Implementation and Sustainability of Business Process Improvement at Newmont: Lessons Learned

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Implementation and Sustainability of Business
Process Improvement at Newmont Lessons Learned
Business Process Improvement in the Extractive
Industries Conference 2005Denver
Colorado September 21 and 22 , 2005
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Continuous Improvement in Newmont

• Pragna Bhakta Global Director Gold Medal
  Performance PLUS Newmont Mining Corporation

• Newmont Mining Corporations Continuous
  Improvement Journey
• The Vision for the future
• The Value we see for our business AND our
  people

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Newmont

• Newmont is the worlds largest gold company.
• Founded in 1921 in New York City,
• Headquartered in Denver, Colorado
• Operations on five continents
• North America, South America, Australia, Asia
  and Africa
• gt 6 million ounces per year
• 18 billion market capitalization
• Employs approximately 14,000 people worldwide
• Only SP 500 gold stock

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Worldwide Operations
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Strategic Overview
North America
Gold Base Metals Major Projects
Holloway
Golden Giant
Nevada
South America
Yanacocha
Kori Kollo
Zarafshan
Martabe
Ahafo Akyem
Batu Hijau
Pajingo
Tanami Yandal
Kalgoorlie Boddington
Martha
Central Asia
Africa
Australia/ New Zealand
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Our Guiding Principle

• Newmont Values
• Act with integrity, trust and respect
• Reward an entrepreneurial spirit, a determination
  to excel and a commitment to action
• Demand leadership in safety, stewardship of the
  environment, and social responsibility
• Develop the best people in pursuit of excellence
• Insist on teamwork and honest communication
• Demand positive change by continually seeking out
  and applying, best practices

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Why focus on Continuous Improvement?

• There is sufficient evidence to suggest that
  organizations that do not continuously
  re-invent themselves in their search for
  excellence, will be left behind

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GMP Newmonts Vehicle for Sustainable Global
Change
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Vision for GMP

• Adding value to every ounce by continuously
  improving business processes in Newmont

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Objectives of GMP

• Developing competencies within the organization
  (Methods and Tools)
• Generating value through efficiency gains, cost
  reduction, and loss prevention
• Leveraging through best practice sharing
• Continually improving Safety at our operations

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The Game Plan for GMP

• Take the upside of the journey so far
• GMP and CIBETS
• GGMP, and
• Risk Management,
• and meld them into a single, cohesive, global -
  Newmont Continuous Improvement Program GMP

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Newmonts Journey So Far
Widely Deployed Process/Tools
Newmont - Gold Medal Performance (GMP)
1995
Normandy - CIBETS (TQM)
The CI marriage in Newmont
Greater Gold Medal Performance (GGMP)
2003
Evolving To..
GMP
2005
Process Redesign Risk Management Project
Management
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GMP Summary
BASIC CONTINUOUS IMPROVEMENT TOOL KIT
PROCESS REDESIGN TOOL KIT
RISK MANAGEMENT TOOL KIT
PROJECT MANAGEMENT TOOL KIT
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Developing Our People through GMP

• Develop in-house capacity to conduct GMP
  projects (reduce dependencies on consultants)
  i.e. GMP academy
• Integrate with Learning and Development programs
  i.e. LEAD!
• Develop a network of GMP experts/specialists
• Included competency in individual personal
  development plans (future GMs, Process Stream
  Managers)

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Training Framework
PROGRAM
LEVEL
PROGRAM
LEVEL
EXECUTIVE SENIOR MANAGMENT

• GMP course content targeted at all levels of
  organization
• Competency based training modules
• Appropriate GMP training for different
  management groups
• Linking theory of Leadership, Management and Team
  with practical business requirements
• Utilizing LD as delivery mechanism for general
  training

EXECUTIVE OVERVIEW
EXECUTIVE
MANAGEMENT
LEAD! PROGRAM
SENIOR
FRONT-LINE MID-LEVEL MANAGEMENT
MIDDLE

MANAGEMENT
ADAPTED FROM LEAD!
FRONT
-
LINE
PROFESSIONAL INDIV CONTRIB
MANAGERS
INDIV CONTRIB
BPI AND
GENERAL
GENERAL
RISK MGMT
RISK MGMT
WORKFORCE
WORKFORCE
PROCESSES
PROCESSES
BPI AND
INTRANET
INTRANET
RISK MGMT
RISK MGMT
REFRESHER
REFRESHER
TOOLS
TOOLS
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Sharing GMP Knowledge
Our People Inter Regional
GMP Global Team
GMP
NEX GMP Portal
Quarterly Reports
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GMP Areas of Influence

• GMP
• Tools
• Methodologies
• Standards
• Competency Development

Social and ExternalRelations
Mergers Acquisitions
SupplyChain
Operations Capital Projects
GMP
InformationTechnology
Environmental
HSLP
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The New Game
OperationsProductivity Value
GMP
Business Performance
Big-step Improvement (GMP process
re-engineering) Sustained with System, Behaviour
and Culture
Quick Fix C I
Time Effort
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In SummaryGMP People Process

• Living Our Values
• Improving safety
• Developing people
• Reducing/Managing Risk
• Reducing cost
• Improving productivity
• Achieving Sustainable Change

A common Continuous Improvement initiative
language providing a discipline and consistency
in all decision- making processes
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Back to the Journey

• Russell Clark Director Of Operations Newmont
  Australia Newmont Mining Corporation

• Newmonts journey on the road from Cibets and
  GMP to GMP
• What we have done, what was achieved
• The lessons learned.What to do, what not to do!

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GMP
BASIC CONTINUOUS IMPROVEMENT TOOL KIT
How does this all work in the real world.. How
has Newmont put it to work and leveraged the
lessons we have learned.. How did we get the
rubber on the road?
PROCESS REDESIGN TOOL KIT
RISK MANAGEMENT TOOL KIT
PROJECT MANAGEMENT TOOL KIT
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A Choice .. we chose both
GMP and CIBETS
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GMP Case Study - Yanacocha

• The Problem Defined
• World shortage of tires
• Increasing costs
• Tire Life at Yanacocha 3,500 hours

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GMP Case Study - Yanacocha

• GMP Tools Applied to
• Awareness/training
• Road construction
• Spillage cleanup
• Pressure checks
• Inspections
• Repairs
• Payload

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GMP Case Study - Yanacocha
Tire life improvement
gt2.5 M annual savings 70 improvement realized
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GMP Case StudyTire Life at Yanacocha
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CIBETS Case Study - Tanami

• The Problem Defined
• Client / Contractor relationship
• Increasing Mine complexity
• Getting deeper
• More expensive to mine
• Traffic in decline
• Mine Constrained
• Duplication
• People, Process, Responsibilities
• Polarity
• Systems, Controls and Standards

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CIBETS Case Study - Tanami

• CIBETS Tools Applied to
• Awareness/training/teaming
• Management Structure
• PDCA Behavior
• Resource Management
• Planning and Measuring
• Reporting and Communication
• Technology Improvement

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CIBETS Case Study - Tanami
Mine tons productivity improvement

• 1.6 m tpa to 2 m tpa
• 12 x 30 t trucks to
• 7 x 50 t trucks
• gt35 M Extra Revenue
• 25 Productivity
• improvement realized
• One Integrated aligned
• management team
• Improved technology
• Mine Control / Pitram
• Quickfill
• Improved resource
• management
• Hot seat changes
• U/G crib room
• U/G workshop

Average Tons Per Day
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The Lessons Learned . 1

• Theres no magic dust or silver bullet
• Its about LEADERSHIP from the CEO, through
  our EDs, our GMs and our Mine Managers

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The Lessons Learned . 2

• Dont skimp on the ingredients
• Its about RESOURCING
• the best team will deliver the best result

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The Lessons Learned . 3

• Dont underestimate the reality
• It IS all about CHANGE not everyone likes
  change, ITS PAINFUL.

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The Lessons Learned . 4

• Dont forget to make the sale
• Its about INFLUENCINGthe SELL is more
  important than the TELL

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Where to next?

• Our business has changed from 2000 through 2005,
  and will continue to change
• We need to find ways to leverage our existing
  assets
• productivity, value, efficiency
• We need to be ready for new deals and
  opportunities
• assimilate them quickly and efficiently into our
  business
• We need to leverage best practice and broaden
  the impact of our continuous improvement
  initiatives
• remove redundant processes, duplication, wasted
  effort
• Our Answer is GMP

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In Summary
BPI is about Change Management! The Success of
Change Management is dependent on a disciplined
and systematic approach to LEADING the change,
while interlinking the management disciplines of
SYSTEMS and BEHAVIOUR to build a CULTURE where
our people are able to align their efforts and
values with our vision and become actively
involved in its pursuit.
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Questions