Structural Variability

  • In mining, variability is inherent to the value chain
  • Absorbing structural variability leads to minimizing complexity and leads to the lowest cost platform
  • Failure to absorb structural variability leaves value on the table
  • Businesses need to align orebody capability to the market
  • In mining, structural variability can be managed through rate, inventory, systems and management processes that give management the ability to best manage the variation associated with the structural variability

Why Companies Fail to Manage Structural Variability

  • Specialization, silo and geological focus add management induced variability which leads to unstable operations
  • Whole System focus is required to absorb structural variability effectively
  • There is no one standard solution to absorb structural variability because each company has different orebodies, infrastructure, and market dynamics
  • Many companies invest in ideological philosophies such as zero inventory and six sigma, which leads them to believe that these ideas are directly applicable to mining – in mining it needs to be applied within the context of structural variability
  • Consequences if not managed include:
    • Secondary complexity which increases cost
    • Prevention of insight into the effects of decisions on the total value chain
    • Increasing complexity which leads to non-value add actions by management - the management effort is then based on today’s tonnage rather than building tomorrow’s capabilities
    • Risk of increasing variability as a result of management reactivity to control the adverse impacts of inherent variation