Maturity Models in Mining

There are many paths to Enlightenment (the Stairway to Heaven)

We're starting to see the more widespread use of maturity models for designing the “Network Centric Next Generation Smart Mine of the Future”.  Maturity models have been in common use in mining for specific applications, such as for business improvement, maintenance assessment and IT service delivery.  These models are usually focussed on process maturity.  That is, by measuring different aspects of the quality of business processes (e.g. governance, QA, documentation, deployment) you can develop a set of stages of progression that can be used as benchmarks and planning targets (roadmaps). 

It is widespread practice across many industries to use 5 levels of maturity in these models, labelled Level 1 (eg. ad hoc) to Level 5 (world’s best practice).  Some models have a Level 0 so that Level 1 is actually a basic improvement on a complete lack of process maturity, although this often just adds an additional level for only a minor benefit.

Maturity models have been applied to data and information management to illustrate the progression of management and analysis practices as the digital technology improves.  For example:  https://www.linkedin.com/pulse/digital-systems-maturity-model-geoffrey-moore 

In the Network Centric Mine view of a mining business (Farrelly et al, 2012), a better basis for operational maturity is to focus on both the amount and quality of collaboration across the value chain, including up and down the levels of decision-making.  This collaboration is both within a company and extending to strategic partners who are integral to the operation.  Different industries have achieved different levels of maturity on this scale, as follows.
 

Mining companies rate low on this maturity model, and while some mines have made gains in moving from Level 1 to Level 2 by integrating across their operation, they have not jumped the “wall of integrated collaboration” due to:

·       Common use of manual processes for data collection and reporting and the use of spreadsheets for analysis and planning, even though some areas such as mine planning use advanced applications.

·       Many are still focusing on functional or operational efficiency, as evidenced by the use of organisational groups such as “Operational Excellence” and “Technical Services”.

·       Collaboration rarely extends beyond site-wide integration, and even then there are often deep silos between mining, processing and maintenance departments at many operations.

·       End-to-end processes that are optimised across multiple functional boundaries are the exception, not the norm.

·       Little evidence of true partner collaboration with external agencies - e.g. there are usually well-defined contractual hand-offs at business process boundaries between mining companies and their partners (e.g. drilling contractors, contract miners and transport providers).

The mining industry is, however, showing signs of widespread progress up these levels and the leading operations in many major mining companies are driving improvements in collaboration by implementing new technology to speed up the core mining processes. These technology improvements are opening up different business models, for example:

·       End to end systems integration, which challenges the traditional methods of separating data between maintenance and operations functions.

·       The use of remote operations centres, which challenge the traditional methods of separating on-site and off-site functions.

·       The use of autonomous systems, which challenge the traditional roles of operators and supervisors.

·       The use of virtual collaboration technology, particularly video conferencing and information sharing tools, which challenge the traditional methods of separating in-house and external services.

The majority of mining companies are still focused on operational efficiency and integrating across the value chain – hence levels 1 and 2.  Innovators have jumped over the “wall of internal collaboration”, which requires significant changes to the operating model, in particular in the way in which they embrace new roles and responsibilities for collaborative working and strategic partnerships.
 

Maturity Model Progression

The collaborative maturity model design takes the extent and scope of collaboration as the main focus for maturity progression.  Ascending the maturity stairway requires new collaborative business models that give rise to better (more mature) levels of collaboration.These maturity models are useful only when the characteristics of each level are clearly described and can be used to develop plans and roadmaps to increase the levels of maturity.

The industry that has demonstrated the most progress over the last 20 years in raising their level of maturity through the implementation of different operating models has been the transport and logistics industry, particularly that servicing aerospace and defence clients.  When 300 companies from a mixture of industries were surveyed in detail to assess their level of supply chain maturity (Poirier 2004), the major factor differentiating levels of maturity was found to be collaboration across the value chain based on the level of ‘connectedness’ of business processes and people within a business, and between a business and its suppliers and customers.

This collaborative supply chain maturity model has been adapted (Farrelly and Records, 2007) to suit the multi-site and federated nature of a mining enterprise, and it forms an overall framework for the development of more detailed maturity models for specific purposes.

Level 1 is characterised as a focus on excellence at the business function level (e.g. mine planning, development, production, maintenance).  Collaboration is mainly within functions or disciplines and there is little to no sharing of best practices. 

Level 2 describes a focus on integration across a site; that is, a considered approach to collaboration across functional areas working together for a particular mining operation. 

Level 3 describes an operation that closely collaborates with some external service providers and multiple sites along the value chain (mine sites, process sites, ports, etc) at a level deeper than simply contracting goods and services.  This might include shared key performance indicators (KPIs), best practices and integration of business processes. 

Level 4 extends this idea with even deeper collaboration with many core processes entirely outsourced on a success basis and coordination is embedded across all participating organisations.  

Level 5 represents seamless integration of business process up and down the value chain, open books on financials, free flow of performance data, and shared responsibility for the end-to-end supply chain.  The entire operation is run as a coordinated series of services where the boundaries of the individual companies are not apparent and shared performance targets and measurements drive optimisation across all components of the business.  This would represent the fully Network Centric Mine.

An important practical observation from many different industries is that while advancing from level one to two is relatively easy, since a company or mine site can do it on their own, advancing to three is the most difficult because many old ideas and paradigms need to be abandoned and business models rebuilt. 

Longstanding cultural imperatives become serious obstacles, as most businesses are very reluctant to abandon practices that were helpful in the past but may not have stood the test of changing times.  Most importantly, businesses need to collaborate with internal and external suppliers in new ways.  

This is the move from “master-slave” relationships to “win-win” partnerships.  Difficulties in implementing such changes are to be expected, and require intense management focus to ensure this step is successful.  Further advancement, while still challenging, is no longer such a leap in the dark.

A further observation is that companies taking on change programs often attempt to take one aspect of the business forward but not others.  This is often true with the implementation of new technology.  These programs usually fail because moving one area to high levels of maturity while ignoring other areas (e.g. skills development, organisational culture, and business process) heightens the implementation risk.  This almost always results in the actual business value of the change falling far below what was expected in the original business case.

The way to build an implementation roadmap that maintains balance in these dimensions is to base it on a well-constructed maturity model.  The model is used to plan the transformation program and to measure progress across all the relevant components and dimensions.


In addition to designing a higher performing business, this maturity model can be also used by a company to assess its current situation in relation to its peers and its collaborators.  If a company is less mature than its peers, or one business function is less mature than another, then the entire business is likely to be operating at a lower level of performance than it could be.  Any mismatch between the maturity of operation of any part of the network of partners also leads to inefficiencies and poor information exchange at the boundaries.  The network is only as good as its weakest link.

Dimensions of maturity

For practical application, a maturity model needs to be divided into components or dimensions that can be assessed in an objective way.  These dimensions need to be mutually exclusive and collectively exhaustive, and for the Network Centric Mine, this works best when the dimensions cover the whole organisational system namely: People, Process, Technology, Information and Culture.

Each of these five dimensions needs to be understood separately as well as holistically to reduce the risk of implementation failure.  Each dimension needs to progress up the maturity scale in a consistent and balanced manner over time, and by degrees achieve the desired characteristics listed as dot points in the following.

People

One of the most common reasons that system implementations fail is due to inadequate consideration of the people aspects of the system.  Any change in process required for the successful operation of any new system usually requires changes to roles and responsibilities of staff for both managing and using the system.  Staff buy-in and acceptance of the need of a new system and their involvement in the implementation from start to finish goes a long way to making sure that they use it and that the value is delivered from it.  Furthermore, it is very common for training in a new system to be inadequate and not be extended to new hires in the future.  While this is a complex area, there are many well-established ways to ensure that the people issues are well handled, often as part of the company capability development and training programs.

Process

Often the implementation of a new IT system allows for the improvement and streamlining of the existing business processes, however it is often difficult to make wholesale changes in process except by stages.  Recommended improvements to processes need to align with experience of good practice elsewhere as well as take advantage of any initiatives for standardising processes across the company.  New processes also need to account for the capability of available IT systems, and one system less capable than another may in fact deliver the desired improvement for a lower cost due to the business process being more easily adapted.  A common mistake in any system implementation is to try to adapt the system to existing manual processes. Alternatively, any new off-the-shelf system would probably be resisted as not representing “how we do things around here”.  A re-design of the process is usually necessary for success.   Any company adopting Lean-SixSigma methodologies will also be using a well-defined process maturity model for process re-engineering.

Technology

All IT aspects of the system and its environment (software, hardware and communications) are covered by the term Technology.  The existing or planned technology environment will place constraints on any proposed new IT system.  Early phase works must identify these constraints and also identify any opportunities that the new technology will permit.  Often, the installed hardware and software is out-dated and highly disjointed (poorly integrated) and they end up controlling business activity rather than supporting it.  Most mining companies now have very well developed IT project methodologies and experienced suppliers to conduct technology implementation and support.  Well-developed and benchmarked maturity models exist for this dimension, such as the Capability Maturity Model (CMM).

Information

The Information dimension incorporates all aspects of data and information collected and processed, including what comes into the system and what leaves the system.  The requirements for the information and reporting to support the desired business processes are key to the identification of business benefits, and key to the selection of the application that will be used.  Other considerations are the constraints imposed by other related business systems into which and proposed new systems will interface.  Early phase works for any new systems need to identify all of these issues.  For most mines, there are islands of information in stand-alone systems that are often only shared via paper reports.  Rekeying of data between systems is therefore common, which means that there are often many inaccurate records.  A clean-up of the existing information workflow is invariably needed for any new system implementation.  New data integration and delivery systems are now leading to new approaches to the maturity stages, for example:  https://www.linkedin.com/pulse/digital-systems-maturity-model-geoffrey-moore 

Culture

The fifth dimension in this model, ‘Culture’, is the knot that ties all the other dimensions together.  Corporate culture distinguishes the ways that different companies and industry segments combine the other dimensions to solve the same problem.  It is the culture that determines the relative focus of the other four areas: people, process, information and technology.  It is also the hardest dimension to understand and the hardest to change.  The culture of any business is the main source of both opportunity and risk in making any technology enabled business change.  The way an organisation is structured, its norms of communication and its work practices are all tied up in the potential success or failure of a business change.  For many mining operations, there is a culture of acceptance of issues, complacency, long standing work practices and corporate inertia points which make any change initiative difficult.

Building the Maturity Model

In practice, maturity models are best constructed each time for the specific scope of effort, and in a mining application they should be focussed on just the first three levels of maturity, since most mining companies will be at maturity level 1 for most dimensions of each component.

Mining companies usually rate low on any collaborative maturity model (Farrelly et al, 2012), and while some mines have made gains in moving from Level 1 to Level 2 by integrating across their operation, they have not jumped the “wall of integrated collaboration” in Figure 1, due to:

·      Common use of manual processes for data collection and reporting and the use of spreadsheets for analysis and planning.

·      Focus on functional or operational efficiency, as evidenced by the use of organisational groups such as “Operational Excellence” and “Technical Services”.

·      Collaboration rarely extends beyond site-wide integration, and even then there are often deep silos between mining, processing and maintenance departments at many operations.

·      End-to-end processes that are optimised across multiple functional boundaries are the exception, not the norm.

·      Little evidence of true partner collaboration with external agencies - e.g. there are usually well-defined contractual hand-offs at business process boundaries between mining companies and their partners (e.g. drilling contractors, contract miners and transport providers).

·      Miners like to tell stories of heroic actions and services augmented to overcome problems in supply chain, rather than smooth, efficient processes.

So rather than building a 5 level maturity model based on comparisons with other industries, we believe it is more useful to rescale the model to cover the range up to and including best practice for the local industry.  That is, what may rank as level 3 on a generic maturity model (compared to world’s best practice) becomes level 5 on the localised version.  This allows the current practices to be assessed over multiple levels and guidance given in more finely calibrated levels.  The higher levels must be achievable if they are to be useful as guidance.

Transformation Planning

The key to progressing down the path to the Network Centric Mine is the development of an innovation program to implement a series of transformational changes.  These changes will each have a real impact on the business bottom line, and their development and implementation needs to be sequenced to ensure business buy-in and business success at each stage.

A balanced program to any business transformation can be defined by the interplay of five distinct dimensions: People, Process, Information, Technology and Culture.   Using these dimensions, each part of the program can be progressed through a series of maturity stages that increases the degree of networking in each of the five dimensions.

The way to build a roadmap that maintains balance is to base it on a well-constructed maturity model, which is used to plan the transformation program and to measure progress in all the relevant components and dimensions.   This includes incorporating the outcomes of other programs being implemented in parallel, for example a major digital transformation program happening across the enterprise.

For each project in the program, each maturity level needs to be defined across each of the five dimensions.  These definitions are then used to define the levels of maturity in each of the key components of the Network Centric Mine.  The various models combine in a 3D matrix, for example for a program of 7 projects:

Increasingly, mining companies will collaborate closely with partner organisations to create and operate this new network centric business environment.  The mining companies and their partners will evolve appropriate technologies, business processes and organisational structures to allow them to operate as extended virtual enterprises at a higher level of technology and process maturity.

Experience teaches us that the technology changes enabling this transformation will only be successful if they are part of a well designed business innovation program and undertaken together with synchronised changes to people, process, information and culture.

The transition to the Network Centric Mine will be made by progressive mining companies partnering with equally progressive partners, who will transcend the traditional client-supplier relationship to create new enterprises that simply out-compete their competition with increased agility, higher productivity, lower operating costs, improved safety, reduced environmental impacts and better community relations.

References

Farrelly, C T, Malherbe, G, Gonzalez, J, Bassan, J and Franklin, D C, 2012.  The Network Centric Mine, in Proceedings International Mine Management 2012 Conference, pp 143-160 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Farrelly, C T and Records, L R, 2007, Remote Operations Centres – Lessons from other industries, in Proceedings 2007 Australian Mining Technology Conference, pp 105-110 (CRC Mining: Brisbane).

Poirier, C C, 2004. Using Models to Improve the Supply Chain, 275 p (St. Lucie Press: Boca Raton).