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A step change in operational excellence, by Hendrik Lourens

When we think of operational excellence, we usually think about maximising the efficiency of all the parts of our operation. We attempt to do this with continuous improvement interventions. Many companies these days have entire departments focused on this. But often, the journey is not straightforward, the results are not what we expected, and we face "resistance to change."

 Systems thinker Professor Russel Ackoff had some exciting ideas in this regard. 


  • "It is better to do the right things poorly than to do the wrong things well", and 

  • "Continuous improvement is not nearly as important as discontinuous improvement".


These quotes hint that it is not easy to identify the right and wrong things in the operating system under our control.

 According to Prof Ackoff, we have two options when we try to improve our system. We can either: 

  • optimise all the parts- then the system will not be optimised 


  • we can optimise the overall system performance - then all parts will not be optimised. 


Eli Goldratt, who wrote "The Goal", took these ideas to their logical conclusion. In his implementation of the Theory of Constraints, he concluded that the widespread effort at optimising all the parts (local optima) destabilises the system's performance (global optima). He concluded that only the system bottleneck should be optimised and run for maximum efficiency. The other parts of the system should have protective capacity to ensure the bottleneck never starves.

If we believe Professor Ackoff and Dr Goldratt, when we try to force all departments to operate at maximum efficiency targets, we force our employees to try and achieve that which cannot be done. We have now set our people up in a no-win, competitive situation. In this environment, as an employee, meeting my KPIs is much more important than helping the next department in the production sequence to meet theirs. In fact, if I did help them achieve their goals, I would get penalised for missing mine, even though the company's overall outcome would improve."

So, employees don't cooperate, trust disappears, and overall system output (efficiency) decreases further. Is it better to have no job description or KPIs than counterproductive ones? Probably. 

However, it's not as hopeless as it may seem. In fact, as a manager, here's what you need to do:

Rather than thinking about roles and KPIs in a vertical, silo fashion, start thinking end-to-end, process and flow.   Well-established tools, such as SIPOC (Suppliers, Inputs, Process, Outputs, Customers) facilitate this approach.  By asking, "Who is our customer? What do they need from us? What is our internal delivery process, who are our suppliers, and what do we need from them to be successful?" you become more focused on upstream, downstream, and the system at large.

We have seen huge value created when getting all parties to sit down and work through a SIPOC process.

At the same time, society is changing, further challenging mining companies as they transition from the information age to the ecological age. The traditional hierarchical management models that were successful in the past are no longer sufficient to meet the evolving expectations of various stakeholders in the current era. These expectations include societal demands for diversity, generating meaningful career opportunities, and environmental concerns.


The solution?

By applying Ackoff and Goldratt's principles, it is possible to achieve a step change in operational excellence and, because of the nature of the intervention, also deliver on many societal needs. We do this by keeping the best parts of our hierarchical models and augmenting them with the missing parts. At Stratflow, we call this the Productivity Platform.


Recently, Kotter offered a solution in his book 'Accelerate', where he referred to a second system—an agile, network-like structure—that operates in concert with the first, the hierarchy, to create a dual operating system (an interesting topic in its own right we could explore in a separate article another time). 


There are proven systematic ways to resolve operational issues such as the ones described above. Over the last twenty years, we have seen organisations advance towards Operational Excellence when following these methods. Best of all, because they deliver rapid, tangible bottom-line results, such initiatives can pay for themselves within months. 


Because these initiatives require cross-functional, inter-departmental collaboration, they are difficult to initiate internally. It is easier for departments to work with experienced external facilitators that maintain neutrality. 

In Summary:

There is ample opportunity for producers in the minerals, metals, and mining space to increase throughput while reducing operating costs and striving for operational excellence. Some of the elements to consider:


  • Consider your system constraints and how to maximise their performance, even if it means sacrificing some efficiencies in other areas.

  • Transition from vertical, silo-based thinking towards an integrated system and a horizontal flow of materials.

  • To shift towards a dual operating system, use natural champions of such concepts as your Guiding Coalition/Change Agents.

  • Implement a no-blame culture: no blame, except for not asking for help when you should or not offering assistance when you could.

  • Every month, day and hour: focus on the bottlenecks!

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