HATTINGH, T.S. and KEYS, O.T. How applicable is industrial engineering in mining?

The 4th International Platinum Conference, Platinum in transition

‘Boom or Bust’, The Southern African Institute of Mining and Metallurgy, 2010.

How applicable is industrial engineering in mining?

T.S. HATTINGH and O.T. KEYS
Centre for Mechanised Mining Systems, University of the Witwatersrand

Industrial engineering is being looked upon in more and more industries as a discipline that can be
used to improve the overall effectiveness of businesses. It is a holistic discipline that draws upon
many philosophies, principles, methodologies and tools to optimize systems and processes to
maximize the use of all resources, so as to provide a product of increasing value to the customer.
Having said this, it is not a discipline that has traditionally been applied in mining and mining is
arguably very different from traditional manufacturing sectors where industrial engineering has its
roots. Two questions thus arise; how applicable is industrial engineering in mining, and how can
industrial engineering principles be implemented successfully? This paper discusses some of the
foundations of industrial engineering and how these are typically applied in practice. Critical
success factors for implementation are also discussed. Case studies are then presented to illustrate
where industrial engineering has been applied successfully in mining. These case studies highlight
the approach used and critical success factors for implementing industrial engineering in a
sustainable manner.

Introduction design processes. Good industrial engineering embraces a

Minerals are sold into a commodity market over which systems approach which encompasses all aspects of the
miners have little control. As mining methods mature and organization both horizontally across the value chain as
stabilize, efficient and effective operations will define a well as considering the key features which make up an
mine’s competitive edge. Mines are realizing that in order organization such as people, organizational structure,
to achieve this they need to focus on a myriad different technology, information, measurement systems and their
aspects of their operations, from technology and the physics impact on business performance. This is done through the
behind rock breaking, to the way in which people are use of fundamental principles and specialized tools and
managed. One of the aspects that is receiving increased techniques.
attention is understanding the value chain: how the Standardized work practices reduce variability in output
elements of mining join together to deliver value. It is these and allow the different activities and sections in an
value chains that are at the heart of the discipline of organization to interface more smoothly. Standardization is
industrial engineering. the foundation that enables organizations to change and
The discipline of industrial engineering is difficult to improve their processes. In an environment where the
discretely define or contain. The production and business methods and plans used to perform work constantly change
processes with which industrial engineering concerns itself from one worker to another, or one day or shift to another,
are intangible, and often exist without having been high levels of variation are a certainty. This variation firstly
explicitly designed in the way a mechanical engineer would makes it impossible to plan adequately and secondly makes
need to design a piece of machinery. In addition, these it very difficult to identify the root causes of problems. In
processes transcend functions and hierarchies within a addition, if any attempt is made to improve a poor work
business, so that industrial engineering does not necessarily method, it will be difficult to implement changes and link
have a clear ‘homebase’ within a company. them to improved outputs. Once flexible standards are in
However, in spite of these vagaries and challenges, it is place, effective problem solving can be implemented.
the authors’ belief that in order for mining companies to Structured problem solving employs the scientific method
become truly competitive, industrial engineering as a in approaching process design and optimization.
discipline should be as integral to mine operation as Hypotheses are formed, and then tested through disciplined
engineering, mining or geology. experimentation and rigorous analysis of facts and data.
The Deming PDCA (plan-do-check-act) Cycle is used to
Industrial engineering as a discipline ensure that this process not only prevents current problems
Industrial engineering is the integration of resources and but also encourages continuous improvement. The plan
processes into cohesive strategies, structures and systems phase involves planning what is to be done regarding a
for the effective and efficient production of quality goods problem or challenge. This can be an extensive process that
and services 1. It is involved with the analysis, design, involves collection of data and facts and stringent root
planning, operation and management of processes within cause analysis followed by the development of
any environment from manufacturing and production countermeasures to address the issues that were found. Do
processes through to service processes and engineering involves taking action based on the findings from the plan

HOW APPLICABLE IS INDUSTRIAL ENGINEERING IN MINING? 205

stage, possibly on a small scale, or in a pilot scenario. This the theories in a sustainable manner.
ensures that the action taken is addressing expected root It has been suggested by Ballé et. al. 3 that many
causes. The check phase is critical as this ensures that applications of tools and techniques fail to take into account
whatever action was taken in do actually delivers the the conceptual frames which underlie the philosophies and
desired results. Action is then taken based on these findings in so doing, miss the point of applying the tools. They
to reinforce and sustain changes that were put in place to suggest four frames that need to form the base off which all
prevent recurrence of issues and share knowledge or to take business improvement initiatives are developed. These
different action if the desired results were not obtained. include:
Industrial engineers are also often involved in process • Understanding the purpose and linking initiatives to
optimization projects that map processes out for a specific overall business performance
area and then use tools to identify value adding activities • Developing a culture of problem awareness and seizing
and waste. Techniques are then used to minimize waste and opportunities for improvement
ensure that value is delivered consistently and continuously. • Applying a rigorous and disciplined problem solving
Due to the complex nature of many organizations, these methodology at all levels
projects often involve the use of advanced techniques • Developing the skills and mindset in people that allow
including computer simulation and other operations them to be effective problem solvers.
research methodologies. In essence the change in thinking has come about by
Good industrial engineering sees the business as a whole. acknowledging that there is a wealth of knowledge at all
It is applied to any process within the business that is seen levels in an organization and that continuously fighting
as adding value to the whole. This includes the production fires and making short-term plans to achieve production is
cycle and maintenance activities but extends to all auxiliary not sustainable nor does it deliver continued improvements
functions that would include office-based processes such as in competitiveness.
procurement. Consider the expertise and knowledge that resides in a
Due to the fact that processes often involve a variety of rock-drill operator with twenty years of experience, or an
stakeholders it is also common for the analysis and design experienced technician. This knowledge has the potential to
of processes to extend outside of the primary organization’s solve problems and drive improvement, but only if given
responsibilities to those of other organizations that support the opportunity and skills.
them. The function of management is not one of controlling and
Industrial engineering has always, by definition, sought to implementation of the ‘one best way’, or managing
improve the productivity and efficiency of a firm. However, numbers and metrics, but rather one of mentoring and
over time, different approaches have emphasized different facilitating discovery. Improvement is effected through
tools, techniques and philosophies. Industrial engineering involving inquiry at every stage: How do you do this work?
arguably has its roots in Tayloristic scientific management, Do you do it the same way every time (standardization)?
where technical experts analyse production methods and Why do you do this? Why is it important (purpose)? How
determine the ‘one best way’ of doing something. The do you know if it has defects (quality)? What causes these
discipline of production management that emerged in the defects (problem awareness)? Why does this happen? How
mid 20th century took a broader systems view, considering might this be solved? How can the results be measured
the interaction of different functions within an organization (scientific method)?
and other disciplines, such as management science. More
recently, improvement philosophies such as Theory of Industrial engineering in practice
Constraints (TOC) and Six Sigma have come to the fore, For those who have implemented initiatives over the years,
along with the management philosophies and tools it is largely undisputed that the techniques of industrial
espoused in the Toyota Production System (TPS), and engineering are able to make a significant contribution to
‘Lean’ Management. (A glossary and bibliography is operating profitability. What is not so clear, however, is
included at the end of the paper.) whether these benefits are sustained and ultimately further
Although industrial engineering has always advocated improved upon in the long term.
understanding processes by spending time on the ‘shop- Industrial engineering is often applied as an intervention.
floor’ observing and interviewing operators, it is not until It may be approached by bringing in a team of specialized
more recently, specifically with the focus on TPS, that more consultants either to address specific issues or to analyse
serious engagement of the workforce in the actual the organization as a whole. It can also be approached as a
improvement process has been introduced. In TPS, central, head-office type of function with a team of
continuous improvement advocates that, ‘Any improvement industrial engineers being used as a resource to the business
must be made in accordance with the scientific method, for once-off or ongoing projects.
under the guidance of a teacher, at the lowest possible level Although these interventions certainly add value and may
in the organisation.’2 This is at the heart of TPS and many be able to resolve a number of operational problems, they
believe that this is the key to implementing improvement are often once-off in nature and even worse, gains made are
sustainably in any environment. often lost months later when the expertise and focus has
Although many organizations have embarked on been removed and production pressure once again drives
continuous or business improvement journeys in recent behaviour.
years, it is often the case that initial quick wins are not It is the authors’ belief that in order to effectively apply
sustained and that further improvement becomes more and industrial engineering to sustain gains, employees must be
more difficult. Many firms successfully utilize tools from engaged at multiple levels. The importance of their input in
Lean, Six Sigma, or any number of other management analysing problems and generating solutions is already well
philosophies to make easy productivity gains, but fail to established. More than this, however, they need to actively
show sustained and continuous improvement. Recent be part of the PDCA process of experimentation and
research has thus focused specifically on how to implement implementation of improvements.

206 PLATINUM IN TRANSITION ‘BOOM OR BUST’

 In addition to delivering an improved organizational and understand how all teams were performing. The
problem-solving ability, engaging workers can have far- consultants and coaches empowered teams with the
reaching effects on morale. The Gallup organization necessary skills and tools to take ownership of their own
reported benefits of employee engagement including a improvement initiatives. Critical to the success of their
reduction in accidents, absenteeism, theft and an increase in project was training of all employees using a top-down
turnover and customer service4. Their studies have shown approach. Courses were attended by a vertical slice of the
that highly engaged teams can average up to 18% higher organization to ensure participation and understanding at all
productivity and 12% higher profitability than disengaged levels. Through access to information and training,
teams. Work on self-directed work teams has shown that a communication has improved and the workforce is now
wealth of knowledge and experience lies within the empowered to identify and solve problems at a workplace
workforce5. The key is to know how to access and use this level. They are also more willing to contribute to
effectively. identifying and solving issues that are affecting production.
The process has united operational and maintenance teams
Industrial engineering in mining by providing a common purpose and sense of ownership.
By its nature, industrial engineering can be applied to any In the case of PT Inco’s Sulawesi Island Mine in
aspect of the mining value chain including exploration and Indonesia7, Alexander Proudfoot reported significant initial
the design of new mines to daily production and efficiency gains as a result of an intervention project but
maintenance of existing mines; from the physical extraction have highlighted the core importance of an employee
of the mineral bearing ore in the reef to the final processing engagement programme to facilitate achieving more in a
of the commodity which is sold to the customer. shorter time as well as sustaining gains in the longer term.
Industrial engineering is not only applied to the more They describe how the initial mine suffered from a culture
traditional ‘production’ or ‘maintenance’ aspects of the of ‘silo mode’ where operating teams never met to discuss
process but can also be used to improve auxiliary and barriers to performance in a constructive manner. Through
support processes such as the supply of spare parts to an a process of training and coaching they were able to engage
underground maintenance team or the project management employees by giving every employee a clear understanding
involved in designing or implementing a new mine or new of their own individual contribution towards achieving
technology within an existing mine. business goals and the contribution made by their team and
This paper will focus on the actual implementation of department.
industrial engineering as a discipline within mining rather Jon et. al.8 discuss the implementation of Lean in mining
than specific cases or areas where industrial engineering from a generic perspective. Although they see significant
can be applied. value in implementing an organization wide strategy they
warn that in order for this to be successful the intervention
requires leadership from senior management, buy-in from
A review of successful mining examples all levels, high investment in training and the use of change
Various case studies have been described in the literature agents. They also mention that implementing such a
that discuss the implementation of industrial engineering as strategy takes a considerable amount of time.
part of business improvement initiatives. All of these cases There are clear themes that emanate from these examples.
have delivered positive results. The focus of the discussion It is clear that in order to stay competitive mining
in this section is the key features of the implementation companies are focusing on continuous business
process. improvement as a strategic driver. This means moving
Rio Tinto Aluminium started on their business away from short-term fixes to a culture that aligns all
improvement journey in 1995 after realizing that a more employees with the purpose of the organization and
structured approach was required for long-term empowers them to effectively contribute towards achieving
sustainability 6 . Along their journey, Six Sigma was more.
implemented,which changed the culture of the organization One more specific point that requires mentioning is that
from one that rewarded a firefighting approach to one that all these companies are on a long-term journey with their
focused on being in control of processes and being able to initiatives. This is not something which is implemented
identify issues and implement pre-emptive measures. They every couple of years as part of some new ‘Project X’.
then decided to extend the business improvement initiatives Companies grow and develop programmes and initiatives
to the workplace by implementing Lean, which encouraged that best suit their needs and culture at the time.
continuous improvement at an operational level by
engaging everyone. They report that Lean has achieved Approaches to sustaining business
‘good and sometimes spectacular results improving
productivity and efficiency at all sites, including the mining
improvement
site.’ Their journey has taught them that in order to make In this section, the authors examine two approaches to
business improvement sustainable a strategic company- implementing more sustainable business improvement
wide approach was required to ensure a culture change initiatives. The first, from Anglo American Thermal Coal,
across the organization. utilizes dedicated in-house on-site business improvement
Rio Tinto’s Weipa mine in Queensland, Australia also resources. The second, from Sandvik trans4mine, examines
implemented Lean as part of their business improvement how an external consulting team can lead sustainable
journey 6 . They did this by using a resident external improvement.
consultant and carefully trained coaches and advisers from
within the organization who were assigned to functional Anglo American Thermal Coal approach9
divisions. One of their main initial objectives was to Anglo American Thermal Coal began their current journey
establish information centres for all business areas that gave of business improvement in 2005. During this they have
employees access to production data, enabling them to see achieved significant benefits and have grown in maturity in

HOW APPLICABLE IS INDUSTRIAL ENGINEERING IN MINING? 207

their approach to business improvement. Several initiatives throughout Thermal Coal. In addition, there is a career path
along this journey have not been successful and it is for an industrial engineer within the organization with tasks
through these experiences that Thermal Coal has developed varying from continuous improvement initiatives to
the current approach that they are using. strategic decision making and modelling.
One such initiative involved an intervention using a team
from an experienced management consulting company. Sandvik trans4mine approach —Chelopech mine,
Although the project showed a number of initial benefits, Bulgaria10
these were not sustained after the consultants left the mine. Sandvik trans4mine is a division within Sandvik who enter
The initiative involved a team from the consulting company into a partnership with a mining customer to increase
operating in parallel with the normal mine operational team system and process efficiency. Sandvik trans4mine has
to ‘prove’ that benefits could be achieved. This approach been assisting mining companies to improve mine
meant that the new way of working was forced onto the performance for several years. Initiatives have been
operational team and that the mine team gained no approached in a consulting type of role to improve not only
understanding of the approach used to make the changes. performance of Sandvik machines but also the entire
Thermal Coal’s current approach involves placing one to production cycle. A team of an industrial engineer and
two industrial engineers at each mine operating as asset operational specialists are used who apply a systems
optimization managers. These engineers report directly to approach to understand the relationships between activities
the general manager of the mine but have no line function. and departments with the ultimate aim of optimizing cycle
The asset optimization manager’s role is to act as a efficiency. Various tools and techniques are used in
facilitator on site as well as providing expertise where conjunction with a project management approach including
required. Experience has shown Thermal Coal that the type work-study, TOC, simulation and other specialized, in-
of individual who is placed in these positions is a critical house developed tools. Once constraints and shortcomings
success factor in the rollout of asset optimization. As a are identified, projects are put in place to address these.
result, Thermal Coal prefers to employ industrial Although the Sandvik trans4mine team is typically able
engineering university graduates. In addition, a stringent to deliver significant improvements in operational
interview and testing process is used to ensure that the performance, the long-term success rate, once the
individual has the right personality, skills and experience to trans4mine team leaves the mine, has varied greatly. What
facilitate and drive improvement at the mine. Engineers Sandvik trans4mine has realized, is that due to the
also report functionally to a central asset optimization team consultant approach that they have been using,
who provide guidance and technical support. sustainability of their interventions depends largely on the
The approach used by the asset optimization team ability of the mine’s human resource base once the project
involves an intensive initial analysis of the entire mine is completed. It is for this reason that Sandvik trans4mine
value chain to ensure that initiatives are aligned with are developing a new approach to their interventions. The
business strategy. Carefully designed measures are then new approach follows a three-tier methodology which starts
used to track performance and identify opportunities for by identifying basic errors and setting up projects to address
improvement. These opportunities are then turned into these, then moves onto the implementation of a
projects at the mine. measurement system and continuous improvement
Once projects are initiated these are owned by line framework. The final tier involves a fully integrated culture
management, managed by the mine asset optimization of continuous improvement within the mine itself. It is
manager, aligned to business KPIs and included in Sandvik trans4mine’s vision to use this new approach to
performance contracts. Projects follow a structured implement continuous improvement at South African mines
approach, pulling in experienced cross-functional teams and in the future.
ensuring that solutions address the root causes of problems. Sandvik trans4mine is in the process of using this new
It is key to have senior management support for the approach at Chelopech mine in Bulgaria. Chelopech mine is
programme and an understanding of what the purpose is. in the process of ramping up production from 1 million
This often involves highlighting the need for change and tonnes per annum (Mtpa) to 2 Mtpa from 2010–2012. In
how asset optimization will enable the mine to achieve order to achieve this, the Sandvik trans4mine team will be
operational excellence. Thermal Coal sees this step as one assisting the mine to perform a systems audit, identify
of the most critical in ensuring long-term sustainability of system deficiencies and develop an Excel production model
the business improvement programme. Although Thermal together with a dynamic simulation tool. The simulation
Coal has experienced resistance to change in certain and model will be used to predict future fleet requirements
instances, this is being tackled by increasing understanding based on current mine performance and to identify
of the process at all levels. opportunities for improvement (in order to optimize fleet
Thermal Coal has also attempted to engage employees at requirements and associated operational costs).
lower levels by implementing a suggestion box type of The new approach follows the structured Six Sigma,
initiative. They warn that this can become very difficult to DMAIC (define-measure-analyse-improve-control)
manage and suggestions can prove to be useless unless methodology. From the outset there is a clear sense of
everyone understands the impact that their roles have on the purpose and the goals that are to be achieved are quantified.
value chain and other areas. This highlights the need for An initial audit is carried out at the mine in order to assess
employees to gain a good understanding of the purpose and their performance in a range of predefined areas.
process of problem solving. A support structure also needs Measurements are introduced to prompt identification of
to be put in place before initiatives such as this can be problems and improvement projects are identified in critical
implemented successfully. areas. Mine employees are fully involved at all stages of
The current approach used by Thermal Coal has delivered this process to gain support for the initiative and to draw on
very successful results. The asset optimization department the wealth of knowledge and experience that they have.
is currently actively tracking 86 improvement projects Through this process, the mining team also gains a full

208 PLATINUM IN TRANSITION ‘BOOM OR BUST’

appreciation of the problem solving methodology that is • Engagement in the process and its ownership needs to
being used. involve everyone within the organization.
Once the improvement projects are identified, they are
then owned and managed by the line management of the Glossary
mine. Sandvik trans4mine sees this as a critical component
of the new approach. The Sandvik trans4mine team now act DMAIC (define-measure-analyse-improve-control)—
as coaches who guide the mine team in the problem solving project methodology used for improving existing business
process. They also provide expert and specialized support processes as part of the Six Sigma approach. It is inspired
where required. Although they are actively still part of the by Deming’s PDCA cycle, and is similar in its emphasis on
Chelopech-trans4mine team, the transfer of skills is now the measurement, scientific experimentation and validation.
focus in order to ensure long-term sustainability. In some Like PDCA, the DMAIC methodology is sometimes
cases Sandvik trans4mine may have a very good idea what referred to as the DMAIC cycle, emphasizing that
the answer to a particular problem is going to be but are improvement is an ongoing continuous endeavour.
ensuring that the mine employees follow the process so that Lean— can be summarized as the pursuit of perfection by
they learn for themselves. achieving customer value through processes that are
According to Sandvik trans4mine project manager, Mike stripped of waste using a cycle of continuous improvement.
Andrews, to date the process appears to have been adopted Waste is defined as the expenditure of any resource for any
well, particularly considering the social background of purpose other than creating value for the end customer.
former Soviet Bulgaria. The team has ensured that local Lean encompasses a broad range of tools and techniques
Chelopech stakeholders become the process owners and the that are used to achieve this goal. It was originally derived
methodology ensures that root causes are addressed as from the Toyota Production System.
opposed to symptomatic influences. At present the Operations research—branch of industrial engineering
Chelopech-trans4mine team is implementing compre- and applied mathematics that utilizes advanced analytical
methods, mathematical modelling, and numerical tools to
hensive measurement systems. The above initiatives are all
arrive at optimal solutions to complex decision making
contributing to assisting the mine in achieving its expected
scenarios.
ramp-up from 1 million tonnes per annum to 2 million
Theory of constraints (TOC)—overall philosophy applied
tonnes per annum; currently Chelopech mine is achieving
to operating and improving an organization developed by E.
(and at times exceeding) its planned ramp-up targets and
Goldratt. It defines the goal of the organization as making
has continued to reduce operating costs. The Chelopech-
more money by increasing throughput, reducing inventory
trans4mine partnership is ongoing and is planned to
and reducing operating expenses. TOC philosophy contends
continue throughout the ramp-up period with the ultimate
that just a few bottlenecks, or constraints, limit the
goal of Chelopech independently carrying out the
organization’s ability to achieve this goal. Techniques are
implemented processes and methodologies on a sustainable
applied to identify, manage, and mitigate or exploit these
basis.
constraints.
Toyota Production System (TPS)—holistic management
Parallels
approach used by Toyota in their pursuit of zero defects
Although the approaches used in the two case studies above using a culture of relentless continuous improvement.
are quite different there are many similar key features that Six Sigma—a business management approach that seeks
are enabling a more sustained approach to business to remove root causes of quality defects and minimize
improvement and the implementation of industrial variability within business operations. Six Sigma follows a
engineering. These are: structured improvement methodology (see DMAIC), and
• Linking all initiatives to the overall purpose of the uses specific statistical methods for the analysis of quality
organization and variability.
• A move to long-term sustainability and away from
short-term, quick fix solutions Bibliography
• Involvement and support from a senior level
BALLE, M and BALLE, F. The Lean Manager, Lean
• Following a structured process to identify root causes
Enterprise Institute, 2009.
and solve problems
• The use of industrial engineers as coaches and GOLDRATT, E.M. and COX, J. The Goal, 3rd edition,
facilitators North River Press, 2004.
• Drawing on local knowledge and expertise to solve LIKER, J. The Toyota Way, McGraw Hill, 2004.
problems PANDE, P.S., NEUMAN, R.P. and CAVANAGH, R.R.
• Imparting knowledge gained and problem solving skills The Six Sigma Way, McGraw Hill, 2000.
to all levels of the organization
• Linking initiatives to performance measures WOMACK, J.P. and JONES, D.T. Lean Thinking, Simon &
• Involving employees in the setting of targets. Schuster, 2003.
WOMACK, J.P, JONES, D.T. and ROOS, D. The Machine
that Changed the World, Free Press, 2007.
Conclusion
As a summary, it is believed that the following points can
enable mines to improve operational efficiency in order to
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Teresa Hattingh
Sandvik Lecturer, University of the Witwatersrand
Teresa Hattingh is a Lecturer in the School of Mechanical, Industrial and Aeronautical Engineering
specializing in Industrial Engineering Design. She is also a Principal Researcher with the Centre for
Mechanised Mining Systems focusing on the interrelationship between mine mechanisation and
human resources, and the application of Industrial Engineering in mining environments. She has
recently worked with several undergraduate student projects within the mining industry. Teresa has
a Masters Degree in Mechanical Engineering and a Postgraduate Diploma in Management from Wits
Business School. She has extensive maintenance, production and supply chain experience in the
chemical and gas industry.

210 PLATINUM IN TRANSITION ‘BOOM OR BUST’