INTRODUCTION:

The global mining industry is one of the fastest growing sectors in the world. The Asia-Pacific region has seen many big investments, new capacity additions, new exploration start-ups in the last few years. Particularly, countries such as China, Australia, India, and Indonesia are expected to drive the Asia-Pacific market at the highest growth rate compared to other regions in the world.¹ With continuous increase in demand for mineral resources, the mining industry is expected to witness a decent growth in the coming years. This growth will bring more challenges for the industry, which can be handled through some innovative improvement frameworks used in other industries (e.g., automotive).

In an industry where safety, efficiency and productivity are crucial to profitability, even small incremental changes in systems can make a big impact and help in sustainable operation. There are many improvement frameworks implemented by manufacturing industries to enhance effectiveness and efficiency and sustainability. Lean is one of the most widely used framework by organizations across the globe which has helped in improvement of systems and ensured sustainable development.² Lean is also being used by few global mining companies and results have been very encouraging. Indian companies can also use Lean for sustainable mining operations.

Lean in Mining:

The starting point in applying the principle of lean is by understanding the value based on customer needs. In the mining industry, especially base metal, product and customer have unique characteristics. Products from the mining industry are standard product that inherently has well defined specifications and requirements. Quality and price are established by global market and there is no product differentiation between firms. Transaction occurs in stock market without direct contact between mining industry as a product provider and buyer. Thus “direct” customers (companies who buy the product) do not play a role that seemed so important in the mining business. However, in a broader view, mining industry has indirect customers who are passively or actively contribute in the role of business, they are stakeholder (society, government, media, etc). Their major interest is not on quality of the product but quality behind the product, such as environment, human well-being, and economic prosperity of society.³

Usage and implementation of lean in the mining industry started few years ago. Over the years, it has provided some benefits to the mining industry through cost reduction, productivity and quality improvement, and better safety. Mining and metal industries have been using lean framework based on business context, needs, internal and external environment. It’s helping companies in achieving some benefits but more can be done by working towards further improvements to meet ever changing needs of the organizations and businesses.

Types of Waste in Mining, methods of reducing it and Key Benefits of Lean Implementation

Any lean implementation requires identification of waste and then plan to minimize wastage through various methods and tool³. Following is the type of wastes and various ways to reduce it in mining industry:

Wait: Muck-pile wash or dust removal waiting period blasting is a major cause of waste creation through waiting in mining. All activities have to be stop during this period. Engineering approaches to reduce waiting time, such as better exhaust fans or duct systems, need to be investigated. Another waste associated with waiting is idle time of mobile equipment, utilisation in underground mining is low. This low utilisation is due to trade off between utilisation of mining face, utilisation of work force and utilisation of mobile equipment, where attempt is to maximise the utilisation of mining face. Cost and benefit study should be conducted to determine the optimum utilisation.

Over Production: Unlike automotive industry where ability of market to absorb product is fluctuating, mining industry has advantage that market is stable and it can be said that market can always absorb in spite of volume of the product. Thus, over production is not an issue in the mining industry except few cases / organizations.

Repair/rework: In mining, risk involving work to repair or to rework is high due to possible and likely accident and cost related. Dynamic and unstable environment introduce constantly possibility for rework and repair that cannot be avoided. However, imperfect work can be reduced by standardised procedure and method to assure the quality of work.

Motion: In mining, this type of waste is related on how the work is done. Currently, training for the new operator deals with mentoring system, which is done informally and non-structure. As a result, non-standardised method is obtained, since variance of method between experience operators is present and trainee may perceive in the different way. Certification system is so far not applicable. Another trial for eliminating excess motion is by automation. As a requirement load is shifting from physical to cognitive, training should be designed to cover not only skill and rule based learning but also knowledge based.

Processing (over): Most visible form of over processing waste is the dimension of tunnel, it is common to observe that dimension of tunnel is exceeding required dimension. Causes are not solely due to the unstable rock but also due to over work in facing work. So far as scaling rock is a non-standard work which is very much depending on the skill, knowledge and experience of the operator. An inexperienced operator may end up by keeping scaling of the rock, and never done, because the termination of the work is based on the subjective judgment of the operator.

Inventory: This type of waste is the most difficult to combat in mining. Very much higher cost of downtime compares to cost of inventory, make it a common believe that inventory is a positive. It is contrast to value of lean that inventory is root of evil. One way to tackle inventory problem is by improving reliability of equipment. It is a big challenge because majority of failure is random failure due to hostile environment. Design out Maintenance is one of the methods that can be utilised.

Transportation: In mining issues regarding this type of waste deals with choice of mode of transport, equipment sizing, pick up location, form of material to be transported.

Human Talent: This type of waste deal with underutilisation of human resource in terms of working hour and most important in terms of capacity and capability. It is based on the belief that the human factor plays 70% when it comes to improvement potential as evidenced in the mining industry. It is advised that attention should be paid to this type of waste.

As per Rio Tinto’s CEO, Sam Walsh while addressing an event (40th Anniversary of the establishment of the Australian and New Zealand Chamber of Commerce in Japan), he talked about the seemingly unrelated industries of automotive manufacturing and large-scale mineral resource extraction⁴. As per Sam, “To the uninitiated, the two industries might seem worlds apart. One manufactures highly engineered, precision vehicle components to exacting specifications. It’s an extremely competitive industry. It requires complex, hugely sophisticated and wherever possible automated plant and equipment. It demands first rate forecasting and scheduling, tight inventory and costs control and a keen customer focus. It depends upon top-flight engineering, electronics and technical expertise and lean, high performance business practices. The other? It’s just digging big holes and scooping the dirt into trucks, isn’t it? Well, no, it isn’t, not by any means. The holes are not big, they are gigantic. So are the shovels, trucks, plants, trains, loaders and ships”. Sam impressed upon the audience the scale of Rio Tinto’s operations and the modernity, complexity, technological sophistication and similarity to other complex production processes such as automotive production.

Going by above analogy, we can try using few of methods used in Automotive in Mining also for process improvement. There are many other sources suggesting, the adoption of Lean concepts beyond the manufacturing sector has been increasing recently. In this line, its scope has been expanded to the mining industry under the realisation of the need for productivity improvements and a leverage for efficient operations.

Lean provides a major opportunity to address some of the mining industry’s greatest challenges. In Mining, lean can dramatically improve performance across all functions—from exploration and development to supply, production, operations, distribution and even mine closure. In fact, lean can unlock significant opportunities for mining companies to make more rigorous decisions and improve the return on invested capital.

The complexity of most mining operations—along with their sheer scale, safety-critical focus, geographic isolation, and environmental impact and other challenges can be tackled by Lean. Lean frameworks can have positive business impact and result into benefits. Companies that excel at implementing Lean throughout the organization will find themselves at a great advantage in a world where humans and machines working together outperform either humans or machines working on their own.

Implementing lean principles can help companies reduce the amount of physical waste and increase the quantity of value extracted from ore, but lean can provide tangible benefits throughout all aspects and processes of mining operations and can ensure sustainable operations.

Lean Framework for Sustainable Mining Operations:

Indian mining industry is characterized by limited adoption of standard frameworks and relatively lower maturity from the perspective of systematic planning, sustainability and business processes. The industry which is facing challenges such as fluctuating demand, cyclical pricing, and reduction in the profitability; operating an effective, efficient and sustainable business is very crucial.

The available data reveal the limited utilisation of Lean and that there is a lack of coherent and conceptual models to guide the implementation of Lean in this industry. It demands innovative systems and frameworks. So, there is a need for promotion of lean and other frameworks which would help to achieve better results in mines design and sustainable operations. Adaptability to new and enhanced lean systems can be the key for mining organizations to become competitive at the global level.

As per the article published in miningdigital.com, Mining faced with fluctuating demand, cyclical pricing and a decrease in the profitability of the mining industry, operating an efficient and streamlined business is critical to any mining operation⁵. Thus, despite its inherent complexities mining firms have been integrating the lean principles of the manufacturing industry into their own operations.

Rooted in the automotive industry and derived from the Toyota Production System, lean best practice has over the past 30 years been applied to great effect in almost every facet of the manufacturing sector. And it is now, with the ever-increasing pressure on the bottom line, that mining firms are looking to reap the rewards of lean processes.

In recent years, some of the most industries most influential executives have spoken out about the benefits of lean and similar continuous improvement strategies. In 2008, Rio Tinto’s CEO Sam Walsh gave a speech stating Six Sigma “is a very fundamental change in the way that we structure our work, actively engaging, actively involving, actively communicating with our people.”“It's not the senior management that implement the sort of significant improvement on the ground it's actually every single person working within Rio Tinto.”

It is fair to suggest that initiatives to come out of business improvement programs include minimised shutdowns, increased production and increased chances of reaching annual targets.

Clearly, there are plenty of various opportunities for mining companies to benefit from lean best practice, however implementation will not always yield immediate results. The important fact to remember when putting these business improvement processes in place is that they do not come overnight, and successful implementation requires the participation of the whole organisation.

But why should the mining industry adopt lean principles into their business process? How can they do this effectively?

A study conducted, titled ‘Implementing Lean Principles in Mining Industry Issues and Challenges’ [3] states that lean processes can significantly help mining companies eliminate waste and improve processes because of a shared common view with the automotive sector. According to the study:

· Both rely if effective business processes;

· Both rely on efficiency within the value stream;

· Both strive to maximise operational efficiency;

· Both rely on an extensive supply chain;

· Both sectors have a ruthless focus on safety.

These similarities bring an opportunity to successfully apply lean principles into the mining industry.

It will allow companies to make more accurate decisions, improve health and safety, boost efficiency, and ensure sustainable operations. The lean can be supported/facilitated by a structured measurement framework to plan, monitor and track the progress of lean practices implementation at the department/ function/organizational level.

Proposed Lean Measurement Framework for Mining Industry for Sustainable Operations:

As there is a need to have a measurement framework for lean implementation in mining, author looked at the existing capability /maturity models and observed that CMMI for Software is most widely used in the industry. There are few measurement framework / models built using CMMI as a based model. These are, People Capability Maturity Model (PCMM), Testing Maturity Model (TMM), Project Management Maturity Model (ProMMM) etc., which are used by many IT and other organizations. These models have multiple levels of maturity / capability and provide ratings (Maturity / Capability Level 2, 3…) as per the status of implementation of related practices in the organization. In the similar way, Lean Measurement Framework (Maturity Model) also can be proposed / developed for mining industries.

Below diagram showing the PCMM mapping to CMMI, which is built using CMMI as a reference model:

Figure 1: CMMI and PCMM

Above levels shown for PCMM is being built using CMMI as a base model⁷. There are maturity level mapped to a group of process areas and practices, which are used to evaluate the rating of the organization.

Below diagram showing PMMM:

The above model is also built using CMMI (SEI Maturity Models) as a reference model⁶ which consists of different levels of maturity as per the status of practices implemented in the organization.

Considering the above framework built on the basis of CMM, for lean implementation also a similar model/ framework can be built. The proposed CMM-based Lean measurement framework for mining companies, will include:

· Multiple levels of maturity/capability with a group of process areas and practices

· Rating at the process area and practice level, which will also include subprocesses/practices

· Framework/System for Lean Project/Program Monitoring in mining companies

· Methodology for Determination of AS-IS Status of Lean Practices in various departments/function of mining companies.

Based on current status (AS-IS) of Lean practices, organizations will be in a better position to plan for further improvements, prioritize the focus areas and put required attention/resources in that direction.

The proposed model will be based on the available capability/maturity models developed for other industries, specifically Capability Maturity Model for Software (CMMI). The model will consist of practices, process areas and objectives/goals at various maturity/ capability levels. For example, at maturity/capability level 2, there will be lean project/program level practices, which will provide the AS-IS status of lean practices implementation in the organization. Similarly at maturity/capability level 3, there will be organizational level lean practices, which will provide the AS-IS status of lean practices implementation at the project/program as well as at the company level. The current capability/maturity level can be used by Organizations to plan their lean implantation journey in more structured and effective ways, which will help in more effective and sustainable mining operations.

Working of the proposed CMM-based measurement framework/model

The proposed model will evaluate rating/capability/ maturity of existing lean practices in the organization. There would be multiple Process Areas for each Maturity Level/ Capability Level (ML/CL). Below table shows typical Process Areas for ML 2/CL2:

Table 1: Example of Process Area-wise % Rating of Mines / Site / Department

Process Area	Current Rating (%) of Lean Implementation	To be / expected Rating (%) of Lean Implementation after N+ Days / Months	ML/CL
Lean Process Area 2-1	XX %	XX+YY %	2
Lean Process Area 2-2	XX %	XX+YY %	2
Lean Process Area 2-3	XX %	XX+YY %	2
Lean Process Area 2-4	XX %	XX+YY %	2
Lean Process Area 2-5	XX %	XX+YY %	2
Lean Process Area 2-6	XX %	XX+YY %	2
Lean Process Area 2-7	XX %	XX+YY %	2

If all the above Process Areas meet the required % of Rating, then the particular department/organization will be at fully compliant to ML/CL2 wrt Lean Practices implementation. The framework will give current rating (XX%) of the department/function/company at a particular stage, which can used to prepare the improvement plan and target can be set by management for the next stage/period.

Table 2: Example of Process Area-wise % Rating of Mines Site (Number/ % are indicative)

Mine Site 1	Managed - Level 2
	LPA 2-1	LPA 2-2	LPA 2-3	LPA 2-4	LPA 2-5	LPA 2-6	LPA 2-7
Sub-Practice-1 % Complete	70%	100%	0%	0%	75%	100%	83%
Sub-Practice-2% Complete		86%	0%	0%	0%	50%	100%
Sub-Practice-3% Complete		67%					0%
Sub-Practice-4% Complete	0%	60%	60%	0%	60%	50%	60%
Sub-Practice-5% Complete	0%	0%	0%	0%	0%	0%	0%
Number of Practices	5	14	10	7	8	4	7
Number of Sub-Practices	12	12	12	12	12	12	12
Current Date - Current Status	23%	62%	15%	0%	34%	50%	49%
Previous Date - Previous Status
Previous Date - Previous Status

The % rating can use used by lean practitioners and management to monitor and track the lean program in the organization.

CONCLUSION:

Currently there are no structured framework for measurement of lean implementation in mining, which can provide a clear direction about the lean-based practices applications in various key operations. For best results and ROI, lean implementation should be tracked and monitored at the highest level in the organization to ensure ownership and commitment. For management visibility it’s very important to provide the status of practice implementation, future plans and quantitative improvements at the regular intervals.

CMM-based lean measurement framework/rating system will surely help mining industry to tackle business challenges in dynamic global environment.

Researcher is intended to develop a comprehensive Lean CMM for mining companies starting from Maturity/ Capability Level 2 and then enrich it further with addition of practices of high maturity/capability (Level 3).

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Received on 14.12.2022 Modified on 10.06.2023

Asian Journal of Management. 2024;15(1):51-56.

DOI: 10.52711/2321-5763.2024.00009