integrated asset management: how well are you using best practices ... - nicholas seiersen, kghm...
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Integrated Asset Management: How Well Are You Using Best Practices in Your Supply Chain and Maintenance Operations? Presentation by Nicholas Seiersen, Corporate Supply Chain Manager, KGHM International at the marcus evans Global Mining Summit 2014 held in Las Vegas, NVTRANSCRIPT
M
PrNick SeiersenCorporate Supply Chain ManagerKGHM International
Ch
I t t d A t Integrated Asset Management: How well
iare you using Best ractices in your Supply hain and Maintenance
operations?p
We are a Top 10 Cu ProduceWe are a Top 10 Cu Produceresources
Resource base
Southern Copper 58 2
Codelco 93.2
Copper content, in million tons
4 KGHM PM + I 2010* 37.5
Freeport 55.8
Southern Copper 58.2
6 KGHM PM 2010* 29.3
Anglo American 31.6
BHP Billiton 35.2
6
Rio Tinto 17.0
Xstrata 18.1
KGHM PM 2010 29.3
QUX 2010 8.2
Antofagasta 8.9
RAO Norilsk 9.1
Source: Production - CRU Copper Quarterly Industry and Market Outlook, Oct. 2011; Resources – Broo
Q
* Excluding Afton-Ajax project where KGHM has a 51% stake in 1.3 M tonnes of Cu resources
r, & Top 5 in terms of Cur, & Top 5 in terms of Cu
Mined copper production
Freeport 1,441
Codelco 1,757
In thousand tons, 2010
700
907Xstrata
BHP Billiton 1,134
Freeport 1,441
Rio Tinto
7 635
645
700
KGHM PM + I 2018E
Anglo American
Rio Tinto
8
508
526
589
Glencore
KGHM PM + I 2010
Grupo Mexico
10101
425
488
KGHM I 2010
KGHM PM 2010
Southern Copper
ok Hunt (A Wood Mackenzie Company); KGHM reports
KGHM I 2010
KGHM in the World
B fit f I t t d A t MBenefits of Integrated Asset M
It focuses on working together to achievg gEliminate the “We” and “They” environm
together” corporate cultureLearn from each other to achieve leadin
OP
INFLUENCERS
Learn from each other to achieve leadinComparing apples to oranges
Adm
OBJECTIVE
Equipment Availability
Logi
Main
ReliaAssetEffectiveness
Capital Cost
Prev
Relia
Life-CycleCost
Maintenance Cost
Prev
Plan
Unpl
Operating Cost Brea
M tManagement
ve leading practicesg pment and achieve the “All of us in this
ng practicesPERFORMANCE DRIVERSPERATIONAL FACTORS
ng practices
ministration• Effective maintenance management• Communications with ops and planning
S li fstics
ntainability (MTTR)
ability (MTBF)
• Supplier performance• Supply & materials performance• Facilities and resources effectiveness• Supply cycle time performance
• Maintenance, planning & scheduling performance• Availability of skilled workforce• Equipment design & usage
ventive & Predictive Mtce
ability (MTBF) • Equipment design & usage
• Effective preventive/ predictive Maintenance• Equipment ownership and operator care• Root-cause and reliability analysis• Availability of skilled workforce
• Balance of maintenance tactics• Reliability and predictabilityventive & Predictive Mtce
ned Corrective Mtce
lanned Corrective Mtce
• Reliability and predictability• Planning and Scheduling effectiveness• Planning and scheduling Effectiveness• Materials management & communications• Effective preventive/ predictive Maintenance• Effective preventive/ predictive maintenance• Maintenance, planning and scheduling
akdowns • Ops/ maintenance communications• Effective preventive/ predictive maintenance• Ops/ maintenance responsiveness and learning
A Quick Primer on BenchmarkA Quick Primer on Benchmark
Three tiers of benchmarking:
N i l• Numerical
• Appropriate use of Best Practice
• Targeted Peer Reviews: Assess
known to be particularly good inknown to be particularly good in
kingking
es (Capability Maturity)
sment of practice of organizations
specific disciplinesspecific disciplines
Project Context
S li it d t KGHM I t t• Scope was limited to KGHM Internat• High NPV mines were included. Sma
declined• Maintenance & Supply Chain had re
processes and KPI’s• Capability Maturity measurement haCapability Maturity measurement ha
Maintenance at some sites and was • Culture: KGHMI is center-led not cen
All it f lt th t th l d i• All sites felt that they were already in
ti l ti ltional operations onlyaller operations were invited but
ecently developed defined standard
ad been attempted before inad been attempted before in not well received
ntralized (sites did not have to buy-in)t t f “i iti ti l d”n a state of “initiative overload”
Project ContextProject ContextIntegrated ProcessesSupply Chain Processes
ContractsContracts PurchasingPurchasing LogisticLogistic
Supply Chain Processes
M i t P
17 Processes were defined in SC
IdentifyWork
IdentifyWork
PlanPlan ScheduleSchedule
Maintenance Processes
Production Processes
6 Processes were defined in Mtce
DrillDrill BlastBlast LoadLoad
Production Processes
cscs InventoryInventoryTo optimize Production, MTCE and SC processes must not only work well, they must work well together.
ExecuteExecute CloseClose AnalyzeAnalyze
HaulHaul DumpDump Etc.Etc.
Objectives
• To build an un biased “Cold Eyesmaturity and compliance (Mainteintegrate)
• To have buy-in from the sites
• To establish a baseline of capabi• To improve networking between
information sharing)• To establish a “driver” for continu
s” measuring stick of process nance, Supply Chain & how they
ility maturity at all high NPV sitessites (facilitate collaboration &
uous improvement
ApproachApproachDevelop CMM:• Set expectations on What to measure and Why• Focus questions on those expectations and defin• Achieve consensus from the working grouPerform CMM:• Assessment• Analysis• Report• Present results• Present results• Improve
Initially lead by PwC but going forward
Y 1 KGH
Initially lead by PwC but going forward by KGHM
•Year 1
PwC / KGHM• Y
KGH
ne the capability definitionsp
this assessment process will be lead
HM / PwC
this assessment process will be lead
Year 2
HM / PwC• Year 3
KGHM
The toolThe tool
Wh t th O t t L k LikWhat the Output Looks Like
CMM Project Timeline
June 2012Sudbury AM Mtg
Jul - Dec 2012 Jan - Feb 2
Decision RFP/AFE & Selection
DesigTrai
Sudbury AM Mtg.
• All sites participated• Develop externally
• 4 RFP’s• 3 Responsesp y
• Cost Split• Committee review RFPs
• PwC awarded
Note:Criteria for RFP award: (i.e.
Bid b t t h• Bid scope best match • Least intrusive to sites• Estimated total cost of
2013 Mar - Apr 2013 Apr - Jun 2013
n & n Application Feedback
• Mar: Sudbury• CI on tool
• Site result sent• Follow up mtg.
• Apr: Robinson• 2014 Sierra Gorda
p g• Site comparison• AM Group review
Why did we award to PwC?)t RFP tto RFP request
sf initiative
Continuous ImprovementContinuous Improvement
• Suggestions to prioritize focus were made to the Site based on potentialmade to the Site based on potential value and difficulty to implement.
• Decision remains with the Site
DRAFT FOR DISCUSSION PURPOSES
Referenced the benefits of work already in progress:y p g• Reduced perception of
Initiative overload• Enhanced trust by giving
credit where it was due
Early ResultsEarly Results
Lessons learnedLessons learned
Site Consultation and Participation – Thpthey participated in its development.higher credibility as its was performe
Definition of assessment Target AreasDefinition of assessment Target Areas relevancy if very different areas are group size is too large. Scores will tei t t iti l b iimprovement opportunities less obvi
Specific Wording of Questions – the intfloor to general manager. Questionsg gthe organization understands the jar
Rapid Feedback - Commit to feed backspecific timeframe The shorter the tspecific timeframe. The shorter the t
he tool was relevant to each site as Also, the assessment itself has
ed by peers.– Assessment results will lose– Assessment results will lose combined in one assessment or the end towards “average” making ous.terview audience ranges from shop should be worded so that all levels of
rgon, acronyms and vocabulary.k to the assessed Area within a timeframe the bettertimeframe the better.
Key Summary PointsKey Summary Points
• The tool was designed to assess botf ti b t b tt till it ifi llfunctions but better still, it specificallytogether
• The tool is based on best practices fSCOR, PAS55 and the developing IS
• The project had better acceptance b• were consulted in the decision to do the p• participated in the design of the tool,participated in the design of the tool, • have ongoing participation in the executio• expanded their network by visiting other s
• A deliberate effort was made to creathe tool and for Continuous Improvem
th the Maintenance and Supply Chain h ll th ky measures how well they work
from industry recognized standards, SO55000
ecause sites:project,
on, andsites.
ate “pull” from the sites for the use of ment to be internally self motivated.
Mayo
yM
NicKGNiNico: 4
Integrated Asset llanagement: How well are
ou using Best Practices in l h i dyour Supply Chain and
Maintenance operations?ck Seiersen
GHM Internationalk i @k [email protected]
416 642 9214/c: 647 391 8360
When we workonce seemed
becomes i
k together, what d impossible inevitable.