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| Arctic Mine Performance Improvement and Cost Reduction |
Context / Scope of project
This remote mine and mill had been operating for nearly twenty years. Production volumes had leveled off in recent years and cost per ton was increasing. The client asked PIP to assist them in implanting a new culture of accountability and to achieve measureable and sustained performance improvement to debottleneck the operation and reduce costs. Many wiring elements were successfully introduced, such as RARs, formal idea implementation and tracking processes, SPIN control over buyers, which served as the key means of achieving the results and establishing a new continuous improvement culture.
Client achieved:
- $3 million in purchasing cost reductions, with an additional $5 million identified
- 85% reduction in stock-outs of critical and operating supplies with no change in inventory value
- Record production month by the fifth month
- 5 out of 8 last months significantly above historical averages
- 75% reduction in low feed condition, resulting in over $7 million in additional annual contribution
- 24% improvement in tons hauled with one additional truck parked
- 31% improvement in variance reduction of mill feed composition
- 20% reduction in planned shutdown durations without scope loss
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What we did:
The work was lead by a PIP and client team that reported to both operational and head office managers. Results were achieved through:
- Developed Value Driver Trees for materials management, mine, mill and maintenance
- Reviewed purchasing practices, including major suppliers, contractors and supply agreements
- Trained purchasing staff on total cost of ownership, negotiation tactics and supply agreement best practices
- Reviewed supply chain to improve materials delivery
- Implemented weekly structured RARs at mid and top levels
- Created and formalized an Idea Generating and Tracking process
- Rolled out visual boards for KPI and Action-tracking in crew meetings and shift changes
- Implemented new KPIs and tracking and feedback loops down to operator levels
- Created and trained on new SOPs at all levels
- Overhauled work areas with 5S: Sort, Shine, Set, Straighten & Sustain
- Extended the process into Safety by driving the correct preventive behavior through KPIs
- Aided client to set up a new, highly effective Continuous Improvement organization to sustain the gains post-project
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