Application of Computers and Operations Research in the Mineral Industry –

Dessureault, Ganguli, Kecojevic & Dwyer (eds)

© 2005 Taylor & Francis Group, London, ISBN 04 1537 449 9

Managing key business indicators through their lifecycle

C. Lumley
Anglo Platinum, South Africa

ABSTRACT: The management of the Anglo Platinum (AP) mining technical systems (MTS), having previ-
ously defined the strategy for the MTS environment, thereafter embarked upon a process to identify critical
business indicators that could potentially impact favourably on the bottom line of the company. Once these
indicators were identified, the value proposition of utilising IT to manage these indicators through their life-
cycle was studied and appropriate strategic and tactical plans put in place to maximise value. This strategic
process took place within a company that had experienced a dramatic expansion programme within the last
four years. The mining technical systems department supports the functional disciplines of geology, survey,
mine planning and evaluation. The team primarily supports mine management to effectively gather, analyse and
disseminate data relating to the ore reserve by integrating a number of strategically selected IT applications
to ensure that the safety, legal and operational requirements are met. This service to business is rendered by
management of a strategic outsource partner via tightly controlled service level agreements (SLA’s). The focus
of this paper will be on grade management and the framework used was a hybrid of Information Systems Archi-
tecture for this business indicator. By using information flow and understanding the decision-making points, the
appropriate techniques and reports were constructed to ensure alignment to the greater internal strategy of the
business.

1 INTRODUCTION of information needed, etc. Qualitative performance

Business indicators are more commonly know as Key
Performance Indicators (KPI’s), assist an organization
to define and gauge progress toward meeting organi-
zational objectives. Within the mining domain there
are a number of critical internal indicators related
to quantity, quality, safety, occupational hygiene and
environmental for example. Other external indicators
may relate to exchange rates, commodity prices, brand
or social investment programmes. Whatever KPI’s are
chosen, they must be aligned and support the com-
pany’s objectives. Their definition and how they are
quantified generally does not change, so they must
be measurable, as they will ultimately determine the
success or failure of the organisation.
Most organisations have hundreds of different indi-
cators that are collected and used to manage dif-
ferent parts of the business, however according to
Young, P. R. (2001), a performance indicator is defined
as follows:
A particular value or characteristic used to mea-
sure output or outcome. Measures of service qual-
ity, performance efficiency and customer satisfaction.
Quantitative performance indicators may include vol-
ume of backlogs, processing time, reference response
time, ILL delivery time, FTE to user ration, availability
indicators include user perception of service qual-
ity, user satisfaction with reference response, types or
levels of service available, etc.
In order to track the lifecycle of the grade indica-
tor within Anglo Platinum a simple framework was
required. After extensive research and consultation on
how to simply visually represent the grade indicator,
the system model from the Zachman Enterprise Archi-
tecture model was chosen. The model is described as
follows by Zachman:
The Framework as it applies to Enterprises is sim-
ply a logical structure for classifying and organizing
the descriptive representations of an Enterprise that are
significant to the management of the Enterprise as well
as to the development of the Enterprise’s systems. It
was derived from analogous structures that are found in
the older disciplines of Architecture/Construction and
Engineering/Manufacturing that classify and organize
the design artifacts created over the process of design-
ing and producing complex physical products (e.g.
buildings or airplanes.)
The system’s model is a thin slice of the greater
Enterprise Architecture model. The model that was
constructed is now a poster that was circulated
amongst operational management at the various busi-
ness units.

43

Copyright © 2005 Taylor & Francis Group plc, London, UK

 Figure 1. Schematic diagram of the functions supported by
the mining technical systems department in terms of the AP
value chain.
This paper documents the methodology employed
by Anglo Platinum to systemically define grade man-
agement both at an operational and strategic level. The
methodology entailed the following components:
• Taking a strategic view of managing key business
indicators
– Defining critical business processes
– Gap identification
– Constructing an information systems model for
grade management
• Implementation of the vision
– Project selection
– Project Implementation
• Influencing the business culture regarding grade
management
– Creating business ownership
• Recommendations
2 DEFINING CRITICAL BUSINESS
PROCESSES
The MTS department is tasked with providing all
aspects of IT strategy, development, support &
maintenance for the following functions within the
organization:
– Planning
– Evaluation
– Geology
– Survey
– Metallurgy
– Safety, Health & Environmental
In terms of aligning the MTS strategy with both the
strategy of the business and the overall IT strategy,
the domain of responsibility had to be defined and the
value chain was again used as the tool for reference.
By drilling down into the underlying processes
and sub-processes of the value chain, the team could
identify the various grade touch points within the sub-
processes. For example, within New Mine Scope, the
44
Copyright © 2005 Taylor & Francis Group plc, London, UK
Figure 2. Schematic diagram of the sub-processes within
the AP mining value chain.
Geological Modelling requires grade data from the
borehole analysis.
Now the picture of grade management throughout
its lifecycle was becoming clear and this critical busi-
ness indicator could now be defined within a process.
The connection between the different tasks could now
be represented in schematic form.
3 GAP IDENTIFICATION
Once the flow of data relating to grade had been
documented and better understood it became imme-
diately apparent that multiple manual interventions
were necessary from the users. This situation was
deemed inefficient and could potentially impact on the
integrity of the data.Additionally, no central grade data
store was available to the user base. The underground
mining samples were stored in a separate database
from the geological samples.
The annual mining planning cycle, which forms
part of the greater Strategic plan, was also using little
grade information within the CAD design programme
because it was cumbersome and required highly skilled
operators to import the grade models from the geolog-
ical modeling package. This obviously impacted on
the confidence levels regarding certain operational and
strategic decisions within the organisation.
From an operational perspective there were multiple
disconnects regarding grade data flows. Of immediate
concern was the information being generated by the
laboratories that was being sent back to the survey and
geological personnel in various formats.
Once the data flow was mapped between the various
systems and different functional areas, the schematic
 Figure 3. Schematic diagram showing part of the systems architecture for managing grade.

was presented back to business and a number of work- – All databases to communicate to each other;
shop held to first agree that the gap exists and secondly – Minimise manual transfers;
to brain storm solutions. These solutions formed part – Increase strategic and operational alignment.
of an initial wish list that was ranked and prioritised at
Once the present state was documented a vision for
a central MTS steering committee.
2005 was constructed and presented back to business.
Once agreed, this schematic of the systems landscape
for grade management was laminated and forwarded
4 CONSTRUCTING AN INFORMATION
to all the mineral resource management teams across
SYSTEMS MODEL FOR GRADE
the organisation. Since 2003 most of the projects that
MANAGEMENT
were envisaged have materialised and little manual
intervention is required. This itself is a strong mes-
Now that the flow of data regarding grade was under-
sage back from business personnel that this strategic
stood and documented, the challenge was to create a
endeavour has added value to their operations.
schematic that was easy to understand and useful to
the operational teams. The schematic had to show the
following attributes:
5 IMPLEMENTATION OF THE VISION
– The chronological sequence of tasks;
– Various interrelated systems and their integration
5.1 Project selection
points;
– High level responsibilities of operational personnel The exercise initially identified 6 projects that were
regarding these systems; categorised into either operational or strategic. After
– Underlying databases. much debate and work shopping, a business prin-
cipal was agreed that the operational projects were
Part of the model is illustrated in Figure 3.
to be completed first, in order to establish an inte-
Other business drivers to conclude the model
grated framework for site based geological and survey
included:
teams. It was also identified that there was poten-
– Enhanced business and technology integration; tial to improve the stope width control process at

45

Copyright © 2005 Taylor & Francis Group plc, London, UK

 Figure 4. Schematic diagram showing part of the systems architecture for managing grade.

Figure 5. Schematic diagram showing project management governance framework.

the underground operations. Any reduction in dilution longer-term plans. Part of the systems architecture for
would have bottom line benefits for the organisation. the strategic planning cycle is represented in Figure 4.
From a strategic perspective it was recognised that bet- The return on investment (ROI) per project was cal-
ter quality polygons were desirable as inputs for the culated as part of the process for motivating a budget

46

Copyright © 2005 Taylor & Francis Group plc, London, UK

 Figure 6. Schematic diagram showing the Mining Technical Systems Steering Committee operating model.
for the projects. The internal rate of return was used as
the discount rate for the Net Present Value (NPV) anal-
ysis. This is in turn was plotted against the risk of the
project, which can be qualitatively determined relating
to its size, time period, clarity of business needs and
the proposed technology platform.
5.2 Project implementation
The following business principles were agreed upon
regarding project implementation:
– Use Prince II project management methodology
according to the internal Project Support Office;
– Project team comprising business, Group IT and
the outsource partners guided by the relevant user
forums;
– Formal quarterly feedback to the Mining Technical
Steercom;
– Business ownership for benefits realisation.
The project governance structure is represented in
Figure 5.
6 INFLUENCING THE BUSINESS CULTURE
REGARDING GRADE MANAGEMENT
6.1 Creating business ownership
The approach entailed convincing management that
grade could be better managed than was the current
47
Copyright © 2005 Taylor & Francis Group plc, London, UK
case. These debates were encouraged via the Min-
ing Technical Steering committee and support was
obtained and mandated via the group regarding the
strategy going forward. Proposed budgets were also
authorised by the business units via this forum.
At a user level, various details were contested and
discussed at a user group. The chairman of the user
group was a member of the Mining Technical Systems
Steering committee and was tasked with making spe-
cific recommendations regarding many contentious
matters.
7 CONCLUSIONS
This strategic exercise resulted in a group strategy for
grade management that was embraced by the mineral
resource management teams across the organisation.
Amongst the numerous learning’s, the crux of the suc-
cess of this initiative was to establish a governance
framework for the Mining Technical Systems domain.
The framework is designed and operates as follows:
As can be seen from the framework, the vision and
strategy is generated by three parties: namely busi-
ness representatives, group IT staff and the outsource
partner. This approach provided the right mix of skills
to generate a model that the business could use in
their daily operations. Simultaneously, the needs of
the strategic planners were met.
 The systems architecture diagram that was made
into a poster indicates which systems are used for mod-
elling, planning, measuring or controlling information
related to grade or content. Furthermore, the diagram
suggests by whom which system is to be utilised to
generate information, while simultaneously indicat-
ing where the information resides. This has assisted
in defining various roles and responsibilities within
the mineral resource management teams.
Additionally, the diagram serves as an educational
tool to people interested in seeing the holistic pic-
ture relating to the lifecycle of grade within Anglo
Platinum.
ACKNOWLEDGEMENTS
The support and permission of Anglo Platinum and
GMSI management in the preparation of this paper
and for permission to publish this paper is greatly
appreciated.
48
Copyright © 2005 Taylor & Francis Group plc, London, UK
The software distributors and developers: GMSI are
acknowledged for their assistance in integrating the
applications of the systems for Anglo Platinum.
REFERENCES
Young, P.R. 2001. Electronic services and library perfor-
mance measurement: A definitional challenge: 21.
Rowe, Mason, Dickel, Mann, Mockler. 1994. Strategic
Management: a methodological approach. 4th Edition.
Addison-Wesley. Reading Mass.
Zachman, J.A. 1987. A Framework for Information Systems
Architecture. IBM Systems Journal, vol. 26, no. 3, IBM
Publication G321-5298. 914-945-3836 or 914-945-2018.
Lumley, C. 2003. Value chain based strategy formulation
for mining technical systems. Application of Computers
and Operations Research in the Minerals Industries, South
African Institute of Mining and Metallurgy.