Ame Barrick Toronto 2008

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Barrick Gold\'s Lean Journey - Presentation given at International AME Conference (2008)

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Ame Barrick Toronto 2008

  1. 1. Lean Lessons Learned Dave Elliott, Continuous Improvement Director Trevor Krawchyk, Learning Organization Manager Barrick Gold Corporation
  2. 2. Today’s Presentation • Barrick’s Lean Journey: • Why and how we started • Our implementation strategy • The critical success factors • Summary • Q&A 2
  3. 3. CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION Certain information contained or incorporated by reference in this presentation, including any information as to our future financial or operating performance, constitutes quot;forward-looking statementsquot;. All statements, other than statements of historical fact, are forward-looking statements. The words quot;believequot;, quot;expectquot;, quot;anticipatequot;, quot;contemplatequot;, quot;targetquot;, quot;planquot;, quot;intendsquot;, quot;continuequot;, quot;budgetquot;, quot;estimatequot;, quot;mayquot;, quot;willquot;, quot;schedulequot; and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: fluctuations in the currency markets (such as the Canadian and Australian dollars versus the U.S. dollar); fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel and electricity); changes in U.S. dollar interest rates or gold lease rates that could impact the mark to market value of outstanding derivative instruments and ongoing payments/receipts under interest rate swaps and variable rate debt obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark to market risk); changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, Dominican Republic, Australia, Papua New Guinea, Chile, Peru, Argentina, South Africa, Tanzania, Russia, Pakistan or Barbados or other countries in which we do or may carry on business in the future; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions, operating or technical difficulties in connection with mining or development activities; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit rating; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. Specific reference is made to Barrick’s most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws. 3
  4. 4. About Barrick •Gold Industry Leader •20,000+ Employees •27 Operating Mines •One of Canada’s Largest Companies 4
  5. 5. What we do… Rock Breaking Rock Moving Rock Processing Our core “Value Stream” 5
  6. 6. Background: Change needed? “It is not necessary to change. Survival is not mandatory.” Dr. Deming 6
  7. 7. Barrick’s opportunity (need) for change! 2002 State: • Low gold prices • Tight margins • Rising costs • Poor equipment effectiveness (OEE) 7
  8. 8. Background: Benchmarked The Best Two common themes: 1. Formal CI System 2. CI Culture 8
  9. 9. Dimensions of CI at Barrick CULTURE OF FOCUS ON CONTINUOUS VALUE IMPROVEMENT CREATION “Get results, change the culture along the way” 9
  10. 10. Barrick’s CI Launch - 2002 • Top down support • Operations focused • Quick, high impact improvement at Goldstrike property • Expanded to all 9 sites (now 27) “Get results, change the culture along the way” 10
  11. 11. Barrick Vision and Values Vision: To be the world’s best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. BEHAVE LIKE AN OWNER ACT WITH A SENSE OF URGENCY BE A TEAM PLAYER CONTINUOUSLY IMPROVE DELIVER RESULTS 11
  12. 12. Barrick CI Vision “Everyone Engaged in Improvement Every Day” 12
  13. 13. Barrick CI – Critical Success Factors 1. Leadership 2. Focus on Process 3. Measurement 4. People & Teamwork 5. Communication and Visibility 13
  14. 14. Barrick CI – Critical Success Factors 1. Leadership • Sustained Commitment from the Senior Leadership • Highly focused on long-term benefits • Included in Personal Performance Commitments • Full-time dedicated global CI Team of Certified Coaches 14
  15. 15. Barrick CI Organizational Model Org. Effect. Regional Ex VP President Mine Operations CI Director GM Director CI Mgr CI Leader Learning Org. Mgr Processing Processing Process & Supt CI Coach Systems Mgr Maintenance Maintenance CI Coach Supt CI Coach Mining Mining Supt CI Coach Corporate Region Admin Admin Supt CI Coach 15 Site
  16. 16. Barrick CI – Critical Success Factors 2. Focus on Process: • Extensive use of all applicable lean tools • Operations Review Teams (ORT’s) embedded in business cycle (PDR or PDCA) 16
  17. 17. Barrick Business Management Cycle JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Talent Review REVIEW ORT / Site gap analysis REVIEW Strategic Planning PLAN Budget PLAN Performance PLAN Commitments Tactical Plan PLAN Execution DO 17
  18. 18. ORTs – A Key Business Process 1.Review 3. Do 2. Plan (Assessment) (Execute) (Site Visit) Objectives Objectives Objectives • Current state • Develop & execute • Leadership support • Opportunity action plans and commitment Identification • Monthly Follow-up • Design solutions “Go to Gemba” 18
  19. 19. Barrick CI – Critical Success Factors 3. Measurement • Focus on Metrics and KPI’s • Track the value creation (waste reduction) • The Culture Scorecard – yes, you can measure culture 19
  20. 20. Barrick CI Value Creation Value Creation 2003 2004 2005 2006 2007 Quality Cost Throughput Total 20
  21. 21. Present: Value Creation Examples Key improvements. . . Crusher Throughput - Avg Tons/day • Automated feed 43,692 42,288 39,544 splitting 38,692 3% 38,048 7% 2% 32,150 18% 2% • Modified surge 26,500 21% pocket/feed chutes • Surge Pocket Increased 2001 2002 2003 2004 2005 2006 2007 65% Improvement!!! 21
  22. 22. Present: Value Creation Examples Before: After: 22
  23. 23. Barrick Culture Scorecard Current 12 month Sections Elements Key Themes To Close Gaps Score Target 1.8 2.5 Vision & Values 2.0 2.3 Business Strategy and Value Streams Foundation 0.7 2.3 Standardized Processes 2.0 2.0 Culture of CI 1.6 2.3 Foundation Total 1.7 2.3 Recruited for Fit 1.4 2.4 Employee Performance and Development People & Leadership 1.8 2.3 Talent Management 1.6 2.3 People and Leadership Total 1.3 2.0 Clear Targets and Goals 1.0 2.0 Visual Workplace Business 2.0 2.5 Regular Structured Reviews (Plan-Do-Review) Performance 1.0 3.0 Workplace Organization (5S) Management 1.3 2.0 Organization Structured for Performance 1.2 2.5 Business Performance Management Total 1.4 2.3 Employee Involvement and Problem Solving Learning & 1.0 2.0 Knowledge Sharing 1.0 3.0 Knowledge Sharing CI Resources/Support 1.3 2.4 Learning & Knowledge Sharing Total 0.8 1.8 Corporate Social Responsibility External Relationship 0.3 1.0 Sustainable Community Development Suppliers, Vendors, Contractors & Consultants Management 1.3 2.3 0.8 1.7 External Relationship Management Total 23 Overall Score 1.3 2.2
  24. 24. Barrick Cultural Measurement Framework S3 THE BEST GOLD COMPANY Everyone Engaged In CI External Relationship External Relationship Management Learning and Management Learning and Management Performance Knowledge Management Performance Knowledge Leadership Leadership People & Sharing Business People & Sharing Business Results S2 Strong results in critical areas S1 Getting started, Processes and CI Culture Standardized limited results Business Strategy & Value Streams S0 VISION & VALUES Not happening Time Focused initiatives in Strong leaders Major gaps in basic Enterprise-wide CI structured process to making big, often planning and culture deliver high impact tough, changes operating (INDEPENDENT) (DEPENDENT) (PUSH) standards (CHAOS) 24
  25. 25. Barrick CI – Culture vs. Value Creation? Value Creation and Culture 3.0 2.5 Value Creation Culture Score 1.9 2.0 1.5 1.5 1.1 1.0 1.0 0.5 - Region A Region B Region C Region D Target Actual Culture score Higher the Culture Score = Greater the Value Creation 25
  26. 26. Barrick CI – Critical Success Factors 4. People & Teamwork • Employee Engagement & Involvement • Employees given accountability for results • Willingness to take chances & challenge the status quo • “CI Awards” - Recognition and Reward 26
  27. 27. Barrick CI Awards Recognize and reward employees for improvements made during the year in the following 3 categories: 1. Employee involvement and participation 2. Idea generation / innovation 3. Achievement of significant results 27
  28. 28. Barrick CI – Critical Success Factors 5. Communication and Visibility • Create formal systems • Establish Best Practices • Share success (it’s contagious!) Continuous Improvement Continuous Improvement Continuous Improvement Pocket Guide Pocket Guide Pocket Guide First Edition First Edition First Edition 28
  29. 29. Results: supporting ‘real’ value creation 29
  30. 30. Our Current Business Environment • Volatile economic forces • Fluctuating Gold Prices (+/- 25% in 1 month) • Inflationary cost pressures • Labour & commodity shortages 30
  31. 31. Summary – 2 Dimensions • Value Creation • Culture – Critical Success Factors • Leadership Commitment • Focus on Process • Measurement • Communication and Visibility • People and Teamwork 31
  32. 32. Questions 32
  33. 33. Thank You Dave Elliott – delliott@barrick.com Trevor Krawchyk – tkrawchyk@barrick.com Please return your completed session survey to the room host.
  34. 34. 34

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