Management By Loss In Mining - Introduction - Preprint 09-017

Ramos, M. J.
Organization: Society for Mining, Metallurgy & Exploration
Pages: 6
Publication Date: Jan 1, 2009
Without an exclusive definition of administration in business, we could propose to define it as performance by management to adopt or implement established business formulas. Administration could also be defined as a universal process that organizes people, and achieves, through efficiency, common objectives and goals. Humanity developed some form of this process from the beginning of civilization. To imply that something is new in administration might be considered specious or naïve. Moreover, what is new in management? Administration of business is not new to the world. To prove this statement, we need only ask this question: Does the architecture and monumental workmanship of the past civilizations of ancient Egypt, Rome, and the Incas demonstrate management without administration and without definition of objectives? The answer must be a resounding ?NO!? In spite of this acknowledgment and for the purposes of this presentation, I will use the word ?new? in business and hope that the reader will follow my reasoning. The mining industry has unique characteristics in respect to other industries. It is multi-disciplinary, has a single purpose (majority for one metal), has two players (man and nature), and it involves high risks for generating environmental imbalance. Mining exploits non-renewable and finite resources, creates an unstable job market (work hard to have no work) and a speculative economic market with unpredictable prices ? a one-time payment for a finite resource with multiple recycling. On top of all that, the industry still operates within obsolete petroleum-based technology, utilizing practices that were designed two centuries ago. Today, we confront the challenges of the millennium with outmoded practices and management. Ordinarily, several styles of administration are standardized into a FRAGMENTED vertical system of organization. Mining has rigid objectives in production, with profitability as the focus from the beginning to the end. Citing the concept of safety, as an important facet of production is bombastic since, in truth, mining is an experimental industry that consistently reports high numbers of fatal accidents. In mining, we designed a process to work according to our objectives, demanding attention and supervision of all levels of management with a halo of parameters that are not assimilated into the design. We continue to perform a rigid style of management in an industry that is still not responsive to variations of the market ? losses in particular. The existing design process generates loss without capitalization and without response to said loss. This perception is reflected in a mindset that is only too ready to ignore mining liabilities. The reality of the enterprise has created an immense pressure from top to bottom in the hierarchy to do more with less. It is for all of these reasons that I propose to set forth a new essence for administration that encompasses an alternative vision and style in mining: Management by Loss. MANAGEMENT BY LOSS Management by Loss (MBL) is a systematic, integral process organized to quality control operation and the human profitability within the industry. It permits focus on achievable goals by utilizing the best practices (Mining Open-closing). Identification and characterization of loss in the process determine how objectives are defined, controlling the time limits to execute based on constant balance of mass, energy, water, and ?wastes? in each stage of the industry, in order to reach final objectives. The concept of loss can be defined by various criteria. Generally, it is the mass that could not make or arrive at its destination from a designed process or simply, it could not maintain balance. Otherwise, the design of the process describes the final point of the resource. However, those resources could not make their destination because of failure to use the best design, resources and TIME. The loss has typical characteristics such as Identifiable, classifiable, measurable, manageable, controllable, valuables, negotiable, avoidable, reportable, and monitoring. In the traditional scheme, these losses are not registered; they are made exclusions. We are trapped within a system, which was designed to obtain objectives of the industry in a specific timeframe. In the present style of administration, the focus is total - our emphasis in this treatise is in the loss. The current traditional report form contains only the most positive achievement of objectives, only the best of the exercise, humanizing numbers, without touching what we left behind or what we were waiting for to assimilate as a ?surprise account?(new account of liabilities). Management by loss is a method that redefines the concept of waste (waste zero) for controlling the mine operation under the equilibrium of the ecosystems. This method confronts the problems that impact our industry in this millennium. Understanding and quantifying losses (reserves, resources, time, energy, water, soil, materials, equipment, tasks, labor, ecosystems, etc) is a priority mandate for the industry and demands the application of a ?new ? style of administration by seeking to maintain balance instead of the disequilibrium that mining now creates in nature. It is necessary to answer questions such as: How can we minimize loss? How can the loss be assimilated during the life of the mine? What is the vision of mining in respect to the generation of waste? How can we convert liabilities into assets? In addition, the control of loss is determined in the achievement of the plan. Loss occurs because of a failure of the process in the original plan. Still we do not plan to fail but we fail to plan appropriately. It is a remarkable thing to accomplish and compel those objectives described in the original plan when that plan is designed with a determined budget. If not, we lose time and, of course, capital. Moreover, in Management by Loss (MBL), we can find answers to the following questions: What is the multiplier of productivity in mining? What are the influences of identification and characterization of loss and what is the level of efficiency of energy in order to achieve waste zero (effective cut off grade)? The challenges of mining in this millennium validate this new style of administration. Finally, it is important to point out that mining is entering into an era that has different rules, but the industry is still run by companies functioning with objectives from two centuries ago. They are trying to confront issues with concepts that are not designed for new tasks. Therefore, I ask you to consider this new style of administration of business under a vision of how the industry should be organized and managed, with an attitude of balance toward nature and social responsibility.
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