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Context / Scope of project
A global minerals company was hit hard by the slump in commodity prices and in a 6 week period revised EBIT estimates from +$300m to -$1billion. They asked PIP to come in and undertake a rapid program “help us find and deliver the cash”. Seven sites on 2 continents participated in the program, with PIP assisting at 4 of those sites. In the first 2 weeks the combined team reviewed all sites from an ‘improve, mothball, shut’ perspective doing a rapid and full analysis of each scenario including improvement potentials, closure and mothballing costs and future optionality. For the sites that remained open, we then worked with client to rapidly deliver the improvement results.
Client achieved:
- Over $380m of cash was delivered to the bottom line in 6 months (annualised rate of $530m)
- First cash savings were flowing within 1 week of project inception
- Original full-year savings estimate was delivered within 4 months
- An improvement idea pipeline with more than double the amount of savings originally estimated by the client was in place within 6 months
- The 4 sites at which PIP assisted with implementation achieved results averaging 160% of original estimates
- A Continuous Improvement culture in place within 6 months
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What we did:
- Identified potential cash through a rigorous diagnostic program
- Prioritised ideas for delivering that cash as quickly as possible
- Created Head Office reporting process for consistent reporting of results from various site
- Closed one site within 4 weeks, closed pits and faces on 2 sites within 4 weeks
- Established Results Action Review (RAR) meetings from COO to site GMs, and from GMs down to front-line at all site
- Improved role clarity and accountability by tying KPIs to Position Descriptions
- Accomodated for differences in culture and approach at off-shore site
- Examples of initiatives delivering cash included:
- Increased equipment availability at all sites
- Decreased variability in feed grade to processing plants
- Increased load rates and reduced cycle times on mining haulage
- Reduced consumables expense through price renegotiation and decreased consumption
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