Assessment of Management System and Results

PNR-000054, Rev.: 08 - 09/08/2022

Department: Operational Excellence
Accountable: Bruna Maffra, Vale ID: 01590414, Department: Operational Excellence - Management
Target audience: Leaders, Staff, Operational Excellence
Required training: ( x ) YES ( ) NO

Expected results: Standardize the assessment process of the VPS Management Model, to
ensure compliance with the model's application.

1. INTRODUCTION
12 purpose of the Management Model Assessment is to identify the maturity level of the VPS
The
implementation and serve as a guide for the areas towards excellence, to establish management
practices for Vale globally and to strengthen a unique management identity that is recognized as
a competitive differentiator for the company.

VPS strengthens Vale’s organizational culture through people development, standardization of

best practices, operational discipline and compliance with the routine. The implementation and
the assessment of VPS are mandatory and must be performed globally by the operational
and corporate areas.

The VPS maturity curve helps people to understand the changes in attitude and action that must
occur throughout the implementation of the Management Model. The curve adopted by Vale was
inspired by Dupont's Bradley Curve, it demonstrates that a successful safety culture empowers
people, while improves quality, productivity, and profits.

The VPS maturity curve has 5 stages:

Image 1 - VPS maturity curve

The model assessment is part of the PDCA methodology (Plan, Do, Check, Act), it is an
opportunity to seek improvement points at the processes, with the benefit of improve the company
performance through the stability of processes and improvement of the results. The VPS
requirements ensure conformity with the Standards ISO 9001, 14001, 45001 and 55001.

2. DEFINITIONS

Vale’s Management Model Excellence Index, abbreviated as IE, measures the VPS maturity level
of the 3 dimensions: Leadership - IEL; Technical - IET and Method - IEG. It is possible to
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calculate a single IE from the average maturity of the 3 dimensions at any hierarquical level. The
indexes are calculated through the assessment of processes and results related to the minimum
requirements in each of the 17 VPS elements. The Excellence Index can be calculated either for
dimension or element, as described below:

IEL - Leadership IET - Technical IEG - Method

1. Behaviors and Commitment of the 4. Perception and Risk 13. Strategy Deployment
Leadership Management 14. Routine Management
2. People Management 5. HSEC 15. Process and Standardization
3. Organizational Design 6. Projects and Construction 16. Problem Solving and
7. Operations Continuous Improvement
8. Maintenance 17. Assessment of Management
9. Change Management System and Results
10. Systems and Technology
11. Supplies and Services
12. Emergency, Crisis and
Business Continuity Plans
Table 1 – Excellence Index of Vale’s Management Model

Leadership and Method dimensions are applicable for all Vale’s managers units. At Technical
dimension, the assessment must respect the structure of Functions bellow. The elements 4.
Perception and Risk Management and 5. Healthy, Safety, Environment and Communities are
applicable for all areas of the company.

MAINTENANCE FUNCTION: Group of maintenance areas responsible for processes related to

planning, reliability, engineering, and execution of a specific asset portfolio. (PNR-000003 - Basic
Operational and Maintenance Standards).

OPERATION FUNCTION: Group of operational areas responsible for processes related to

planning, reliability, engineering, and actual operation of a specific asset portfolio. (PNR-000003
- Basic Operational and Maintenance Standards).

PROJECT FUNCTION: Group of project areas that develops and executes projects and
constructions according to a methodology that include technical and business processes.

The table below illustrates the applicability of the VPS elements.

1. Behaviors and Commitment of

15. Process and Standardization

17. Assessment of Management

5. Healthy, Safety, Environment

10. Systems and Technology

6. Projects and Construction

12. Emergency, Crisis and

11. Supplies and Services

Business Continuity Plans

14. Routine Management

Continuous Improvement
13. Strategy Deployment
3. Organizational Design

16. Problem Solving and

9. Change Management
2. People Management

4. Perception and Risk

VPS elements
System and Results

applicability per
and Communities

8. Maintenance

function
the Leadership

7. Operations
Management

Operation Function X X X X X X X X X X X X X X X
Maintenance Function X X X X X X X X X X X X X X X
Project Function X X X X X X X X X* X X X X X X
Other areas X X X X X X X X X X X X X X
*If the project has its own Supply Department
Table 2 - VPS elements applicability per function

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3. TYPES OF ASSESSMENTS

There are 2 types of assessments of the management model:

Self-assessment: it is a self-declaration of the area regards its maturity level on the management
model requirements. The self-assessments are mandatory for all areas and must follow the official
schedule defined by Operational Excellence. The self-assessments can also be performed at
higher frequency to evaluate the implementation maturity of specific elements or requirements

Formal Assessment: performed by the Second Line of Defense through multifunctional internal
groups of specialists, that assess conformity and maturity of process and results based on the
VPS requirements, it is preferred to be performed integrated between the 3 VPS dimensions. The
formal assessments follow a defined schedule according to the Operational Excellence strategy.

4. ARCHITECTURE OF VALE’S MANAGEMENT MODEL-VPS ASSESSMENT

There is an assessment checklist associated with each of the 17 elements of VPS. The scores
range from 0 to 4 in alignment with the VPS maturity model presented in Section 1

0 - Nonexistent: Practice not implemented

1 - Weak: In early stages of implementation, only a few examples
2 - Under Implementation: Process under implementation, still not comprehensive
3 - Implemented: Process fully implemented and achieving the expected results
4 - Excellence: Process incorporated into routine and continuously improved

From level 3 and above, the expected results from the implementation of the requirements are
being achieved. The progress in the maturity level is directly related to the area results, as
illustrated below:

Image 2 - VPS Maturity level

The maturity is defined by the full compliance with all the items of the level, if one level is partially
met then the maturity can not be classified in that level. The image below brings an example of
an hypothetical assessment of the requirement 13.3 of the element 13 - Strategy deployment. In
the example the maturity would be 2 - Under Implementation.

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Image 3 - Assessment rule for the requirements

4.1 Elements

The Excellence Index of each VPS Elements is calculated by the average grade of its
requirements, and the result resolved to two decimal places. The best visualization of each
element maturity is a radar chart, where each spoke represents one requirement, as illustrated
below.

Image 4 - Example of IEG - Routine Management

4.2 Dimensions

The maturity of the VPS dimensions is calculated by the average grade of its elements and
resolved to two decimal places. The best visualization of each dimension maturity is a radar chart,
where each spoke represents one element, as illustrated below.

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Image 5 - Example of IEG

4.3 Evaluation by hierarchy

The Excellence Index can be calculated at all leadership levels. For the formal assessments, it is
necessary to determine sample and the level to obtain the results. The IE from one level can be
calculated through the average IEs from the levels bellow.

Vale IE must be calculated through the average score of:

• Executive Vice President Iron Ore;

• Executive Vice President Base Metals;
• Executive Vice President Global Business Solutions;
• Average score of the other Vice Presidents.

5. VPS ASSESSMENT STRATEGY

Before carrying out an assessment, the employees of the area should be trained in the
Management Model. It is mandatory to attend the online VPS training, to read the VPS Guide and
the PNRs associated to the elements. The guidelines and rules for the assessments should also
be communicated to the employees involved. The assessments must be registered at the official
tool and follow the guidelines informed by Operational Excellence.

The self-assessments and formal assessments are carried out to identify opportunities in the
implementation and utilization of VPS, with the purpose to keep and/or improve the results.

Based on the opportunities identified, the area should prioritize the requirements that will be
worked in the implementation. This prioritization should be aligned both with the area needs as
with the VPS strategy defined for Vale and/or business in the year.

Once priorities are defined, an implementation plan must be created with the purpose to support
the area in the implementation of the management model. The plan should include the elements
and requirements that will be worked in the period. It should also clearly expose the objective
intended to be achieved at the end of its execution.
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6. ROLES AND RESPONSIBILITIES

The image below details the roles and responsibilities of the lines of defense in the assessment
of the management system.

Image 6 - Roles and responsibilities

7. ASSESSMENT OUTCOMES

The main outcomes of the self-assessments and formal assessments of VPS are:

Excellence Index: Calculated by dimension, element and/or requirement, according to the

assessment scope;

Identification of the main opportunities in the management model implementation: Based

on the gaps identified, the areas can prioritize the main improvement opportunities and create an
implementation plan with the purpose of improving people’s lives and results.

Whenever there is a formal assessment, a final report must be produced identifying the critical
and systemic improvement opportunities and the best practices of the area. The report will be
used as an input to build the VPS implementation plan;

VPS Implementation plan: The plan must be created and/or updated after each assessment
and can be consolidated at the Executive Manager level. It must have the following details:

• Dimension;
• Element;
• Actual grade;
• Target grade;
• Action;
• Responsible;
• Due date.

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8. FOLLOW-UP OF THE IMPLEMENTATION PLAN

The leader is accountable for the VPS implementation plan. This role should not be delegated
to other people (e.g. focal point). Management review of the VPS Implementation Plan must
be performed at least monthly.

The leader must guarantee focus and the prioritization of actions during the implementation of the
plan and check the effectiveness. The leader is the responsible to support the implementation of
the actions, providing the necessary resources, developing the team, and acting as help chain
whenever is necessary.

It is essential to follow the processes evolution and the achievement of the results to ensure an
upgrade in the management model maturity and to promote the continuous improvement.

9. EXPECTED RESULTS AND LEARNINGS

It is expected with the self-assessments and formal assessments of the management model:

Image 7 - Expected Results and Learnings

10. APPENDICES

• Appendix 1 - Leadership Maturity Checklist;

• Appendix 2 - Technical Maturity Checklist;
• Appendix 3 - Method Maturity Checklist;
• Appendix 04 - Excellence Index Calculation.

11. DEVELOPERS

Name Dimension
Fabiola Vasques Andrade Queiroz Leadership
Vitor Bueckmann Technical
Victor Taveira Method

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