Planning with Confidence
Business Process Improvement through Integrated Planning
Ryan Miles
Principal Advisor
Integrated Planning
AngloGold Ashanti
Americas Region
Ryan Miles has a B. Sc. in
Mining Engineering and is
near completion of a M.
Sc. in Mineral Economics
& Operations Research
from the Colorado School
of Mines. He is accounta-
ble for the implementation
of Integrated Planning
across the Americas re-
gion, which includes sites
in Brazil, Argentina, Co-
lombia, and Colorado.
Ryan is proficient in Portu-
guese and Spanish to di-
rectly communicate with
the sites.
Previously he worked for
Dimension Technology
Solutions, who is famous
for developing a web-
based asset management
suite called eMESA. There
he managed implementa-
tions across North &
South America, Africa,
and the south Pacific.
Formerly at URS as a min-
ing engineer conducting
short term and long term
mine planning, feasibility
studies, and facilitating
workflow management for
Operations Excellence at
multiple global sites. He
is happily married and has
an 21 month old son
named Leo.
Abstract
Over the past decade the mining industry boom has increased margins; however,
also brought lower efficiencies, out-of-control costs, and higher variation of perfor-
mance. This larger variation in key processes causes difficulty for many mine
managers to confidently meet their planned targets. Stakeholders demand a high
level of confidence that strong results will be delivered as expected. Planning de-
partments find themselves with an elevated need to confidently forecast ahead.
Can there be a way to objectively measure the confidence in planning?
Globally, AngloGold Ashanti is implementing a standard Business Process Frame-
work (BPF) to meet business expectations consistently. The cornerstone of the
BPF is Integrated Planning which seeks to statistically model all key site activities
in order to define the confidence level of delivering all business expectations. The
critical constraints and opportunities of the entire process are identified to develop
a strategy for achieving each defined target. The chosen strategies must get vali-
dated through integrating the production and service schedules in a statistical
model to be simulated in order to ensure the required productivity will be sustain-
able. All site models get joined globally and modeled with the probable risk profile
to set a confidence in accomplishing the company’s goals.
Who is AngloGold Ashanti?
 20 operations in 10 countries, on four continents, with corporate headquarters
in Johannesburg, South Africa. There are four regional support centers: 1.
South Africa 2. Continental Africa 3. Australia 4. Americas
 AngloGold Ashanti is listed on the Johannesburg Stock Exchange (JSE), the
London Stock Exchange (LSE), the New York Stock Exchange (NYSE), the
Ghana Stock Exchange (GhSE) and the Australian Securities Exchange (ASX).
 2012 All Injury Frequency Rate (AIFR) the lowest on record at 7.72 per million
hours worked.
 Ore Reserves at end of 2011 totaled 2012 TOP 10 GOLD PRODUCERS
75.6Moz and Mineral Resources of
1.Barrick Gold Corp. (7.42 Moz)
230.9Moz. 2012 Resources in-
2.Newmont Mining Corporation (4.98 Moz)
creased 10.6Moz to 241.5Moz re-
3.AngloGold Ashanti (4.16 Moz)
flecting exploration success at La
4.Gold Fields Limited (3.3 Moz)
Colosa (Colombia) and Tropicana
5.Kinross (2.62 Moz)
(Australia). 6.Goldcorp Inc. (2.39 Moz)
7.Newcrest (2.07 Moz)
 61,242 employees globally 8.Polyus Gold (1.68 Moz)
(including contractors) 9.Harmony Gold (1.22 Moz)
10.Buenaventura (1.06 Moz)
Source: www.mining.com/top-10-gold-company-
production-for-2012-80750/
1
CONFIDENCE IN AN UNCERTAIN GLOBAL MARKET?

Gold was on a steady increase from 2001 opening at $268/oz reach-

ing an all time high at $1900/oz in August, 2011. Then proceeded
onto a steady decline until the price crashed, dropping $200/oz on
April 15, 2013. The jury is still out on if the price will stabilize, con-
tinue to drop, or rise to new heights. There are enough uncertain-
ties for mining companies to deal with, and if execution of work is
not consistent, results will be lower than expected. Work execution
begins with proper planning to provide clarity and achievable goals
with the available capacity. If the plans aren’t consistent, then the
results will not be consistent. However, with the amount of varia-
bles that exist when forecasting it is easy to pass the blame to an-
other because one variable didn’t perform as expected. Production
will say that maintenance didn’t have the right equipment at the
right time and maintenance will say that the operations handle the
equipment outside of specifications. This has led to a focus on im-
proving efficiencies in production and maintenance, however, what lyze the entire process and ensure the dependent variances are
usually gets missed is that these processes are dependent to each accounted for and can achieve the desired output. This reveals the
other. Eliyahu Goldratt introduced the Theory of Constraints with basis for Integrated Planning, which sets the confidence level on the
his 1984 best selling book The Goal that revolutionized the manu- plan. But how can you know that your planner is confident with
facturing industry. Goldratt claims that in order to maximize the their forecast. The use of an objective confidence level will be ex-
goal to make money now and in the future one must “Optimize the plained later; first, the foundation for improvement at AngloGold
flow of the process, not local efficiencies.” In other words to ana- Ashanti must be introduced in the Business Process Framework.

BUSINESS PROCESS FRAMEWORK

The Business Process Framework (BPF) was introduced in 2007 to AngloGold Ashanti as part of Project ONE by Australian consultant Mick
McAlear, who has decades of experience developing world class management systems. The BPF purpose is to ensure that processes deliv-
er the business expectations established by management. The underlying theme is to reduce variation and provide clarity to the opera-
tions by stabilizing the way the company does work globally. Across cultures and languages the BPF allows each site to speak the same
business language. The BPF simply is designed around the Deming Shewart cycle of Plan-Do-Check-Act. Clarifying the process flow of
doing work allows consistent measurements and confident planning to result in delivering the expected outcomes. The pictured diagram
indicates the overall flow of the BPF. What is evident from the diagram is that every one of the activities identified in it affects, and is
affected by, every other activity in the diagram. If any activity is not designed correctly, or not executed at the right time, and in the right
way, then the quality and efficiency of every other activity will be affected. Executing each one of the activities on the below diagram
entails a significant number of decisions and actions – there are over 350 in the detail of the Business Process Framework design. Work
Management was the first portion
to be implemented globally with
the goal to execute the work con-
sistently before suggesting chang-
es to the overall process. Analyze
& Improve measures the outputs
to clearly understand when an
operation is within specifications.
This paper will only address the
portion of Integrated Planning
which is the first step to setting up
the operation for success. The
five blocks of Integrated Planning
provide a multiple-angled ap-
proach to validate the budget plan
and optimize the schedule. This
sets the Confidence Level of the
plan. The next section will intro-
duce the Confidence Level metric.

2
 WHAT IS A CONFIDENCE LEVEL?

Actuals can differ

greatly from plan on a
daily basis and still hit
the targeted average
for a time period,
which leaves the plan-
ner puzzled when
targeted results are
not met. Stakehold-
ers demand a high
confidence on the
return of their invest-
ments and do not
respond well to bro-
ken promises in mar-
ket guidance. An-
gloGold Ashanti has
taken the approach to
now put a calculated
confidence level on all
annual plans and
track where the actu-
als fell relative to the
given confidence lev-
el. This first requires
a paradigm shift in the way that data is managed and monitored. typical way to identify a statistical performance level is with a Per-
All measures company-wide now must be tracked using a Control centile. If the operating level falls where 75% of the data points are
Chart and Capability Histogram, illustrated in the diagram to the below that point then this is the 75th percentile. The Confidence
above right. A control chart graphs at the lowest interval required Level is a measure of the percentage of times a scenario will exceed
to ensure a consistent process. Many process outputs this interval a targeted operating level. So for a 90% Confidence Level the oper-
will be at a daily level. The objective is to have the fewest set of ating point is at the 10th percentile. When we plan using only aver-
measures to reliably monitor the consistency of the process. A Con- ages the highest Confidence Level you can achieve is 50% on the
trol Chart is a management tool that if 7 consecutive points fall process, which will decrease when combining the dependencies in
above or below the average they will highlight red indicating special the entire flow. The target confidence level within AngloGold Ashan-
cause variation. This alerts a time that management should investi- ti Integrated Planning currently is 80%, but can be higher or lower
gate the cause to the variance, and will prevent managers from if defended by local management. The last note on image 3 below
overreacting to a stable process common cause variation. The Ca- is that many times operations think if the performance is lower than
pability Histogram helps to identify if the process is performing with- expected then more capability must be added, for example by pur-
in the specification limits to consistently deliver overall results. This chasing new trucks and shovels. However, by decreasing the vari-
histogram also helps make decisions of the type of changes availa- ance in the current performance of a process will result in a higher
ble depending on capability. There is a three step process when confidence and also likely to increase the mean. The importance of
examining a confidence level, illustrated below. Once a large operating a stable process has been a key paradigm shift during the
enough sample of historical data can be formed into a histogram the implementation of Integrated Planning world-wide.

1. Divide histogram into percentiles.  2. Expressing Target Confidence.  3. Impact of Variation on Confidence. 

3
 INTEGRATED PLANNING: FITTING THE PIECES TOGETHER
The purpose of Integrated Planning is to set the confidence level of
the plan. The design is a multiple angle approach to validate the
budget plan and optimize the schedule. This first step is the “top
down approach” to Set Performance Targets, and answers the
question of what is the operation capable to achieve? The start is to
interpret the business expectations from the stakeholders and senior
management, then map the flow of the key productive processes.
There are 3 distinct types of process dependencies: Transform,
Transfer, and Store. Next, historical data is gathered for each step
in the flow and the capability can be calibrated to fit a mathematical
function. This technique moves away from the law of averages and
accounts for the actual variation in process capability. From this a
statistical model is run to simulate iterations of outcomes to display
a histogram distribution of the array of results possible. Then the
target Confidence Level is determined from the histogram. The next
step is to look at the operation from the “bottom up approach” with
the Operating Master Schedule. This takes the projected produc-
tion plan with variable rates and commencement dates and inte-
grates with downtime ranges expected from service and support
work. This Schedule is in the form of a model to be simulated in
iterations to form a histogram of what can the operation achieve? If
these histograms do not align or do not match desired confidence
levels then the strategies must be analyzed to understand how can
we achieve the plan? The first process to Set Production Strategy
looks at the critical constraint and branches the output into its key
drivers. In the case of the illustrative diagram below, hauling has
been branched as the critical constraint and using data available put
into a statistical model to simulate which drivers can be changed to
provide the greatest impact on the overall outcome. The other side
of this strategy process is to Set Service Strategy to analyze risk
management to find the most cost effective way to sustain the pro-
duction activities. This is done by analyzing the criticality, failure
modes and effects of each critical area or equipment in the opera-
tion. The result is a set of optimized work packages scheduled to the
correct interval to reliably deliver the plan. These changes are again
modeled to reflect the proposed improvements in the Operating Mas-
ter Schedule distribution. Once these confidence levels are met the
last step is to Set Expenditure Schedule to answer the question
how much will it cost? This approach adds the costing rate ranges to
each variable task into a histogram that forecasts the probable over-
all cost of achieving the plan. These 5 process steps of Integrated
Planning must be fed and monitored with proper measures to Ana-
lyze & Improve. This will set up the Work Management to deliver the
expected outcomes with the Right Work, in the Right Time, and the
Right Way. The last section will discuss how to implement this new
approach to planning and the tools that AngloGold Ashanti is using.
4
IMPLEMENTATION OF INTEGRATED PLANNING

The implementation of
Integrated Planning
began in 2012 with the
roll out of Performance
Targets to the global
operations. This was an
exercise by the corpo-
rate team to begin to
understand the confi-
dence levels of each
mine’s current capabili-
ties. In 2013, the ac-
countability to Set Per-
formance Targets has
been shifted to the sites
with regional support
for implementation.
The Americas region
has mobilized to lead
the way through the
rest of the concepts of
Integrated Planning in
this years cycle to de-
velop the business plan
for 2014. The delivery
dates on completing
these tasks, illustrated
on the left, align directly
with the milestones for
Executive Committee review and Board approval. The biggest challenge in this implementation is the change management piece to drive
adoption of the new approaches to validate the plan. Following the Prosci® ADKAR® methods, Awareness and Knowledge are the key ob-
stacles in accepting this change. These hurdles are being solved with affective communication from the region through the General Man-
agers and along side on-site Business Improvement teams. The goal is to have all concepts in place this year and sustainably stable by
December 2014 to fully realize the value from this new approach.

INTEGRATED PLANNING TOOLS

Integrated Planning will not replace any of the site’s current planning software and methods. However, new software will be added to
import the plan data and validate it with a confidence level. The corporate team has selected South African based Cyest Corporation’s
Qerent Modeler software as the main tool for Integrated Planning. Cyest has provided a lot of customizations to deliver on the multiple
angled approach of Integrated Planning, this custom version of Qerent software has been internally named OreSim. This software pro-
vides calibration to 53 different statistical distribution functions for accurately
forecasting actual processes. For some analysis, especially with setting Pro-
duction Strategies that can vary greatly depending on site conditions, addi-
tional statistical tools that can be quickly and simply utilized by site manage-
ment. Microsoft® Excel® has been very effective at managing strategies at a
short-range and medium-range level to incorporate variation in the day-to-
day planning of the operations. The Service Strategy development will utilize
the Isograph® RCM software called Availability Workbench. This will help
facilitate FMECA (Failure Mode Effect Criticality Analysis) workshops to opti-
mize the maintenance intervals and work packages. Other simulation model-
ing software may also be investigated to ensure the best possible analysis
will be done for the operations. These tools will drive Confidence in Business
Process Improvement through Integrated Planning.

5
 AngloGold Ashanti Americas
6300 South Syracuse Way,
Suite 500
Centennial, CO 80111

Feel free to send me questions

and feedback:

Ryan Miles
Direct: +1 303 889 1478
Fax: +1 303 889 0707

Email: rmiles@anglogoldna.com

ANGLOGOLD ASHANTI GLOBAL LOCATIONS:

6
 gold

Planning with Confidence

Ryan Miles Principal Advisor
Integrated Planning

Business Process Improvement through Integrated Planning

1
 Planning with Confidence Outline gold

 Who is AngloGold Ashanti?

 Context within an uncertain Gold Market.
 Why Business Process Framework?
 What is Integrated Planning?
 What is the Confidence Level of the Plan?
can take you to the ends of the earth.
 Questions

2
 AngloGold Ashanti gold

To be the leading mining company

 Third largest gold producer in the world in 2012 (Gold production of 4.16Moz)
 2012 All Injury Frequency Rate (AIFR) the lowest on record at 7.72 per million
hours worked.
 20 operations in 10 countries, on four continents, with corporate headquarters
in Johannesburg, South Africa
 61,242 employees globally (including contractors)
 Ore Reserves at end of 2011 totaled 75.6Moz and Mineral Resources of
230.9Moz. 2012 Resources increased 10.6Moz to 241.5Moz reflecting
exploration success at La Colosa and Tropicana.
 AngloGold Ashanti is listed on the Johannesburg Stock Exchange (JSE), the
London Stock Exchange (LSE), the New York Stock Exchange (NYSE), the Ghana
Stock Exchange (GhSE) and the Australian Securities Exchange (ASX).

3
Global Profile gold

4
 Top 10 Gold Producers for 2012 gold

1. Barrick Gold Corp. (7.42 Moz)

2. Newmont Mining Corporation (4.98 Moz)
3. AngloGold Ashanti (4.16 Moz)
4. Gold Fields Limited (3.3 Moz)
5. Kinross (2.62 Moz)
6. Goldcorp Inc. (2.39 Moz)
7. Newcrest (2.07 Moz)
8. Polyus Gold (1.68 Moz)
9. Harmony Gold (1.22 Moz)
10. Buenaventura (1.06 Moz)
Source: www.mining.com/top-10-gold-company-production-for-2012-80750/

5
 Gold Prices gold

New Years 2001 - $268.00 New Years 2007 - $636.90

New Years 2002 - $278.40 New Years 2008 - $835.60

New Years 2003 - $347.50 New Years 2009 - $881.10

New Years 2004 - $415.30 New Years 2010 - $1,096.50

New Years 2005 - $437.10 New Years 2011 - $1,421.60

New Years 2006 - $514.90 New Years 2012 - $1,675.00

Source: http://www.prweb.com/releases/New-Years-2013/Gold-Price/prweb10282925.htm

6
 Gold Prices gold

New Years 2001 - $268.00 New Years 2007 - $636.90

New Years 2002 - $278.40 New Years 2008 - $835.60

New Years 2003 - $347.50 New Years 2009 - $881.10

New Years 2004 - $415.30 New Years 2010 - $1,096.50

New Years 2005 - $437.10 New Years 2011 - $1,421.60

New Years 2006 - $514.90 New Years 2012 - $1,675.00

Source http://www.prweb.com/releases/New-Years-2013/Gold-Price/prweb10282925.htm

7
 Optimize the entire process flow gold

 The Goal – Written by Eliyahu M. Goldratt in 1984

– Revolutionized Manufacturing Industry.
 “The Goal is to make money now and in the future; everything
else is a means to the goal.”
 “Optimize the flow of the process, not local
efficiencies”
 Introduced the Theory of Constraints
 Dependent event variation must be
accounted for to optimize the process flow.

8
 Why Business Process Framework?
gold

The Business Process Framework is a system for managing the work that people do.

− To standardize the process for doing work

− To Reduce Variation and Provide Clarity
− The Right Work, Right Time, Right Way
− Planned work is 30% more effective than unplanned work.
− 60% of Environmental incidents are linked to poor planning.
− 80% of Safety issues are linked to inadequate planning.
− Planned maintenance support work is 10% of the cost of an in-service
failure.
− 60% - 80% of variation in Plant performance is caused by not doing the right
work, at the right time, in the right way.
− Properly constructed systems facilitate and enhance delivery of individual
effort.

© McAlear Management Consultants 2007

9
9
Business Process Framework gold

© McAlear Management Consultants 2007

10
 Integrated Planning Purpose gold

 Sets the Confidence Level of the Plan.

– Validates the plan
– Optimizes the schedule.
– Does not replace current planning software.
– Requires a statistical model to simulate the plan.

11
 Integrated Planning – 4 Questions gold

How much will it

cost?

What are we
capable to
achieve?
Can we actually
achieve it?

How do we achieve it?

12
 Integrated Planning – Multiple Angle Approach gold

Shot Muck
Inventory
Open pit Performance Targets “top down approach”
Drill & Blast

Transform Store Stockpile Stockpile

CIP & Gold
Transporting Crushing Milling
Leaching Production
Blasted
Muck
Underground Transfer Store Transform Store Transform Transform Transform
Advance

Transform Haul Cycle Capacity

Store

Spotting Loading Hauling

Production Dump Time Return Time
Time Time Time
Strategy
Production Strategy
Mine Plan

Operating Master Schedule

Production Activities
Plant Flow Operating time /
Input Production
contribution
Maintenance Calculate
Intervals Service Activities Simulation of
downtime / frequency
Input & production
Asset
Reliability Downtime / Simulate
Other Support Production Impact
Activities
Site Risk
Mitigation Input Calculate “bottom up approach”
Service
Strategy

13
 What is the Confidence Level of the Plan? gold

 Actuals can differ greatly from Plan for several reasons

– Different rock type characteristics
– Work Execution is not consistent
– Unplanned Maintenance
 Stakeholders demand high level of confidence in Returns
– Do not like broken promises in market guidance
 Results are below the expected outcome if dependent variation is
not accounted.
 Paradigm Shifts
– Statistical evaluation of total process flow
not only individual parts.
– Not using only averages but including
effects of Variation.

14
Which Process Performed Better? gold

15
 Variability analysis using histograms gold

Control Chart Histogram

13100
12500
11900
11300
10700
10100
9500
8900
8300
7700
7100
6500
5900
5300
4700
4100
3500
2900
2300
1700
1100

0 20 40 60 80 100 120 140

Frequency
Frequency can also be
140 expressed in a %

120

100
Frequency

80 Distribution
60

40

20

16
 Dividing histograms into percentiles
gold

400 Key Points

350
•75% of the data points

75th Percentile
300
are below the 75th
250
percentile value.
200

150 75% of
data point •The 75th percentile
100
number of a process is
50
seen as an stretch but
0
2,586 3,517 4,449 5,380 6,312 7,243 8,175 9,106 10,03810,969 achievable process target
that can be sustained if
the process is stable and
constant.

17
 Expressing targets in confidence levels
gold

400 Key Points

80% Confidence Level

350
•A confidence level is a
300
statistical calculation that
250
indicate the number of
200
data points that will
150
exceed a number
100
specified.
50

0
2,586 3,517 4,449 5,380 6,312 7,243 8,175 9,106 10,03810,969
•A confidence level
associated with a
number, measures the
number f times out of a
100 that the number can
be expected to be
achieved.

18
 Impact of variation on a confidence level
gold

500 Key Points

450
400
80% CL •Two processes with
350
Increase in
exactly the same mean
300 80% confidence
level
could have very different
250
200
numbers representing the
150 80% confidence level.
100
50 •By reducing variability the
0
381 1,732 3,082 4,432 5,783 7,133 8,483 9,833 11,18412,534 80% confidence level
number will move closer
to the mean.

•Reduction of variability
increases the
predictability of the
output.

19
 Aligning Confidence Levels
gold

Optimise the OMS to align with the SPT target …

SPT output
OMS output

… or reduce the SPT target to ensure the required

confidence levels in the plans.
20
Example of Integrated Planning gold

21
Questions? gold

22