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Ame Barrick Toronto 2008
1. Lean Lessons Learned
Dave Elliott, Continuous Improvement Director
Trevor Krawchyk, Learning Organization Manager
Barrick Gold Corporation
2. Today’s Presentation
• Barrick’s Lean Journey:
• Why and how we started
• Our implementation strategy
• The critical success factors
• Summary
• Q&A
2
3. CAUTIONARY STATEMENT ON
FORWARD-LOOKING INFORMATION
Certain information contained or incorporated by reference in this presentation, including any information as to our future financial or operating
performance, constitutes quot;forward-looking statementsquot;. All statements, other than statements of historical fact, are forward-looking statements.
The words quot;believequot;, quot;expectquot;, quot;anticipatequot;, quot;contemplatequot;, quot;targetquot;, quot;planquot;, quot;intendsquot;, quot;continuequot;, quot;budgetquot;, quot;estimatequot;, quot;mayquot;, quot;willquot;, quot;schedulequot;
and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable by us, are inherently subject to significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: fluctuations in the currency markets (such as the Canadian and Australian dollars versus the U.S.
dollar); fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel and electricity); changes
in U.S. dollar interest rates or gold lease rates that could impact the mark to market value of outstanding derivative instruments and ongoing
payments/receipts under interest rate swaps and variable rate debt obligations; risks arising from holding derivative instruments (such as credit
risk, market liquidity risk and mark to market risk); changes in national and local government legislation, taxation, controls, regulations and political
or economic developments in Canada, the United States, Dominican Republic, Australia, Papua New Guinea, Chile, Peru, Argentina, South Africa,
Tanzania, Russia, Pakistan or Barbados or other countries in which we do or may carry on business in the future; business opportunities that may
be presented to, or pursued by, us; our ability to successfully integrate acquisitions, operating or technical difficulties in connection with mining or
development activities; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits;
diminishing quantities or grades of reserves; adverse changes in our credit rating; and contests over title to properties, particularly title to
undeveloped properties. In addition, there are risks and hazards associated with the business of exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of
inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual
results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf
of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements
made in this presentation are qualified by these cautionary statements. Specific reference is made to Barrick’s most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying
forward-looking statements.
We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or
otherwise, except to the extent required by applicable laws.
3
9. Dimensions of CI at Barrick
CULTURE OF
FOCUS ON
CONTINUOUS
VALUE
IMPROVEMENT
CREATION
“Get results, change the culture along the way”
9
10. Barrick’s CI Launch - 2002
• Top down support
• Operations focused
• Quick, high impact improvement at Goldstrike property
• Expanded to all 9 sites (now 27)
“Get results, change the
culture along the way”
10
11. Barrick Vision and Values
Vision:
To be the world’s best gold company by finding,
acquiring, developing and producing quality reserves in
a safe, profitable and socially responsible manner.
BEHAVE LIKE AN OWNER
ACT WITH A SENSE OF URGENCY
BE A TEAM PLAYER
CONTINUOUSLY IMPROVE
DELIVER RESULTS
11
13. Barrick CI – Critical Success Factors
1. Leadership
2. Focus on Process
3. Measurement
4. People & Teamwork
5. Communication and Visibility
13
14. Barrick CI – Critical Success Factors
1. Leadership
• Sustained Commitment from the Senior Leadership
• Highly focused on long-term benefits
• Included in Personal Performance Commitments
• Full-time dedicated global CI Team of Certified Coaches
14
15. Barrick CI Organizational Model
Org. Effect. Regional
Ex VP President
Mine
Operations
CI Director GM
Director
CI Mgr
CI Leader
Learning
Org. Mgr
Processing Processing
Process &
Supt CI Coach
Systems
Mgr
Maintenance
Maintenance
CI Coach
Supt
CI Coach
Mining Mining
Supt CI Coach
Corporate
Region Admin Admin
Supt CI Coach
15
Site
16. Barrick CI – Critical Success Factors
2. Focus on Process:
• Extensive use of all applicable lean tools
• Operations Review Teams (ORT’s) embedded in business cycle
(PDR or PDCA)
16
17. Barrick Business Management Cycle
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Talent Review
REVIEW
ORT / Site gap analysis
REVIEW
Strategic Planning
PLAN
Budget
PLAN
Performance
PLAN
Commitments
Tactical Plan
PLAN
Execution
DO
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18. ORTs – A Key Business Process
1.Review 3. Do
2. Plan
(Assessment) (Execute)
(Site Visit)
Objectives Objectives
Objectives
• Current state • Develop & execute
• Leadership support
• Opportunity action plans
and commitment
Identification • Monthly Follow-up
• Design solutions
“Go to Gemba”
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19. Barrick CI – Critical Success Factors
3. Measurement
• Focus on Metrics and KPI’s
• Track the value creation (waste reduction)
• The Culture Scorecard – yes, you can measure culture
19
20. Barrick CI Value Creation
Value Creation
2003 2004 2005 2006 2007
Quality Cost Throughput Total
20
23. Barrick Culture Scorecard
Current 12 month
Sections Elements Key Themes To Close Gaps
Score Target
1.8 2.5
Vision & Values
2.0 2.3
Business Strategy and Value Streams
Foundation 0.7 2.3
Standardized Processes
2.0 2.0
Culture of CI
1.6 2.3
Foundation Total
1.7 2.3
Recruited for Fit
1.4 2.4
Employee Performance and Development
People & Leadership 1.8 2.3
Talent Management
1.6 2.3
People and Leadership Total
1.3 2.0
Clear Targets and Goals
1.0 2.0
Visual Workplace
Business
2.0 2.5
Regular Structured Reviews (Plan-Do-Review)
Performance
1.0 3.0
Workplace Organization (5S)
Management 1.3 2.0
Organization Structured for Performance
1.2 2.5
Business Performance Management Total
1.4 2.3
Employee Involvement and Problem Solving
Learning & 1.0 2.0
Knowledge Sharing
1.0 3.0
Knowledge Sharing CI Resources/Support
1.3 2.4
Learning & Knowledge Sharing Total
0.8 1.8
Corporate Social Responsibility
External Relationship 0.3 1.0
Sustainable Community Development
Suppliers, Vendors, Contractors & Consultants
Management 1.3 2.3
0.8 1.7
External Relationship Management Total
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Overall Score 1.3 2.2
24. Barrick Cultural Measurement Framework
S3
THE BEST GOLD
COMPANY Everyone
Engaged In CI
External Relationship
External Relationship
Management
Learning and
Management
Learning and
Management
Performance
Knowledge
Management
Performance
Knowledge
Leadership
Leadership
People &
Sharing
Business
People &
Sharing
Business
Results
S2
Strong results in
critical areas
S1
Getting started, Processes and CI Culture
Standardized
limited results
Business Strategy & Value Streams
S0 VISION & VALUES
Not happening
Time
Focused initiatives in
Strong leaders
Major gaps in basic Enterprise-wide CI
structured process to
making big, often
planning and culture
deliver high impact
tough, changes
operating (INDEPENDENT)
(DEPENDENT)
(PUSH)
standards (CHAOS)
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25. Barrick CI – Culture vs. Value Creation?
Value Creation and Culture
3.0
2.5
Value Creation
Culture Score
1.9
2.0
1.5
1.5
1.1
1.0
1.0
0.5
-
Region A Region B Region C Region D
Target Actual Culture score
Higher the Culture Score = Greater the Value Creation
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26. Barrick CI – Critical Success Factors
4. People & Teamwork
• Employee Engagement & Involvement
• Employees given accountability for results
• Willingness to take chances & challenge the status quo
• “CI Awards” - Recognition and Reward
26
27. Barrick CI Awards
Recognize and reward employees for improvements
made during the year in the following 3 categories:
1. Employee involvement and participation
2. Idea generation / innovation
3. Achievement of significant results
27
28. Barrick CI – Critical Success Factors
5. Communication and Visibility
• Create formal systems
• Establish Best Practices
• Share success
(it’s contagious!)
Continuous Improvement
Continuous Improvement
Continuous Improvement
Pocket Guide
Pocket Guide
Pocket Guide
First Edition
First Edition
First Edition
28
30. Our Current Business Environment
• Volatile economic forces
• Fluctuating Gold Prices
(+/- 25% in 1 month)
• Inflationary cost pressures
• Labour & commodity shortages
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31. Summary
– 2 Dimensions
• Value Creation
• Culture
– Critical Success Factors
• Leadership Commitment
• Focus on Process
• Measurement
• Communication and Visibility
• People and Teamwork
31
33. Thank You
Dave Elliott – delliott@barrick.com
Trevor Krawchyk – tkrawchyk@barrick.com
Please return your completed session
survey to the room host.