BPI at KEC Creating a Collaborative Culture

1
BPI at KEC Creating a Collaborative Culture

• Industry Summit on Mining Performance
• September 21-22, 2005

2
Business Focused Collaboration
Leveraging the skills of the broader organization
for competitive advantage through a willingness
to share ideas actively and persuasively, add to
learn from others

• What it is not
• Operating in a silo so that best practice is not
  transferred
• Reinventing the wheel locally
• Building good relationships only within your own
  immediate environment
• Communicating and networking heavily without
  tangible business benefit
• Placing personal or local needs over collective
  needs
• Being competitive or political within Rio Tinto
• Playing your cards close to your chest and
  resenting examination from outside

• What it is.
• Transferring knowledge and best practice and
  encouraging the same in others
• Involving other parts of the business in
  intiatives when it is beneficial to do so
• Working together in a collegiate manner, even
  where there is geographical spread
• Building positive straightforward and trusting
  relationships with others
• Building relationships at many levels and across
  functional boundaries
• Being open-minded to and encouraging others
  ideas, being adept at drawing on specialist
  skills and listening well to experts
• Automatically thinking of actions beyond own area

3
The Collaboration Equation
Collaboration Trust X Networks X
Direction
( Nodes Connections )
( Common Interest Common Understanding )
( Consistency X Reliability X Relationship Self
Interest )
4
Challenge - Similar issues at all sites
Longer haul distances
Increasing demands from ownership
Inflationary pressures on all costs
Slow growth in mature markets
Increasing strip ratios
Increasing competitive pressures


Difficult geology in some locations
Increasing environmental demands

• At KEC each site faced similar issues. The
  question became how do we collectively and
  consistently solve problems??
• Provided initial process workshops
• During diagnostics phase we provided shared
  resources between sites to analyze the business
• Held weekly conference calls with all BI teams to
  discuss issues
• Bi-weekly written communications briefs
  circulated throughout the organization
• Steering committee meetings
• Quarterly BI workshops

5
Creating a culture of collaboration and BI across
five sites

• Six Simple Rules for fostering collaboration
• Setting clear direction
• Establishing firm leadership
• Engage and empower the workforce
• Utilize systems
• Measure results
• Communication, communication,

6
Set a clear direction from the start of the
process in 2004

• Defined value as earnings impact and return on
  shareholder value
• Clear targets for value were established at each
  site, as well as HQ, marketing and logistics
• Outside consultant released after 5 months to
  ensure process was owned by KEC personnel
• Fact based decisions / value add activities
  process used at all sites
• Weekly conference calls, regular site visits, and
  quarterly workshops established to promote idea
  sharing and resource sharing across sites

7
Established firm leadership throughout the
organization to insure support

• VP, Manager and Financial Analyst setup as KEC BI
  Core Team with support from a Steering Committee
  made up of VPs and CEO.
• Full-time site BI Facilitators implemented at
  each of the five mine-sites and HQ
• Clear authorities and responsibilities for each
  positions
• BI Facilitators Prioritize projects, promote
  process, value improvements
• Project Owners Implement improvements, request
  resources and support
• Project Sponsors Support process, promote
  involvement of site personnel
• Business Analysts Authorize project values
• Mine Managers Responsible for targets,
  authorized to initiate projects and provide
  resources

8
Engaged mine-site personnel at all levels in BI
activities

• Painted case for BIP with all hourly and staff
  employees through presentations and
  communications
• Involved hourly and supervisory workforce in
  diagnostics and solutions generation
• Project owners responsible for implementing,
  tracking and reporting results of process
• Tested the use of crew projects at Spring Creek
  with positive results
• Performance of BI linked to individual
  performance reviews and bonus programs

9
Utilized several key, simple systems to ensure
consistency and idea sharing

• Developed Project Center residing in a BI Portal
  web based project tracking application that
  uses simple screens for defining, planning,
  authorizing and recording project progress
• Project management principles
• Weekly conference calls used to share ideas and
  discuss issues with BI progress
• Simple templates for presentations and
  communications to ensure consistency
• Logical valuation based on key business drivers
  in an Excel spreadsheet

10
Systems - Project Center
11
Measure the results at every step to ensure
progress is being made

• Creating of value driver tree model and baseline
  critical so all projects valued from same
  perspective
• Report not just on value delivered but also
  projects in the pipeline
• Central metric utilized for all equipment
  performance Overall Equipment Effectiveness
  (OEE)
• Report each year on business improvement targets
  incorporated into budget
• KPIs that represent financial impacts as well as
  leading and lagging physical metrics and their
  trends for both projects and sites

12
Collaboration External to KEC

• In addition to benefiting from our internal
  collaborative efforts, KEC is partnering with
  other business units under the Rio Tinto
  umbrella.
• Collaborative forums (BI, project center, etc.)
• North American BI Workshops
• Partnering with customers, suppliers and vendors

13
What is next for KEC?

• Succession planning for leadership team
• Higher involvement and empowerment of operator
  level employees
• Continued focus and urgency in improving mining
  market
• Further develop KECs collaborative culture
• Leverage collaboration through Improving
  Performance Together, a Rio Tinto collaborative
  improvement effort.