Coal, Cost and Culture: Management Strategies for Improving Mine Performance

When managing mines and plants, management teams tend to depend mostly on equipment to create the results promised to the board and shareholders. Because equipment gets top priority in the improvement world, companies tend to overlook or undervalue processes that help people work together more effectively. In doing so, they give away more value than they realise (sometimes millions of dollars).

Why aren’t companies looking harder at people processes when defining improvement projects? I believe that there are several answers to this question:

• Equipment is easier to fix/repair/upgrade than behaviour. 
• Engineers live to maximise equipment and process efficiency. It is natural for them to look to equipment first for the answers to better performance.
• Equipment produces products. We can walk out into a plant and watch the physical flow of material being mined/converted/refined into finished goods or parts for industrial use or consumer purchase. The production process is exciting to watch and creates value. It is a logical place to start the improvement process.
• In capital-intensive industries, equipment and facilities comprise a large proportion of the balance sheet. As a result, acceptable ROI is critical to confirming that the right investment decision was made. Departments responsible for meeting ROI targets want to maximise equipment performance to maintain their credibility and achieve promised targets. As a result, people at many levels focus on equipment performance.  
• Mobile and fixed equipment units do not have emotions. Trucks will not complain or leave the company if process changes are made that affect driver performance or responsibilities. Motors are not embarrassed if they are under-performing. Conveyors are not responsible for taking corrective action that might make others feel uncomfortable. Furnaces are not accountable for making sure that they have what they need from another department to process material. Packaging machines are not reprimanded for failing to communicate with marketing about customer requirements for packaging quality. You get the idea…

To summarise, companies look first to equipment for improvement opportunities for two reasons:

• Companies (and shareholders) measure success based on quantitative process performance.
• They lack the skills to deal with the feelings and potential conflict associated with change or barriers to change.

When management teams do not understand the connection between equipment, cost and culture, they overlook, avoid or postpone a self-examination of their ‘people processes’ (especially management processes). They make culture change the last priority in improvement, hoping it will happen through the ‘back door’ as improvements are made to equipment performance and cost. This choice is a fatal flaw in every improvement strategy because:

• Management processes create the culture, both in their sequential process steps and how they are executed.
• The culture enables or disables a company’s ability to maximise operational and financial results.
• Management teams sabotage sustainable change and damage their credibility with the board and the workforce.

What if the approach to improvement was reversed so that ‘people processes’ were improved BEFORE new equipment was purchased, plants were expanded or actions were taken to reduce cost? How much easier would it be to implement and sustain improvement? Having the courage to change the culture first will deliver and sustain benefits beyond expectations.

Here’s the thought for May: If you are serious about sustaining improvements in equipment performance and cost, start by improving the ‘what and how’ of your management processes.

Author: Kay Sever CMC, CQIA, Sustainable Improvement Consultant and Coach. Kay Sever is a leader in sustainable improvement for mines and plants. She combines 29 years of mining experience with a common sense approach to improvement that raises awareness about lost opportunity and hidden barriers that prevent improvement success. www.miningopportunity.com.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/30042010/coal_cost_culture_change_a_priority_in_improvement/