ACARP Conference – September 2007 Lessons from Manufacturing.

F A R T H I N G W E S T P T Y L I M I T E DM A N A G E M E N T C O N S U L T A N T S

A.C.N. 063 498 886

ACARP Conference – September 2007ACARP Conference – September 2007

Lessons from ManufacturingLessons from Manufacturing


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Within the Australian Coal Mining community today

BHP Billiton - Six Sigma

BMA - Six Sigma

Rio Tinto - Lean Six Sigma

Peabody - Lean Six Sigma

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Within Manufacturing there are two dominant philosophies that are driving productivity improvement and quality –

Lean Thinking and Six Sigma


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Six Sigma

The aim of Six Sigma is to systematically improve processes by eliminating defects.

One standard deviation - around 68 percent.

Two standard deviations 95 percent.

Three standard deviations about 99 percent.

Six sigma quality – 6 standard deviations

from the mean represent defect levels below 3.4 defects per one million opportunities

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Productivity Improvement

If the aspirational aim of Six Sigma is to eliminate defects to less than 3.4 per million…

Why are so many Six Sigma projects themselves

defective?

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Motorola has reported over US$17 billion in savings from Six Sigma as of 2006 (20 years

implementation)

2006 results were impressive.

Sales grew 22% to a record $42.9 billion.

Net earnings were $3.7 billion.

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Lean is built around the concepts of the Toyota Product System.

Lean’s focuses on improving the 'flow' or smoothness of work, eliminating waste / variation and the pursuit of perfection.

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In 2006 Toyota’s

Sales grew 13.4% to a record $179 billion.

Net income was $11.7 billion.


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What are the lessons that the mining industry should learn from manufacturing?

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Lesson – reduce variability

Both Lean and Six Sigma have different philosophical approaches but share many common tools.

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Perhaps the most striking common philosophical feature is the

pursuit of the continual reduction of variability and the elimination of waste.

Why is this important?


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Continually reduce variability

Law 11 of Factory Physics#

(Pay me now or pay me later)

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If you have high variability you will pay for it through.

Long Cycle times and high WIP levels

Wasted Capacity (low utilisation of resources)

Lost throughputFactory Physics – Hope & Spearman pg 623.


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Case Study - Utilisation

Support distance

Roof Bolt Pattern6 * 2.1m bolts per m

Rib

Cut and fill 90 90 90 90

Car "A" travel outbye car "B" travel inbye 90 90 90 90

Install rib support 105 205 205 205

Car travel & Bolt - Parallel activities 105 205 205 205


Car "B" travel outbye car "A" travel inbye 90 90 90 90

Install Roof support 150 150 245 245


Total Cycle time 435 535 630 630

Potential advance m/hr - Ignoring all other activities 8.3 6.7 5.7 5.7

Theoretical m per 8 hr shift 66.2 53.8 45.7 45.7

Cut bolt Efficiency Mine "C" @ 3.75m / op hr 66%


Car travel outbye, unload and travel inbye 135 135 135 135

Install rib support 105 205 205 205



Car "B" travel outbye car "A" travel inbye 135 135 135 135

Install Roof support 150 150 245 245


Total Cycle time 465 535 630 630

Potential advance m/hr - Ignoring all other activities 7.7 6.7 5.7 5.7

Theoretical m per 8 hr shift 61.9 53.8 45.7 45.7

Cut bolt Efficiency Mine "N" @ 1 m / hr 15%

One shuttle car operation - times at 70 advance from boot

Technically Attainable Advance Rates based on cut, bolt travel - ExistingAssumes no delays due to supplies, ventilation etc - Travel times for 70m wheeling

8 * 1.8 m bolts to roof in mesh per m

4 * 1.8 m bolts to roof in mesh per m

One 400mm rib bolt in mesh to each rib

Two shuttle car operation - times at 70 advance from boot

1.0 m advance per cycle

Two 400mm rib bolt in mesh to each rib

Focus on reduced variability

66% Utilisation3.75 m / operating hr

Better conditions

15% Utilisation1.0 m / operating hr

X


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Lesson – Implement the Philosophy

Implement the philosophy not just the tools.

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Lesson – Learn by Doing

People Learn by doing!

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Teach and practice the use of tools in the context of real work problems.

They don’t teach the tools and then go looking for a problem.


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Lesson – Go and have a look

Go to the place where value is added!

Ohno – who is credited with the development of the Toyota production system said...

“Management should walk the factory floor at the rate of 100m per hour.”

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Slow down.

Observe.

Talk to the people adding value.

Involve these people in the improvements.


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Lesson – Learn to See

Learn to see non Value Adding Activities

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Learning to See

Total Available TimeTotal Available Time 24 * 7

Scheduled Production TimeScheduled Production TimeScheduled Down TimeScheduled Down Time Reduced by maintenance shifts

Available Run TimeAvailable Run Time Set -up Time

Set -up Time

Reduced by panel advances

Reported Run TimeReported Run TimeUnplanned RecordedStoppages

Impacted by breakdowns as per Deputies reports

Net Run TimeNet Run TimeMinor

Unrecorded Stoppages

Unrecorded

StoppagesReduced by getting supplies to face / wait on car / ventilation extensions

Efficient Net Run TimeEfficient Net Run Time Slow SpeedSlow

Speed Proficiency (speed) of bolters and miner driver

Value Add TimeValue Add TimeRejects ReworkRejects Rework Repairing roadways, intersections, off-centre or over-wide roadways

The proportion of time spent “Adding Value” (cutting and supporting) can be very smallThe proportion of time spent “Adding Value” (cutting and supporting) can be very small

Equipment Value Adding TimeEquipment Value Adding Time


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Big productivity gains - Its about the peopleBig productivity gains - Its about the people

There are enormous productivity paybacks in eliminating non value adding time.

And

These productivity gain do not require big capital investment

There are enormous productivity paybacks in eliminating non value adding time.

And

These productivity gain do not require big capital investment

Net Run Time

Reported Run Time

Available Run Time

Scheduled Production Time

Total Available Time

Efficient Net Run Time

Net Run Time

Reported Run Time

Available Run Time



Value Add Time

Net Run Time

Reported Run Time



Net Run Time

Reported Run Time

Available Run Time



Value Add Time


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Net Run Time

Reported Run Time

Available Run Time




Net Run Time

Reported Run Time

Available Run Time



Value Add Time


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Net Run Time

Reported Run Time

Available Run Time




Net Run Time

Reported Run Time

Available Run Time



Value Add Time

Net Run Time

Reported Run Time



Net Run Time

Reported Run Time

Available Run Time



Value Add Time


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Lesson – Think Systemically

Think systemically – not just locally…

Map the Flow of Value

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Lesson – Measure Success

Develop a “dashboard” that measures success – not just failure

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Developing the “Dashboard” - Measurements for Success

DefectsUnnecessary

Inventory TransportingOver

Production

Under-utilisation of employees

Unnecessary or excessive motion

Inappropriate Processing

Waiting

Under performance on Production Rates

The 7 Wastes (plus 1)

Lots of other ways to help develop the dashboard - safety/cost quality/delivery and Can Do metrics


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Lesson – Ask your people to solve problems

Ask your people to help you solve the problems

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Jim Womack, Jan 2006

“A Lean management system involves managers at every level posing the key problems that need to be solved and asking the teams they lead to develop and implement the answers.

This practice of asking the correct questions rather than providing the correct answers… is perhaps the starkest contrast between Lean Thinking and orthodox mass production and the hardest to implement.”


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Lesson – Audit and improve front line management

Build into “Standard Work”…

processes that audit the way work is done…

Develop front line managers into coaches and mentors

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Supervising and auditing improvement

programs

Supervising and auditing improvement

programs

Formal Audits

Undermanager Audit of Development Panel StandardsTo be filled in each time the panel is visited

Date: ________ Shift: _____ Panel: _____ Heading: _____ Miner: _____

Deputy Name: __________________ Miner Driver Name: __________________

Yes No Corrective actionSupervision

Is there adherence to breaks as per the EA? ________________________________________

Is the "Can do" work being performed as per the panel notes and the "Pillar Cycle Check List"?

________________________________________

Is the Deputy managing the panel supplies for this shift and the on coming shift?

________________________________________

Approaching the face

Are the wheeling roads clean and graded rib to rib (especially at face and boot) and cables and hoses appropriately hung?

________________________________________

Is the water management under control? (Down holes installed - pumping out swillies?)

________________________________________

Is casual water being managed? (No leaking hoses, leaking couplings, overflow from Gas drainage drilling)

________________________________________

Is the heading on centre and the roof to the stipulated height? ________________________________________

Is the floor competent? ________________________________________

Is the miner sitting level? (Not on a cross grade?) ________________________________________

Has the breakaway been formed to standard? # ________________________________________

Is stone dusting to standard? ________________________________________

At the face

Is a copy of the OMP on the miner? ________________________________________

Is the miner driver using the measuring stick to check roof height? ________________________________________

Is the cut height and deviation from centre being recorded in the rib line every 3m?

________________________________________

Is the miner drivers check list filled in and has the crew initiated corrective action where appropriate?

________________________________________

Have competencies been matched for maximum productivity? ________________________________________

Have you discussed productivity and safety with the face crew? (Meters cut? Conditions? Problems? Rectification?)

________________________________________

Does the production correspond to the reported down time? ________________________________________

# Answer as appropriate - SOP summary - When forming maintain 2.6m roof height but go up into the roof 200 mm and come out of the floor the equivalent distance, cut corner for wheeling and support, finish off by coming back and brushing for level.


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Lesson – Pick up Good Ideas

Take on board ideas that work and roll them out…

But remember Lean is a philosophy not a series of tools

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Development Panel

Out bye headingPit TopDrift

Pit bottom Lay down area

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Pull system for supplies?

Belt


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Panel Lay Down Area

Bolt Oil Mesh Mesh

Bolts Bolts Bolts Oil Oil Mesh Mesh Mesh

Bolt Bolt


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Panel Lay Down Area

Bolt Oil Mesh Mesh


Bolt Bolt


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Bolt

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Panel Lay Down Area

Bolt Bolt Oil Mesh Mesh



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Bolt

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Panel Lay Down Area

Bolt Oil Mesh Mesh


Bolt


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Panel Lay Down Area

Bolt Bolt Oil Mesh MeshBolt



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Panel Lay Down Area


Bolt

Empty Pit Bottom Lay Down Area



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Panel Lay Down Area


Bolts Bolts Bolts Oil Oil Mesh Mesh


BoltOilOilOil

Kanban Card Box

Mesh


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Panel Lay Down Area




Bolt

OilOilOil

Kanban Card Box

Mesh


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Panel Lay Down Area



BoltOilMesh

Kanban Card Box Pit Bottom Full Supplies for Panel

Oil

Oil

Mesh


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Panel Lay Down Area



BoltOilMesh


Oil

Oil

Oil

Mesh


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Panel Lay Down Area



BoltOilMesh


Oil

Oil

Oil

Mesh


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Panel Lay Down Area



BoltOilMesh


Mesh

Oil


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Mesh

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Panel Lay Down Area

Bolt Bolt Oil Mesh


BoltOilMesh

Kanban Card Box

Mesh

Oil



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Lesson – Manage the doing

Manage the doing

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Manage the Doing

Ensure:

The people doing the work adhere to standard operating procedures.

The people doing the work managing their performance by-the-hour, shift-to-shift against the agreed metrics.

Supervisors, and managers auditing performance and providing feedback and guidance on progress, by-the-hour, shift-to-shift, week-to-week, month-to-month.

Regular after action Reviews to capture the positive and negative aspects of work activity and resource “problem solution”.


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Continually reduce variability

Implement the philosophy not just the tools

People learn by doing

Go to the place where value is added

Learn to see non Value Adding Activities

Think systemically – not just locally… Map the Flow of Value

Develop a “dashboard” that measures success – not just failure

Ask your people to help you solve the problems

Build into “Standard Work” processes that audit the way work is done

Develop front line managers into coaches and mentors

Take on board ideas that work and roll them out

Manage the doing

In Closing


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Nationally Accredited

Practical – On the Job

Advanced DiplomaLean Six Sigma


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3 Prizes to winEnter the Guessing Competition to win a 5 months licence of

SigmaFlow Modeller

T D F A R T H I N G W E S P T Y L I M I T E

M A N A G E M E N T C O N S U L T A N T S A.C.N. 063 498 886


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ACARP Conference – September 2007 Lessons from Manufacturing.

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