This document discusses applying Theory of Constraints (TOC) principles to improve production at a mine. It describes how the mine previously struggled with inconsistent daily production around 40-60% of capacity due to constantly shifting bottlenecks. Implementing TOC principles involved identifying the main bottleneck (LHD fleet), buffering upstream and downstream work, and adopting new metrics to measure and sustain steady flow through the system. This increased average monthly production to over 75% of proven capacity, resulting in significant extra monthly revenue.

1. Goldratt Group Pty (Ltd) | 1
A Theory of Constraints
Application
Applying FLOW Engineering
Principles (TOC) for a step
improvement in Safe Production
The 75% Initiative

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A Theory of Constraints
Application
The Problem & the Root Cause
-
50
100
150
200
250
300
Hundreds
Daily Production
40%
60%
Frequent High daily performance
Average
40%
60%
Proven Process Capacity
BARRIER
Root Cause for the Productivity barrier:
Management responding to flow disruptions (moving bottlenecks) through
constant allocation of resources, required to deal with unforeseen problems

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A Theory of Constraints
Application
The 75% Change Required
40%
60%
Proven Process Capacity
Correcting
the Flow
Mindset
Sustaining
the Flow
Mindset
1 2
75%
75%
Improvement
Project based on
Flow Engineering (TOC
Principles)

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A Theory of Constraints
Application
Sustained high performance
-
50
100
150
200
250
300
Hundreds
Series1
Corrective
(55%)
Sustain
(70%)
Changed to Sustained
Flow Strategy

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A Theory of Constraints
Application
Sustaining Flow Engineering Steps
1. Stop allocation of resources to deal with moving bottlenecks
2. Decide where the FLOW bottleneck resource should be
3. Buffer the upstream flow from impacting the bottleneck (starvation)
4. Buffer the downstream flow from impacting the bottleneck (blockage)
5. Adopt the new Flow measurements and make the flow visible
6. Review daily and monthly

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A Theory of Constraints
Application
Sustaining Flow Engineering Steps
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
11-Jan-16 31-Jan-16 20-Feb-16 11-Mar-16 31-Mar-16 20-Apr-16 10-May-16 30-May-16 19-Jun-16 9-Jul-16
Mine: Jan - June 2016
41%
59%
14,5
8,6
11
75% Target
75%
14,5
2,4
25%
Monthly meters income at 59% = $619 200
Monthly meters income at 75% = $792 000
Variance = +$ 172 800

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A Theory of Constraints
Application
Flow Engineering Model
60
60
6024 24
24
24
LH
D
LH
DLH
D
LH
D
LH
D
One
Bottleneck
LHD
Space Buffer
Work Buffer
Skill Buffer
People Buffer
Diesel Buffer
Many
Moving
Bottleneck
Blast
Belts
People Skills
Breakdowns
Consumables
Diesel
Travel distance
Cleaning up
Ramps
Face time
Operators
Visits
etc

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A Theory of Constraints
Application
Flow Engineering Model
Bottleneck
Decoupling
Buffer
of Work
Buffer
of Work
Buffer
Of Space

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A Theory of Constraints
Application
Flow Engineering Metrics
Measurement RP Reference 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8
LHD Production for the day
M3
+100 75-
Space Buffer (Before Blast) 60M3
-1/3 2/3 +
Work Buffer (Just After Blast)
- Blasted M3 +100 75 –
Stopped LHDs
- Operator
- Diesel
LHDs Available (shifts)
No 1
No 2
No 3
No 4
No 5
No 6
No 7
Breakdown (more than 1 hour) time
on LHD fleet
Diesel Cycle
0 1
3 2 1
0 1
3 2 1
0 1
Blue = Service
Black = Major Repair

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A Theory of Constraints
Application
OPS Room Visibility

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A Theory of Constraints
Application
The Goal
Sustainable (Safe)
75% Productive
Performance
Thank You