Process Improvement In Mining Companies: A Study Of BHP Billiton

Problem Statement

Discuss about the Importance Of Implementing Management And Process Improvement In Mining Industry: Bhp Billition.

BHP Billiton’s business is related to discovering, developing, converting as well as selling natural resources. The company is working in around 25 countries all over the world (BHP Billiton: The future is yours, 2018). The business depicts the different diversification across geographic regions and markets. The company is among the top producers of the world, and supply critical commodities like energy coal, aluminium, copper, iron ore, metallurgical coal, uranium, silver and titanium minerals, nickel, manganese, along with gas and oil (Anand, Ward, Tatikonda & Schilling, 2009). For around 150 years, the company is contributing and developing communities, industry, and economies around the world. The root trace of Billiton in 1860 as well as tin mine over the Indonesia Island, while the varied and rich history of BHP started with lead, silver and zinc mine in Australia (BHP Billiton: The future is yours, 2018). In the year 2001, the company is developed through a merger with BHP Limited and Billiton Plc (Anand, Ward, Tatikonda & Schilling, 2009). Its headquarters are located at London and Melbourne. Both the companies exist as different, and operate in combination, by BHP Billiton.

Mineral extraction, as well as processing, depict the similar activity of enterprise related to particular risks. Mining companies are highly oriented towards the capital valorisation, profit, company assets augmentation, maintaining market position, along with different objectives (Anand, Ward, Tatikonda & Schilling, 2009). Achieving prominent goals in the present market condition, features through change and competition is quite challenging if the modern methods of management are not implemented. Continuous process improvement is essential in the intense competition in the market as well as the emergence of low-cost operations to prevailing (Anand, Ward, Tatikonda & Schilling, 2009). The international financial crisis along with associated worldwide recessions have both directly or indirectly afflicted, and it’s referred as no exception. In various countries of the world, mining is an essential contributor to the economy, along with this, it’s also subjected towards the demand and supply of unfavourable movement of cost, and inconsistency of demand and supply. No matter what’s the reason for the reduction in income, there is no doubt that the managers should try to optimize the cost of production (Baaij, Greeven & Van Dalen, 2004). In such challenging situations, the company should try to keep up with its market position and work towards managing and improving the process.

Aim

Problem statement

To deliver sustainable performance, it is essential to maintain the improvement the process of the mining company. In case of extraction of natural resources, it is crucial that quality process should be selected that can help in the effective removal of resources, which is appropriately processed with a set type of quality method (Bessant, Caffyn & Maeve, 2001). Regular quality check and useful technique can help in continuous process improvement. This research will analyse the importance of management and growth of the process.

Aim

This research aims to discuss the significance of managing and implementing process improvement at BHP Billiton, which is a mining company.

Objectives

• To identify the methods of managing and improving the process in the mining industry
• To examine the after effects of continuous process improvement
• To recommend best strategies for enhancing mining companies performance

Research questions

Question 1: What all methods are applied for improving process quality and its effectiveness?

Question 2: Discuss the challenges that occur in implementing process improvement at BHP Billiton? 

Justification and potential output of the research

Management and process improvement in improving business and business growth is beneficial. To attain the competitive position, mining companies try to adapt it, instead of going with status quo. This research will be helpful in understanding the steps taken by BHP Billiton in improving the process and to stay competitive in the market.

Hypothesis development

• A successful process improvement program be implemented at BHP Billiton
• A collated model like Six Sigma, lean manufacturing, Kaizen would be applied in the mining industry.

Defining continuous improvement

As per Bessant, Caffyn, Gilbert, Harding & Webb (1994), continuous process improvement is explained as the culture of sustainable improvement that targets over the waste elimination in every process of the company. Erol, Apak, Atmaca & Öztürk (2011) considers that continues process improvement is closely related with Kaizen and explained it as the gradual change as well as unnoticeable enhancements that aggregate for a specific time for offering visible evidence that is things are changing. Farris, Van Aken & Doolen (2009) explains continuous process improvements as the process of organization that emphasize as well as sustain the incremental innovation practices. Other views depicted through Glover, Farris, Van Aken & Doolen (2011) explains that constant process improvement applied by mining companies is for improving the quality, minimizing the lead time, minimizing cost as well as enhancing the reliability of delivery. Through examining as well as collating with the above definitions, one can easily explain continuous improvement that is defined as the focused approach for enhancing the process efficiency through ways of sustained and incremental innovation, which happens through reducing waste and by improving the quality (Langbert, 2000). The base of continuous process improvement is explained as the principle of adaptation and modification that design and develop the things.

Objectives

The effect of continuous process improvement over the performance of the business is highly remarkable, and various case studies have also shown its impact on increasing profits, quality, throughput, and morale (Laperche, Lefebvre & Langlet, 2011). It is noted that sound continuous process improvement strategy is essential for the company in attaining the flexibility, responsiveness as well as the ability towards adopting the changes of environment.

Probably, the highest benefit of continuous process improvement for mining companies depends on the fact that, if it’s sustained or not, and the same will lead towards the sustainable production (Nocco, 2005). This, later on, drives towards the time and cost efficiency; process quality; reduction and effectiveness of energy use and material. Continuous process improvement is not a new concept when the companies are moving towards competitive edge over its competitors. Various continuous process improvement methodologies are created such as lean manufacturing (LM); Six Sigma (SS), the theory of Constraints (TOC), and Kaizen theory (Nzimande & Chauke, 2012). Every methodology is different in enhancing the process. LM emphasize over reducing waste; SS minimize quality defect; TOC analyse optimization of assets, and Kaizen emphasize quality improvement (How to Implement Lean Principles in the Mining Industry, 2014).

Continuous improvement of processes

In the context of economic practice, there is two kind of innovation, either its emergent, or fundamental changes that need the massive investment along with overcoming intrinsic apprehension, or either the slow changes, which is accepted readily and needs a negligible form of investment (Recht & Wilderom, 1998). It is noted that organization should strive towards producing the better, low-cost products and services for expansion. Along with the development, it is required to have a continuous form of improvement. To analyse the constant process improvement, one can examine the managerial concept of Kaizen. In the year 1950, it is noted that W.E Deming went to Japan to teach the quality control. During that period, Deming cycle was introduced, which is one of the critical quality control technique for making sure about continuous process improvement (Van?k, Mikoláš, RüèkovA, BartoòovA, KuèerovA & Oèek, 2011). Deming cycle implies Plan do check act cycle, which is also known as total quality control or either total quality management.

Deming cycle within Total Quality Management

Kaizen is accepted as the philosophy through various managers and employees in Japan. It helps in connecting the previous approaches such as TQC, consumer orientation, just in time, small group activities, as well as zero defect. In another context, Kaizen is referred as the application for low-cost approach and common sense approach (Steffen, Couchman & Gillespie, 2008). The traditional approach related to quality control holds the managerial approach, as the team is essential for continuous process improvement and it also supports in driving the company values and culture.

Research Questions

The viewpoint of Kaizen needs all employees of the company, including managers and employees to have a positive attitude that takes severe contribution and recommendations. One of this inclusive approach can offer a grant, which needs to enhance the previous standards, avoid the following initiatives and prevent the stagnation (Van?kI, SpakovskáI, MikolášI & PomothyI, 2015). Along with this, Kaizen also depicts the performance of productivity, activities of total quality control and employee’s relations. One of such stumbling block related to implementing the change can be easily misgiven and mention whether the interested party should acknowledge the difference or not (Terziovski & Sohal, 2000). The positive benefit associated with kaizen is that it can assist in building the use of resources and don’t need any investment.

Successful implementation of process improvement requires having a formal declaration as well as updating of previous methods of management. Kaizen should be implemented like the blueprint of others experience and should include the particular background of companies (Viljoen, 2002). It is entirely expected that Kaizen technique begins with the managers and then continuously applied to employees. It relies on changing behaviour and style.

Viljoen (2002) explains that total quality control is the management approach that emphasizes the process of a bottleneck for continuously enhancing the mining operational performance. The theory of constraints relates to the interaction of elements that depend on few steps like identity, exploit, elevate, subordinate, repeat as well as prevent inertia to guide the efforts of system improvement (Viljoen, 2002).

Five focusing steps of theory of constraints continuous system improvement

Identity- it’s the most challenging step of TOC, and it relates to exploring the system constraints. Constraints might be not quickly identified, and its system analysis needs exploring the barriers (Viljoen, 2002). Failure in adequately determining the limitations of the system might lead to success in the process of improvement. When system constraints are examined, then they are removed.

Exploit- by exploring the constraints; one can quickly shift the obstacle towards its limit. Wu & Chen (2006) mention that any failure in using constraints might reduce the success of the entire system.

Subordinate- every activity going within the system should subordinate as per the identified and exploited constraints. It is essential that one should be careful while going after the efficiencies because for attaining the right performance, one might clash with the hope of proper mining performance.

Elevate- it is essential to evaluate the stem, for examining the actual constraints regularly. This approach aims to enhance the capacity over the constraints. The companies should spend on increasing the ability, so that system performance goes adequately.

Justification and Potential Output of the Research

Repeat and beware of inertia- it includes the recycling process that examines the improvement to go continuously (Wu & Chen, 2006). Nevertheless, it is quite critical to make sure that inertia does not impact the system.

TOC has the high inclination towards the mining industries. Though, this theory fails to include any flaws. It is claimed that by adding 100% use of constraints, it required being halt and mentioned as a wasteful activity. In case of mining industries, TOC can be implemented for continuously running the industry process. Though its implementation is quite challenging, the outcomes for managing the mining system had lead towards the increase of $3 million (Wu & Chen, 2006).

The research methodology is applied for developing the non-empirical model through the help of deductive reasoning, the particular experience, along with literature review. In this research, survey technique will be applied for collecting quantitative data, which will try to strengthen the information quality used for model construction. As per Wu & Chen (2006), data collected through the survey include three advantages over the information obtained from various other sources:

• Probability sampling supports in enabling the confidence, that selected sample is not biased, and also assist in calculating how precise the information is most likely to be.
• Comparable data is collected for everyone, and in the case when standardized estimation goes consistently around every participant.
• A particular survey might be referred as the only way for making sure that every information, that is required for data analysis is available and can be related simultaneously (Wu & Chen, 2006).

The survey questionnaire will emphasize the previous strategies to determine what its use for today and whether participants will be able to analyse the subject. The survey questionnaire will be mailed to supervisors and managers, including, process engineers, senior managers, design engineers, management consultants, along with continuous improvement process specialist at BHP Billiton (Wu & Chen, 2006).

This survey aims to examine the components that are required for developing the process improvement program for BHP Billiton. The main limitation of this model is that it emphasizes the processing and technical departments within BHP Billiton and will refer the service departments like Finance, human resource, etc. Though the barriers coming in its implementation will be involved, it’s not part of key research objectives.

The research methodology undertaken will try to collect different information through articles, journals, and books, which are peer-reviewed. Various approaches will work to develop influence over the process improvement programs and management strategies for its implementation at BHP Billiton.

BHP Billiton should undertake both the primary and secondary methods for collecting data so that it can be analysed, how important is management and implementation of process improvement in a mining company. As per primary data method, BHP Billiton will be able to present the current situation of the company (Wu & Chen, 2006). As per secondary data, BHP Billiton will refer the existing data, which is available through online sources and journal articles and books. BHP Billiton will offer recommendations for improving the process and will suggest strategies for it.

Hypothesis Development

Chapter 1: Introduction

This chapter will discuss the research background, which relates to the research topic. It will analyse the current situation of the company and process improvement going within the company. It will also check its effectiveness in performance of mining company. Along with this, this chapter will also include aims, objectives, research questions, and justification for research output.

Chapter 2: Literature Review

This chapter will include literature review, which will be based on thoughts of various authors. This section will discuss continuous improvement practices and theories applied by companies.

Chapter 3: Research methodology

This chapter will focus towards various research methods that are implemented with an aim to gather the data by survey method, and the same will be conducted through primary sources. This section will also analyse the different ways of research. The secondary data will be collected through journals, books, and online sources. In case of the primary method, it will be conducted through the survey, in which questionnaire will be mailed to managers and supervisors of BHP Billiton.

Chapter 4: Data analysis and Findings

This section will include the data analysis of collected data through survey and literature review. By collected information, data will be analysed by graphical representation method.

Chapter 5: Conclusion & Recommendations

This chapter will include the research summary, and the complete research study will draw the appropriate conclusion. The conclusion will be linked to set research objectives, and researcher will ensure that the researcher fulfils them. This chapter will also mention about research scope in future, along with relevant recommendations.

In this research, the amount will be incurred over gathering a huge amount of information for conducting research. The money will be spent on conducting a literature review, where different online sources, journals, and books will be considered. In the primary data collection method, the survey will be conducted, and that’s why money will be spent over conducting it, communicating with participants, mailing them a questionnaire, gathering their response and finally interpreting the results (Wu & Chen, 2006). The project budget is fixed by the university, and complete research is done accordingly.

Gantt chart

A Gantt chart is referred as the horizontal bar chart that attractively depicts the project schedule. Gantt chart shows the steps that are undertaken for conducting research. This project began on 1 May, when research topic was chosen. The research area is also selected that is important for analysing the process improvement programs (Wu & Chen, 2006). This research is related to the mining sector, in which continuous improvement is essential for attaining effectiveness in the process.

Continuous Improvement of Processes

After the finalization of the research topic, the outline is prepared, and accordingly, the proposal is ready for doing research. For undertaking this research, the researcher has tried to conduct a market survey and gained extensive knowledge about the mining industry. This research is being done through analysing different sources like articles, books, and online sources, and by this literature review is done. The research methodology section relates to the strategies of research, a method of sampling as well as data collection methods. In this research, both primary and secondary methods are selected for collecting information about the research topic. In data analysis section, results are obtained through analysing collected information and in last section conclusion and recommendations are mentioned.

References

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