• Capital projects – manage them proactively or they will eat your money while you sleep before costing you your job

      Capital Projects are, by definition, large and important. The amount of capital work in the pipeline in the Australian mining industry alone is 62.6 billion AUD – up from 17.7 billion AUD three years ago. This rapid increase in capital projects has meant the number of project managers with relevant experience, in both corporates and EPCM (Engineering, Procurement and Construction Management) companies, is spread thinly. As a result you can no longer count on the people in your EPCM team – or your own internal team – having prior capital experience commensurate with the size of project you are about to undertake. This greatly increases the risks of capital blowout. Because these are significant numbers, the financial difference between well and poorly managed capital projects can be dramatic and this has hurt many careers and companies over the years. At the moment the reports of budget and schedule blowouts are frequent. It is easy to attribute this to price increases and inflation in the construction industry but the evidence shows that tightly managed projects do not follow the trend of cost and schedule blowout. In this article, we explain how PIP has helped organisations tighten their management of capital projects to bring them closer to budget and schedule, despite industry trends. There are three key elements to the approach. Hardwire your projects for success from the outset; generate and implement ideas to speed up delivery and bring variances back in line, and proactively manage the execution of projects.

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    • Construction Productivity Achieving 'on time and on budget'

      Excellence in construction management can be achieved through cascading Key Performance Indicators (KPIs) down to the lowest level in your organisation. This gives a business considerable specific information on what to do when reviewing KPIs and resultant actions on a daily and weekly basis. And specific improvement ideas are generated through these structured idea-generation sessions.

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    • Critical Path Reduction (CPR) – When Time is Money

      The economics of so many capital projects are damaged, some irrevocably, by design dragging out and taking too long or by construction running over the allotted time and blowing the budget. Similarly planned shuts, blast furnace re-lines or longwall moves extend for longer than planned and subsequently lose revenue for the business. In situations like this, when “time is big money”, our Critical Path Reduction (CPR) methodology can help save you millions. PIP’s CPR methodology rigorously assists to identify and then systematically critique and reduce the time required to complete a project or repeating activity. Through a series of structured, facilitated sessions, a business can learn how to reduce the durations of projects, ideas or events.

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    • Get your E in to C A seamless transition from Engineering design to efficient Construction

      Many projects are slow to shift their focus from engineering design to construction (E to C). Four to five months can pass whilst the organisation moves out of design mentality and into construction mode, resulting in significant construction delays and a workforce that becomes used to low productivity levels. These tend to become entrenched behaviours that lead to long schedule overruns. Shifting to a construction mindset early avoids costly delays and delivers the rapid ramp-up required to hit the overall construction schedule. PIP can diagnose problem areas that are holding your project organisation back, and provide tools to ensure that the transition is quick and seamless. This article explores the need to actively shift capital projects out of engineering design mode and into construction mode. It covers the pitfalls of not doing this proactively, and how to achieve this transition rapidly.

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    • Managing your sustaining capital

      Is there scope to optimise Sustaining Capital within your organisation? Are the wrong projects being approved? Do you want to accelerate your Sustaining Capital process? Are approved projects not challenged or fully optimised? Are small capital projects poorly executed? Or do you simply have a lot less capital to spend to weather the current storm? Capital approval processes are often targeted at large and complex projects. Meanwhile, expenditure on smaller, ongoing capital projects – Sustaining Capital, which is required to keep existing operations on-track, slips under the radar. This article looks at the various items of managing Sustaining Capital in your operations. It also gives pointers and perspectives on how it should be managed and typical levers for improvement.

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    • Operational readiness: Fix the Wiring upfront to maximise project returns

      The net present value (NPV) of a project is determined by the actual onset of costs and revenues. The ramp-up years of the project are especially critical because of their disproportionate influence on the NPV calculation. An under-delivering project ramp-up curve is not atypical as under-delivery in the first year of a project can easily destroy 30% or more of the project’s expected NPV. PIP is regularly engaged on major projects after they have significantly under-delivered on their expected ramp-up curve. In most of these projects, effective processes were in place to ensure rigorous review of project design and extensive analysis of costs. There was usually regular and comprehensive reporting to the Board of Directors on progress vs. plan of project completion and cost. However, in almost all of these businesses, the planning and execution of the operational elements to enable project success was underdone. While tens, or in some cases hundreds of millions of dollars were poured into detailed planning and governance on the capital side, insufficient money and attention was focused on planning and execution on the operational side. The implication of this lack of attention is two-fold: under-delivery during ramp-up (e.g. lower output, quality issues and cost overruns) and an inability to rectify performance over the rest of the project. This under-delivery on capital projects does not need to occur. Attention upfront to the detailed implementation of sound operational processes (the wiring) can enable a smooth start-up and mean that ongoing progress is a sound investment. It can also mean it is cheap, relative to the capital cost of the project – and indeed to the NPV cost of not doing so.

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    • Optimising capital portfolios

      Deciding how to allocate capital across major projects is one of the most critical and difficult decisions that capital-intensive businesses such as mining, oil and gas, infrastructure and utilities need to make. Demand for capital to fund multiple growth opportunities, as well as sustain existing operations, typically exceeds available funding, and not all projects can (or should) be undertaken. Executives need to make difficult and complex trade-off decisions about how to optimally allocate capital and other scarce resources in a way that maximises returns for the business. Many companies lack a robust framework and process to select which projects should be funded and often make sub-optimal decisions and expensive mistakes.

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    • Optimising the value of capital projects in the design phases

      This article summarises PIP’s methodology for optimising value, shortening schedules and reducing capital in the design phase of capital projects. Using NPV/IRR and capital return as its guide, the process identifies the drivers of value and then systematically identifies, prioritises and assesses ways to reduce capital, risks and operating costs, to increase revenue and decrease time-to-first profit. The process can be applied at any or all of the key stages in design (business case, feasibility and detailed design). This approach has helped our clients improve the ultimate return on investment for their capital projects by more than $39bn in NPV in the past four years and reduce capital by $41bn.

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    • What do you do when your Engineering (Design) Service Provider is failing to deliver, jeopardising your project cost and schedule?

      Large capital project teams often face issues getting their engineering service providers (ESPs) to deliver on time, in specification and within budget, leaving the owner wondering whether to change canoes mid-stream. We frequently hear from clients that they are unhappy with their ESPs. They feel they have the “C Team”, milestones may have been missed, there is no apparent understanding of the project’s objectives and its requirements and there is a lack of urgency to get the job completed on time. At best, this can mean a frustrating relationship for the duration of the work. And an unproductive owner-ESP partnership may actually lead to significant project delays and cost increases. We are often asked: “I want to change my ESP, can you help?”. In our experience clients can usually get a better outcome by increasing the alignment with, and through, the better managing of the incumbent. This article gives examples of how to rapidly improve the performance of the incumbent ESP.

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    • Winning back lost time during completions and commissioning

      Most capital projects suffer from delays in construction completions and unanticipated cost growth. If you are entering the commissioning phase, PIP has tools to help recover or accelerate the commissioning phase. Here we discuss how to prioritise and work on the right things to smooth the sequencing in commissioning.

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    • Front Line Coaching – getting the engine room productive

      Most volume, revenue, yields and cost results are driven from decisions and behaviours made by the front line and their supervisors. Channelling those decisions and behaviours will transform a business’s results. PIP’s Front Line Coaching (FLC) is an evolutionary process that begins with training a supervisor on what their Key Performance Indicators (KPIs) are and why? What is important to manage? How to manage it and how to deal with variance in order to achieve targeted results? The difference between good and great FLC is the extent to which it targets the KPIs and the people that will have the biggest profit impact.

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    • Want to lift skills for a high performing business?

      High-performing businesses sometimes need new skillsets but training courses alone just won’t do – they’re an input Key Performance Indicator (KPI) after all. Experience shows that a strategy needs to be deployed across the whole organisation to get a performance uplift that sticks. A holistic approach is required. At PIP, we have developed and refined a six-element approach to training that irreversibly moves the output KPI and achieves an effective skills transfer. Our approach is to: train in the line as well as in the classroom; make classroom training participative; carry out front-line coaching; make training impact the whole organisation; actively manage training and make targeted training material. This article takes a look at this approach and notes how it works.

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    • Want to lower your handicap? Look at your training and coaching regime.

      Like golf, while the basics of managing and improving a business are all very simple when viewed in isolation, the combination of many simple things in a dynamic situation means that achieving good results is actually extremely difficult. Recognising this, golfers have coaches who work with them on and off the course and support them not just with the theory and tips, but also in practice, over and over again, until each elements is ingrained in the DNA of the player. Regardless of your arena, make sure your advisers are doing the same.

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    • Concerns over emissions, energy and water pricing

      PIP has been helping clients to achieve dramatic reductions in energy and water usage and carbon emissions for some time. With carbon trading certain to be introduced in the near future and increased water pricing equally likely, survival in the mining, mineral processing and manufacturing industries will require much greater attention to resource efficiency. Specific examples of how PIP helps identify, capture and lock-in efficiencies in resource-intensive industries are: metal smelter – 48% reduction in water cost; lime kilns – 55% reduction in carbon and particulate emissions; blast furnace – 75% reduction in emissions; smelting – 10% reduction in coke spend and integrated mining and production – 6-9% reduction in diesel consumption.

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    • Cost Wiring Does My Bum Look Big in This?

      PIP’s proven wiring processes deliver a lifestyle change to businesses that generates rapid, sustainable results. With our Continuous Cost Management (CCM) processes in place the systematic squeezing of costs will become an everyday routine for a business; as will clear accountabilities, incentives that work and user-friendly reporting and reviews. Businesses will develop the ability to analyse data (no more chats without facts) and will benefit from improvement processes and induction training in cost management for new managers. 

      However, for a site to continuously manage costs, and improve their position on the cost curve, some key questions must be answered. Where is the money? Who owns it? What’s really happening? How to reduce it? How to drive the process?

      This article explores those questions and looks at four approaches to Cost reduction: non-essential usage; essential usage; price and terms and wiring.

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    • Debtor Days – the good, the bad and the ugly.

      Debtors may be tying up your firm’s cash flow or you may be funding someone else’s company – not your own. Either way the term ‘debtor days’ refers to the average number of days it takes your company to receive payment from your customers. Does your firm have low debtor days? Do you know exactly what your average debtor days are? Could you pick if you fall into the good, bad, or ugly category? This article will help you figure out the rate.

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    • Electricity cost savings

      Companies often overlook energy savings potential or deem the effort required to achieve them as too great.

      However, with careful analysis of opportunities and by building a strong fact-based business case, it is possible to highlight and capture savings of 10% to 30% of electricity spend.

      Additionally, driving a targeted electricity sourcing effort and leveraging load-shifting and peak shaving have allowed clients to dramatically drive down costs.

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    • Footprint Rationalisation

      As the effects of the recent financial crisis spill over into the world’s related economic sectors, businesses are feeling the pinch. PIP has helped clients in many industries make significant improvements to the bottom line by carefully examining their manufacturing footprint. (i.e. which plants or sites to keep and which to close?) This has eliminated the carrying costs of excess capacity and enabled businesses to focus efforts on the most cost-effective plants.

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    • Four approaches to cost reduction

      Have your input costs been rising over the past few years? Do you have new employees in your organisation who cannot remember the times in the cycle where cost control was a way of life? Do many of your employees no longer have cost management skills and habits? Are you struggling to get transparency on the drivers of your rapidly rising costs? Many of PIP’s clients are facing these worrying signs. Some are already starting to feel the impact of these symptoms on their costs and profitability. Others have lived through economic and commodity cycles before and know that if they don’t act soon, habits and higher costs will have hardened and will be very difficult to remove at a later date. This article outlines the four drivers of costs and the different methodologies for tackling them. Rapid change in behaviours for reducing ‘unnecessary’ spend; root-cause analysis for spend that is currently seen as ‘necessary’; strategic sourcing and hardwiring in the changes to ensure that savings are not eroded over time.

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    • Helping your team to identify further cost, cash and capital reductions

      When the economic slowdown came, you and your team did some excellent work to rein-in costs, cash and capital outflows. You reduced shifts, curtailed overtime, stopped discretionary and growth spend. Times in your industry may even have been so tough that you had to go round this orbit two or three times. Now you want to bring costs down further, either to survive or to position yourself for the upturn that you are hoping is near and will be sustained. The easy re-positioning is done and you now need help with more ideas, momentum or execution expertise to deliver still further improvements in cost and cash. If you are facing an increasingly difficult task delivering this further boost, a PIP diagnostic may be the catalyst needed to help you, and your team, take the initiative. Our Cost Diagnostic will provide you with, a better understanding of the cost drivers in your business and the potential reductions in cost which remain; team consensus, as to how to deliver these reductions; the resourcing requirements needed to put a plan into action, and lastly, targets allied to a plan, in which you take ownership. The Diagnostic can assist business leaders to quickly determine what the cost, cash and capital reduction potential is for a site or business as well as establishing a plan and alignment amongst the managers to capture those savings rapidly and sustainably. It will help you determine the magnitude of cost savings possible (dollar size of the prize); what levers to pull in order to deliver that improvement; the order in which to pull those levers (prioritisation); the approach to use for each, and the resources required in order to deliver them in a particular timeframe (typically nine-month delivery with the bulk of the savings delivered in five to six months). More importantly, the Diagnostic is carried out with management involvement so they own the answers and are prepared to commit to targets and to the process needed to deliver the results. It is therefore a powerful tool not only for clarifying the cost-reduction potential for a site or business but also in aligning the management behind those targets for the journey ahead. You can then use this plan to drive ongoing cost reductions and performance improvement with or without PIP’s support.

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    • If the money isn’t out there, try looking inside!

      With debt markets all but seized up and equity values significantly off their peaks, the availability of cash has become a critical lever for business success. For those that have it, there will be attractive acquisition opportunities and the chance to build a market position that can be fully exploited once market sentiment becomes more positive. For those that don’t, remaining profitable may not be enough. Companies that lack a strong balance sheet will face the prospect of fending off the unwanted attentions of cash-rich competitors making low-ball offers. The good news is that there is almost certainly lazy capital hidden in your organisation that can be harnessed to ensure the predators in the market don’t pick on you. This article shows you where to look and what to do – taking quick-win, shorter-term and longer-term perspectives – to squeeze out that lazy cash.

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    • Improving customer satisfaction

      Customer satisfaction with Business-to-Business (B2B) clients is critical to profitability, but it is often neglected as it is more complex to measure and manage than operational and cost performance.

      • The subjective nature of B2B customer satisfaction makes it more challenging than retail consumer satisfaction
      • PIP recommends keeping B2B customer satisfaction simple
      • We find that this approach can produce a step change in B2B customer satisfaction which can drive higher profitability

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    • Improving fuel efficiency

      In many businesses, fuel consumption is often a major driver of cost. In this article we examine ways PIP has assisted clients in sustainably reducing fuel consumption whilst maintaining or improving operational productivity.

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    • Is your business sick of absenteeism and tired of overtime?

      As labour costs continue to increase, absenteeism and overtime could start to dent your bottom line if left unchecked. Fortunately, with the right processes and controls in place, these spend levers are controllable. Absenteeism and overtime incur the extra costs for cover. Key things that need to be done are neglected (e.g. trucks parked up in mines due to no driver) and those working overtime (to cover absences or to increase take home pay) become either tired or, if unfamiliar with their covering roles, create safety and productivity issues. In today’s increasingly tight labour market, you need to manage these spend levers more effectively to ensure that labour costs don’t rise and any associated costs, such as the cost of safety risks and lost tonnage, don’t manifest.

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    • On the scrap heap? Turn it into cash

      Are you looking for ways to reduce costs and generate cash? Reducing the amount, and cost, of scrap can significantly improve the internal costs of your business. With scrap reduction resulting in lower working capital, improved yield, disposal cost savings, reduced double handling and lead times – who wouldn’t want to reduce the cost of scrap? This article illustrates how PIP can help to identify, capture and lock in efficiencies to reduce scrap and other forms of waste.

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    • Optimising overheads – it’s that time again

      Looking into a mirror after the festive season can reveal that we have indulged and have some excess fat to trim. In the same way, while markets tighten and while profits are easing, companies rightly re-focus and tackle those expanding overhead costs. Whether you have done overhead reviews in the past or not, this article provides a basic framework that provides some direction on how to tackle overhead costs. It focuses on how a function adds value? How to increase this value and how to reduce the costs associated with this?

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    • Reducing working capital: opportunities in inventory management

      For a typical company, more than a fifth of total funds are wrapped up in working capital. To lessen the overall cost of running the company and to increase shareholder return this investment needs to be reduced. In this PIP Speak, we take a look at how to rapidly and sustainably streamline working capital by managing inventories across the business more effectively and profitably – regardless of whether the inventory in question is for operating supplies, maintenance supplies or the supply chain.

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    • Crystallising the improvement opportunity in chemical plant operations and aligning your people behind it

      Have you recently inherited a chemical plant? Thinking of acquiring a chemical business and want to assess the improvement potential? Not sure what it is capable of? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your chemical plant operations; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists chemical plant managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the management involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in coal preparation plants and aligning your people behind it

      Have you recently inherited a coal processing plant (CPP)? Maybe you are not sure what it's capable of and want to assess the improvement potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your CPP operations; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists CPP managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the CPP managers involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in manufacturing and aligning your people behind it

      Have you recently inherited a manufacturing site?? Maybe you are not sure what it's capable of and want to assess the improvement potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your manufacturing operations; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic will assist manufacturing managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the management involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in metal processing operations and aligning your people behind it

      Have you recently inherited a metal processing site? Thinking of buying a new business and want to assess the improvement potential? Not sure what it is capable of? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your metal processing operations; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists metal processing managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the management involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in port operations and aligning your people behind it

      Have you recently taken charge of a port operation and want to assess the improvement potential? Maybe the organisation is not meeting targets or you are not sure what your operation is capable of? Or is it just time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you. The Diagnostic will provide you with a better understanding of the potential of your operation; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic will assist port managers to quickly determine the potential improvement for an operation and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick win, medium-, and long-term). Importantly, our Diagnostic is completed with the involvement of all major stakeholders so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your port operations and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in rail operations and aligning your people behind it

      Have you recently inherited a rail operation? Maybe you are not sure what it's capable of and want to assess the improvement potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your rail operation; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists rail managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with involvement from all major stakeholders so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

      Contact us for the full article

    • Crystallising the improvement opportunity in refineries and aligning your people behind it

      Have you recently taken charge of a refinery? Maybe you are not sure what it's capable of and want to assess the improvement potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your refinery; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic will assist refinery managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with involvement from all major stakeholders so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Crystallising the improvement opportunity in sourcing and aligning your people behind it

      Many procurement operations miss targets or fail to achieve their full potential. A sourcing diagnostic is a cost-effective way to identify sourcing improvement potential in your business. It is a process that engages your people and takes them on a journey of coming to a fact-based assessment of potential improvement opportunities. This article outlines our approach to quantifying these opportunities and aligning your business to deliver sustainable results.

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    • Crystallising the improvement opportunity in your mining sites and aligning your people behind it

      Have you recently inherited a mine site? Maybe you are not sure what your operation is capable of and want to assess the improvement potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise the improvement opportunities, define the priorities, set targets and align your people to achieve those targets? PIP’s Diagnostic methodology can help you.

      The Diagnostic will provide you with a better understanding of the potential of your operation; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic will assist mine managers to quickly determine the potential improvement and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the involvement of all major stakeholders so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your mining operations and prioritise the tasks necessary to realise this potential.

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    • Crystallising your organisation’s improvement opportunity and aligning your people behind it

      Are you looking to drive significant improvement across your organisation? Are you unsure of what is possible and want to assess the real potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise where the improvement lies, what the priorities are, and how to align your people to achieve the targets. PIP’s Diagnostic methodology will help.

      The Diagnostic will provide you with a better understanding of the potential of your organisation; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the management involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Achieving rapid, sustainable improvements in contract mining

      Many sites have outsourced their mining operations to contract miners. However, sobering realities sometimes set in within a few months. These may include the fact that volumes produced are well below target or maybe the site has above-average cost per tonne when compared to the industry and internal benchmarks. Such realisations pour doubt on the owner’s decision to involve outside operations. There may also be a lack of transparency, a lack of reporting and a lack of understanding of on-site activities and issues. There may also exist a limited ability to agree on objective volume adjustments, invoice levels and claims for additional work. Even sophisticated contracts may not align interests sufficiently, often resulting in unexpected costs, underperformance and damaged relationships. Performance, which inevitably requires both parties to perform their tasks in a coordinated, integrated fashion, is complex to manage across organisational boundaries. The two parties may also struggle to ‘speak the same language’ at which point issues become frustratingly difficult to solve and the root causes of the problems become difficult to identify. This article shares ways we, at PIP, have worked with mining houses and contract miners to rapidly improve mining performance.

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    • Becoming a globally competitive underground longwall coal miner

      In underground coal mining, the gaps between average and top performing operations are large. Differences in geology and host country business conditions account for only part of these differences. Proper technology selection is a prerequisite to competitiveness, but not a driver of it. The biggest cause of these performance gaps is ‘Operational Excellence’. 
      This article describes the key levers to achieving Operational Excellence in underground coal mining:  making the business more transparent and more focused, and therefore easier to manage – right down to the supervisors and their crews, right across the site.

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    • Before the horse bolts: Predictive maintenance increases production and reduces cost

      PIP can help you if you are having difficulty with predictive maintenance. You may be looking for ways to reduce costs and generate cash or losing production time to equipment failures. You could have spotted conducting repairs that are preventable and reactive, or you may be suffering recurring component failures, such as seals, bearings and gaskets. If so, the chances are that you have a problem with the design or execution of predictive maintenance. Fixing or replacing production critical equipment is like chasing down an escaped animal – necessary, effort-intensive and better avoided in the first place. Done well, predictive maintenance allows you to close the stable door before the horse bolts, saving significant time and cost, while keeping production on-line. This article takes a look at predictive maintenance and how it can help you.

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    • Dispatch

      A good dispatch system gives an overarching view of a working business. As such, it not only helps an organisation coordinate activities in an efficient and timely way, but can also create value uplift. This article looks at some of the factors preventing companies from optimising their dispatch systems and offers four examples of when PIP interventions have helped improve performance. 

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    • Draglines: Embedding performance improvement across the operation

      Are you concerned that you are not getting the best out of your dragline operations? If you are, you are in good company. Even the highest-ranked sites in PIP’s benchmarking surveys have abundant opportunities for improvement. Draglines are by far the cheapest way of moving overburden, but so often operate below full potential. We have found focusing on the following four key areas of planning, operations, maintenance and strategic sourcing results in improved dragline productivity and tonnes uncovered.

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    • Driving performance in offshore shared service centres

      Many companies have saved on costs by offshoring back office operations to lower-cost countries. Yet they may have only realised half the savings gains that would be possible. Companies have made their operations more EFFICIENT, but they have frequently not focused on the levers that make those operations more EFFECTIVE.
      This article looks at how companies can improve the effectiveness of their offshore operations – suggesting that with wiring and process improvement further gains are possible.

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    • Driving performance in shared services centres

      Many companies have saved costs on back office operations by setting up shared services centres, offshore or onshore (inhouse or outsourced). Yet they may have only realised half the savings gains that would be possible. Companies have made their operations more EFFICIENT, but they have frequently not focused on the levers that make those operations more EFFECTIVE.

      This article looks at how companies can improve the effectiveness of their back office processing operations, suggesting that with wiring and process improvement further gains are possible.

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    • Feed supply optimisation (You are what you eat)

      The selection of the right feed for your processing operation often has a significant impact on your earnings before interest and tax (EBIT). This article outlines the type of work needed to optimise feed selection and your EBIT. Some mix of feeds can have your operation running like a pig – others like a dream. Some may upset your sulphur balance, requiring the addition of expensive energy to make up for the loss. Whilst some bring useful by-products, others bring unfortunate and costly ones. Making these trade-offs requires the combination of deep technical and operational knowledge along with experience in markets, procurement and commercial decisions. It requires discipline to collect the facts to make those complex economic trade-offs and the rigour to ensure that assumptions made along the way were correct. This article illustrates through case studies how this is done and demonstrates the significant EBIT impact that such work can have. This article outlines how to capture savings from optimising the feed of raw materials into your process. Too often raw materials are treated as interchangeable, to be negotiated on the basis of ‘best price’, but for many process industries, they have vastly different values in use.

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    • Field force effectiveness

      Managing a widely spread field force is a testing but essential part of any organisation. Managing it well, and achieving optimum field force effectiveness, is critical to success. This article looks at three areas that can help ensure productive, effective field force management: namely, identifying and reducing unproductive time, improving productivity and improving quality of task time.

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    • Fixing your train load out problems

      For many operations, their substantial investment in mines, processing plants and associated infrastructure is jeopardised because of poor train load out operations.
      Failure to utilise all available (scheduled or opportunistic) rail “slots” reduces overall output and has costly impact on the downstream supply chain.
      The good news is that poor train load out performance can be improved rapidly and sustainably with focussed business improvement attention. Our proven and practical
      approach combines four critical elements:

      1. Careful analysis to identify the right improvement areas and focus effort on the precious few ideas that fix the root causes of poor performance
      2. Effective and sustainable implementation of those ideas
      3. Diagnosis and improvement of the business “Wiring” which has allowed past poor performance
      4. Coaching and skills transfer to ensure sustained (and further improving) performance

      This article describes how we support our clients to eliminate their train load out pain by applying this approach effectively.

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    • FLAC – Attack of the Killer Dirt

      Contamination of fluid systems is a frequent cause of unplanned maintenance downtime. PIP has developed a Contamination Control Framework that addresses the causes, prevention and cure of fuel, lubricant, air and coolant (FLAC) contamination. This framework also ensures correct control structures and working environment fundamental to a functional FLAC program. Our Contamination Control Framework has been successfully applied to several sites with fast, impressive results.

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    • Getting big value from 'Big Data'

      The business world is changing – the price of storing data and computing is falling dramatically as the number of available transistors or integrated circuits increases. Businesses are moving from a position where data was scarce to one where there is far more data than they have time or resources to analyse. Companies now sit on vast and exponentially increasing Data Mountains about, for example, their customers, their transactions and their networks. Mining this data by simply employing analysts to develop and test hypotheses, is, as the incoming data stream multiplies, becoming increasingly ineffective. We now live in the world of ‘Big Data’. The business pages constantly expose us to the furore around Big Data. But what is all the talk about and is your organisation doing the right things with its own data? Are you at risk of falling behind your competitors if you fail to capitalise on this emerging trend? Transform data to the necessary few insights needed to unlock value for your business. This article summarises the impacts Big Data is having on the business world and how you can capitalise on your own Big Data opportunities.

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    • Getting the bucks from your trucks. Is your truck half full or half empty?

      For most mines, productivity of the mining fleet is a priority for profitable operation. The mining fleet is typically about 20% of initial capital expenditure (capex), requires significant sustaining capex, and incurs large ongoing maintenance and operating costs each year. Furthermore, if it is the bottleneck in your operation, low productivity leads to significant loss in volume and associated margin. If your fleet is not productive, this hits both volume and costs creating a double hit on earnings before interest and tax (EBIT). This article highlights the levers that can be activated to increase the value you extract from your truck fleet and gives some examples of what to do to capture those benefits.

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    • Hard wiring your mobile field force to win

      You’ve spent a fortune developing a targeting and call strategy and a state-of-the-art customer relationship management (CRM) system. If you’re not getting the return on those investments that you’d expected, you’re not alone. Many sales and other mobile staff, such as maintenance engineers, paramedics and workplace inspectors under-deliver because they struggle to execute well. They lack the culture of accountability required to implement the strategy and make the best use of scheduling, targeting and sales tools. Their organisations must have the right wiring – the organisation’s collective set of management practices, skills, and habits – to create and sustain an accountability culture. This article outlines how to create such a high-performing mobile field force.

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    • Improving Excavator Productivity at an Open-Pit Mine

      PIP’s recent work at a North American diamond mine shows that significant improvements can be achieved – and sustained – in core open-pit mining operations. Client input, pit observations and driver tree analysis all confirmed that improved excavator performance, in terms of availability and productivity, was key to moving more tonnes. In addition, high turnover and poor equipment reliability contributed to low morale in the mining department. The client wanted to see widespread involvement of crews in the business intelligence (BI) process to drive a positive performance-focused culture. Together the Mining Superintendent, supervisors and BI team, implemented a six-step process to quickly improve excavator productivity and effect a sustainable cultural change. They confirmed the right levers and our ability to report accurate data; they engaged all crews to get their input and implemented ‘Just Do It’ improvements to address their concerns; they involved operators to re-do standard operating procedures (SOPs) for core excavator activities and they trained all crews on SOP best practice and agreed shift targets. They also provided constant feedback to crews and cascaded Key Performance Indicator (KPI) Scorecards in the department to lock in the change. This article discusses this six-step approach and its benefits.

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    • Increasing tool time¹ to unleash maintenance artisan productivity

      Maintainers are expensive, hard to hire and to retain. In parallel, maintenance is one of the larger-cost items, and the opportunity cost of downtime from poor maintenance on bottleneck equipment can be enormous. Yet many of our clients find that only 40% of their maintenance artisans’ time is spent actually maintaining, the rest is lost to non-value added tasks like administration and waiting for either spare parts or for the next job to be scheduled. If your maintainers spend less than 70% of their time working directly on equipment (i.e. tool time), you may find that you have a hidden productivity gold mine. This article looks at maintenance artisan productivity and how to coach and support your maintenance team to systematically improve it.

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    • Insourcing or Switching Contract Miners? Get the Wiring right upfront to maximise value

      The decision to insource or transition an incumbent contract miner is being executed. Hopefully all the detailed implementation planning is well underway and plans are afoot to hire people, transfer/procure equipment and so on. Now that the key assets are being addressed, part of the team’s time needs to shift to ensuring the transition is rapid and smooth, and the forecast improvements in volumes, costs and cost per tonne are realised according to plan. The net present value (NPV) of a contract mining transition is a function of the impact on both operating costs and revenues. The ramp-up weeks and months of the new team are especially critical because they set the baseline for future performance and have a disproportionate influence on NPV. An under-delivering ramp-up curve for a new fleet is not atypical: under-delivery in the initial weeks of a contract fleet change-out can easily snowball to destroy 30% or more of the expected NPV. PIP is regularly engaged to help rescue slow transitions and productivity far behind what was in the business case. Unfortunately, by the time PIP is involved, vast amounts of value have been destroyed. In most of these situations the planning and execution of the operational elements enabling a successful transition, was under-done. While months were spent on fleet planning and commercial arrangements to complete the contractual transfer, insufficient resources and attention were focused on the planning and execution of the details in the operational start-up and subsequent ramp-up. This under-delivery on contract transitions does not need to occur. Attention upfront to the detailed implementation of sound operational processes (the wiring), which can enable a smooth start-up and position the operations well going forward, is a sound investment – and cheap, relative to the capital cost of the transfer (and indeed to the NPV cost of not doing so).

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    • Is your call centre actually working?

      The proliferation of contact centres has been driven by their ability to handle increasingly complex transactions, plummeting communications costs and growing customer acceptance. However, we all have our own horror stories about contact centre optimisation gone wrong – long hold times, repeat calls, multiple handovers and unresolved issues. This article investigates the contact centre issue and finds a way forward.

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    • It’s not just about the machines ‘Managing the maintenance team’

      The concepts, tools and frameworks around preventative and predictive maintenance have been around for decades. They are not difficult concepts, yet so many of us are plagued by poor reliability at sites. We have introduced the concepts and given people the tools, so why do we not have top-class maintenance at our sites? We would suggest that for many sites it is because the problem is being tackled as a technical one. Most of the focus is on improving tools and not enough focus is on the issue of how the maintenance team is managed. The common theme we find in maintenance departments with excellent results is the way they proactively manage their people. It is not just about the size of their maintenance budget and the level of sophistication of their maintenance tools. This article sets out the four factors that when combined, can transform the performance of your maintenance department.

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    • Maintenance - Outsourced, but not out of mind

      Although there are many reasons for companies to outsource, the trigger is often the realisation that a constant internal headache – such as managing maintenance – could potentially be dispensed with by seeking external expertise to manage it. In theory, handing responsibility to someone else allows additional time and attention to be diverted to more ‘core’, or critical, processes/sections of the business. After all, the external service providers would surely have developed expertise in the maintenance issues from having handled the same services and situations in other companies. Unfortunately, too often it turns out to be quite a different story in practice. In our experience, completely outsourcing a headache with an attitude of “they’ll look after it – it will be fine” is likely to result in it becoming a migraine over time. And by the time you are made aware of the magnitude of what you are now dealing with, you’ll need to spend even more money and time sorting it out. Most outsourced contracts have misaligned incentives (supplier not sufficiently incentivised to maximise customer’s profit). And they involve a lot more work and a higher level of skill than is typically anticipated. There are four steps to successful outsourcing. Know why you are outsourcing; don’t outsource the understanding and control of the process; select a supplier that can deliver and set up clear, tight controls and alignment through a detailed contract. This article explores how to succeed in outsourcing.

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    • Maintenance cost reduction - when you can no longer accept that 'things just cost more now'

      Besides raw materials and energy, maintenance costs are one of the highest costs a business has. They can, however, be directly influenced, even reduced, with the use of several key levers. Using this approach, PIP frequently helps clients deliver a 15%, and above, reduction in maintenance costs while holding flat, and often improving on, maintenance availability. This article focuses on providing examples of their application in maintenance.

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    • PIP gets traction in tyre crisis

      In the past, few mining companies focused on tyres and the better ones that did, were focused on reducing the cost of tyres. With a global shortage of tyres now upon us, most companies need to be well down the path to excellence in tyre management. Not just to reduce costs, but also, more importantly, to extend tyre life so the business can keep its fleet on the road longer. Those that don’t will be in the business of buying chocks to park their trucks up and watch the commodity boom pass them by. Damage to a haul truck tyre used to mean replacing the tyre, typically a US$20,000 expense. The global shortage of large tyres means the same damage could leave the truck offline completely, a revenue loss of $15 million per year. PIP uses a systematic process entailing three elements. Each element works to really get the results and lock them in. Each enables a rigorous ideas pipeline, wiring – key performance indicators (KPIs), accountability, reviews – and skills training. In this article we talk about the current situation in tyres and the systematic processes that PIP is applying with its clients to extend tyre life.

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    • Planned shutdowns: How to unlock value by reducing costs and downtime

      Planned shutdowns represent both a high direct cost and a large opportunity cost due to lost production. If poorly executed, they can also be a significant source of injuries and reduce operational stability and campaign length. Most of the work required to improve shut performance can be implemented quickly, and then perfected over a number of shuts. PIP’s approach is to focus on four key levers. These are, reducing the frequency of planned shutdowns; reducing the duration of the critical path for these shutdowns; improving management processes and reducing the direct costs of planned shutdowns.

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    • Revisiting the decision to outsource your mining - transition or insource?

      Many sites have outsourced their mining to contract miners. However, a sobering reality often sets in after a few years. Many of our clients became frustrated with their contractor’s failed attempts to: 1) Align economic incentives – “they continued to overcharge, instead of working more productively” 2) Manage closely – “dotted reporting lines didn’t work, and we couldn’t reach fact-based agreements because Key Performance Indicators (KPIs) data never matched up” 3) Renegotiate – “they knew we depended on them… in the short term”. It is common to feel that you are not getting the best from a current contract mining arrangement. But what are the key considerations and the logic to employ when changing to another contract miner, or altering the way you are managing the present contract miner, or insource?

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    • Solve your skills shortage by getting personally involved

      With skill shortages hobbling the mining and minerals processing industries, the race is on to find, and attract, the best candidates before your competitors do. That’s why CEOs need to ensure they are treating recruitment as a vital part of the production process. Organisations put a lot of time and money into looking at their production bottlenecks and unblocking them. At one site recently, lack of staff, as a result of slow recruiting, cost the company $30 million per annum in lost tonnage from trucks parked up due to lack of drivers. The key was to increase the speed of the recruiting pipeline. Recruitment velocity is the speed at which you get a candidate to accept a position and be on location. In a market where people have lots of choices, if you take two weeks longer to make an offer than your competitors you are only going to hire those who don’t get offers from others or hire no one at all and live with large numbers of vacancies month on month.

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    • Stabilising your operation by systematically eliminating the repeat offenders

      Transforming reactive maintenance departments into proactive ones requires a structured approach that focuses on short-term gains and long-term sustainability. While this approach will differ site to site, and needs to be determined by a site review, on most reactive sites it will make sense for one of the first initiatives to be a focus on eliminating the largest repeat failures. By tackling repeat offenders as a first step, you generate fast financial results and reduce production disruptions. This provides a morale boost to the maintenance team and frees employees to improve the business rather than firefight, win the necessary support to continue improving maintenance and initiate other important but slower changes. This article outlines our approach for reducing the largest causes of unplanned downtime. It includes identifying root causes, generating targeted ideas to reduce downtime and project managing these ideas to a successful completion. In addition, it covers how to hardwire these changes in place so that results don’t slide backwards.

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    • Thinking of doing it yourself? – insourcing your mining operation

      Many companies have historically opted for an outsourced model – using a contractor to manage all, or part, of their operations. They reached this decision because of a variety of reasons, including the availability of key expertise, risk mitigation, available capacity, technology, etc. However, recent pressure on margins and/or a failure of outsourced suppliers to deliver the improved performance and promised expertise, has prompted many of these companies to reconsider their business model in favour of an ‘insourced’ or owner-operate model. Making this decision, based on a robust business case, is the first step. The next is making a successful transition to owner-operate by limiting, or negating, impact on production or operating cost and managing the array of associated transition risks involved. Getting it wrong – a lengthy transition with poor performance that does not achieve the envisaged benefits – can quickly destroy much of the value in the insourcing business case. In this article we share PIP’s experience on what is required to mitigate these risks and to ensure a smooth transition without losing control of the operation. We also look at the planning required to successfully move from outsourced, contract mining to insourced, ‘owner-mining’.

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    • Time for a change? – revisiting your equipment strategies

      Taking our maintenance improvement approach gives both ‘quick fixes’ and longer-term improvements. The latter allows a business to step back and review the equipment strategies across a site. This entails reviewing key equipment and looking at the likely failure modes, and their impact, and determining the right maintenance strategy for optimising the value of that equipment. The approach also considers whether the equipment should be either run to failure, changed-out based on time or condition monitored, and on what conditions. So your throughput has increased 25% over the years, your PMs have not changed in that time and you’re thinking that might be why your pump downtime is skyrocketing? Your stainless piping costs are enormous and you are wondering whether you really need to change these pipes out every 24 months. Perhaps its time to revisit your equipment-based strategies? Equipment-based strategy work takes prioritised pieces of equipment and steps back to assess failure modes and risks/impacts, and then develops a maintenance strategy to match. Before committing yourself to this maintenance improvement approach, it is worth recognising that while this programme is very important to realise the full potential of your business’s assets, the timing of benefits may not be as immediate as some other performance improvement initiatives. However, applying the 80:20 rule will help rapidly bring you some of the bigger benefits. This article lays out the key steps for developing equipment-based strategies. It provides guidelines for determining what equipment to focus on and provides simple decision trees that can guide strategy development.

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    • Timely, intelligent mine plans – possible? Or just a myth?

      Delivering improved mine performance – in productivity and costs – requires clear accountability and rigorous operating discipline. That process cannot start without a timely and accurate mine plan. Mine planning is a repetitive task. Every month key personnel sit down to prepare an ideal task list for the next month, schedule required down days and major stoppages and discuss and finalise the plan before it goes to print. In this article we look at an effective way to create an accurate mine plan.

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    • Turning your coal plant into a gold mine

      This article outlines how to implement sustainable continuous improvement for your Coal Preparation Plants by:
      1. Identifying the most valuable levers
      2. ‘Wiring’ for sustainable continuous improvement

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    • Unleashing the potential of low-skilled workforces in remote locations

      Aligning and motivating the front-line workforce to deliver against the company objective is fundamental to achieving targets in any business. Remote and culturally diverse locations present some unique challenges to achieving this alignment and motivation. This article outlines an approach to unleash the potential from your front-line workforce to achieve rapid and sustainable results, no matter where your asset is located and how diverse your workforce is.

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    • Unplanned maintenance - 5 Whys at crew level (are you people asking the right questions?)

      The tail of a maintenance unplanned downtime Pareto is long. While dedicated teams can tackle the top causes, we suggest hardwiring a parallel process, where maintenance crews systematically tackle the middle of this Pareto as part of their standard routines. This ‘five whys’ process has the crews identifying medium-sized repeat failures, walking through a systematic process to identify their root causes and then proposing solutions to fix them. Over time, this approach will improve equipment availability and condition. In parallel, it will change your people’s mindset to failure prevention. This article puts forward the success of the five whys process.

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    • When it comes to your operators, business as usual is not enough

      In heavy industries, the operators are not only one of the largest business costs but also a major driver of overall productivity. In recent years, hiring and retaining operators (and their supervisors) has been expensive and difficult in many regions – raising the bar for productivity required just to stand still financially. Realising acceptable productivity from inexperienced operators and supervisors cannot be achieved with business as usual.

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    • Why do so many maintenance initiatives fail to deliver

      Have you ever initiated a new and exciting maintenance turnaround project that didn’t deliver the results? Purchased a foolproof methodology for maintenance risk management and been puzzled why its application at your site goes nowhere? Maybe you have developed an asset management strategy that looks perfect on paper but has never resembled day-to-day operations? You’re not alone – at least 50% of companies that start maintenance projects report that they do not achieve the promised benefits. So what is missing in the adoption of the next big thing? Quite often a simple understanding of exactly where your maintenance department is today. If you are continually frustrated by a lack of sustained improvement in maintenance performance then understanding your ‘maintenance maturity’ will help you to select and deploy the right initiatives that will deliver results. In this article, we describe the maintenance maturity curve and explain how it is used to guide a detailed diagnosis in your maintenance organisation. The case studies illustrate the powerful results that can be delivered when this approach is used to design a targeted improvement programme.

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    • Agreeing deliverables – getting the conditions right for excellence in execution

      Within hours of visiting a company we can ascertain if the company has a culture in which things get done (and fast) – an ‘execution culture’. In most companies, very few managers seem to achieve this, but what separates those very few successful managers from the unsuccessful? And how can ordinary managers create a culture of execution in their particular team or department? The great news is you don’t have to be a leader of heroic proportions to achieve this. There are just two simple steps to completing a ‘circle of accountability’ and fostering a strong execution culture. Get agreement from the person doing the job, the implementer, on what needs to be delivered (task or result) and close the loop (check it was delivered) and then, if necessary, hold to account. This article covers the first element – assigning and agreeing deliverables. It’s all about laying down the conditions for execution success. If the deliverable is not agreed upon with the implementer (it’s neither measurable nor understandable), it won’t be delivered and the accountability circle will remain open.

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    • Cascading Performance Reviews to deliver alignment and results

      Does your corporate strategy translate into the right initiatives being delivered to the front line? Are major opportunities being actively addressed throughout the organisation? Is performance transparent across sites and departments and are problem areas identified and addressed? Can you recognise problems on the front line early enough to rectify and instigate change so things don’t go off the rails? Are the strategic imperatives of the CEO’s office allied with the actions of the coalface? If you have trouble answering any of these questions it may be worth taking a closer look at the review structure in your organisation. One of the first things PIP typically does to help an organisation perform to its optimum is to implement cascading performance reviews – from the most senior manager down to the teams (and where possible, individuals) at the front line. We believe that a cascading system of reviews can generate a rapid improvement in performance. It both enables an organisation to implement key value delivery initiatives and, combined with coaching on how to use it, can create a performance culture.

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    • Change management – do you need it?

      Change can be positive: however, the traditional methods of managing change fall short of the mark. In this article we suggest there is an alternative to just bulldozing a change through, outside the lines of reporting. Change can only succeed when instigated and embedded within the existing, accountable management structure by the workforce itself – with 100% buy-in. As renowned business thinker Peter Senge says: “People don’t resist change. They resist being changed!”

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    • Change programmes need to be holistic

      The majority of improvement programmes fall short on delivering potential savings because they fail to adequately cover the areas of ideas management, wiring and coaching. PIP’s belief is that you need all three of these dimensions in place in order to achieve sustainable, continuous improvement. Many companies have undertaken continuous improvement programmes, however, relatively few have achieved the results they were targeting. This article describes the three crucial dimensions you need to have in place to be successful. We also discuss some of the pitfalls and how to avoid them.

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    • Continuous Improvement – 15 minutes of fame or a timeless masterpiece?

      Will your Continuous Improvement (CI) efforts be like the art of the Christo, as ephemeral and temporary as it is bright and impressive? Or will they be more like Leonardo da Vinci whose masterpieces have sustained beauty and appeal over a long time? This article addresses three key things to do from day one to ensure you are set up correctly for continuous improvement. Ensure lines are aligned to drive improvement (rather than a CI function being in charge); make it easy for them to do so (focus on priorities, free up their time, wire so it's easy – send the right data, to the right person at the right time). And lastly, ensure lines understand how the wiring works and fits so they can defend, sustain and modify it intelligently.

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    • Do you have time not to do business improvement?

      Your time is limited but your to-do list seems endless. The last thing you want to do is add one more thing to the list, especially a big one like a business improvement programme. It’s counter-intuitive, but that might be exactly what you need to do. In our experience, managers who initiate a well-run business improvement programme find that it is far from being the straw that breaks the camel’s back – quite the reverse. Not only will a good programme lift performance, it actually frees up time for managers and their staff. A good business improvement programme eliminates low-value activity, which can take up valuable time; reduces the number and length of meetings and the number of people who need to attend them, and prevents ‘buck-passing’ and endless, circular follow-ups by training an organisation to assign clear deliverables and single-point accountabilities. In other words, an effective business improvement programme will address the root causes of your endless to-do list, freeing up those magical “extra hours in the day”. PIP’s clients use them to get on top of important issues before they become urgent… or to get home in time for dinner.

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    • Dreading the upcoming budget cycle? You’re not alone!

      Many managers dread the budget setting process. It takes too long. It’s like a game of cat and mouse producing targets that are not clearly linked to the business plan. Targets end up being thrust down from above, so they are not owned by the managers who have to deliver them.
      This article summarises an alternative approach and simple tools to make your budget setting process useful. It shows how to ‘find the money’, and create ownership and understanding of how to achieve targeted results.

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    • Focusing Business Improvement

      In PIP’s experience, a common characteristic shared by underperforming companies is that they do not have enough understanding of where to focus, or what is driving their results. When they ask themselves questions such as: “why have costs risen 20% over the past three years?” or “how is it that we consistently produce at only 50% of our theoretical capability?” they don’t have a way to readily find out. Whether it’s looking back to understand what drove results, or looking forward to identify how to meet difficult targets, understanding the critical levers that drive a business’s performance should always be the starting point. The ideal tool for this is the Value Driver Tree (VDT) – a visual picture of the gears that power a business. This article illustrates how Value Driver Trees can be used to focus energy and change behaviours in an organisation.

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    • Follow through or fall over? Why some organisations only promise while others always deliver

      An effective Management Operating System (MOS) enables an organisation to plan, communicate and manage the activities that are key to the delivery of required results. We examine how to diagnose the quality of your MOS, identify some common weaknesses, outline how to implement change and provide some case examples of the benefits achieved by our clients. Organisations need rules and procedures to forecast demand, plan production down to a shift-by-shift level and compare actual results with the plan and initiate corrective actions. We call this the MOS of a business. As well as ensuring standards are met and commitments are delivered, the MOS enables analysis of performance, identification of gaps and development of improvements in response to changing environments. We think of the MOS comprising five elements. Forecasting activities and results; planning and scheduling work; work execution; reviewing results and agreeing actions to drive improvement, and revising the way work is done by making agreed actions happen.

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    • Getting the most from your people

      PIP’s experience, which may appear counter-intuitive at first, is that by increasing your expectations of performance from people and improving your performance management system, you are more likely to retain your best people. Our performance management approach ensures measurable, single-point accountability for each Key Performance Indicator (KPI) in the business; cascades a regular, prioritised cycle of Plan-Do-Reviews at each layer in the organisation and periodically reviews the talent of the entire organisation with specific actions for each individual.

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    • Managing the Ideas Pipeline to Capture the Value

      The Ideas Pipeline is one of PIP’s three approaches when delivering rapid, sustainable results. It identifies high-value ideas and proactively manages them to lock in results. This article describes the Ideas Pipeline’s essential stages and discusses the importance of proactively and continuously managing the Pipeline.

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    • Meetings that work

      Run well, meetings are a powerful part of an organisation’s wiring that get things done. They can be pivotal points where final decisions are made, based on information read in advance. They should be the central forum in which people are recognised for getting things done, and held to account if inadequate progress has been made. Meetings are an important part of a culture of getting things done. Handled poorly, they represent a terrible waste of time. This article describes an approach to set up meetings that foster good wiring habits and ultimately success.

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    • PIP’s Spin Cycle - A powerful approach for rapid results

      Regardless of whether a client needs to create a cost focus, bring overtime and absenteeism under control or ensure machinery is operated at the target speed, PIP’s Spin Cycle methodology enables change to be captured in the line and delivers quantifiable results within a month of implementation. Our Spin Cycle methodology is a powerful tool to drive rapid behavioural change. Key elements of the Spin Cycle approach include agreeing target (disaggregate & cascade low, then lower); communicating widely – how YOU can influence; reporting out – get into detail; reviewing and agreeing corrective actions and consequences, and taking corrective actions – close escape hatches. With the help of PIP, the capacity of Australia’s largest coal export logistics system – Hunter Valley Coal Chain (HVCC) – was increased by 15% in just four months.

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    • Prioritisation – Have You Got It Yet?

      If too much is happening but nothing is getting done it is time to get serious about prioritisation. To do so, will deliver rapid results through proven prioritisation tools and the development of sustainable prioritisation habits. Most people in organisations are working hard on too many things. This dilutes their focus and impact and ultimately harms the bottom line. But this is fixable. By understanding and using the key concept of wiring you can permanently embed prioritisation tools and prioritisation habits into your organisation to speed up the pace of improvement. Prioritisation requires a rigorous approach and a constant focus. At PIP, we believe that using simple tools can help organisations significantly improve their execution skills and leads to tangible bottom-line impact. For these tools to have a lasting effect, they must be hardwired into the organisational habits. This article illustrates how.

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    • Proactive management - Debunking the 'Micromanagement' Myth

      The terms empowerment and micro-management often lie at opposite ends of the spectrum. Many people are afraid of actively managing their people because they are worried they will disempower their staff and be labelled micro-managers. A better approach – which we at PIP term proactive management – is a hybrid of both styles. Good proactive managers actively coach their people and ensure that they are successful whilst growing. Proactive managers ensure that their people are working on the right priorities, right Key Performance Indicators (KPIs) or good targets; set a credible, ongoing plan that, by using the right approach, timescales and resources, can deliver on time. They ensure that their team is keeping the plan on track, are open to judicious accountability and maintain a positive sense of faith and enthusiasm. The team must feel ownership for any problem-solving whilst putting their shoulder to the wheel when the going gets tough. This article explores how PIP can help your proactive managers succeed.

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    • Debottlenecking

      This article outlines PIP’s approach to debottlenecking operations.

      1. Diagnose the improvement potential and develop a plan
      2. Deliver results and ongoing continuous improvement through and down the line:
      • Managing an ideas pipeline
      • Strengthening the 'Wiring' of the organisation
      • Coaching for high performance and continuous improvement

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    • Skills – putting ‘Continuous’ back into Continuous Improvement

      There can be a depressing sense of déjà vu about much business improvement – a series of one-off projects where many of the savings are not sustained and the cycle starts again. But PIP’s approach is different. We set up the systems, wiring and skills to embed continuous improvement in organisations from day one. One-off improvement exercises, by definition, typically offer limited long-term benefits. There is rarely sufficient rigour and investment of time in developing skills required to deliver ongoing improvement. Over the years we have had the opportunity to work with a large number of companies on operational improvements. Rarely were we the first consulting firm to be called in to help. In many cases, we were not even the second or the third. Through this revolving-door process, it has become apparent that many companies look at business improvement as an initiative and not as a culture. It is our view that business improvement is something that should be started once. It should be an ongoing process in the business, not something that starts and stops in campaigns. Unfortunately we have also learned that this view, while shared by many companies, is not widely practiced. Driving change is easy; getting it to be sustainable is hard.

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    • Sustaining disciplines – essential if you want to sustain change

      How many times as a manager have you overseen the implementation of an enlightened change (to procedures, to systems, to reviews) only to come back three months, or three years later, and find it redundant or neglected and the business floundering in the same position as before you instigated the change? While the natural inclination is to roll one’s eyes at those you left in charge – it is also highly likely that you have not put in place good enough sustaining disciplines to sustain the change. This article revisits the role of sustaining disciplines in an organisation’s wiring and the role they play in hardwiring changes into place.

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    • Targets that motivate

      Most organisations set targets for their people. Many still don’t succeed in getting behaviours to change significantly. We all know we have to set targets for our people. But what makes a good target? Obviously it has to tie in with the overall business goals, but for it to be effective, it also needs to be motivating and affect behaviour. For a target to be motivating it needs to be sufficiently possible, which is to say, it is neither too easy nor too hard, but a stretch that is possible to achieve with some effort. It also needs to fit the given consequences in the target owner’s eyes, which is to say, that the rewards for success are worth striving for and failure won’t mean an unacceptable downside. And, with respect to their own experience, the target needs to be achievable in the eyes of the owner – not that of the manager or the owner’s peers. PIP has a simple yet effective framework for building targets that will motivate and improve performance. In this article, we discuss each of the three elements above, helping you set motivating targets that sustainably lift performance.

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    • Tinkering? Or committed to delivering sustainable change?

      Ever put your best person in to a site or area to fix a problem, yet they just don’t seem to get traction? Ever seen individual improvements occur in an area or site yet the overarching Key Performance Indicators (KPIs) didn’t change? Ever seen one good manager after another fail to turn around a problem site and fail to break the cycle of firefighting? Everyone wants to achieve the benefits from operating at lower costs or higher efficiency, and yet the organisation keeps slipping back into the status quo. Perhaps you are inadvertently falling into the trap of ‘tinkering’ – which comes from failing to put a sufficient critical mass of high-quality resources into an area to create and sustain a significant and lasting change. This article looks at the principles behind making such business changes.

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    • Visible Leadership

      Achieving high performance requires building and communicating the right operating strategy, with the right input and output (Key Performance Indicators) KPIs to deliver the value the organisation is seeking. It also means ensuring your people know what needs to be done to deliver on the strategy and how they are supposed to do it. It ensures there is Single Point Accountability for each action and each KPI; makes sure that the incentives reinforce the actions you want to see; cascades reviews of both the results (i.e. did it work?) and the actions through the organisation. And periodically reviews the talent in your organisation. This article outlines the importance of visible leadership in a manager’s role and explores what this actually means and what actions to take.

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    • What is wiring? Wiring your organisation for success... it’s crucial

      Ever wondered why some organisations seem to naturally perform better than others? Why some businesses improve year on year and proactively take control of their futures while others don’t? More importantly, why do some seemingly successful business improvement projects unravel shortly after the consultants have left? Quite often the answer lies in an organisation’s ‘wiring’. Wiring is the mechanics of management. It’s an organisation’s management processes, staff, competencies, disciplines and the behaviours managers do and don’t accept. Working together, these factors influence how an organisation will behave and therefore, how it will ultimately perform. Water finds the path of least resistance and people and organisations will do the same. The science of wiring determines how to program a business so the right types of behaviour and the right outcomes become the path of least resistance – effectively charting the course for the organisation going forward.

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    • Will you still be talking to each other next year?

      PIP’s prime objective is to assist our clients to build better businesses. An important part of this effort is accomplished by ‘wiring’ the skills, habits and norms that drive improvement into business-as-usual practices. It would be easy just to run an excellent, one-off improvement project with great project communication however, we believe the real concern is, when our team leaves, what benefits or improvements has the business taken on? Effective communication is not a project’s greatest challenge – the greatest challenge is enabling the client to establish ways and means to instigate change in the long-term. We can be the best of communicators but the real challenge is how to hardwire systems and habits into a client’s organisation so as to enable communication and the sharing of information internally on an ongoing basis. Our focus therefore is on ensuring that the client’s communication wiring is in place and works well and that its people are running it themselves as part of their ongoing business. While project communication stops when the project ends, in-the-line communication must be built to last.

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    • ‘Hard wiring’ for high performance

      At PIP we believe that a company’s future success or failure is ‘wired’ into the organisation’s fabric. Good wiring is a strong predictor of business success.
      This article explains that all organisations are wired a certain way – whether they know it or not – and to improve performance you must change the wiring. Critical elements of wiring are explained from the way accountabilities are defined to how meetings are conducted.

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    • “In the wild, the big don’t so much eat the small, the fast eat the slow" - how does your speed of execution rank?

      How many times have you seen great initiatives pass across your desk for only a limited number to be taken up and made to work? At PIP we see this too often, so we focus on four major culprits of delayed execution: lack of prioritisation, lack of resources, lack of alignment and lack of specificity. In this article we explain these four culprits and what to do to prevent them slowing down execution in your area.

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    • “To be simple is to be great.” Ralph Waldo Emerson

      Today’s business landscape is evolving faster and becoming more complex than ever before. We now have access to unprecedented levels of information and interconnection, all promising better productivity, lower costs and an improved bottom line. In this environment, more often seems better. The reality experienced by many, however, is that all the novel complexities that seem so alluring often overtake us. More, turns out not to be better after all. Instead, as new processes and systems get piled on top of each other, we’re left grappling with challenges that seem to get more tangled and entrenched by the day. Meanwhile, the tyranny of the urgent steals our attention while top priorities languish, half-completed and overdue. We’d all like to rise above the everyday noise and spend our time focusing on the things that really matter. The question is how?

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    • Is the price really right?

      The current economic environment is seeing weakening demand and pricing pressure applied to many goods and services. While most businesses will be focusing on costs, it is now more important than ever to understand product and customer profitability, marketing and pricing processes, value pricing, price reporting and accountability. Correcting historic price anomalies is an important and difficult task. The good news for cyclical industries is that a declining price environment can make the rebalancing of historical pricing abnormalities easier. For example, if your company has historically under-priced a high specification range, any price reduction could now be applied to your commodity range to correct the relative anomaly. Similarly, if small customers have been under-priced relative to large customers, any price declines should favour your larger customers.

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    • Assessing ways to rapidly improve safe behaviour in your organisation

      • Mining and other heavy industry companies are facing unacceptable safety performance and increased external pressure, forcing them to re-assess their approach to safety
      • Traditional safety audits are important, but not sufficient in providing a holistic approach to improve safe behaviour
      • The Safety Wiring Pyramid is a structured and systematic way to assess safety practices and identify opportunities to rapidly improve safe behaviour
      • Good Safety Wiring, combined with safety improvement ideas and targeted coaching can sustainably improve your safety performance

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    • Safety and operations improvement go hand in hand

      There is a perception that business improvement is not compatible safety performance at a site. PIP’s experience disproves this. The evidence shows that the application of core improvement and management disciplines can rapidly improve sustainable safety results. The same fundamentals that are good for operations are also good for safety. These are clear accountabilities, compelling targets, widespread employee participation, cascaded reviews closing the loop on actions, root-cause problem-solving and regular compliance audits. All these apply to operations and safety alike. Furthermore, stable sites with controlled operations and low variability prove to be the safest. Adoption and adherence to five improvement fundamentals can drive a dramatic turnaround in site safety performance. These are stretch targets that are widely understood and communicated; site-wide involvement from the general manager down to the operators; cascaded reviews that focus on Key Performance Indictors (KPIs) and actions to impact them; root-cause solutions to address the key drivers and closing the loop with regular audits.

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    • What safety leaders do

      Wesfarmers, one of Australia’s largest companies and biggest employers, felt it was time to step back and review where they were on the safety journey and what aspects of best practice could be adopted and applied to better protect its 200,000+ employees.
      PIP were privileged to be chosen to partner with Wesfarmers to carry out this review to find out what global safety leaders look like and what they were doing to drive improved safety.
      This article shares our combined insights from the review. We would like to thank Wesfarmers for allowing us to share these with you.

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    • Go-to-market Strategy: Is your company actively selling value to your buyers?

      Designing and delivering winning value propositions, specifically crafted for each buyer segment, is the key to a successful sales strategy. This article explores PIP’s approach to putting in place an overall winning Go-to-market Strategy: one that will define and prioritise buyer segments and develop and execute effective, sector-specific sales propositions.

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    • Sales force effectiveness

      Your sales force is your company’s front line. If the front line is not pushing forward, the company is stagnating, or worse, going backwards. But addressing a weak front line is a tough task. There are so many things you could work on and each is linked to the others – so where to start? Based on our experience with clients across industries and geographies, PIP thinks of sales force effectiveness as being driven by five interdependent elements: strategy, coverage, skills, motivation and performance management. Working on just one will not be sufficient to firm up the front line; you need to get all five aligned or your sales force will lose ground to competitors. Fortunately, there are some basic tools and analyses we have used successfully across sectors to identify and address performance gaps.

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    • ‘Wiring’ your sales force to win

      You’ve spent a fortune developing a sales strategy and a state-of-the-art customer relationship management (CRM) system. If you’re not getting the return on those investments that you’d expected, you’re not alone. Many sales forces under-deliver because they struggle to execute well. They lack the culture of accountability required to implement the strategy and make the best use of sales tools. Sales organisations must have the right wiring – management practices, skills and habits – in place to create and sustain an accountability culture. This article outlines how to create such a high-performing sales strategy.

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    • Managing industrial marketing for rapid sustainable results

      Those of you who are familiar with our work delivering rapid results on the shop floor may be interested to know that we also do extensive work in industrial marketing and sales. Results on the market side can be rapid, significant and are generally free from capital expenditure (capex). There are four areas where PIP repeatedly helps industrial clients to find and deliver significant profit improvements. These are:

      1. By understanding how the business makes money by determining the true business-wide margins of various product/customer/market mixes
      2. By designing a winning value proposition for those identified highest margin mixes and ensuring that it is delivered effectively
      3. By generating a strong pipeline of ideas for improving prices, volume and margins (the key drivers for margin improvement) within the guidelines set by the value propositions, and actively managing this pipeline to successful completion and sustainability
      4. By maximising account manager effectiveness through good wiring, support and proactive management, in parallel with the delivery of value propositions and the completion of margin improvement initiatives.

      This article discusses the benefits of searching for ways to deliver profit improvement.

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    • National Business Improvement Study Results

      In today’s corporate environment, along with the responsibility for running a business, there is a relentless pressure to continually improve performance. Year in and year out – be it through increasing profits, reducing costs, increasing production or increasing sales – new targets must be met. Most managers readily recognise that there will always be opportunities to improve on current performance. The real challenge is to translate that potential into implemented dollar results. To this end, New Focus was commissioned by PIP to conduct an independent national business improvement study among large Australian corporations, to understand the challenges faced. The study targeted senior managers who had direct profit responsibility for organisations with sales greater than $250m, and was conducted unbranded to maintain its independence. The study discovered that 46% of respondents estimate that their organisation could increase profit by more than 15% if they were able to realise the full potential of the business improvement opportunities available to them. 50% of them however, achieve less than half of the amount identified above (failure to execute). Of the savings that are actually implemented, more than two-thirds of the CEOs were uncertain if these implemented changes would stick and be in place in five years’ time. This represents a huge drop-off in potential profits from identified improvements – through implemented improvements, and then to sustained improvements. In the eyes of those CEOs surveyed, the biggest challenge facing big business today, in the area of business improvement, is the perceived lack, or inadequacy of, execution/implementation skills among managers and staff. Worryingly, few in the survey felt they had a solution to this problem.

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    • A Remote Site Supply Chain that Really Works

      Mining operations depend on well-run warehouses and inventory management to maintain a high level of equipment availability and optimum production. At remote sites, the importance of the supply function is magnified. There are few alternatives when a part is needed at short notice in the Arctic tundra or a desert mine, and expediting and lost production costs are high. Getting the supply chain humming is not trivial, yet these teams are often left to train themselves. Getting it right requires an ability to understand equipment strategies; to interact with the maintenance group on the correct spares strategy and strategic-sourcing competence, in order to secure arrangements with suppliers that consider, not only price, but also the total economic impact that service or material will have on a site. The P2P (procurement through to payment) processes and warehousing management must be excellent and, finally, vendor and contractor management skills, and procedures, are required to get what is needed, and promised, from suppliers. To address this element of the supply chain, our warehouse coaches are tasked with simplifying the function and making it more transparent, so it is easy for someone new to understand. They also need to make it easy to manage and perform at a sustainably higher level than when they arrived. While these elements are not totally separable, this article focuses in particular on the warehousing and inventory management aspects of this function.

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    • Building high performing procurement teams

      Creating a high-performing Procurement and Strategic Sourcing department is a challenge. Many organisations struggle to finalise issues of structure, accountabilities, Key Performance Indicators (KPIs), candidate selection, incentives and training. Getting it right not only improves procurement costs/value but also gives better business alignment with suppliers, leading to better business outcomes. We regularly support our clients to build sourcing teams that deliver rapid and significant savings and have the sustained capability to continue to perform after we leave. A key part of our work with Supply Chain departments involves putting the right organisation in place. Our work typically covers four components:

      1. Determining the location and structure of each sourcing function
      2. Specifying individual KPIs, accountabilities and performance targets
      3. Staffing the team (defining the capabilities required to deliver, then identifying, interviewing/screening and placing suitable personnel)
      4. Transferring capabilities to the sourcing team (through training, role play and processes) to enable strong sustained performance.

      This article outlines some of our work in areas such as organisation structure, accountabilities, KPIs and skill building.

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    • Capturing the benefits of Global Sourcing

      Many organisations are aware of the opportunity to generate supply chain savings through global procurement

      Realising these savings in a rapid and sustainable manner involves understanding regional manufacturing capabilities, identifying, vetting and selecting, appropriate suppliers, and effectively engaging with them to ensure on-time, on-budget delivery of highquality goods.

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    • China sourcing

      We take it for granted that many goods in our shops, hardware stores and supermarkets are made in China but what about the equipment in your mine, process plant, railway or port?

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    • Crystallising your organisation’s improvement opportunity and aligning your people behind it

      Are you looking to drive significant improvement across your organisation? Are you unsure of what is possible and want to assess the real potential? Does your team not feel the same need for rapid change that you do? Maybe it is time for your management team to step back and crystallise where the improvement lies, what the priorities are, and how to align your people to achieve the targets. PIP’s Diagnostic methodology will help.

      The Diagnostic will provide you with a better understanding of the potential of your organisation; consensus amongst your team on the size of the opportunity; an understanding of the key levers that will deliver the result; challenging but achievable priorities and targets; a plan and resourcing requirements to move forward and ownership of that plan. Our tried and tested Diagnostic assists managers to quickly determine the potential improvement for their business and establish a plan and alignment of their team – even where multiple organisations are involved – to capture those improvements rapidly and sustainably. It will help determine the size and value of the improvement, what levers to pull to deliver that improvement, the right sequence in which to pull those levers (prioritisation), the approach to use for each and the resources required in order to deliver results in a particular timeframe (typically split into short/quick-win, medium, and long-term).

      Importantly, our Diagnostic is completed with the management involvement so they own the answers and are prepared to commit to the targets, the process and the changes needed to deliver the results. This article provides an overview of how you and your team can rapidly quantify the full potential of your business and prioritise the tasks necessary to realise this potential.

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    • Emerging developments in retail global sourcing

      Meeting the changing demands of the customer in the most efficient and profitable way puts retailers under ever-increasing pressure. In this article we explore four global sourcing strategies that can help alleviate this pressure and ensure aspiring and best-in-class retailers remain at the top of their game.

      • Think globally: looking beyond China as the go-to destination for sourcing.
      • The importance of ethical manufacturing and the benefits of procuring goods direct from source.
      • Make sure quality control and quality assurance are carried out responsibly and thoroughly, and are not just last minute add-ons to the manufacturing process.
      • Take a new, cost-effective look at a means of global distribution that is as efficient as it is profitable.

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    • Getting full value from renegotiated supplier contracts

      Are you capturing the value you expect from contract renegotiations?

      • The successful renegotiation of prices and terms is typically greeted with applause?
      • However, too often the savings are not actually captured on the bottom line.
      • This article outlines the importance of ‘hard wiring’ those savings into your business and outlines a variety of measures that can be taken to achieve this

      Contact us for the full article

    • Getting the most out of your contractors?

      PIP has, in the last few years, tackled the issue of effective contractor management, from both a cost and safety management angle, at more than 20 mining and processing sites. We have extensive experience in this area and our approach includes: collect data; apply controls; gate control; authorisation process and gate contractor tracking. We eliminate root causes of contractor usage and ‘wire’ the site for sustainable effective contractor management. This article shares PIP’s proven methods in this area.

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    • Hyper-competition – mastering supplier fragmentation

      This article gives an overview of an approach we have developed for situations where a category is high value for the client, but the supplier market is highly fragmented and the category is therefore difficult to source. In this approach (hyper-competition), we have developed an approach to rapidly sourcing such categories globally with extensive, transparent competition – often between hundreds of suppliers.

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    • Inbound Logistics Optimisation for remote sites

      Mining and oil and gas operations often have extreme logistics requirements due to remote locations and dynamic requirements for materials and equipment. 

      As such, flaws in processes such as forecasting, order management, inbound logistics and materials handling can have a large impact on profit. An effective inbound supply chain requires fine-tuned processes and wiring and potentially reorganised carrier and network choices.

      PIP focuses on four levers for improving inbound logistics:

      • Demand analysis
      • Shipping optimisation
      • Materials handling
      • Receiving and materials management

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    • It’s time to buy

      Now is most certainly the time to buy – suppliers are losing volumes and are keen for your business. If you have cash, others will take a discount to get it. PIP is busy across the globe assisting its clients to renegotiate their categories. While most procurement departments see opportunities to reduce their spending, the hard part is achieving maximum savings in a short timeframe and sustaining these savings in the longer term. PIP can help you achieve higher savings quickly due to robust methodology; our focus on prioritisation and ‘time to cash’; our extensive operational experience, which means we understand the economics of the categories you are buying; our ability to hardwire benefits to ensure that savings are locked in over the longer term, and our top-of-class resources who knuckle down to supplement your own people. This article provides a basic overview of how we approach strategic sourcing with our clients.

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    • Locking in the contract benefits

      After the negotiations are over and contracts are signed, often the biggest challenges still lie ahead. To ensure sourcing savings flow to the bottom line, we need to ‘re-wire’ the interface between Sourcing, Suppliers and End users.

      • Work the contract: internal disciplines and controls to achieve full value from contracts
      • Work the suppliers: drive improved performance from suppliers in terms of cost, quality and supply
      • Work ourselves: Establish relationships with end users to drive ongoing benefits

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    • Optimising outsourced contracts to drive value

      This article outlines a variety of levers companies are using to capture further savings from their outsourced contracts.

      It partners with our articles on increasing productivity from outsourced suppliers (service centres, contract miners, outsourced maintenance).

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    • Outsource or insource? Getting it right and getting results

      Changing your outsourced supplier, or taking things back in-house (insourcing) is a major step. You may be considering change because outsourcing is not working well (maybe it never did) or internal or external circumstances may have changed sufficiently to warrant a review. The original outsourcing decision would have been made for sound commercial reasons and not taken lightly, so any decision to change needs be fact-based, thorough and authoritative. Setting up, or changing, your outsourcing is a major step that doesn’t always deliver what you expect. Thorough analysis and deep commercial insight are required to select the right activities to outsource, choose suppliers, create the right commercial terms and manage successfully. Once a sound decision is made, a detailed execution plan, tailored to the specific situation, will enable you to achieve the results you want. In this article we provide some tips and case studies to help you review your outsource, change supplier or insource decision.

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    • Rapid Category Sourcing – fast cash flow

      Rapid Category Sourcing is a methodology to deliver substantial procurement cost reductions quickly, with an exceptional return on investment. Rapid Category Sourcing is perfect for commodity-like categories where sound comparison between vendors is easy and therefore where many of the elements of Strategic Sourcing are not needed, and where the category approach can deliver more value than Rapid Vendor Sourcing. 
      Typical techniques under Rapid Category Sourcing are reverse auctions, and streamlined Requests for Proposal. Running a category through a reverse auction can deliver high savings with relatively little invested time. For spend areas that are slightly less commodity-like, Requests for Proposals (RFPs) can be fast and better value than comprehensive Strategic Sourcing. In both cases, it’s a matter of having the right tools and knowing where to find the value.
      This article describes what Rapid Category Sourcing is, where it is useful, how it compares to other methods, how the programme works, and what is required for success.

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    • Rapid Vendor Sourcing – capturing savings from the tail

      Rapid Vendor Sourcing is a methodology that delivers procurement cost reductions fast. This approach applies to nearly any area of spending. However, Rapid Vendor Sourcing is particularly exciting as a means to cut significant costs in areas of spending for which Strategic Sourcing or Rapid Category Sourcing1 approaches are inappropriate.

      In particular, this method is superb for capturing cost reductions in fragmented spending known as the “tail”, which we have found to be in the bottom 15%-25% of the spend pareto. By contrast, Strategic Sourcing and Rapid Vendor Sourcing are especially appropriate for unleashing value in the larger spend categories, those which notionally account for the top portion of sourceable spending.

      This article describes what Rapid Vendor Sourcing is, where it is useful, how it compares to other methods, how the programme works, and what is required for success.

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    • Supply chain 'Wiring'

      There are three levers (price, usage and wiring) to pull when tackling sourcing. Each yields powerful results in their own right and each needs to be tackled before a sourcing department can feel comfortable that they have the particular spend item in order. At the core of PIP’s ability to deliver rapid, sustainable results, is our Spin Cycle methodology – a powerful approach to drive rapid behavioural change in six areas. Text spend, discretionary spend, contractor spend, corporate cards, domestic travel and contract management. Our Spin Cycle methodology enables change to be captured in the line and typically starts to deliver quantifiable results within a month of implementation. This article covers the lever of supply chain wiring, illustrating the significant financial and compliance results that can be delivered on this dimension.

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    • ‘Collaborative Sourcing’ – Unleashing additional value for contract owners and vendors

      Supplier relationship management and negotiations can be difficult to handle, with different paradigms and tough situations. This article outlines PIP’s “Collaborative Sourcing” approach, which has proven to be very effective in unleashing value for both customers and involved vendors.

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    • ‘Reverse Auctions’ – Turning the tables on the purchasing process

      Reverse Auctions are online tendering vents that typically last 30 to 90 minutes. Reverse Auctions are:

      • Effective for highly competitive commoditised categories
      • Run using a web-based tool
      • Able to generate high levels of savings quickly

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    • Bringing a Private Equity focus to your business to drive superior returns

      A common perception among senior executives is that Private Equity (PE) funds achieve their superior returns by employing financial engineering techniques, by using clever capital structures and by injecting as much debt as possible into their portfolio companies. Prior to the recent global financial crisis, there may have been some truth in this, however, in the debt-constrained economic environment of the last four years, PE funds have been forced to focus heavily on core-operating disciplines to add value to their investee companies. PIP has extensively worked with many PE-owned companies to identify key actions that PE funds must execute to achieve superior returns. We can now share the six measures that top-quartile PE funds take to maximise company performance and financial returns. They are to:

      1. Understand the key business drivers and areas that deliver value
      2. Simplify organisational structures, make accountability key and cascade it down the business
      3. Introduce Key Performance Indicators (KPIs), from CEO to front-line employees, to easily track and measure impact
      4. Align incentives with business objectives
      5. Drive relentless execution of the priority initiatives through to cash
      6. Make tough decisions quickly, based on “just enough” facts.

      This article provides a summary of those actions to help you achieve superior PE-type returns.

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    • Global Private Equity: Driving exit value for a portfolio business

      Achieving exits of private equity assets remains a challenge. Although a degree of normality is returning to the capital markets following the recent Global Financial Crisis, markets remain wary of IPOs of PE assets, and secondary transactions are falling through off the back of disappointing valuations. In this article, we review what Private Equity firms can do to drive performance in their portfolio businesses to ready them for sale; we draw on our own successful experiences obtained through following a disciplined four-step approach:

      1. Maximise in-year EBITDA estimate
      2. Build a growth story
      3. Optimise capital management
      4. Manage the exit process

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    • Notes for management teams considering a change to private equity ownership

      Private equity (PE) holds clear attractions for executive teams, including financial rewards and managerial freedom. However, these benefits are associated with significant risks for management teams. PE firms frequently replace senior management before a purchase or during ownership. Fifty-nine per cent of PE firms blame failure to meet targets on poor management performance and 35% of PE firms have replaced management teams in more than 40% of portfolio companies. Even if you keep your job, you could still lose your house – management will have (and be expected to have) a stake in the business that only just lets them sleep at night. What does a private equity-backed management team need to do? This article outlines seven common themes that underpin successful outcomes.

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    • Planning for a successful merger

      Many things can go wrong when integrating two different companies after a merger or acquisition. Frequently the merged company falls short of the value creation expected from the operation. To make things worse, value is often destroyed with key managers leaving the company and customers looking for alternatives. Moreover, as top managers become distracted by complex post-merger integration issues, performance of the core business can suffer. Post-merger realities can also pose unique challenges to the management team. For example, a large number of critical one-time decisions need to be made by new teams of managers who have never worked together and probably don’t trust each other yet. And there is also an extended period of anxiety between the deal announcement and the actual post-integration reality. Individuals are preoccupied, and rightly so, with how the integration will affect them. There are three major levers of merger value that need to be managed properly. A high-quality due diligence that verifies the investment business case; pre-merger planning to clearly define merger rationale and integration plans and the execution capability required to extract the full value of the merger in a sustainable way and, therefore, with medium- and long-term impact. In this article we describe how to plan and prepare for a successful merger so activities are started as early as possible and then proceed swiftly.

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    • PMI success requires execution excellence to avoid the seven deadly sins of M&A

      Supplier relationship management and negotiations can be difficult to handle, with different paradigms and tough situations. This article outlines PIP’s ‘Collaborative Sourcing’ approach, which has proven to be very effective in unleashing value for both customers and involved vendors.

      Contact us for the full article

    • Private Equity: Making the most of your advisers

      As money continues to pour into the private equity asset class, investment managers are looking for ways to extract greater value from their portfolio companies. In this article, we review some implications for advisers (they will need to bring a broader range of skills to the transaction) and outline how PIP can help. The solution lies in focusing advisers on adding real value by bringing a broader set of skills to the transaction. These incorporate three key elements. In order to validate the investment thesis and give greater certainty around the projected cash flows, get the commercial due diligence team focused on the key strategic issues (early). Take a structured look at the operational improvement opportunities that could quickly deliver additional dollars to the bottom line. And leverage execution skills to ensure that the benefits of operational improvement initiatives are delivered rapidly.

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    • Private Equity: Where to from here?

      In the aftermath of the recent global financial meltdown comes a period of change and volatility, wholly unanticipated when the current portfolios of private equity (PE) investments were transacted. How PE firms react to the changes and manage the transition with their investee businesses will strongly influence the pecking order when the markets finally emerge from the crisis. This article takes a look at this side of the PE sector.

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    • The value of executional excellence in Post Merger Management

      Most mergers fall short of achieving the initial benefits estimated before the deal is closed. In fact, the difference in the value of a well-managed deal and a poorly managed one can be substantial. There are three major levers of merger value that need to be managed properly. A high-quality due diligence that verifies the investment business case; pre-merger planning, to clearly define merger rationale and integration plans, and the execution capability required to extract the full value of the merger in a sustainable way and, therefore, with medium- and long-term impact. In this article we describe how to foster execution capability in a Post Merger Integration (PMI) context.

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    • Transaction Services: Making sure your acquisition does not fail

      Most M&A transactions fail and CEOs who preside over a merger failure are significantly more likely to lose their jobs than their peers. The key to success is in identifying and eliminating the sources of transaction failure, which is where PIP’s experience and approach can prove invaluable. PIP provides clients with comprehensive transaction support services – from due diligence to identifying opportunities and mitigating risks; from the design to the execution of effective post-merger integration plans. In this article, we explore how and why transactions fail, and what can be done to prevent it.

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