theory of constraints and authentic leadership journey to

13th International Conference of the TOC Practitioners Alliance - TOCPA

www.tocpractice.com

May 21-22, 2014 Johannesburg, South Africa

13th International Conference of the

TOC Practitioners Alliance - TOCPAwww.tocpractice.com

•Theory of Constraints and Authentic Theory of Constraints and Authentic Theory of Constraints and Authentic Theory of Constraints and Authentic

Leadership journey to ExcellenceLeadership journey to ExcellenceLeadership journey to ExcellenceLeadership journey to Excellence

Katlego Mabote :TOC Optimization Manager South Africa :Lonmin

22th May 2014


www.tocpractice.com

Katlego Mabote Resume

2014/12/10

Katlego Mabote is a qualified Industrial Engineer. He is currently

studying for Master Qualification in industrial Engi neering .

Katlego worked for BMW as a Quality / Process engine er trainee .

He al so a Six Sigma Black Belt. He later joined BHP Bil liton where

he was employed as an Operational Excellence and Bu siness

Improvement specialist . Katlego joined De Beers an d based at

De Beers Consolidated Mines Voorspoed Mine where he works

as a Continuous Business Manager focusing on the cli mate,

culture and practices of embracing people process a nd system

business improvements in the company and achieved th e Highest

CBI maturity level of 2.8 in four Years .

Katlego is currently working as Optimisation Manage r for Lonmin

for focusing on TOC.


www.tocpractice.comTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards Excellence

Conversations to be Outlined Conversations to be Outlined Conversations to be Outlined Conversations to be Outlined

2014/12/10

3 Focus Areas of the Topic 3 Focus Areas of the Topic 3 Focus Areas of the Topic 3 Focus Areas of the Topic

• Authentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journey

• TOC approach to ChangeTOC approach to ChangeTOC approach to ChangeTOC approach to Change

• Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors

What to Change in LeadershipWhat to Change in LeadershipWhat to Change in LeadershipWhat to Change in Leadership What to Change to leader behavioursWhat to Change to leader behavioursWhat to Change to leader behavioursWhat to Change to leader behaviours

Variability to Remove “W” Variability to Remove “W” Variability to Remove “W” Variability to Remove “W” ––––Effect AnalysisEffect AnalysisEffect AnalysisEffect Analysis New leader Behaviour New leader Behaviour New leader Behaviour New leader Behaviour

Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results

Lonmin is achieving Lonmin is achieving Lonmin is achieving Lonmin is achieving


www.tocpractice.com

2014/12/10

Defining the Current Structure and leadership model Defining the Current Structure and leadership model Defining the Current Structure and leadership model Defining the Current Structure and leadership model

Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and creating an enabling environment creating an enabling environment creating an enabling environment creating an enabling environment

REFRAMING REFRAMING REFRAMING REFRAMING

Local Efficiency & Cost World Local Efficiency & Cost World Local Efficiency & Cost World Local Efficiency & Cost World Frameworks towards a Frameworks towards a Frameworks towards a Frameworks towards a

Production Flow Production Flow Production Flow Production Flow

FrameworkFrameworkFrameworkFramework


www.tocpractice.com

2014/12/10

Defining the current Flow Model

Production HL's

Chair Lif tGondola

Cross Tramming

Skip

Cage

Decline belt

Shaft Schedule

GroutPlant

SupportPumping

5 R a is e L in e s S t op in g3

Ra i s e sHo led

5 R a is e s i nDe v e l o pm e n t

D r op R a is e T r a v e l W a y F la t E nd

Re e f

W as t e

B o x

P r o d u c t io n T o n s Ra is e T o n sW as te T on s

D R B l as t

DR D r il l

PlantStockPile

Main Stores

Shaft Store

10 10 10 1010 10

TOC principles non existences

1. No Buffer management system

2. No concept of the War Room

3. Primary and Secondary Chain

not designed for TOC


www.tocpractice.com

6

10 10 10 10 10 10

A B C D E F D E FA B C

16 15 14 13 1210

STOP START / DO

Manage EFFICIENCYManage EFFICIENCYManage EFFICIENCYManage EFFICIENCY Manage FLOW Manage FLOW Manage FLOW Manage FLOW

Control EverythingControl EverythingControl EverythingControl Everything Control Leverage PointsControl Leverage PointsControl Leverage PointsControl Leverage Points

Manage Silo’sManage Silo’sManage Silo’sManage Silo’s Flow of the System as a Flow of the System as a Flow of the System as a Flow of the System as a WholeWholeWholeWhole

Manage by Budget Manage by Budget Manage by Budget Manage by Budget Manage the Constraint(s)Manage the Constraint(s)Manage the Constraint(s)Manage the Constraint(s)

Individual KPI’sIndividual KPI’sIndividual KPI’sIndividual KPI’s Buffer ManagementBuffer ManagementBuffer ManagementBuffer Management

Cost world (Input control)Cost world (Input control)Cost world (Input control)Cost world (Input control) Throughput world (Lost Throughput world (Lost Throughput world (Lost Throughput world (Lost revenue)revenue)revenue)revenue)

Management by NumbersManagement by NumbersManagement by NumbersManagement by Numbers Management by Means Management by Means Management by Means Management by Means (What)(What)(What)(What)

People just work for a People just work for a People just work for a People just work for a salary and must be salary and must be salary and must be salary and must be controlled controlled controlled controlled (Efficiency driven)(Efficiency driven)(Efficiency driven)(Efficiency driven)

People are intelligent People are intelligent People are intelligent People are intelligent

and want to performand want to performand want to performand want to perform

(Leadership, Care & Growth)(Leadership, Care & Growth)(Leadership, Care & Growth)(Leadership, Care & Growth)

Low morale and spiritLow morale and spiritLow morale and spiritLow morale and spirit Positive and enthusiasticPositive and enthusiasticPositive and enthusiasticPositive and enthusiasticculture culture culture culture

Defining Current Behaviours to be Changed


www.tocpractice.com

2014/12/10

Defining What needs to be Changed

Defining What needs to be Changed

1. Leadership Structure – TOC enabling environment

2. TOC Flow principles to be entrenched

3. Promotion of Economic Business Competency


www.tocpractice.com

PERFORMING ZONE

Shafts Achieving 80% of the Budgets NON PERFORMING ZONE

Shafts Achieving 60 % of the Budgets

Define Lonmin TOC Model –Entry Point

8

PERFORMING ZONE

Shafts Achieving 100% and Exceeding the Budgets

NON PERFORMING ZONE

Shafts Achieving 40% of the Budgets

How the project trial was commissioned


www.tocpractice.com

2014/12/10

Unpacking the Flow Model and What needs to be

Changed –Constraints Identified

ROWLAND SHAFTTOC Operational Flow Model

2013-03-18

Call:Reef: 190 000t/m, 8000 t/dAIM for: 9500t/dWaste: 1000t/d

26 level

28

29

30

24

23

22

21

22

20

19

18

17

3x250t

1600t

8000t

Product ion Crews:69 Panels in Mer & UG2

5 White areas

Reef and Waste ore passes 100t - 200t

3 hours flow

Flow / HLReef : 500-800t/dWaste: 75-100t/d

1,2 km

Chair Lift600 people /h

Gondola40-50 Cars/d

Cross Tramming:3x locos, 63t / span

200t in 40 min, 300t/h

Skip: 25tReef 600t/h

Waste 480t/h

Cage:180 people

14 min cycle to 26 level

(Increase to 230)

Decline belt1200t/h

Buffer Store per H/L:Agreed l ist, Including Winches

Stock for 4-5 daysReplenished by Logistics,

2x per weekEngineering Spares

Well Managed

Optimised Half Level: 5 Production crews (each producing550m2 Mer, 540m2 UG2, Reef 14000t/m-800t/d 5 Reef raise crews, 3 Raises holed. One Flat end & Travelling way crew(producing 35m/m, 1500t/m). Flat end5 raises ahead of raise crews,

16

Shaft Schedule

SUBORDINATION Projects:1. Face Time2. Compressed Air Column3. Labour Unavailable4. Drop Raising (Longer term)5. Relationships (Strategic)6. ATM & Kiosk7. Grout infrastructure8. Material Supply Logistics

Vent ila tion Zones:

PlantStockPile IDENTIFIED CONSTRAINT

Vertical & Decline Shaft System - Men & Material

GroutPlant

SupportPumping

Drop RaiseConstraint

SlusherProgress

Constraint

EngineeringWorkshop per

Level

EXPLOITATION1. Shaft Schedule2. Additional Chairs on Chair Lift3. Extra Deck on Mary-Anne4. Centralised Blasting5. Man Carriages on 16, 17, 18 Levels

31

Cyclone Plant?

HL Store

Main Stores

GuaranteedAvailabil ity

Shaft Store1-2 Weeks

1,3 km

3,3 km

15E 1,0 km

5 R a is e L in e s S t o p in g3 R ais e s

H o l e d5 R ais e s in

D e ve lo p m e n tD ro p R a ise T ra ve l W a y F la t E n d

R e e f

Wa s t e

Bo x

Pr o du c t io n T o n s R a ise T o nsWa s t e T o n s

D R Bl as t

D R D r i l l

25

26

27


www.tocpractice.com

2014/12/10

Beginning to find Solutions

1. Overall flow of tons

2. Rate of the identified bottleneck

3. Status of the primary buffers feeding the bottleneck and it’s effects on flow stability

4. Status of the protective capacity

5. Visibility of the system’s reality & Changes

6. Spirit / Vibe / Dynamics of the shaft

7. Level of understanding of the TOC concepts


www.tocpractice.com

2014/12/10

Defining the Problem at hand-The Real Constraits

• Have we identified THE REAL constraints?

– Physical constraints are easy to ID & manage

– People behaviour constraints more challenging (system generated frustration?)

– Morale / Spirit improving; union, bonus, material, leadership

• The proper functioning of the daily Ops Room improved significantly. The reflection meetings have started; the purpose of which is to analyse the information built up in the Ops Room.


www.tocpractice.com

12

0

50,000

100,000

150,000

200,000

250,000

Oct

-06

De

c-0

6

Fe

b-0

7

Ap

r-0

7

Jun

-07

Au

g-0

7

Oct

-07

De

c-0

7

Fe

b-0

8

Ap

r-0

8

Jun

-08

Au

g-0

8

Oct

-08

De

c-0

8

Fe

b-0

9

Ap

r-0

9

Jun

-09

Au

g-0

9

Oct

-09

De

c-0

9

Fe

b-1

0

Ap

r-1

0

Jun

-10

Au

g-1

0

Oct

-10

De

c-1

0

Fe

b-1

1

Ap

r-1

1

Jun

-11

Au

g-1

1

Oct

-11

De

c-1

1

Fe

b-1

2

Ap

r-1

2

Jun

-12

Au

g-1

2

Oct

-12

De

c-1

2

Fe

b-1

3

Rowland Shaft Total Tons

Tons

6M mov ave

Linear (Tons)

Impossible to set a proper

base line for comparative

purposes

Showing the Impact of the current thinking Model


www.tocpractice.com

2014/12/10

Focus Areas of Change

4 Focus Areas of the Topic 4 Focus Areas of the Topic 4 Focus Areas of the Topic 4 Focus Areas of the Topic

• Authentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journey

• TOC approach to ChangeTOC approach to ChangeTOC approach to ChangeTOC approach to Change

• Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors

• W W W W ––––Effect AnalysisEffect AnalysisEffect AnalysisEffect Analysis


www.tocpractice.com

2014/12/10

What was implemented to achieve the Change

1. OPS Room – To Change from Black box mind-set to

Proactive Approach

2. Project Commissioned to implement the buffer

Management systems –Store underground

3. Leadership Coaching –One on One Coaching

4. Reflection meetings – To reflect and begin to identify

the invisible


www.tocpractice.com

0

1000

2000

3000

4000

5000

6000

7000

8000

7-Jan 21-Jan 4-Feb 18-

Feb

4-Mar 18-

Mar

1-Apr 15-

Apr

29-

Apr

13-

May

27-

May

10-Jun24-Jun 8-Jul 22-Jul 5-Aug 19-

Aug

2-Sep 16-

Sep

30-

Sep

14-

Oct

28-

Oct

11-

Nov

25-

Nov

9-Dec 23-

Dec

6-Jan 20-Jan

To

ns

Rowland Shaft Tons Hoisted - 7 Day Moving Average

7 Day Ave

Linear (7 Day Ave)

TOC Ops room meetings introduced

Buffer of winches in place

Initial TOC Training

complete Labour

vacancies

filled

S54

Lamproom

+ DGI

Hoist

Section 54

Hoist

Breakdown

Bonus threshold reduced

Materials Buffers

in place

TOC Results


www.tocpractice.com

TOC the Clear Results ROI


www.tocpractice.com

17

The Results- Comparison

The Results- Comparison1. Low Variability

2. Upward trend

3. Movement from Non performance to performance

4. A profit Game


www.tocpractice.com

W Effect Analysis is an indication of performance and variability

W Effect type 1 = Performance (It means exceeding target and being profitable) example Below) Performance is paying off the buffer

W Effect Analysis is an indication of performance and variability

W Effect type 2 = Non Performance (It means not consistent and not stable ) example Below) Performance is not paying off the buffer great concerns

W Big W Small

How we monitor sustainable results

Business Units Monitoring –W effect Analysis Template


www.tocpractice.com

TOC Dashboard -Example Template

2014/12/10

Buffer Management SystemBuffer Management SystemBuffer Management SystemBuffer Management System

Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan

Buffer Management SystemBuffer Management SystemBuffer Management SystemBuffer Management System

1.1.1.1. Engineering Buffer Engineering Buffer Engineering Buffer Engineering Buffer

2.2.2.2. Material BufferMaterial BufferMaterial BufferMaterial Buffer

3.3.3.3. People Buffer People Buffer People Buffer People Buffer

W – Effect Analysis October

No Buffer

2 Weeks Buffer

Buffer

September W effect


www.tocpractice.com

World of

Local Optima- Efficiency

- Statistics & Formulas

- Simple rules

- Physical

World of

Production Flow- Flow

- Bottlenecks &

Buffers

- Interdependence

- Logistics & People

Manufacturer

Bm

Consumer1

Warehouse

1

Bw

Bw

Bw Bc

Bc

Bc

Bc

Warehouse

2

Warehouse

3

Consumer2

Consumer3

Consumer4

Information Information

System

Planning

& Manning

People, Materials,

and Equipment

Winch

Build Packs FB

Feeding

Buffer

Total Shift Time

Face Shift

TimeT

R

A

V

E

L

T

I

M

E

T

R

A

V

E

L

T

I

M

E

Face

Time

Buffer

Critical Chain Time

WP

DP DRILLING Chrg

MS Critical Path

NP

Transport

Winch

D E FA B C

Protective Capacity

OPS ROOM (Daily management system)- Focus on Immediate Future

- Good Visibility

- Pro-active / Creative

- Behaviour / Culture

3 Bottles

Strategic Intent with TOC Initiative

12 16 12 13

15

12

11 1216

1514

1316 15 14 1310 12 OUTIN 16

13


www.tocpractice.com

21

The TOC is a Sustainable approach – Moving Forward

The Conclusion

theory of constraints and authentic leadership journey to

Documents