8 Ways to Improve Operational KPIs in the Mining Industry

Contributor:  Megan Edwards
Posted:  11/14/2012  12:00:00 AM EST  | 

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As all planners in the open pit mining industry know, one of the biggest challenges in your day to day job is not getting the mine plan written down, it’s the adherence of other operational departments to the plan. A keyway to get other departments’ buy in to a mine plan is to develop KPIs for the departments that are credible, achievable and still push them to over-deliver. Following Mining IQ’s Open Cut Mine Planning event that ran last month, some interesting suggestions and tips came out of one of the on-site discussions between some of Australia’s leading mining companies:

1. Variance – understanding the variance between the actual production levels and the mine plan, and identifying the reasons behind this is crucial when constructing KPIs for the staff. If the variance is due to unrealistic expectations (due to machinery availability, staffing levels etc.), staff motivation will drop and KPIs will become redundant.

2. Coping with temporary disruptions – every mine site will have temporary disruptions from the unforeseeable. However, rewarding staff through bonus schemes for quick return to targets is a great way to minimise the disruption. Examples used by mine sites include rewarding based on tonnage post incident, accident frequency rate and productivity rate. After the plan has deviated from budget, it’s important the updated plan needs to be focused on getting things back on track. An often under-utilised department is the engineering team – they have a lot of good, practical ideas so make sure you check with them next time for some innovative suggestions!

3. Up front involvement of production staff – multiple processes are involved in production, so each phase of production needs to be completed in a fit state for the next phase to begin. Involving the production staff in the initial target setting and KPI agreement ensures that when this implementation comes around, they are both familiar with what’s coming, and prepared for it.

4. Understanding the culture of your staff – every mine site will be different in its make up of staff. Different ages, sexes, ethnicities, religions and classes are all motivated in different ways. Whilst it is impossible to please everyone, understanding the general makeup of your workforce is vital to building in bonus schemes and the way that any KPI information is communicated to the staff.

5. Contractor and subcontractor management and information sharing – frequently contractors and subcontractors will have their own agendas – being paid a set amount for a contracted time that is not always based on productivity. Therefore, aside from building this into their contracts, it is important to consider other ways to get contractors on board for achieving KPIs on production targets. A key way to do this is of course to get them involved in determining the KPIs from the outset. The other way is to give them a slightly different KPI to the planning or production departments. Usually KPIs are based on tonnage, but this is not the only option – lack of incidents/break downs, or staff efficiency are other choices.
6. Group KPIs, not department specific – often planning and production will have different KPIs. This can work both for and against a company. Giving different departments different KPIs means they will have more specific KPIs relevant to their job function – but it also removes the opportunity of a project team working together to deliver one end goal. Accountability to their team mates is a powerful way to get more out of most people.

7. Ensuring KPIs are fluid and adaptable – the concept of a ‘dynamic’ KPI system is often lost on many mining companies. Regularly reviewing, evaluating and updating KPIs is a sure fire way to ensure they are always realistic, and (top end) achievable – keeping staff motivated and engaged.

8. Incorporating mine reconciliation into fluid and dynamic mine plans – reconciliation is an ever growing business improvement approach that more and more mining companies are understanding the value of. However, the reconciliation process is only beneficial if it is used to pinpoint flaws in the production/processing chain and adapt production targets accordingly. This requires cooperation not only between mine planning and production teams, but also geology departments.

Megan Edwards Contributor:   Megan Edwards

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