Case Studies

• Listen to a presentation by Keith Michaelson on how CL&P improved outage restoration.
• Mine sector employees trim millions
• Breakthrough Strategy: A stepping stone to greater success

Mine sector employees trim millions

Mongolia's mining industry has an opportunity to capitalize on a different sort of resource and save millions in processing and production results. A programme empowering all levels of the workforce in ways to cut costs and improve productivity has allowed Boroo Gold Company Ltd operating in East Mongolia's Selenge Aimag, to trim millions and already its benefits are being adopted by contractor companies working at the mine.

An American-designed process change and improvement process, 'Rapid Results', implemented in December 2006 by the company, has reduced safety accidents and incidents and [provided] a potential savings of operations costs of approximately USD 20 million, company-wide. 100-day projects, designed to yield quick results are implemented through 'WorkOut' and 'Breakthrough' teams and Boroo Gold Change Manager, Earl Crowder said: "The results have been fantastic and have paid off top management for their support."

'Rapid Results' instills informed and responsible decision-making for improved performance and problem solving. It develops teams drawn from the company employee base that cut across department structures. The teams address the broader business of mining as they identify a high priority problem or issue of concern and analyse cost cutting and process improvement measures through real time and dollar savings activities.

But, unlike similar mining industry programmes, 'Breakthrough' empowers employees to apply their knowledge and experience through leadership; team skills; research; planning; managing and monitoring; communication and cooperation and innovative use of technologies and statistics to solve their problem or issue. It challenges them to learn and understand the entire mining process and see how their solution and cost saving innovations can contribute to increased company-wide efficiency.

Sixty-seven employees in 'WorkOut' and 'Breakthrough' teams completed round one of the 'Rapid Results' programme on April 14, 2007. 37 employees in round two delivered presentations of processes and results at a full-day meeting, Friday, August 31 in the Ulaanbaatar Kempinski Hotel Conference Room.

Round two teams and their goals included: Drill and Blast Optimization - to increase drill productivity by 10 percent through reduction of ore size by 50 percent; Contractor Management - to reduce contractor incidents by 90 percent; Energy Efficiency - to reduce electrical and diesel costs by three percent; Operations to Maintenance - to implement a dispatch system and produce an Approval for Expenditure (AFE) for its implementation; Asset Management - to increase haul truck use by five percent and an additional team, 'Just Do It' focusing on implementing a workplace housekeeping project.

Team one saved the company USD six million and won the Presidential Award for the best results in round two. Their issue was identified when an employee asked the question, "Why do the ore fragments have to be so large?" The team found ways to reduce fragment size by optimizing blasting, increased throughput of ore through the Mill from 260 tonnes to 330 tonnes per hour and found a way to identify pit hardness mapping of ore.

Team two's goal on management and safety of contractors demonstrated the capacity of 'Breakthrough' outcomes to permeate the mining industry nationally. Mine Superintendent and Contractor Safety Team leader, Purevraash told the meeting how his team's efforts to improve contractor safety by issuing internationally approved Personal Protective Equipment (PPE) had been adopted by contractors, Blast LLC, Monnis and J and B Trade in their own companies where there had previously been little regard for wearing PPE and avoidable incidents and accidents. Purevraash said he was proud of his team, in particular the way they overcame initial resistance from contractor employees to wear PPE.

Senior Maintenance Planner and team four leader, Myagmar-Erdene handed new Boroo Gold President, John Kazakoff, a comprehensive AFE for installation of voice-operated mine dispatch system software. His team had identified the dispatch system software would solve problems of poor communications and inadequate tracking of equipment use in mining areas. Team Facilitator and Principal Geologist, Ben Playford said it [the software] would show cost benefits after three months and pay for itself in nine months, with sufficient benefits to justify and upgrade to an automated system.

Teams shared their 'lessons learned' and said working with people from different departments was beneficial to more efficient operations. They agreed that different people working together brought different ideas to find the best solutions to a problem. They said managing conflicting work priorities and 'Breakthrough' was their greatest challenge.

Centerra Gold Chief Operations Officer, Paul Korpi said of the methodology and team results, "This is cutting edge stuff and I have not seen it at the seven mines I have previously worked on." He said Boroo Gold Company's willingness to implement 'Rapid Results' to achieve success to date has resulted from a combination of factors. He said the fact that the Mongolian and foreign employees didn't have to 'unlearn' old habits-as was the case at long established sites-was a major feature of the success and he was fully confident the 'Breakthrough' processes had become institutionalized in the Company and therefore sustainable in spite of inevitable change at management levels. "It's part of the culture now," he said.

Mr. Korpi said mining companies that embraced this model of problem solving for increased efficiency would see value from their investment and the Mongolian mining sector could learn much from the Boroo experience. He said Boroo's cooperation with other mining companies, through 'Breakthrough' teaming activities could introduce and raise awareness of international standards.

Boroo's Director of Strategic Business Processes, Scott Armstrong who has seven years experience in the industry said, "The most beneficial results to come out of our teaming activities are the growth and development of our People. Employees from all across the workforce have an equal say in the goals and objectives of each team and ultimately learn about the whole business, not just their own department. This translates into the development of our future leadership."

He said former Mine Operations Training Clerk, G. Batsukh has been appointed fulltime to continue the 'Rapid Results' programme across the Company.

The remainder of the company's 601 Mongolian Employees, 31 foreign employees and contractors can participate in the programme with round three planning starting mid-September.

American company, Schaffer Consulting developed 'Rapid Results' methodology and have applied it in a wide range of industry sectors, worldwide.

This article reproduced from "The Mongol Messenger" September 5, 2007 By Lee Campbell

Breakthrough Strategy: A stepping stone to greater success

Since the early 1990s, several DuPont business units have relied on a performance improvement methodology called the "Breakthrough Strategy." Developed by Schaffer Consulting over the last 40 years, the technique is also used at Nortel, Motorola, E. I. du Pont, and other leading companies.

The Breakthrough Strategy provides a structured framework to help align improvement objectives with business objectives, ultimately accelerating their pace and payoff. Its cornerstone is "tapping into hidden reserves" of potentially productive capacity, then focusing on immediate results, which are used as stepping stones to greater successes. "The commitment is to reach the set goals with the resources that are available right now," says Rudi Siddik, a Schaffer consultant who has led Breakthrough Strategy sessions at Du Pont Canada.

The first applications in DuPont Canada were at Whitby site, where two projects contributed over $900,000 in savings in 1990. Art Heeney, now site manager at Maitland, was Whitby's site manager then. Of the Breakthrough Strategy, he says, "Today, in Manufacturing Committee, we are looking at ways to increase productivity, and the Breakthrough Strategy can help us do this."

Examples abound within DuPont. Some breakthrough projects have been initiated by Manufacturing Committee (made up of site managers and key functional leaders); others were sparked by Functioning Effectiveness.

Under the Functioning Effectiveness umbrella, Jack Smith led a breakthrough project in Maintenance, Repair and Operate Materials (MRO) at Kingston and Maitland (see courier, December 1998). Improvements in shop access have led to better safety and operations integrity, while reducing costs.

In another Functioning Effectiveness project, Wilma Ouimet, senior business specialist - Kingston, and her team used the strategy to reduce re-work related to inventory reclassifications at Kingston site and Maitland Engineering Polymers. (Reclassifications are needed after incorrect codes are entered into the main accounting system.) By developing improved work processes, including detailed documentation, the controllers and Finance people succeeded in boosting quality and cutting errors. "We met our original goal and now have a documented process that can be used by other teams," says Wilma.

The Breakthrough Strategy is also being used in a corporate drive to reduce hand and finger injuries. This team, sponsored by Ajax site manager John Foster (representing Manufacturing Committee), is chaired by Lloyd Cook, Whitby, and Jim McKinnon, Ajax. In December 1998, they quickly set a goal to reduce hand and finger injuries by 50 percent at the end of 12 weeks. "We first developed a generic workplan. Now each site and business unit is forming its own specific workplan from the generic one," says Lloyd, safety manager at Whitby. "If we meet our goal, we will achieve our best year ever, as far as recordable injuries are concerned. We want to have the systems and processes in place that will sustain our improved performance," he adds.

The strategy has also been used to cut freight costs. Pat McCaffery, a manager in Materials, Logistics & Services, explains that Manufacturing Committee, while looking for ways to support our superordinate goals, asked if there were additional opportunities to reduce freight expenses. "Even though our freight costs are very competitive within global DuPont, we set ambitious goals and then met them in four or five months," says Pat. They generated actual savings of $100,000 in 1998, and expected savings of $500,000 in 1999, by putting in place controls for everyone who deals with freight, to ensure that it is being handled by approved carriers who offer pre-arranged rates.

At Kingston site, a breakthrough program started in August 1998 for the Batch Polymer Pelletizer Systems, which had experienced quality problems. "We used a disciplined approach to understand the issues, determine the root cause and set up a work plan. Our specific goal is to decrease the monthly volume of pelletizer waste by 2.4 percent by the second quarter of 1999," says Ken Hall, integrated operations leader. At press time, the team was on track; they expect to see the benefits of their work through the second quarter of 1999.

Sourcing and services manager Josée Lachance says, "The Breakthrough Strategy is an easily learned, very focused project-planning framework that brings discipline to a project. It is not new at DuPont, but we are applying it more diligently now."

This article reproduced from the DuPont Canada "Courier" March 1999

The MENTOR Network

Schaffer Consulting worked with Mentor, one of the leading human services companies in the US, on its acquisition of a competitor (REM), doubling their revenue size and census count.

Schaffer Consulting helped Mentor to successfully integrate the two businesses which had two very different cultures. The challenge was to quickly determine the new division and regional leadership structure and to help them run a combined book of business that was larger than their combined business prior to the deal.

Johnson & Johnson, Ethicon Division

Schaffer Consulting conducted a best practice assessment of J&J's largest acquisitions of the prior few years, and then helped the company apply the lessons to specific integrations at J&J ETHICON, INC. We helped Ethicon, the world's leading provider of surgical sutures, hemostats, and anchors, integrate four strategic acquisitions of entrepreneurial companies and transform them into productive contributors to a more formally organized business.

Each of these acquisitions required a disciplined integration approach to make the acquisitions pay off for J&J, and to present a seamless transition for the acquired company's customer base.

Schaffer Consulting also provided them with an Acquisition Integration Toolkit which allows them to now do deals on their own.

General Electric

Schaffer Consulting worked with GE Lighting on the acquisition of Tungsram, the first acquisition of a state-owned Eastern European company by a Western company.

Following Tungsram, we worked with Lighting on their acquisition of Thorn, a UK Lighting company, to create a new European Lighting Division.

Schaffer Consulting helped Global Consumer Finance, a GE Capital company, to create an integration process and function now adopted by many GE businesses.