology and discusses their impact.  4.4.1  ABC Measures  Basic ABC measures are direct input-output ratios calculated directly from the process-based data. By comparing the absolute costs per unit of output, a unitised cost, or process cost is calculated. Table 4-3, 152  above, shows the first 20 process accounts in Ontario division's process based accounting system. As mentioned previously, some processes act in a supporting or overhead role. For example, the outputs from 'Supplies and Personnel Handling (account with suffix 125), are consumed by the other processes. However, considering that Prodstats keeps track of all material movement (muck and supplies), the time and money spent moving supplies for a particular process can be known. For example, if most of a supplies handling crew's time in a particular day is spent delivering shotcrete and construction material for backfill barricade construction, those costs could be automatically allocated to the Backfilling process. The ability to merge these support costs with the processes that consume their outputs involves a highly detailed process map and considerable programming in the database, however, the West Mines considers the project to be of value and has a Process Based Accounting team working to build a fully integrated core process based accounting system.  23  The intention is to include all support processes into the core  production processes. The West Mines TMMS redesign team saw the utility of using this type of cost accounting for determining the budgets for the operating mines. Therefore the impact of producing ABC measures is to facilitate many various projects and other measures based on process costs.  Until the fully integrated process based accounting system is created, a less accurate process based accounting system was developed and is currently used. Table 4-5 shows the unitised cost for the Crean Hill mine. Note that the processes without measurable outputs and those that vary according to tons hoisted (hoist, crushed, conveyed, shipped), labelled 'cost by ton', have been compiled into a single output measure: the number of tons hoisted in the time period. To show the complexity of this system, over seven hundred thousand financial transactions, and over three hundred thousand production records are used to calculate the table. This is accomplished through querying tools, a database, and a systems map. On a Pentium III computer with a T3 connection (high-speed network), the table should be calculated in approximately one hour. Omitted from the table are the fixed costs charged against the mine from head-office such as taxes and corporate costs. In order to respect confidentiality, only the unitised costs are shown, having been altered by a common factor.  153  Table 4-5: Activity Based Cost Results for 6 Month Time Period for Crean Hill Mine Unitized Development Tophammer Drill ITH Drill Mucking Truck Backfill costs by ton  Nov-00 288.00 8.06 18.26 7.67 2.04 5.49 22.62  Dec-00 369.92 8.94 20.80 6.93 3.20 16.85 24.10  Jan-01 856.02 12.35 10.46 9.21 1.36 3.99 25.98  Feb-01 1849.69 10.03 6.91 2.31 12.48 32.99  Mar-01 1261.49 17.85 17.57 7.39 2.77 48.11 43.46  Apr-01 2639.00 5.96 5.72 10.12 5.19 1.16 35.62  May-01 Unit 1210.68 $/ foot of adv 10.53 $/ft 14.56 $/ft 8.04 $ / ton mucked 2.81 $ / ton trucked 14.68 $ / ton poured 30.80 $ / ton hoisted  Figure 4-26 shows the process trends normalised (all numbers begin at 1) from the first month. The increased process costs reflect the difficulties suffered by Crean Hill related to equipment, materials stockpiling (sand and shotcrete), environmental issues (water treatment), and infrastructure reliability over this time period.  -•— Development -*— Tophammer Drill | ITH Drill -*— Mucking -*— Truck - • - Backfill Nov-00 Dec-00 Jan-01 Feb-01 Mar-01  Apr-01 May-01  H — costs by ton —-Overall  Month  Figure 4-26: Normalised Unitised Process Costs Trends  4.4.2  Performance  Measures.  The 'Determining performance measures' phase of the TMMS successfully resulted in performance measures for all three mines. Performance measures for Creighton and Coleman/McCreedy East were successfully determined and made available through an application called CorVu that creates reports from data in MIMS. The reports are either bar charts, line-graphs, run-charts, or tables. The software allows users to 'drill down' into the measures by double clicking on areas within the graph or table. The 154  calculations programmed into the query application were developed using a methodology similar to the one discussed in section 3.3, where performance measures are closely associated to the job, work, and management level, have accurate targets, and appropriate rewards. Performance measures for Crean Hill were virtually identical to those of the other two mines except that there was only one S2 to measure.  In reviewing performance management at INCO, managers had difficulty producing a list of job responsibilities or accountabilities related to production or cost management (in fact none were ever produced). Environmental, health, and safety issues were effectively managed across all of INCO. Managers at INCO are held accountable quantitatively and qualitatively using various measures, evaluation schemes, and periodic reviews. In order to determine the responsibilities and accountabilities related to the production system, interviews were held with tactical managers. '  24 25  These discussions  revealed the desires of these managers to know explicitly what are the responsibilities and accountabilities of their positions. This was a reassuring result as it demonstrates the need and appetite for quantifiable measurement. The discussions used process maps so that process based performance measures could be derived. A full suite of performance measures for the S3 (superintendent) and S2 (general foreman) were developed by mid-July 2001 for all mines. The discussion below reviews the results of determining the performance measures for both S3s and S2s at the WMC.  4.4.2.1  S 3 Performance Measures  Corporate objectives are well aligned with the TMMS application. For example, Ontario Division platforms are business literacy, organisational effectiveness, breakthrough improvements, and safety.  26  Part of business literacy relates to performance measures. Organisational effectiveness espouses accountability.  The TMMS application was assimilated with other WMC initiatives such as the  development of superintendent measures.  The superintendent is responsible for the mine and is  encouraged to manage it like a business. This psuedo-business, the mine, has to supply the mill with monthly quotas of ore at the highest grade and volume possible within the constraints of the budget and  155  long-term mine plan.  Table 4-6 shows the seven S3 measures developed by July 2000. Their  performances are currently reviewed once a month at the variance meetings.  Table  4-6: Performance Measure for Mine Superintendents at I N C O West Mines, July 2000.  Measure Name Equivalent Ni cost/lb  Accountability Issue value produced compared to costs incurred  Mine Tonnage  Fulfilment of production volume  Mine Costs  Maintaining cost control  Ore Recovery  Making full use of metal inventory  Recovered Nickel Equivalent  Dilution  Product Surplus  Ensuring product quality  Description  Method of Calculation  The overall value of the ore in pounds of nickel as a ratio of cost, compared with the budgeted value of ore in Ni pounds and actual costs. Traditional measure culturally necessary, compares the budgeted mine tonnage with actual mine tonnage. Traditional measure culturally necessary, compares the budgeted mine cost with actual mine cost Measures recovery from the stopes by comparing the planned percentage oreblock excavation with the oreblock size. Actual volume is measured using a Cavity Monitoring Survey instrument. This is the measure of grade as a function of Nickel. In the graph, the value of all metal produced is divided by the value of nickel and tonnage produced.  Ensuring quality processes  A figure calculated subjectively by a geologist, ratio of waste to total material, compiled over a month compared to planned dilution.  Measure of overall performance  This measure is culturally divergent for mining, however, the need to reduce costs while increasing output is induced by this measure.  'all  metals  ^ V  N  metal produced; x value;  •  ,  (value of nickel / lb) x total cost;  mine tonnage  ^mine costs  volume excavated from oreblock planned ore block size  'all  metals  ^ v  >  metal produced; x value; J  '  (value of nickel/lb) x total tons  tons of waste material tons of muck  1000,000 R = Revenue C = costs b = Budgeted a = Actual  Figure 4-27 is an example of the performance trends over six months for the Creighton mine. All measures compare Budgeted or Planned performance with actual performance. Therefore budgets and plans are used as targets for performance. However, as these budgets are not considered to be accurate, a common omission of responsibility for poor performance is that the budget was not accurate.  23  This was  an important issue and was also partly responsible for the West Mine's Business Systems unit to 156  commission the process based budgeting project previously mentioned. Figure 4-28 shows the 'product surplus' measure described in Table 4-6. This measure is culturally divergent because for the first time in INCO's history, revenues are being measured with costs at a tactical level. Note that if all revenues and costs for a month are on budget the resulting performance will be a value of 1. A positive value results for each unit above the planned revenue and/or below budgeted cost.  A cumulative measure of  performance is also present on the graph as a bar. As can be seen, the cumulative performance for that time period has resulted in a loss of over $7 million. Therefore this may be a reflection of being under budget in terms of production or over budget in terms of costs.  Equivalent Ni c o s t  i -  t$/l  3.00 3.50 2.50  O  2.00  -  Z  1.50  -  1.00  -  0.50  -  0.00  -  (O/} >  LU  $/lb  -  •  Budget  -a—actual  Jan  Feb  Mar  M e a s u r e of unitized overall performance  Apr  May  Jun  Jul  Month  Figure 4-27: Performance Measure Trends for S3 - Equivalent Ni cost / lb  Monthly Overall Performance (Scorecard)  o  <  CD 13 c CD > CD  Cumulative Y T D : l o s s of $ 7 . 6  million  a: Figure 4-28: Performance Measure Trends for S3 - Overall Monthly Performance  :  157  4.4.2.2  S2 Performance Measures  Performance measures for the S2 operational tactical managers (general foremen) were developed through a series of meetings between the project consultant/facilitator (author) and the Crean Hill S2. The same process was undertaken at Creighton by other personnel. Table 4-7 provides some of the core accountabilities of operating S2s identified through the interviewing process.  Table 4-7: S2 Level Operating Tactical Manager Responsibilities24 P r i m a r y Responsibilities  Manage core mining process interactions both in productivity and cost (unit operations) Reduce process variation  I S e c o n d a r y Responsibilities  Co-ordinate engineering and operations (jointly undertaken with engineering supervisor) Motivate operations workforce Co-ordination between work groups (between operating beats and operations-maintenance) Address safety issues and responsibilities Plan and maintain process capacities for manpower, equipment, and supplies on a medium time-scale (2 weeks to 1 month) Implement corporate assignments.  Specific quantifiable accountabilities and performance measures were developed in a process map format from the outlined responsibilities. These 'performance measure'-process maps were made into Tabloidsize posters and had explanation tables to provide further detail for the S2 managers. These resources were compiled into a manual for the S2 managers. Figure 4-29 shows a small section of the poster while Table 4-8 provides the accompanying explanations found in the S2 measures manual.  158  P r d n Drilling T o p H a m m e r (Boart drilling)  Lateral / R a m p development  030  Scoop Tram Mucking  005  P r d n Drilling ITH  045  $/ footage advance feet / day  $/ ton meter tons / day-location  Drill down: - location  Drill down: - operator - delays  025 $/ footage drilled feet / day  $/ footage drilled feet / day  to  Blasting  Drill down: - operator - location - delays  Drill down - operator - location - delays  Figure 4-29: Section of S2 Performance Measures Process M a p .  24  The 'Cost Account' column in Table 4-8 shows the process based cost account used to calculate the input (costs) of the measure. The 'Pseudo-Revenue' column describes the output component of the measure. The 'Measure' column lists the performance measure. The 'Notes & Drill-down' columns describe the measure, its weaknesses, and drill-down options. Drill-downs options are related to how the data is modelled in the relational database. The performance measures described are reported as trends within a database querying tool that would allow the S2 manager to 'drill-down' into the information by simply double-clicking on sections of the graph to obtain more detailed information.  For example, two  performance measures for development are suggested: $/footage advance and average feet per day for the time period, typically one month. The outputs (production) are tracked according to data elements such as operator, workplace, time to complete or material used. The inputs (costs) are tracked by expense element and equipment costs. Therefore within the feet per day performance measure, the manager could drill-down into a particular operator's feet per day trend or compare the costs between the various pieces of equipment within the process as a function of their productive outputs. As might be expected, a manager can be lost in the multiple drill down options available, therefore key drill-downs for the performance measures are included as seen in Figure 4-29 (lowest item on the process boxes).  159  T a b l e 4-8: P e r f o r m a n c e M e a s u r e D e s c r i p t i o n s  Cost  Pseudo  Account/  Reve-  Process  nue  Measure  Notes & Drill-downs  $/ft.  Lateral development footage is currently not being collected directly. Footage advance may be inferred from Prodstats information. A drilldown to specific locations would be important in order to distinguish between elevated costs between workplaces or drift layouts.  name  1311005 Lateral/Ramp Development  Footage advance  1311045 Scoop tram mucking  Tons mucked per unit of distance  $/ton  Being the highest cost and most complex process in a typical operation, this measure may be the most important. Prodstats and the MIMS database provides the ability for many drilldown options: operator ID, expense elements, delays, source and destination, etc... Unfortunately, the database currently does not provide distance between workplaces. Therefore a measure that would ideally present the true cost driver of this process (ton-meter) is not easily available but is still strongly recommended. As an overall measure for the S2s, dollars per ton may be acceptable. However, many drilldowns should be made available so that analysis of the true performance is available.  1311025 Production Drilling ITH  Feet drilled  $ / foot  ITH drilling is undertaken throughout the division and therefore would be available as a comparative measure. However consideration should be placed on the drill pattern, as frequent drill movements would increase unit costs. Ideal drill downs when searching for improvement opportunities and reasons for variance would include: operator (some operators can drill far more productively than others), location (level induced delays can be identified), delays, and expense elements (to identify costing abnormalities).  adv.  The process cost performance measures are intended to be reviewed once a month in a S2 variance meeting (since costs were reported monthly). Figure 4-30 provides an example of the process based monthly performance measure for the development process for Crean Hill Mine.  Other performance  measures are evaluated in less structured environments but more often. Performance targets are typically the scheduled production rate or budgeted costs.  No official extrinsic rewards are being given to  managers yet. The intrinsic reward of meeting budgets or production quotas are the motivating factors used at INCO.  Process based performance measures have allowed managers to identify areas of poor  160  performance as discussed later in this chapter. Diagnostic measures and solution specific  measures were  used to pinpoint specific areas in need of managerial intervention.  3500  1  Iff ant  rZD  ft plan — • - $ / f t a d v a c t .  H » - $ / f t budget  i—i  3000 >  1  03  180 160  2500 2000  try  140  8  120  |  100  ^  80  g  60  |  40  £  20 0 t  J>  #  cF  ^  Figure 4-30: Development S2 Performance Measure Trends  4.4.3  Diagnostic  & Solutions  Measures  Diagnostic measures are tools which can be used to detect when a process is operating sub-optimally. Diagnostic measures are also often undertaken in conjunction with improvement initiatives in order to investigate problems with processes. Solution measures are the measures calculated specifically for improvement initiatives and will be discussed in the "Using the System" section. Several diagnostic measures have been requested by tactical managers through this project such as: •  Mucking process stability: In mid-2000, the mucking process was considered to be sub-optimal. Mucking rates by various workplace locations, operators, delays, and equipment were undertaken. The study revealed that excessive delays were being incurred. For example, in a ten-hour shift, the truck was hauling for only 2.5 hours.  161  •  Contracting-out reductions: As part of an industrial relations improvement initiative, Ontario Division agreed to significantly reduce the dollars spent on contract workers, ensuring that local 6500 union members are employed in all possible positions. A measure was created to track the dollars spent on contracting-out expense elements. The integrated measurement tools allows managers to drilldown into the costs by double clicking on the month, supplier, or amount charged to obtain all available information on the financial transaction.  •  Scoop maintenance costs: Maintenance costs were extremely high for all underground mobile equipment at Crean Hill. For the past two years, the equipment has had a book value of zero (very old equipment). In order to determine which piece of equipment was most expensive, a measure was devised to accurately compare equipment output to equipment cost. Table 4-9 shows ratio of average monthly maintenance costs to number of tons mucked (moved) in that month for the Crean Hill mine LHDs. Tactical foremen were surprised at some of the scoop costs and several scoops have since been retired.  This measure was easily and quickly undertaken using the process based data  infrastructure and measures. Over 36,000 cost records and 15,000 production records were used in the creation of Table 4-9.  Table 4-9: Scoop Maintenance Costs per unit Produced Scoop MIMS name  Average Monthly maintenance costs per ton mucked ($ / ton moved) Aprinm  Calculation ->  v~* maintenance costs for monthj », ™™ mucked for monthj t o n s  6  13-SCOOPS-ST8A-689 13-SCOOPS-JCI125-791 13-SCOOPS-ST8A-690 13-SCOOPS-ST8A-709 13-SCOOPS-JCI600-865 13-SCOOPS-R1700-871 13-SCOOPS-ST8A-710 13-SCOOPS-JCI3.5-686 13-SCOOPS-ST8A-700 13-SC60PS-Sf8B-888  15.43 12.2 11.88 7.5'; -1.95 4.78 3.01 2.70 2.06 0.72 162  4.4.4  Impact of Determining  Performance  Measures.  In early 1999, the quantitative performance measures at INCO Ontario division were primarily the mining industry's stalwart 'tons hoisted' and 'costs', measured and reported independently on a monthly basis. Creating a core set of process based account measures has resulted in a proliferation of accountability and quantitative measures.  The impact of creating a core set of process based cost accounting measures facilitated the creation of performance and diagnostic measures. In developing such measures, the development teams had identified several other benefits of a standardised process accounting system. For example, the ability to easily determine the required budget for the mine plan.  Performance measures also clarified accountabilities and motivated tactical managers to improve performance. These measures allowed the managers to determine their accountabilities in relation to work processes, such as managing ITH drilling, instead of absolute output measures such as tons hoisted. The performance measures motivated many tactical managers to undertake improvement initiatives. Managers were so eager to initiate improvements at some operations that there was a lack of resources to undertake the initiatives.  Diagnostic measures, such as Table 4-9: Scoop Maintenance Costs per unit Produced, allowed managers to view their processes as never before. This measure, as well as others, sparked considerable discussion among the tactical managers. The impact of solution measures is to enable improvement initiatives as 28  will be shown in a later section.  The results of the 'determine measures' phase was the creation of process based costing, performance, diagnostic, and solutions enabling measures. These measures were made available in either Excel reports or on a MIMS Querying tool called CorVu. A West Mines menu was created by maintenance personnel with expertise in MIMS programming, the menu interface is seen in Figure 4-31. When viewed on-line, 163  users can drill down into the various graphs or tables to view more detailed information. Figure 4-31 shows the Web-based reports that were available by June 2001, but these could be used only to report data, no drill-down abilities were available in this format. However, the creation of these various measurement mechanisms and the numerous methods of analysis and drilldown options, creates the need for structure. Without adequate structure to the analysis and review of measures, tactical managers can become lost in the many ways of viewing or analysing the information. Therefore, a structured organisational design is needed to define a procedure to manage performance and improvement initiatives. The motivation to improve through improvement initiatives must is also structured within the management infrastructure.  File  Menu knowledge Library Users  Ijelp  Creighton Mine Reports Operating ^xnimsm-:-  Maintenance  Y e s t e r d a y s Requisition Estimated Commrt merits  Drilldown Reports  Last 7 Days Requisition Estimated  Yesterday's Work Orders Created  Commitments  Last 3 Days of W o r k O r d e r s C r e a t e d  M o n t h t o Date Re q u sit i o n s E s t i m a t e d C o m m r t r n e r r t s Supplies and Services vs Budget  \ :  Current Work Order Backlog Maintenance Effectiveness Report  L"  Weekly Operating Executed T a s k s Creighton  Weekly Regulations by T y p e by User  Weekly Executed Schedules  Monthly Requisitions hy User by Type  Weekly Executed T a s k s  M o n t h to Date A c c o u n t C h a r g e s A c t u a l V s . B u d g e t  Adrninistrative W o r k Order Report  V e a r to Date A c c o u n t C h a r g e s Actual V s B u d g e t L a s t 12 M o n t h s L o s t P r o d u c t i o n In c u t t i n g C u r r e n t  Maintenance Analysis M e n u  Work O r d e r s created by Or  Month  Work O r d e r s C o m p l e t e d by User  L a s t 1? M o n t h s A v a i l a b i l i t y & U t i l i z a t i o n Incl. C u r r e n t M o n t h ]  Backlog of W o r k  Cost by A s s i g n e d Tons Cost  by Reg. Develop.  C o s t b y ITH F o o t a g e  ;| j  C o s t b y E q u i v Mi L b s [  C o s t b y T o n s SanrJfill  L a s t 16 w e e k s P a r e t o W o r k O r d e r  Analysis  12 M o n t h T r e n d W o r k O r d e r A n a l y s i s  C o s t b y THD F o o t a g e  C r e i g h t o n P r o d u c t i v e Unit C o s t 1 r e n d s  L a s t 12 M o n t h M u c k C i r c u r t P r o j e c t L o s t P r o d u c t i o n L a s t 12 M o n t h s M u c k C i r c u r t P r o j e c t A v a i l a b i l i t y S U t i l i z a t i o n |  Standard Job Usag  Return to West Mines Menu Figure 4-31:  Orders  L a s t 28 D a y Par e t o W o r k O r d e r A n a l y s i s  West Mines Report Menu for Creighton Mine.  164  -3  P i o d s t a t s - Fill - T i e n d R e p o r t - M i c r o s o f t I n t e r n e l Explorer  1 Fto  £dil  *  View  Fflvorites  7=  Back \ Address \pj  Jools  Help  O  D  Stop  fa  :  Refresh  <3  ,  Home  i  Ll]  ©  Search  Favorites  0  H  History  http://j ud_charts/prodsla(s/lrend3.asp?y=2001 &m=068carea-17  Print  Edit  Messenger ~J  £>Go  Links »  SNP°B<)/H°fr* I Primary Scoop | Development | Fiji | I T H Drilling | Ti-»m» | Mite Drilling < Hay  fib & » & -  L  t  |  Jun,  2001  Jul  I  i  Creighton - Regular Development Footage 900 » ACTUAL | - • - SCHEDULE I BUDGET  600 700  _ *-~*  .  600 500 400 300 200 100  o 01  02  03  04  05  06  07  08  09  10  11  12  13  14  15  16  17  18  19  20  LEGEND  ACTUAL  BUDGET  BEAT 44  84  120  BEAT 55 BEAT 56  21  22  23  24  25  '  26  27  28  29  30  SCHEDULE 75  0  30  80  60  1  Figure 4-32: Web-based Reports for Creighton mine  Figure 4-33 summarises the impact of developing performance measures using the methodology proscribed in this thesis. The development of process based measures facilitated the development of the other types of measures. Performance measures clarified accountabilities and motivated improvement initiatives. Diagnostic measures facilitated the investigation of sub-optimal processes for the key factors causing the deficiencies. These measures were presented and made available through computer networks and drill-down capabilities.  165  SYSTEMS PLANNING  SCOPE  • inspiration • clarification of rotes * reviewing mistakes of ttie past • clarification of steps • showed the importance of developing TMMSs  BUILD DATA INFRASTRUCTURE  K  • increased understanding of processes and activities • trust in data  • ability to create process based measures  DETERMINE MEASURES  DATA V  ;INFO-  -  BUILD MANAGEMEN INFRASTRUCTURE  ORGANI- \ SATION & NEED /  USING THE SYSTEM  IMPROVE^ **• MENT /  • core process based measures facilitate the creation of more specific measures • motivate improvements • clarify accountabilities • diagnose problems • enable improvements  Figure 4-33: The impact of determining measures  4.5  Build Management Infrastructure Phase  Managers at INCO have many safety, environmental, labour relations, and legislated duties. legislated requirements reduced the resources for review or analysis of performance measures.  These The  Divisional platforms of breakthrough, organisational effectiveness, safety, and business literacy provides no clear guidance on where, when, or how production management issues must be dealt with. Breakthrough improvements take time, resources, and perseverance.  For example, an attempt to  formalise a regular meeting to review, analyse, and identify opportunities using the S2 measures was often postponed or cancelled when equipment breakdowns and environmental issues came to the forefront.  In an attempt to continue the contact and review process, some meetings were held  underground or at the hoist control room.  The four suggested types of meetings for an effective management infrastructure include: •  coaching/performance review  •  solution identification  •  planning  •  T M M S audit  166  4.5.1  Coaching  / Performance  Review  Creighton and Coleman had performance review procedures. The S2s would have daily meetings with their Sis to discuss the production issues and to review the foreman log book. The Sis would have daily 'line-up' meetings with the men on their crews where work allocations and safety warnings would be communicated. The S3 and S2s have daily meetings at the end of every shift, and since mid-2001 have used the Web Based report tools as seen in Figure 4-32. By mid-2001, performance measures for S3s and S2s had been developed for all of the W M C . The development of performance measures for lower-level employees are planned but not yet established.  Those management levels that did have performance  measures have been motivated to initiate improvements.  4.5.2  Solution  Identification  Improvement programs were initiated by those managers for whom performance measures were established and reviewed.  The S2 at Crean Hill was not motivated to undertake any improvement  initiative without direct solicitation from the S3. This may be due to the fact that no official regular S2 performance measures review was undertaken between the S2 and S3. The other two mines, where an S3-S2 coaching/performance meeting was held on a regular basis, had many improvement initiatives.  The S2s lacked the time and training in operations management techniques to undertake improvement initiatives themselves. For example, the S2 of Creighton Deep noted that the development process in his area was consistently behind budget (can be seen in Figure 4-32). He allocated his most educated SI as project foreman and set the goal of improving the capacity of the process. He also solicited the aid of the West Mines Business Systems unit which provided support by hiring a consultant from Hatch Associates and engaging the Crean Hill facilitator/consultant part-time.  Regular 'improvement project update'  meetings were held twice weekly.  Several improvement initiatives have been motivated and directed by process based measures such as: 167  •  Crew analysis (Coleman/McCreedy East);  •  ITH performance improvement (Creighton beats 55-56, under a GF with an engineering and project management background);  •  Process mapping / workflow optimisation (Coleman/McCreedy East & Creighton);  •  Cost auditing / rationalisation (Creighton);  •  Mucking-Truck optimisation (Crean Hill);  •  Development capacity improvement - Theory of Constraints - Simulation - Process mapping (Creighton Deep).  At the superintendent level, performance improvement initiatives include: •  Process Based Budgeting;  •  Contracting-out reductions;  •  Understanding our business education program;  •  Process Innovation for Mining Systems (this project).  4.5.3  Planning  Planning meetings was already firmly established at INCO prior to the application of the TMMS methodology. However, a cost or process based component had yet to be added to the meetings. The planning meetings are attended by personnel from engineering, geology, maintenance, logistics, and operations. These meetings primarily review the short-term mine. Cost targets are set through the budgeting process that is currently being changed to a process based budgeting process. Following the establishment of an IT infrastructure and measures, the planning process at Crean Hill used the performance rates of processes such as mucking (tons per shift) and drilling (feet per shift) provided by Prodstats as an estimate in planning a stope.  168  4.5.4  TMMS Audit  The TMMS was reviewed on a quarterly basis. Small changes to the performance measures and data infrastructure occurred almost weekly. Meetings with the West Mines Manager (S4), the steering committee, and Mines Research necessitated a review of the success and issues of the TMMS. The Business Systems unit of the WMC undertakes reviews on a roughly two-week basis where issues of the management systems are discussed and changes planned. Some changes, such as the need for a standard TMMS across all the West Mines has been identified in these meetings. The audit function also continues to plan the implementation of the management components identified in the systems plan.  4.5.5  Impact of Building Management  Infrastructure  Establishing the management infrastructure was found to be the most difficult phase to implement as the meetings that are developed consume a tactical manager's time and require decisions to be made. Meetings are also occasions for potential conflict as issues such as job performance, inappropriate decisions, and gaps in understanding surface. A good tactical manager will ensure that the discussion does not generate unproductive conflict. INCO culture has begun to change as managers are trained in personal interaction and are promoted based on their ability to treat subordinates with respect. The meetings are also occasions to make decisions from which action is derived. Indecisiveness was a frequent result of the meetings as the development of new performance measures was requested instead of developing action plans for improvement. When the management infrastructure was firmly established, and resources to initiate improvement were made available, improvement projects were motivated and subsequently initiated. Some of these improvement initiatives are discussed in the 'Using the System' phase, below.  The overall impact of building management infrastructure is to allow all the components of the TMMS to function as designed.  The coaching or review meetings initiated improvements, the solutions  identification meetings determined and implemented solutions, the planning meetings suggested targets, 169  and the audit meetings continued the evolution of the TMMS. Figure 4-34 shows these basic impacts of building the management infrastructure.  SYSTEMS PLANNING  SCOPE  • inspiration • clarification of roles * reviewing mistakes of the past • clarification of s t e p s • showed the importance of developing T M M S s  , BUILD DATA INFRASTRUCTURE  K DATA  • increased understanding of processes and activities • trust in data • ability to create process b a s e d measures  V  DETERMINE MEASURES  • INFO.,,  BUILD MANAGEMENT • . INFRA- • STRUCTURE  ORGANI- N SATION & I'NEED /  USING THE SYSTEM  • core process based • improvements initiated measures facilitate the • targets set creation of more • solutions identified, specific measures planned, and • motivate improvements implemented • clarify accountabilities • TMMS evaluated for * diagnose problems effectiveness and * enabie improvements evolved  Figure 4-34: Impact of Building Management Infrastructure  4.6  Using the System  Presenting all improvement initiatives and system components, derived from the application of the TMMS at the WMC is beyond the scope of this thesis. Using the system is comprised of basically following the procedures as laid-out in the management infrastructure.  The basic element of the  management infrastructure includes a meeting where tactical managers review performance, decide on a course of action that would improve the most pressing issue, then monitor the changes. What makes this TMMS unique is the degree of integration of the information, the use of modern management techniques, considering the cultural issues, and instituted audits of the system. Three examples of using the system are discussed in this section, demonstrating the information integration, modern management techniques, inclusion of cultural issues, and TMMS audits. The first example discusses the efforts to improve the capacity of the development process at the Creighton mine's lower mining area, called Division 6. The second example discusses the anticipated required increase in truck haulage capacity at the Crean Hill mine. The final example discusses the need and development of an automated process based budgeting tool linked directly to the mine schedule.  170  4.6.1  Division  6 Capacity  Improvement  The Creighton Prodstats system is considered to be the most accurate in the W M C since Creighton management enforced the use of the Prodstats data for incentive payment calculations (in early 2001). This prompted the creation of web-based performance measures so that the S2 managers could monitor the performance of their areas on a daily basis. A daily meeting is held at the end of each workday where the S3 and S2s would meet to discuss ongoing performance. Trends showing decreasing productivity in a particular area would be discussed. The core performance measures for the S2 operational managers at Creighton were considered to be: •  P r i m a r y L H D m u c k i n g r a t e : number of tons mucked from the stope per shift  •  T r u c k h a u l a g e r a t e : number of tons hauled to the final dump-point  •  I T H d r i l l i n g r a t e : the number of feet drilled per shift  •  D e v e l o p m e n t a d v a n c e r a t e : the number of feet of advance by area  The Division 6 mining area at Creighton mine is separated into three distinct areas where the development processes differ in equipment, excavation design, material mined, crews, and incentive contracts. Table 4-10 shows the characteristics of the various development areas.  Table 4-10: C o m p a r i s o n o f Development Areas i n Creighton Deep  Area  Equipment  Excavation Design  Material Mined  levels 6900-7000  Older equipment, 1 boom jumbo, x-truck  Smaller openings, sometimes preshotcreted, then bolted, then another layer of shotcrete  levels 7200-7400  Newer equipment, 2 boom jumbo, McClean Bolter  Large opening, occasionally shotcreted, de-stress blasting  levels 7530 and lower  Newest equipment, automated 2 boom jumbo  Large openings for truck access, shotcreted, de-stress blasting  Developing through backfill and old workings to recover remnant ore Sill and x-cut development, higher priority. Ramp development, highest priority  Name  171  The general foreman of Division 6 was challenged to improve the development process, as it was falling behind its planned production rate and costs were higher than budgeted. An improvement initiative based on the Theory of Constraints and TQM management techniques was initiated, where the capacity of the development process was to be improved without additional capital spending. Specific improvement targets were not set, yet a general improvement of 10% above the budgeted cost and capacity was discussed.  Detailed process mapping analysis of capacities, delays costs, and prodstats information were undertaken. The detailed integrated data infrastructure enabled the calculation of the different production rates and costs of the various mining areas.  A complex task-level simulation was developed to test the  performance increases that would result from changes in crew and equipment allocation, procedures, and materials inventory availability (bolts, screen, shotcrete, etc.). The simulator was used to calculate changes in incentive payments to gain operator support for changes from the operators. This element fitted well with the 'security' aspect of the operators as it was demonstrated that increased incentive payments could be achieved with very little extra effort. The simulator also aided the acceptance of the technically minded managers as the changes were all tested mathematically prior to being implemented in the mine.  In order to respect confidentiality, detailed descriptions of the suggested changes are not  discussed, however, it can be mentioned that several changes were suggested resulting in increased performance. Some of these suggestions include performance measures of the underground inventory stores so that no stock-out delays would occur.  4.6.2  Truck Haulage  at Crean  Hill.  The dynamic nature of mining causes bottlenecks to shift between areas and processes. For example, if a particular mining area is close to the dump point, mucking is unlikely to be the bottleneck for that area. Crean Hill has few remaining stopes/workplaces as the mine is scheduled to close by mid-2002. Most of the production is expected to be mined from a stope located at the bottom of the mine where a truck is 172  required to haul the material up the ramp to the crush/convey/hoist circuit. The capacity o f the truck required by the mine plan is close to the theoretical capacity. A n improvement initiative to increase the capacity o f the trucking process was therefore required. This initiative was relatively simple as there is only one truck and route, and only two operators to observe. A n analysis o f the delays from the Prodstats system revealed that the truck was being operated for less than half the shift, as seen in Figure 4-37. Other information display formats allow increased information to be revealed. F o r example, Figure 4-36 shows the average delay per occurrence and frequency o f occurrence. This would allow those delays with the most frequent and lengthy delay to be addressed first.  Some o f the delays such as 'travel time' could  not be avoided. However, the fuelling and oiling tasks could be redesigned to consume less time and 'lunch/meetings' delays could be mitigated by having a different operator continue to operate during the primary truck driver's lunch-break.  Figure 4-35: Historical Delays and Work Throughout Shift  173  Figure 4-36: Graph of Historical Crean Hill Trucking Delays  Through a series of discussions with operators and tactical managers using process maps and process information, several changes were planned which would increase the productivity of the trucking process to the desired rate. These changes included operating the truck over the lunch-break and fuelling the truck only once a shift (the fuel tanks have enough capacity). A procedure whereby increased tactical management attention was encouraged for key bottlenecks was also discussed.  4.6.3  Automated Budget/Scheduling  Tool  An informal audit of the planning, progress tracking, and scheduling procedures at Crean Hill revealed a lack of short-term mine schedule, lack of ability to easily track performance against the schedule, and develop productivity rates that could be used in planning. In the development of the new mine plan, it was decided to create an automated scheduling, planning, tracking, and budgeting tool, that forecasts and 174  tracks actual costs and progress against the mine plan. The database information was already integrated as part of the 'data infrastructure' phase of TMMS development. Similarly, the performance measures for both cost and productivity were developed as part of the 'performance measures' phase of TMMS development. The mine plan was developed using Excel® and Project Scheduler 7® (PS7) (the INCO standard for mine scheduling). All changes to the mine plan, workplace/process rates, productive units, planned equipment, and duration were maintained in Excel.  4.6.3.1  Schedule  Calculating the progress and expected finish date for a PS7 task is a traditionally time-intensive procedure. A planner must first collect performance data by workplace and using spreadsheets, calculate the units produced and production rate, calculate the percentage progress (PS7 uses only duration and a percentage of the progress to calculate the start and finish times of a task) then manually input the progress for each workplace on the PS7 planning software. This process is simplified using the integrated data infrastructure because queries can be written to automatically poll the progress of particular workplaces for progress, production rates, and forecast the start and finish times. The Prodstats system keeps track of each process and productive unit by workplace therefore the schedule can be updated on a daily basis (although it is only updated once a week, before the weekly production meeting). This progress is then automatically transferred into the PS7 schedule revealing the workplaces that would finish before or after the planned date.  4.6.3.2  Budget  The annual budget at INCO WMC is used as the basis for the performance measures for the Superintendents. Traditionally, the budget is based on the previous year's annual costs and productivity. Typically, the previous year's budget is revised using planned changes to the overall production. For example, if the overall unit cost for the entire mine in the previous year was 80 $/ton at 25,000 tons per month, and production is expected to increase by 5,000 tons per month, the expected annual costs should  175  increase by 1/5 (5,000/25,000). This method can result in an inaccurate forecast as fluctuation of various parameters can affect the accuracy of such a method, for example: •  The use of different mining methods.  •  Changes in technology  •  Changes in workplace costs induced by depth, reconditioning requirements, or travel time  •  Seasonal costs  4.6.3.3  Linking Budget to Schedule  Crean Hill was primarily a V R M mine but is now becoming a cut & fill, room & pillar, sub-level cave mine, inducing a shift in mining costs. Costs would also vary on a monthly basis as the primary mining areas may shift from cut and fill to room and pillar. However, by linking the mine plan to historical productivity and unit costs by process, a far more accurate cost and production budget (forecast) can be developed. This was undertaken at Crean Hill where the integrated database was first linked to the mine's PS7 schedule. Figure 4-37 shows the data model that allowed the budget to be linked directly to the costs and production information.  As can be seen, workplace, time, process, and equipment are all data  elements common to each record. Excel was able to link directly to PS7 since the scheduling software has the option of entering the workplace information as a database  176  Figure 4-37: Data Model linking PS7, Production, and Cost Records.  For corporate requirements, annual budgets must be reported as monthly forecasted production and costs. The costs must also be reported by expense element (for example, labour, drill steel, shotcrete, safety supplies, etc.). However, production and costs for performance measurement at the S3 level should be reported according to process. When the data infrastructure is integrated as laid-out in the TMMS methodology, managers have the ability to easily convert the forecasted budget from expense element to process (development, production drilling, etc.).  Figure 4-38 shows the simplified procedure  undertaken to create this automated budgeting tool. The most complex step is to create the schedule and sequence, which is a planning function undertaken by the engineering staff. Database functions called 'pivot tables' in the Excel software in a pre-prepared spreadsheet allows the forecast cost in terms of processes to be presented as expense elements with a few mouse clicks. The process by which this is accomplished is summarised as: •  Through spreadsheet calculations, the process outputs by month are calculated. For example, the number of ITH drilling days for a particular workplace is assessed by calculating the start and finish time from a linked flat-file (table of records, see section 3.2.1) from the PS7 software.  177  •  A set drilling rate per day (continuing the example) was used in the development of the schedule plan. This set rate is multiplied by the number of days in the month the workplace expects to be undergoing ITH drilling (calculated previously) resulting in the total number of feet drilled.  •  The unit cost for ITH drilling calculated from the ABC measures ($/foot drilled) is multiplied by the total number of feet drilled.  These calculations are maintained in the spreadsheet with live links to the database. Therefore the sum of the monthly costs can be organised by any attribute such as process, expense element, or even workplace. A numerical example is provided to illustrate.  Calculate planned  Create s c h e d u l e &  p r o c e s s output by  sequence  month  —• Calculate average historical monthly  —•  Multiply (link) planned  O r g a n i s e by  p r o c e s s output by  e x p e n s e elements  average  M a k e allocations  monthly  —•  p r o c e s s cost  for technological  p r o c e s s costs  or p r o c e s s e s by maintaining links  changes  F i g u r e 4-38: S i m p l i f i e d P r o c e d u r e for the D e v e l o p m e n t o f A u t o m a t e d S c h e d u l i n g / B u d g e t i n g T o o l .  Figure 4-39 shows a section of the information inputs for the drilling process. Equipment number 999 (resource #3) is an Boart top hammer drill with an average drilling rate of 100 ft/shift.  ciri Ilir  #fppili||ii||  Assumed ! Level 2550 "[  Workplace  Mininq  1750  URM  1790  URM  1750. 8750j  URM  82601 6475!  URM URM URM  M e t h o d Footaqe  .  Duration fshiftsl.-drill tijpe  26 " 96 91 73 54 97 26  45501 89281 17501  Equip Res,# N a m s '  =  Actuals Notes  1750 1750 ft  Boart  Boart Boart  3l  F i g u r e 4-39: Screen C a p t u r e of B a s e I n f o r m a t i o n E n t r y i n E x c e l S h o w i n g D r i l l i n g D a t a  178  redecesso Abb  #  Figure 4-40 shows the section of the Gantt chart where the ITH drilling process is scheduled. As can be seen, the drilling process is underway between mid-November 2001 workplace 1970.  and mid-February 2002 for  The spreadsheet can automatically calculate the number of units produced in that  period. For example, there are 38 shifts expected in the month of January (19 days x 2 shifts per day) and since the drilling rate for equipment # 999 is 100 ft/day, a total of 3800 feet is expected to be drilled in January. Since the average unit cost for the top-hammer drilling process (according to the historical data) is 12.36 $/foot drilled, the monthly cost for that workplace and process is forecast to be $47,000. A new flat file is therefore created where the costs can be organised according to process, time period, or workplace.  Task Name Workplace  Level  Workplace  P r e d e c e s s o r #s  R e s o u r c e #s '  2001 s  2002 Q  H  D.  .1  F  M  A i  2550  1930  Reconditioning  2550  1930  Drilling  2550  1930  27 FS,33 FS  Blasting  2550  1930  28 F S  Mucking  2550  1930  29 FS,35 F S  Workplace  2550  1970  Reconditioning  2550  1970  46 F S  11  Drilling  2550  1970  32 FS,133 F S  3  Blasting  2550  1970  33 F S  Mucking  2550  1970  34FS.40 FS  M  J  J  A  S  O  i  11 3  Figure 4-40: Screen Capture of PS7 Gantt Chart at 2550 Level, 1970 & 1930 Workplace.  Since the process costs are calculated using a database that includes expense elements, the average distribution of expense elements by process can be calculated.  Table 4-11 shows the distributio