the de beers · pdf filethe de beers journey the journey towards operational excellence and...

CBI De Beers � 28/09/2007 10:57

Matt van Wyk

DBCM CBI Lead

The De Beers Journey

The journey towards Operational Excellence and establis hing a Continuous Business Improvement Culture

International 20Keys® Study Mission 1st - 5th of October 2007 to Germany

CBI De Beers � 28/09/2007 10:57

Content

• Company background• The DBCM Journey

• Business Model Review

• Technical Limits Projects

• Diamondream Business System

• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

TThe diamond pipeline he diamond pipeline

SALES

RETAILING

MINING

JEWELLERYMANUFACTURINGPOLISHING

POLISHED

ROUGH

$12.5bn $14.2bn

$18bn ~$64bn

PROSPECTING SORTING

MARKETING

CBI De Beers � 28/09/2007 10:57

World diamond production, the mainplayers (not current)

154 Million carats

Alrosa14%

BHPB2%

De Beers32%MIBA

5%

Rio Tinto23%

Others24%

US$ 12.6 Billion

Alrosa18%

BHPB3%

De Beers41%

Rio Tinto8%

Others28%

MIBA1%

World Production (estimated)

CBI De Beers � 28/09/2007 10:57

��

2500

Botsw

ana

Russia

Canad

a

Angola

RSA

Namibi

a

DRC

Austra

lia

0

500

1000

1500

2000

1,6

0.50.7

1,5

2.2

0.8

1,4

3.23000

World Production ($ Billion estimated)

CBI De Beers � 28/09/2007 10:57

•1866

First confirmed discovery of a diamond in Africa ne ar Kimberley.

1870

Discovery of Bultfontein (Kimberley), Koffiefontein, Jagersfontein, Du Toitspan, 1871 De Beers and Kimberley mines.

1888

Registration of De Beers Consolidated Mines Limited , major shareholders being Barnato, Rhodes, Beit and Philipson-Stow

1924

AAC joins London Diamond Syndicate which is reforme d in 1925; Sir Ernest Oppenheimer becomes a De Beers director in 1926.

1980

Discovery by De Beers of the Venetia pipe in Limpop o Province of South Africa. Mine opens in 1992

2001

De Beers de-lists after Oppenheimer family company, Anglo American and Debswanasuccessfully offer $19.67 Billion to the independen t shareholders.

Diamonds, De Beers and South Africa…

CBI De Beers � 28/09/2007 10:57

Number of Mines: 7

Turnover: US$ 1,1 billion p.a.

Tons treated: 33 million p.a.

Carats produced: 15 million p.a.

People employed:

6000 permanent

150 temporary

DBCM

CBI De Beers � 28/09/2007 10:57

Snap Lake

Victor

Williamson Diamonds

De Beers operationsDe Beers operations

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DBCM operations in playDBCM operations in play

CBI De Beers � 28/09/2007 10:57

Content

• Company background

• The DBCM Journey• Business Model Review



• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

Business Model Review

Introduction

Sep Apr ‘06

Challenges facing

DBCM 2004:

•Five DBCM mines running at a loss•Impact of R/$ exchange rate

Launch of Strategic initiatives with:

BMR decentralised

Jan ‘04 Aug ‘04 Sep ‘04 Apr ‘05 Aug ‘05 Nov ‘05

“Thrive @ 5” strategy born

“Thrive @ 5” strategy born

DBCM Leadership Planning Session

DBCM OPCO Strategy Review

Design Phase completedStart of :

Technical Limits Project Launch of DBS System

May ‘06

CBI De Beers � 28/09/2007 10:57

Why are we doing this?

CBI

20092007

Current state

Future state

2006

<20%ROCE

-Profit

$699mEBITDA

World class ways of work

The current g

ap is $245m pa

+30%Productivity

>20%ROCE

+Profit

$944EBITDA

CBI De Beers � 28/09/2007 10:57

Following a balanced approach

People

SystemsProcesses

CBI De Beers � 28/09/2007 10:57

Content


• The DBCM Journey

• Business Model Review • Technical Limits Projects


• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

Business Model Review

Aim:

To provide DBCM with a preferred business model that will enable the organisation’s “Thrive @ 5” strategy

•Right people

•Doing the right things right

•Focussing on core business

CBI De Beers � 28/09/2007 10:57

Content




• Technical Limits Project• Diamondream Business System

• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

Project Purpose – Key questions to answer

Unlocking Value

How can we get more from the same, or the same from less?

How can we use the asset base more completely?

Given the current asset base, what is the real maximum capacity available?

EfficiencyEfficiencyUtilisationUtilisation

Capacity

32

1 The constraint issue

The time issue The performance issue

CBI De Beers � 28/09/2007 10:57

Employee inputs

Observations“Could Be”

Process followed – Investigation Phase f(x) = y

“Should Be”

“As is”

TARGET

MO

VE

ME

NT

Focus interviews

Statistical analysis

Trend analysis

Process flows

INPUTS

Process owners inputs

“Opportunity”Gap

“Technical Limit”

The scenarios were explored and tested extensively with the respective Process Owners to establish the “Should be” and “Could be” positions

CBI De Beers � 28/09/2007 10:57

Summary of high level findings: Capacity

Unlocking Value

EfficiencyEfficiencyUtilisationUtilisation

Capacity

The constraint issue


CBI De Beers � 28/09/2007 10:57

Capacity of bottlenecks

87%

69%

51%

58%

67%

95%

76%

83%

70%

76%

100% 100% 100% 100% 100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

Venetia CTP NTP NM (BMC) Finsch

Actual "Should be" scenario Unconstrained capacity

6,307,20053,453,5005,213,52011,865,4207,688,000Unconstrained capacity

4,817,74837,282,1174,327,2229,041,4507,295,392"Should be" scenario

4,201,98030,761,6872,658,8958,208,6046,651,012Actual

DMSWaste StrippingPan PlantScrubbingDMSIdentified Process

Constraints

Unused capacity?

Key Constraints within the Respective Mine Value Ch ains

CBI De Beers � 28/09/2007 10:57

Findings: Efficiency

Unlocking Value

EfficiencyEfficiencyUtilisation

Capacity



CBI De Beers � 28/09/2007 10:57

Efficiency of operations (steady state)

Feed Rates January 2005

0

200

400

600

800

1000

1200

2004/12/1400:00

2004/12/1900:00

2004/12/2400:00

2004/12/2900:00

2005/01/0300:00

2005/01/0800:00

2005/01/1300:00

2005/01/1800:00

Date

tph

Coarse DMS tph Fine DMS tph Head Feed tph

Aprox. 920 tph

Aprox. 580 tph

Aprox. 340 tph

0

200

400

600

800

1000

1200

Jul-0

5

Aug

-05

Sep

-05

Oct

-05

Call rate 850 tph; expert system max set 950 tph

1 hr intervals

Plant shutdown Catching up on tons after shutdown?

Building stock before shutdown?

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05

Date

tph

Scrubber Capacity - 1440 tph (+/- 10

Scrubber being overfed

0

200

400

600

800

1000

1200

1400

1600

Apr-05 Apr-05 M ay-05 Jun-05 Jun-05 Ju l-05 A ug -05 A ug -05 Sep-05 O ct-05 O ct-05

D ate

Ton

s

S et P o in t - 1050 tp h"F resh" Feed Sc ru bb e r C ap ac ity - 1100 tph

CBI De Beers � 28/09/2007 10:57

Findings: Utilisation

Unlocking Value

EfficiencyUtilisationUtilisation

Capacity



CBI De Beers � 28/09/2007 10:57

Utilisation - The effective use of time

Ore Processing – OPU = 56%

48%

2%

11%

19%

20%

OEU OPS DELAYS UN-MANNED HOURS ENG DELAYS PLANNED MAINTENANCE

Ore Extraction – OEU = 48%

56%

14%

17%

6%

7%

A Standard definition based on 365 days per year x 24 hours per day was adopted to measure overall ass et utilisation across all operations

CBI De Beers � 28/09/2007 10:57

Findings: Barriers

Unlocking Value

EfficiencyUtilisation

Capacity



Barriers to performance

CBI De Beers � 28/09/2007 10:57

Barriers to Performance

Key issues identified:

• Lack of operating skills

• Poor information management

• Poor standards

• Unclear accountability

• Unclear communications

• Uncertainty about the future

CBI De Beers � 28/09/2007 10:57

Findings: Opportunities

Unlocking Value

EfficiencyUtilisation

Capacity



CBI De Beers � 28/09/2007 10:57

Portfolio of Value Creating Opportunities (VCO’s)

VEN Drilling Utilisation

KIM CTP - Steady State Efficiency

VEN Steady State Operation

VEN Hauling Utilisation

VEN Loading Capacity (Shovels)

VEN Overall Plant Utilisation

KIM CTP - FeSi Optimisation

KIM CTP - OPU

KIM NTP - OPU

KIM NTP - New Front End

NM OE - KNC Unit Cost Reduction

NM OE - BMC Unit Cost Reduction

NM OP - KNC & MB Capacity Utilisation

NM OP - AK3 /TP Capacity Utilisation

NM OP - TP/KNC Steady State Efficiency

FIN ROM - Utilisation/Efficiency

IMPACT

DIF

FIC

ULT

Y

HIGH

LOW HIGH

LOW

Namaqualand Venetia Finsch Kimberley

CBI De Beers � 28/09/2007 10:57

Content





• Diamondream Business System• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

Diamondream Business System

The journey:

I. Align with business strategies

II. Customise Workplace Improvement for DBCM

III. Strengthen the first line management

IV. Establish a common CBI framework

The DBCM Way!

CBI De Beers � 28/09/2007 10:57


First Strategy followed:

Align with business strategy (QCDSM)

Page 6DIAMONDREAMSBusiness System

De Beers � 14/08/2007 08:53

WE

• Profitable Mines• More mines within our niche• We will have a transformed, growing industry

TALENT MANAGEMENT

TALENT MANAGEMENT

TALENT MANAGEMENT

TALENT MANAGEMENT WORKPLACE ACCOUNTABILITY

WORKPLACE ACCOUNTABILITY

WORKPLACE ACCOUNTABILITY

WORKPLACE ACCOUNTABILITYBUSINESS PERFORMANCE

BUSINESS PERFORMANCE

BUSINESS PERFORMANCE

BUSINESS PERFORMANCEBUSINESS INFORMATION

BUSINESS INFORMATION



6 Sigma

6 Sigma

6 Sigma

6 Sigma

CBI De Beers � 28/09/2007 10:57

How does it align to our common goal?

Is translated into …Is translated into …

…… to guide the codification of the …to guide the codification of the …

…… underpinned by Lean concepts aimed at …underpinned by Lean concepts aimed at …

…… to systematically …to systematically …

PVV & StrategyDBCM Exco

Diamondream Business SystemOperations

Eliminating WasteSections

Drive out Value (Target 30% Productivity Improvement)Front Line

DBCM Opco Operational Principles

…… which forms the basis of the …which forms the basis of the …

Operating RulesCentre

DBS

The underlying principles that provide the framework

for the way in which Operations are structured

and guideline for conducting all Operational

Activities

The set of standard work practices, procedures and guidelines that define the way in which all activities

should be carried out:The DBCM Way

The structured approach adopted by DBCM to

continue improving the efficiency and

effectiveness of Operations

CBI De Beers � 28/09/2007 10:57

Operational Principals

DBCM Operational Principles

One company,one goal

Intent:“DBCM have a single

operational goal supporting our core business of

diamond winning”

Right peopledoing the

right things right

Intent:““We will empower, develop and engage our people to

add value to the organisation”

We measure to improve

Intent:““We will establish simple visual controls to enable

informed decision makingat the right level”

World class ways of work

Intent:“We will develop

standardised processes as the foundation for

continuous improvement “

CBI De Beers � 28/09/2007 10:57


Second Strategy followed:

Customise the 20 Keys to workplace improvement

Develop material to portray the language of DBCM

CBI De Beers � 28/09/2007 10:57


Third Strategy followed:

Strengthen our first line managers through the

Supervision For Energised Work Teams Learnership

CBI De Beers � 28/09/2007 10:57

LEADERSHIP THAT ENABLES

“We teach others the knowledge, skills and strategi es they need to succeed.

And we work hard to get obstacles out of their way so they can make progress.”

The Serving Leader - Jennings & Stahlwehrt

Production

Production Support


CBI De Beers � 28/09/2007 10:57


Fourth Strategy followed:

Establish a common CBI framework

One company one system!!

CBI De Beers � 28/09/2007 10:57

The DBCM CBI Language

Purpose, Vision, Values & Principles

DDD

Total Organisational Excellence (Lean)

Underpinned by a world class philosophy as followed by Toyota over the last sixty years and fully aligned to Delivering the Diamond Dream

The strategy to embed world class methodologies into DBCMto reach our 2014 targets and beyond

Codification & training

Audit &assurance


Embedded through the 14 facets (focus areas) for CBI

Leanworkflow

Variabilityreduction

Constraintremoval

Meaningful contributionby ALL!

Quality Productivity

Business value

CBI

CBI De Beers � 28/09/2007 10:57

Content






• Results• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

Results - Venetia Mine Progress

Increase is significant:

6% increase in average throughput rate

CBI De Beers � 28/09/2007 10:57

Results: Kimberley Head Feed Rates

Kimberley:Variation still a problem

Venetia:Vast improvement in stability

CBI De Beers � 28/09/2007 10:57

Pareto Chart- Delays for Sep 2005 - March 2006

0.0

20.0

40.0

60.0

80.0

100.

0

120.

0

140.

0

160.

0

180.

0

Blockages- Chutes

Screen Failure

Holes-Delivery Line

Trips-Drive Unit

Torn Conveyors

Trips-Pumps

Malfunction-Other

Material unavailable

Overload Conveyoys

High turbidity-Thickeners

Reduced feedrate pneumodrier

Blockages pumps

Conveyor skewing

Reduced Feedrate-Conveyors

Low Level -DMS Media Sumps

Valve Failures

Conveyor slipping

Blinding-Panels

Pump Failures

Blockages-Delivery Lines

80% of delay durations are caused by 20% of the def ects

Results: Kimberley Pareto Analysis on Delays

Waste defined

CBI De Beers � 28/09/2007 10:57

0

50

100

150

200

250

300

2003 2004 2005 2006

Screen Downtime (Hours)

Enhanced screens with saddle tops have yielded a significant increase in screen performance

and reliability

Results: Core Challenge: Screens

CBI De Beers � 28/09/2007 10:57

0

5

10

15

20

25

30

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Chute Downtime (Hours)

Dead boxes with material build. Options to enhance scrubbing efficiency are being explored

Dead boxes have been cut out to prevent build up of material, reduce the risk during barring activities and improve plant

uptime

Results: Core Challenge: Chutes

CBI De Beers � 28/09/2007 10:57

Results: Kimberley Overall Plant Utilisation Improv ements

0

20

40

60

80

100

OverallPlantUtilisation(%)

2005

64

2006

67

2007YTD

78

CBI De Beers � 28/09/2007 10:57

Results – Getting the basics rightBEFORE AFTER

CBI De Beers � 28/09/2007 10:57

Results: Supervision development

Small Group AreasSupportive Leadership

VisualControls

Pride

CBI De Beers � 28/09/2007 10:57

Results: Supervision development

CBI De Beers � 28/09/2007 10:57

Results: Operational Performance to date (April YTD )

Kimberly:

• Throughput: +78%

• Production output: +88%

Venetia:

• Throughput: +1%

• Production Output: +18%

Improved business value

CBI De Beers � 28/09/2007 10:57

Results: Contribution to date

TLP Contribution

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

220,000,000

240,000,000

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb-

06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb-

07

Mar

-07

Apr

-07

Mar

gin

cont

ribut

ion

(ZA

R)

874 t/hr cycle time

CTP Contribution variance analysis

R 0.00

R 20.00

R 40.00

R 60.00

R 80.00

R 100.00

R 120.00

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Mill

ions

Should-be Actual

TLP “should-be” target R113 mil by Dec2007

Cumulative contribution R99 mil

Extended shutdown – lower throughput

Tip of the iceberg!

CBI De Beers � 28/09/2007 10:57

Results: 2006 National Productivity Institute Award - Gold

CBI De Beers � 28/09/2007 10:57

Content






• Results

• Highlights• Learnings

Content

CBI De Beers � 28/09/2007 10:57

• Lean awareness created at all levels in a new environ ment

• Full alignment of efforts throughout the organisation

• All initiatives filtered through the CBI lens

• Reframing of our new culture eminent

• Much greater focus on frontline (where the action is!)

Highlights

You can feel the energy

CBI De Beers � 28/09/2007 10:57

Highlights

CBI De Beers � 28/09/2007 10:57

Content






• Results

• Highlights

• Learnings

Content

CBI De Beers � 28/09/2007 10:57

• Executive support critical

• Holistic approach customised in own language

• Dedicated resources a must

• Simplicity is the key to unlock energy

• The how is already known, just unlock it by empowering people to act

• There is value to unlock everywhere

• Translate for execution

Learnings Keep it simple!

CBI De Beers � 28/09/2007 10:57

Questions

the de beers · pdf filethe de beers journey the journey towards operational excellence and...

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