The Oyu Tolgoi open-pit mine in the remote South Gobi region of Mongolia has been producing copper since 2013, while first production from the underground development is anticipated in 2020.
Rio Tinto manages Oyu Tolgoi on behalf of the joint venture owners, the government of Mongolia (34%) and Canadian-based Turquoise Hill Resources (66%); Rio Tinto also has a 51% interest in Turquoise Hill.
The US$5.5 billion project will become one of the largest underground mines in the world with the potential to supply copper for up to 100 years.
Due to the complex nature of the underground project plan, the Oyu Tolgoi project senior leadership realised its existing project management systems were not suitable for safely governing the interactions of the multitude of functions and processes across the shared resources of time, space and equipment necessary for the underground work. They needed to develop a new strategy to keep the project on track.
In 2016, after a global review of potential partners and solutions, Proudfoot was awarded the project through a request for proposal (RFP) process by presenting a comprehensive culture and management system delivered through a training approach based on behaviours as opposed to technology.
As part of the project, Proudfoot needed to create and implement a bespoke management control system (MCS) to manage the overall project and to plan work across all silos in an integrated way, supported by a management operating system (MOS) to schedule and safely execute work.
Together, this set of tools, communication and commitment meetings, and behaviours are used to manage constraints across various planning horizons and enable people and processes to deliver results. The systems would work in conjunction with a project-wide integrated planning process (IPP).
The MOS needed to:
• manage the project's complexity by providing plans that are easily understood by the operating team;
• enable safe, disciplined execution of work that hit monthly targets;
• allow each employee to understand their role in the bigger picture of the project;
• provide decision support to the underground teams;
• introduce aligned and integrated processes, systems, behaviours, role clarity, communication channels, information flows and decision-making;
• standardised ways of forecasting, planning, scheduling, executing and reporting across underground work;
• support Oyu Tolgoi's culture of leadership and safe operations; and
• be self-enhancing and suitable for numerous iterations as the project grew.
Meanwhile, the IPP was designed to:
• align and integrate all construction, development operations and maintenance plans across the project, keeping it on schedule;
• flag up and communicate the risks associated with ‘constraints' - any limitations or restrictions placed on operations;
• give a clear overview of the status of planning and performance;
• highlight operational areas of concern across the entire value stream with ways to address them; and
• enable a rapid business decision-making process.
To help create the MCS and MOS, Proudfoot wanted to understand all operations, how and why decisions were made in the past and how decisions were being made now.
The consultant partnered with Oyu Tolgoi to design the MOS based on best practices from both the miner and its own experience in mining and industrial applications. The IPP also had to work in conjunction with the MCS/MOS to free up management to focus on safe outcomes.
The design requirements also dictated that the majority of the management team was expected to be Mongolian within five years, transferring leadership of the project from ex-pats.
Proudfoot started designing the MOS before setting foot in Mongolia. On February 1, 2016, nine of its consultants flew in to work with the 30-person client ‘care-and-maintenance' international team (from the US, South Africa, Canada and the UK).
"We understood how critical it was to coach both leaders and frontline employees in how to use the MOS. We also knew that coaching effectiveness increased when conducted in the users' mother tongue, so we needed to develop Mongolian nationals as coaches and leaders as quickly as possible," the consultant says.
Among other things, Proudfoot created a management simulation ‘board game' version of the IPP, MCS, and MOS, in Mongolian and English, based on the concept of learning through play and allowing people to fail safely.
MegaMine 2.0 involves management and workers/players being ‘mine captains' who go through development phases just like those they encounter in real life.
Proudfoot describes its MCS/MOS as both a tool-based and behaviour-based approach, which should give all stakeholders the correct tools to do their work.
Working with the project senior leadership team, the consultant developed the conceptual MCS design criteria; for example, moving the complexity out of daily operations and into the planning process. The consultant says it drew on its cross-industry expertise from the likes of aviation and automotive industries in designing the MOS.
Company systems are usually driven by compliance where, even though a system specifies what a workforce is supposed to do, people occasionally don't comply because they see no logical reason not to, or they can ‘get away with it'. In aviation, the same checklists and rules exist, but people comply because they understand this is the expected culture, and everyone in the organisation reinforces this behaviour. This is also true in the mining industry where a simple mistake can have significant consequences.
Proudfoot wanted to apply this level of expectation of behaviour for Oyu Tolgoi by helping people understand the risks of non-compliance.
According to Proudfoot, the MegaMine 2.0 board game plays a key role here by demonstrating the consequences of people's actions.
The MCS, MOS and IPP are aimed to complement each other. The IPP and its relationship to how plans are developed and cascaded down within the organisation and across departments underscore the system. It creates an environment where the MOS can do its job.
"Our scope of vision was to get an MOS for the project. But Proudfoot prioritised needing an IPP to bring all the activities together - grading activity discipline, providing data to make the right decisions. They showed us that the IPP is the backbone, the MOS is the execution," says Oyu Tolgoi's general manager underground, Greg Field.
"The IPP is an amazing engagement tool. It breaks the schedule up into value milestones across all work grades. I'm one level, then managers, then level 2 and level 1 - it links everyone right down to the guy digging in the mine. Everyone in the chain recognises the impact of the slightest action.
"Simplification was another surprise. The tactical way every meeting has a scheduled agenda: everyone knows who should be there, why, what needs to be achieved etc. Over and above that, Proudfoot has a scoring mechanism for meetings that is shared, making everything transparent. This drove improvement hugely."
Proudfoot started developing the MOS as soon as it applied for the RFP, and it was updated as operation processes evolved. Oyu Tolgoi wanted to start using it as soon as the consultant arrived on site, so Proudfoot turned its early involvement into an opportunity to use feedback in the build, delivering a system within one year that they are still using.
MegaMine 2.0 was instrumental in convincing the workforce how effective the MOS could be if used correctly.
The IPP supported the new work culture, Oyu Tolgoi says, and it succeeded in getting the majority of work planned and scheduled at a detail level in advance of execution on a highly complex project. In fact, the miner implemented a rule that "no unplanned work would be executed".
The IPP, MCS and MOS systems are designed to complement each other, be adaptive and self-enhancing as processes change, becoming ever more complex. As Oyu Tolgoi moves towards being operative, the client can tweak the IPP to create new iterations. Importantly IPP was designed and implemented utilising existing Rio Tinto and Oyu Tolgoi digital systems and infrastructure, reducing complexity and compressing implementation timeframes.
Proudfoot implemented the MOS and IPP, coaching managers and training employees on how to use it while the mining development and construction work was ongoing. It has also trained Mongolian coaches who continue teaching the systems to new workers.
"At the beginning there was a small client team, with the challenge of managing the work and hitting an ambitious deadline. We helped to create a culture of proactive planning and continuous improvement, including using MegaMine 2.0 as a tool to help coach the native workers. We wanted to stay away from a technological approach to training. We wanted to take a more human, engaging approach.
"This is the first time an IPP has been created for the underground mining industry. We used it to offer a completely different way of thinking and working. It looks at all aspects of planning on every level, then searches for any constraints and resolves them," Proudfoot says.
Join us at Future of Mining Americas on the 29-30 October, 2018, in Denver, Colorado, US, where Proudfoot's president of natural resources, Jon Wylie, will discuss how to ‘Engage Your People: Compressing Major Mine Ramp Up Ahead of Schedule' and give a presentation on ‘Improving Net Present Value - How do you keep a $5.6 Billion Investment on Track?'; Cay Mims, managing director natural resources, Americas, is taking part in the 'From Regulator and Stakeholder to Partner and Supporter' fireside chat; and Pamela Hackett, CEO, Proudfoot, is part of a 'Masterclass on Transformation' knowledge exchange.
For more information on this year's programme and speaker line-up please click here.