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Context / Scope of project
The CIS iron ore mine was hard hit by a fall in iron ore prices and increase in energy costs. The mine had a track record of improving operations but was disappointed by previous operational improvement experiences. PIP conducted a diagnostic to identify and estimate possible improvements.
Client achieved:
- Identified opportunity to increase volumes worth $20 m USD per year
- Evaluated opportunity to decrease operating costs by $10 m USD per year
- Identified one-off savings worth $30 m USD
- Highlighted gaps in current business improvement activities and identified ways to gear them up
- Cleared up misunderstanding about absolute level of safety at the site in comparison with world standards and identified ways to catch up.
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What we did:
- Identified bottlenecks by interviewing top management, comparing nominal capacities, and analysing data on intermediary stockpiles
- Developed value driver trees (VDT) for bottleneck areas: trucks and ball mills. The VDTs allowed us to estimate impact on volumes and input KPI in trucks and mills
- Surveyed and assessed Management Operating System of the client. Defined key impediments to development of continuous improvement culture
- Analysed cost base and built VDTs for major cost items
- Conducted Day-In-Life diagnostics by working whole shift with shift-boss and assessing shift-boss time allocation
- Based on VDTs, interviews, and observations estimated the “size-of-the-prize” – the potential to increase volumes and decrease costs with practically zero capex.
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