SOURCE: Kay Sever | June 30, 2022
Context is defined as “the circumstances that form the setting for an event, statement or idea”. In 2022, we will be exploring the context surrounding optimization in business…
1) what we believe and have been taught about success in business and
2) how these beliefs have influenced our perspectives on the“who, what, when and how” of optimization and the gains we are able to achieve and sustain.
To illustrate the power of context on business success, this month we will compare similarities between optimization and pushbacks in an open pit mine. Correlating these seemingly unrelated topics will bring new insights about the optimization process.
Overburden and Optimization
If new information about an existing orebody is discovered via satellite imaging, core drilling, etc., mineable reserves and the three-dimensional shape of the mapped orebody may change. Several years after mining begins at a new operation, management may decide to mine newly discovered reserves that reside just outside the existing pit boundary. A “pushback” is budgeted to gain access to that ore.
As part of the pushback plan, haul roads and benches for drilling, waste removal and ore extraction are often modified. The overburden covering the ore must be removed to reach the ore.
Overburden is a barrier that stands in the way of immediate access to ore and value creation.
Overburden can be seen and measured. Overburden requires its own plan for removal and placement, and this plan must be executed BEFORE the ore can be accessed, moved and processed.
So how does a pushback and overburden relate to optimization? Optimization is an effort to achieve the best possible result. It is most often pursued at existing operations. Optimization carries with it barriers, limiting factors and conditions that act like overburden to block access to hidden or trapped value.
These barriers must be removed to maximize and sustain the gains linked to optimization.
Two Kinds of Optimization Barriers
Let’s examine the characteristics of the two kinds of barriers to optimization:
1) Barriers that can be seen and measured (for example, bottlenecks within the production value stream that can be removed with equipment upgrades). Removing this barrier requires a plan and an investment, often millions of dollars. Only executives and leadership teams can decide to invest in optimization and procure new equipment.
2) Barriers that are unseen and are never measured (but can be if management knows how to find them). These barriers reside in the organization and act like “virtual overburden” that hide or delay access to opportunities for value creation. These barriers will remain in place after equipment has been upgraded and operate behind the scenes to steal some of the gains from that investment. The losses associated with “virtual overburden” can be measured and prioritized for removal. Virtual overburden can be “mined” (removed) from the organization, which will increase the ROI from optimization and help sustain gains for the long term.
Remember… removing virtual overburden from an organization can only be done by management, just as buying new equipment to optimize performance can only be approved by management.
Executives and managers must plan for and take action to remove organizational barriers… the workforce does not have the authority to do this work. If management does not embrace the removal of “virtual overburden” as a critical step in the path to full optimization, losses linked to their “virtual overburden” will continue for years without their knowledge, even if they invested in new equipment and systems to achieve optimization.
More About “Virtual Overburden” Removal
Executives and leadership teams must be confident in their ability to embrace and manage the barrier removal process as the contribution only they can make to optimization success and sustainability.
Not all barriers are known on Day One of an optimization initiative! New barriers will be discovered as more is learned about the capabilities of your value stream, people and organization over time. These discoveries often reveal previously hidden barriers that must be removed by management to release “trapped” profit, just as overburden must be removed to access the ore that will increase profit.
What does this mean to executive/management team strategies and tactics for optimization?
1) Managing urgency and leading with the proper focus are key tactics for generating maximum returns from your optimization efforts AND sustaining those results for the long term.
2) Virtual overburden barriers will be continuously discovered as performance improves, which means that the discovery process and barrier removal process are not processes that “stop” at some point. Instead, both of them are inseparable parts of a continuous optimization process.
3) Barrier removal must be viewed as a top management priority and responsibility by every management team that wants to achieve and sustain “best possible” performance.
Thought for the month: If you understand what’s missing and take action to remove barriers that are holding you back, you can be confident that you are not just “getting better”… you are “getting it all”!
Kay Sever is an Expert on Achieving “Best Possible” Results. Kay helps executive and management teams tap their hidden profit potential and reach their optimization goals. Kay has developed a LIVESTREAM management training system for Optimization Management called MiningOpportunity – NO TRAVEL REQUIRED. See MiningOpportunity.com for her contact information and training information.
To comment on this story or for additional details click on related button above.