Editor’s note: The key operating people at any Canadian mine and mill were once concerned almost solely with meeting production quotas. Not anymore. At the better operations, getting more work out of the people a company employs has become as critical a demand as hitting the monthly quotas. It’s called productivity, and it can be improved in two ways: First, you can spend money and buy new, more efficient technology that will reduce operating costs and boost production. Second, you can try to get the most out of existing people, facilities, systems and resources. A combination of the two is often the case, but this paper deals with the second option. A couple of years ago, a worker at Brunswick Mining & Smelting suggested the company install a friction washer for screening support. The device cost $1,200 and resulted in annual savings of about $750,000. In the fall of 1985, a committee of mill employees at Noranda’s Mattabi mill designed and installed a new copper sulphate mixing and feeding system. The total cost was about $20,000 with a saving of $32,000 per year in materials, as well as a noticeable increase in the reliability of mixing operations. In the summer of 1984, two maintenance technicians (rock drill doctors) at Mattagami Mines modified the rock drills at a cost of $150 each to claim $3,000 per year in maintenance and material savings for each drill. Not all improvements were that remarkable, but in a Noranda Minerals study that I recently conducted, the median cost for each minor technical improvement (MTI) was $1,300 and the median saving was $9,500. (Quite often, the quality of the working life was improved as well.) I studied 73 incremental innovations at six Noranda properties, implemented between 1980 and 1985. The resulting net savings over that period were estimated to be $4.6 million. Labor productivity was improved as a result of 67% of these improvements in mines and 44% of those in mills. Better use of materials and capital costs were noted, although less frequently than productivity. Downtime, volume and quality were also improved. It was observed that there was a direct relationship between improved productivity and improved quality of work for employees, in cases where removal or redesign of inefficient jobs or tasks resulted in less hazardous and more pleasant working conditions. In any industry, a steady stream of innovations over time can add up to significant economic benefit. For example, a 1960s study of improvements in operating efficiency in the petrochemical firm DuPont found that the cumulative effect of the minor improvements over the course of 30 years was in fact greater than that of major changes. This relationship has been noted in other firms and industries as well.
The MTI approach depends to a large extent on employees taking ideas, often very simple ones, and turning them into working innovations. It also requires a long-term management commitment to encourage employees to develop incremental improvements in day-to-day operations. Fortunately, it doesn’t always take 30 years, as it did at DuPont, to see the effect of these innovations.
In implementing the various projects at Noranda, there were some problems. For example, the amount of employee time spent “tinkering” was often underestimated. And operating managers, supervisors or staff people who must contend with a daily work schedule in a lean operation sometimes found documenting the MTIs to be irritating.
To encourage continuous improvement, a balance must be struck between control and flexibility — between tight control over allocating employee time and operating funds, and having the flexibility to react quickly to creative ideas. To be serious about effecting such changes, mine managers and superintendents must follow two strict rules:
* Clearly state the objectives and priorities for operating improvement, including quality of work life issues, and
* where possible, remove any bureaucratic processes that delay or deny access to time and funds for legitimate projects.
Employees from all levels of an organization can play a role in innovations leading to operating improvement. Although the role of the mining and industrial engineer or the process technician in improving the efficiency of processes is well documented, improvement does not have to originate solely in the engineering department. When improvement is viewed as an organization-wide process, the full breadth of employee involvement is better understood. To start the process, good ideas, issues or areas for improvement have to be recognized and responded to with actions. If ideas are to come from the underground levels and mill floors, the initiative must be taken by the first- line supervisor, foreman or mine captain. These people are conduits for ideas going up to engineering and to management for approval or assistance, and for projects coming down for implementation; they determine the climate for creativity at the working level. In the Noranda study, supervisors and foremen were the most-cited sources of ideas for improvement, followed by the hourly- rate workers and tradespeople. Creating a Procedure
Once a potential improvement has been identified, a device or procedure has to be innovated. Ideas coming from work groups of laborers, operators or tradespeople must be acted upon under the authority of employee committees and management. Alternatively, ideas my be passed on to engineering or technical departments. However, it is not uncommon for management to be unaware of some improvements that have been quietly introduced.
One of three strategies is generally followed in implementing MTIs. In the Noranda study, 55% involved in-house development of new equipment or methods, 23% were modifications of existing equipment and methods and 20% were direct purchases of new equipment and methods. The latter strategy, involving suppliers in solving operating problems or in realizing opportunities for improvement with their products and expertise, is a useful one that is often overlooked.
Encouraging innovation and monitoring its performance are also critical. The supervisor’s skill at managing change is important for speedy implementation, as is the ability of the engineer to communicate, which can mean the difference between accepting or rejecting a new technology. At the project’s conclusion, its success or failure should be evaluated. Finally, employees with track records of successful innovation should be identified to managers who will evaluate future ideas.
Managers should also consider the inherent ability of a group or organization to innovate. Two policy suggestions may be useful here. First, supervisors and technical people must have the training and attitude to identify and implement improvements. Some mining companies train laborers so that they participate in cost- reduction and safety activities. Second, because a number of people will be involved in the success of an MTI, managers would be wise to establish employee involvement groups or quality circle groups, with membership from across the entire operation.
Enlisting participants may not turn out to be a problem. As one Noranda executive observed, there is no shortage of ideas once employees get going, just a shortage of time to get to all the ideas. Two issues invariably surface on the topic of motivation: how should employees be compensated and how does operating improvement affect job security? Compensation to employees for improvements they have suggested ranges from none, to recognition, to monetary reward. Which is the most reasonable and the most likely to spur innovation is debatable. In fact, the appropriate compensation will vary with the individual innovator’s personal ambitions and needs.
Motivation studies in other industries suggest that managers and their employees have different perceptions of what constitutes good compensation for productivity gains. Managers ranked money and recognition about equally as motivating factors, while industrial engineers tended to think workers were best motivated by personal recognition. Rank-and
-file workers thought they would respond best to money. Job Security
The effect of innovation on job security is a critical issue. In the mining industry, fortunately, the operating improvements are so urgently needed for the survival of mining companies and their dependent communities that aggressive demonstrations of concern have been limited.
In the Noranda study, little or no evidence of layoff was directly attributable to MTIs. Employees were generally placed in other jobs or new jobs were found for them. However, given the uncertain economic conditions in most of the mineral industry, job security is difficult to guarantee. The most constructive policy possible, and one that is followed by most Canadian mining companies, is to maintain open communication about the company’s needs.
Continuous improvement requires a receptiveness toward innovation right across the company. If the majority of innovations originate in the engineering department, resistance or indifference in the mill and mine can lead to failure. The reverse is true as well. The policy suggested is cultivation of communication within and across the entire operation. Ideally, managers should find out what people really need and motivate from a positive position, with the facts about the company’s position placed frankly on the table.
One of the most interesting findings in the Noranda study (and one that Noranda is addressing) was that proven operating improvements were often not transferred from mine to mine or from mill to mill within the company. Considerable opportunity costs are incurred and resources wasted in rediscovering the wheel where there are barriers to technology transfer across operations. In the Noranda study, the $4.6 million in net savings could have been tripled over the same period, had the MTIs been diffused to all the company’s installations that indicated they could have used them.
A plan must be developed to encourage maximum utilization of operating improvements. It should include internal technology transfer, with economic and timely means of communicating operating improvements to all potential users within the firm. Either corporate staff or property management should follow up on patent protection and licensing. Government programs, such as technology transfer activities at the Canada Centre for Mineral and Energy Technology, may also be useful in external communications.
To sum up, continuous operating improvement is an achievable objective for mining companies, once the structure is in place to bring together both ability and motivation. Most managers know their people have the ability to be innovative. The question is this: Are they also organized and motivated to be innovative? Some up-front policies targeted at promoting and facilitating improvement can do much for continued recovery in the industry.
Be the first to comment on "From the centre IDEAS THAT PAY"