theory of constraints and authentic leadership journey to
TRANSCRIPT
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
May 21-22, 2014 Johannesburg, South Africa
13th International Conference of the
TOC Practitioners Alliance - TOCPAwww.tocpractice.com
•Theory of Constraints and Authentic Theory of Constraints and Authentic Theory of Constraints and Authentic Theory of Constraints and Authentic
Leadership journey to ExcellenceLeadership journey to ExcellenceLeadership journey to ExcellenceLeadership journey to Excellence
Katlego Mabote :TOC Optimization Manager South Africa :Lonmin
22th May 2014
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
Katlego Mabote Resume
2014/12/10
Katlego Mabote is a qualified Industrial Engineer. He is currently
studying for Master Qualification in industrial Engi neering .
Katlego worked for BMW as a Quality / Process engine er trainee .
He al so a Six Sigma Black Belt. He later joined BHP Bil liton where
he was employed as an Operational Excellence and Bu siness
Improvement specialist . Katlego joined De Beers an d based at
De Beers Consolidated Mines Voorspoed Mine where he works
as a Continuous Business Manager focusing on the cli mate,
culture and practices of embracing people process a nd system
business improvements in the company and achieved th e Highest
CBI maturity level of 2.8 in four Years .
Katlego is currently working as Optimisation Manage r for Lonmin
for focusing on TOC.
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.comTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards ExcellenceTOC and Authentic Leadership Journey towards Excellence
Conversations to be Outlined Conversations to be Outlined Conversations to be Outlined Conversations to be Outlined
2014/12/10
3 Focus Areas of the Topic 3 Focus Areas of the Topic 3 Focus Areas of the Topic 3 Focus Areas of the Topic
• Authentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journey
• TOC approach to ChangeTOC approach to ChangeTOC approach to ChangeTOC approach to Change
• Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors
What to Change in LeadershipWhat to Change in LeadershipWhat to Change in LeadershipWhat to Change in Leadership What to Change to leader behavioursWhat to Change to leader behavioursWhat to Change to leader behavioursWhat to Change to leader behaviours
Variability to Remove “W” Variability to Remove “W” Variability to Remove “W” Variability to Remove “W” ––––Effect AnalysisEffect AnalysisEffect AnalysisEffect Analysis New leader Behaviour New leader Behaviour New leader Behaviour New leader Behaviour
Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to Investing in TOC as a strategic approach to identify bottlenecks and sustainable leadership to ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results ensure profitable future and excellence, How Lonmin is investing in TOC and the results
Lonmin is achieving Lonmin is achieving Lonmin is achieving Lonmin is achieving
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
2014/12/10
Defining the Current Structure and leadership model Defining the Current Structure and leadership model Defining the Current Structure and leadership model Defining the Current Structure and leadership model
Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and Definition TOC within : Improving Capacity and Scope of making more money and creating an enabling environment creating an enabling environment creating an enabling environment creating an enabling environment
REFRAMING REFRAMING REFRAMING REFRAMING
Local Efficiency & Cost World Local Efficiency & Cost World Local Efficiency & Cost World Local Efficiency & Cost World Frameworks towards a Frameworks towards a Frameworks towards a Frameworks towards a
Production Flow Production Flow Production Flow Production Flow
FrameworkFrameworkFrameworkFramework
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
2014/12/10
Defining the current Flow Model
Production HL's
Chair Lif tGondola
Cross Tramming
Skip
Cage
Decline belt
Shaft Schedule
GroutPlant
SupportPumping
5 R a is e L in e s S t op in g3
Ra i s e sHo led
5 R a is e s i nDe v e l o pm e n t
D r op R a is e T r a v e l W a y F la t E nd
Re e f
W as t e
B o x
P r o d u c t io n T o n s Ra is e T o n sW as te T on s
D R B l as t
DR D r il l
PlantStockPile
Main Stores
Shaft Store
10 10 10 1010 10
TOC principles non existences
1. No Buffer management system
2. No concept of the War Room
3. Primary and Secondary Chain
not designed for TOC
13th International Conference of the TOC Practitioners Alliance - TOCPA
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6
10 10 10 10 10 10
A B C D E F D E FA B C
16 15 14 13 1210
STOP START / DO
Manage EFFICIENCYManage EFFICIENCYManage EFFICIENCYManage EFFICIENCY Manage FLOW Manage FLOW Manage FLOW Manage FLOW
Control EverythingControl EverythingControl EverythingControl Everything Control Leverage PointsControl Leverage PointsControl Leverage PointsControl Leverage Points
Manage Silo’sManage Silo’sManage Silo’sManage Silo’s Flow of the System as a Flow of the System as a Flow of the System as a Flow of the System as a WholeWholeWholeWhole
Manage by Budget Manage by Budget Manage by Budget Manage by Budget Manage the Constraint(s)Manage the Constraint(s)Manage the Constraint(s)Manage the Constraint(s)
Individual KPI’sIndividual KPI’sIndividual KPI’sIndividual KPI’s Buffer ManagementBuffer ManagementBuffer ManagementBuffer Management
Cost world (Input control)Cost world (Input control)Cost world (Input control)Cost world (Input control) Throughput world (Lost Throughput world (Lost Throughput world (Lost Throughput world (Lost revenue)revenue)revenue)revenue)
Management by NumbersManagement by NumbersManagement by NumbersManagement by Numbers Management by Means Management by Means Management by Means Management by Means (What)(What)(What)(What)
People just work for a People just work for a People just work for a People just work for a salary and must be salary and must be salary and must be salary and must be controlled controlled controlled controlled (Efficiency driven)(Efficiency driven)(Efficiency driven)(Efficiency driven)
People are intelligent People are intelligent People are intelligent People are intelligent
and want to performand want to performand want to performand want to perform
(Leadership, Care & Growth)(Leadership, Care & Growth)(Leadership, Care & Growth)(Leadership, Care & Growth)
Low morale and spiritLow morale and spiritLow morale and spiritLow morale and spirit Positive and enthusiasticPositive and enthusiasticPositive and enthusiasticPositive and enthusiasticculture culture culture culture
Defining Current Behaviours to be Changed
13th International Conference of the TOC Practitioners Alliance - TOCPA
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2014/12/10
Defining What needs to be Changed
Defining What needs to be Changed
1. Leadership Structure – TOC enabling environment
2. TOC Flow principles to be entrenched
3. Promotion of Economic Business Competency
13th International Conference of the TOC Practitioners Alliance - TOCPA
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PERFORMING ZONE
Shafts Achieving 80% of the Budgets NON PERFORMING ZONE
Shafts Achieving 60 % of the Budgets
Define Lonmin TOC Model –Entry Point
8
PERFORMING ZONE
Shafts Achieving 100% and Exceeding the Budgets
NON PERFORMING ZONE
Shafts Achieving 40% of the Budgets
How the project trial was commissioned
13th International Conference of the TOC Practitioners Alliance - TOCPA
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2014/12/10
Unpacking the Flow Model and What needs to be
Changed –Constraints Identified
ROWLAND SHAFTTOC Operational Flow Model
2013-03-18
Call:Reef: 190 000t/m, 8000 t/dAIM for: 9500t/dWaste: 1000t/d
26 level
28
29
30
24
23
22
21
22
20
19
18
17
3x250t
1600t
8000t
Product ion Crews:69 Panels in Mer & UG2
5 White areas
Reef and Waste ore passes 100t - 200t
3 hours flow
Flow / HLReef : 500-800t/dWaste: 75-100t/d
1,2 km
Chair Lift600 people /h
Gondola40-50 Cars/d
Cross Tramming:3x locos, 63t / span
200t in 40 min, 300t/h
Skip: 25tReef 600t/h
Waste 480t/h
Cage:180 people
14 min cycle to 26 level
(Increase to 230)
Decline belt1200t/h
Buffer Store per H/L:Agreed l ist, Including Winches
Stock for 4-5 daysReplenished by Logistics,
2x per weekEngineering Spares
Well Managed
Optimised Half Level: 5 Production crews (each producing550m2 Mer, 540m2 UG2, Reef 14000t/m-800t/d 5 Reef raise crews, 3 Raises holed. One Flat end & Travelling way crew(producing 35m/m, 1500t/m). Flat end5 raises ahead of raise crews,
16
Shaft Schedule
SUBORDINATION Projects:1. Face Time2. Compressed Air Column3. Labour Unavailable4. Drop Raising (Longer term)5. Relationships (Strategic)6. ATM & Kiosk7. Grout infrastructure8. Material Supply Logistics
Vent ila tion Zones:
PlantStockPile IDENTIFIED CONSTRAINT
Vertical & Decline Shaft System - Men & Material
GroutPlant
SupportPumping
Drop RaiseConstraint
SlusherProgress
Constraint
EngineeringWorkshop per
Level
EXPLOITATION1. Shaft Schedule2. Additional Chairs on Chair Lift3. Extra Deck on Mary-Anne4. Centralised Blasting5. Man Carriages on 16, 17, 18 Levels
31
Cyclone Plant?
HL Store
Main Stores
GuaranteedAvailabil ity
Shaft Store1-2 Weeks
1,3 km
3,3 km
15E 1,0 km
5 R a is e L in e s S t o p in g3 R ais e s
H o l e d5 R ais e s in
D e ve lo p m e n tD ro p R a ise T ra ve l W a y F la t E n d
R e e f
Wa s t e
Bo x
Pr o du c t io n T o n s R a ise T o nsWa s t e T o n s
D R Bl as t
D R D r i l l
25
26
27
13th International Conference of the TOC Practitioners Alliance - TOCPA
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2014/12/10
Beginning to find Solutions
1. Overall flow of tons
2. Rate of the identified bottleneck
3. Status of the primary buffers feeding the bottleneck and it’s effects on flow stability
4. Status of the protective capacity
5. Visibility of the system’s reality & Changes
6. Spirit / Vibe / Dynamics of the shaft
7. Level of understanding of the TOC concepts
13th International Conference of the TOC Practitioners Alliance - TOCPA
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2014/12/10
Defining the Problem at hand-The Real Constraits
• Have we identified THE REAL constraints?
– Physical constraints are easy to ID & manage
– People behaviour constraints more challenging (system generated frustration?)
– Morale / Spirit improving; union, bonus, material, leadership
• The proper functioning of the daily Ops Room improved significantly. The reflection meetings have started; the purpose of which is to analyse the information built up in the Ops Room.
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
12
0
50,000
100,000
150,000
200,000
250,000
Oct
-06
De
c-0
6
Fe
b-0
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Ap
r-0
7
Jun
-07
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g-0
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-07
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c-0
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b-0
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r-0
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Jun
-08
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g-0
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-08
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c-0
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b-0
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r-0
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Jun
-09
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g-0
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-09
De
c-0
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Fe
b-1
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Ap
r-1
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Jun
-10
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g-1
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-10
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c-1
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b-1
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r-1
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Jun
-11
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g-1
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Oct
-11
De
c-1
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Fe
b-1
2
Ap
r-1
2
Jun
-12
Au
g-1
2
Oct
-12
De
c-1
2
Fe
b-1
3
Rowland Shaft Total Tons
Tons
6M mov ave
Linear (Tons)
Impossible to set a proper
base line for comparative
purposes
Showing the Impact of the current thinking Model
13th International Conference of the TOC Practitioners Alliance - TOCPA
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2014/12/10
Focus Areas of Change
4 Focus Areas of the Topic 4 Focus Areas of the Topic 4 Focus Areas of the Topic 4 Focus Areas of the Topic
• Authentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journeyAuthentic Leadership journey
• TOC approach to ChangeTOC approach to ChangeTOC approach to ChangeTOC approach to Change
• Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors Profit and Sustainable behaviors
• W W W W ––––Effect AnalysisEffect AnalysisEffect AnalysisEffect Analysis
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
2014/12/10
What was implemented to achieve the Change
1. OPS Room – To Change from Black box mind-set to
Proactive Approach
2. Project Commissioned to implement the buffer
Management systems –Store underground
3. Leadership Coaching –One on One Coaching
4. Reflection meetings – To reflect and begin to identify
the invisible
13th International Conference of the TOC Practitioners Alliance - TOCPA
www.tocpractice.com
0
1000
2000
3000
4000
5000
6000
7000
8000
7-Jan 21-Jan 4-Feb 18-
Feb
4-Mar 18-
Mar
1-Apr 15-
Apr
29-
Apr
13-
May
27-
May
10-Jun24-Jun 8-Jul 22-Jul 5-Aug 19-
Aug
2-Sep 16-
Sep
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Sep
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Oct
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Oct
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25-
Nov
9-Dec 23-
Dec
6-Jan 20-Jan
To
ns
Rowland Shaft Tons Hoisted - 7 Day Moving Average
7 Day Ave
Linear (7 Day Ave)
TOC Ops room meetings introduced
Buffer of winches in place
Initial TOC Training
complete Labour
vacancies
filled
S54
Lamproom
+ DGI
Hoist
Section 54
Hoist
Breakdown
Bonus threshold reduced
Materials Buffers
in place
TOC Results
13th International Conference of the TOC Practitioners Alliance - TOCPA
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TOC the Clear Results ROI
13th International Conference of the TOC Practitioners Alliance - TOCPA
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17
The Results- Comparison
The Results- Comparison1. Low Variability
2. Upward trend
3. Movement from Non performance to performance
4. A profit Game
13th International Conference of the TOC Practitioners Alliance - TOCPA
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W Effect Analysis is an indication of performance and variability
W Effect type 1 = Performance (It means exceeding target and being profitable) example Below) Performance is paying off the buffer
W Effect Analysis is an indication of performance and variability
W Effect type 2 = Non Performance (It means not consistent and not stable ) example Below) Performance is not paying off the buffer great concerns
W Big W Small
How we monitor sustainable results
Business Units Monitoring –W effect Analysis Template
13th International Conference of the TOC Practitioners Alliance - TOCPA
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TOC Dashboard -Example Template
2014/12/10
Buffer Management SystemBuffer Management SystemBuffer Management SystemBuffer Management System
Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan Performance against TOC (5 to 10) % above Plan
Buffer Management SystemBuffer Management SystemBuffer Management SystemBuffer Management System
1.1.1.1. Engineering Buffer Engineering Buffer Engineering Buffer Engineering Buffer
2.2.2.2. Material BufferMaterial BufferMaterial BufferMaterial Buffer
3.3.3.3. People Buffer People Buffer People Buffer People Buffer
W – Effect Analysis October
No Buffer
2 Weeks Buffer
Buffer
September W effect
13th International Conference of the TOC Practitioners Alliance - TOCPA
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World of
Local Optima- Efficiency
- Statistics & Formulas
- Simple rules
- Physical
World of
Production Flow- Flow
- Bottlenecks &
Buffers
- Interdependence
- Logistics & People
Manufacturer
Bm
Consumer1
Warehouse
1
Bw
Bw
Bw Bc
Bc
Bc
Bc
Warehouse
2
Warehouse
3
Consumer2
Consumer3
Consumer4
Information Information
System
Planning
& Manning
People, Materials,
and Equipment
Winch
Build Packs FB
Feeding
Buffer
Total Shift Time
Face Shift
TimeT
R
A
V
E
L
T
I
M
E
T
R
A
V
E
L
T
I
M
E
Face
Time
Buffer
Critical Chain Time
WP
DP DRILLING Chrg
MS Critical Path
NP
Transport
Winch
D E FA B C
Protective Capacity
OPS ROOM (Daily management system)- Focus on Immediate Future
- Good Visibility
- Pro-active / Creative
- Behaviour / Culture
3 Bottles
Strategic Intent with TOC Initiative
12 16 12 13
15
12
11 1216
1514
1316 15 14 1310 12 OUTIN 16
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