The traditional approach to benchmarking

The traditional benchmarking process as defined by Robert Camp’s 1993 article "The Bible of Benchmarking" follows the sequential steps below:

Phase 1: Planning
Step 1: Identify what is to be benchmarked
Step 2: Identify comparative companies
Step 3: Determine data collection method and collect data

Phase 2: Analysis
Step 4: Determine current performance levels and gaps
Step 5: Project future performance levels
Step 6: Communicate benchmark findings and gain acceptance

Phase 3: Integration
Step 7: Establish functional goals
Step 8: Develop action plans

Phase 4: Action
Step 9: Implement separate actions and monitor progress
Step 10: Recalibrate benchmarks

Companies still want to compare themselves with their peers to improve their businesses or to close the gap between their business and the businesses of their competitors. But traditional benchmarking was born in the manufacturing industry and was duplicated into the mining industry without any consideration for structural variability (SV) in the ore body. SV and the differences in infrastructure make it almost impossible to compare different mining operations with each other.

Common Pitfalls of Traditional Benchmarking

Cost Creep
Improving equipment rates to global benchmarks may cost a lot and may not have any effect on cash, because the system bottleneck prevents any upstream or downstream improvements from affecting cash or NPV.

Operational Instability
Improving operational parameters into an unstable core process will lead to enhanced instability. Most mining companies have increased throughput from the original installed nameplate system capability through continuous improvement effort. When operating systems (end to end mining operations) approach their inherent system capacity and capability, they become unstable. This instability may for example manifest as increasing variance to plan, maintenance reliability issues, safety incidents, and failure to meet long term objectives. Stabilization of the operations are a pre-requisite of optimization and digitization. System losses due to instability often exceeds the expected benefits of process improvements.

Incremental Return on Investment
Traditional benchmarking exercises are applied within the current Operating Philosophies of the business. This is often a waste of time and resources because changing the Operating Philosophies yield much more value and the change in Operating Philosophies might even bring down equipment efficiencies to create significant value. Global Mining Company (GMC) has numerous examples where this was the case.

The Global Mining Company Approach

GMC approaches business improvement and benchmarking from a whole system perspective by employing our unique software solution INSIGHTIZE™.

• The first step is to understand the current operation from the ore body to the market. To do this, INSIGHTIZE™ analyses the current Core Process and the current Operating Philosophies
• INSIGHTIZE™ then evaluates the value of different business improvement options based on the GMC IP and expertise
• High value options are identified and presented to management. These options will typically include options with and without additional capital investments. Management decides on the best option for their business
• INSIGHTIZE™ is adapted to reflect the chosen option and the designed system bottleneck is identified. The effect of all KPIs are tested and the KPIs which represent the biggest impact on the cash and NPV are identified
• These KPIs are prioritized and the system benchmark is determined through the INSIGHTIZE™ advanced analytics

The benefits of this approach include:

• Scientific proof that every improvement dollar spent yields the highest value possible
• Maintenance of stable operations
• Focus innovation efforts
• View of Value Drivers for the Whole Operational System instead of Silo Value Drivers
• Risk associated with different options are quantified
• Insight into co-dependencies between mining and processing
• Full transparency on business improvement prioritization

Once the operations are based on the highest value core process and is digitized, external benchmarks can be tested for their impact on cash before any dollar is spent.