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Transformation Towards A
Continuous Improvement Culture
Trevor Krawchyk, Business Improvement Specialist

March 2011 – SME Denver
Today’s Presentation

 Barrick’s Culture of Continuous Improvement:
   •   Why and how we started
   •   Our implementation strategy
   •   The critical success factors
   •   Summary
   •   Q&A
About Barrick




 • Gold Industry Leader
 • 20,000+ Employees
 • 25 Operating Mines
 • One of Canada’s Largest Companies
Background: Change needed?



     “It is not necessary to change.
       Survival is not mandatory.”

                              Dr. Deming
Barrick’s opportunity (need) for change!

    2002 State:
    • Low gold prices
    • Tight margins
    • Rising costs
    • Poor equipment effectiveness (OEE)
Background: Benchmarked The Best




             Two common themes:
             1. Formal CI System
                2. CI Culture
Dimensions of CI at Barrick



   FOCUS ON                             CULTURE OF
     VALUE                              CONTINUOUS
   CREATION                            IMPROVEMENT




    “Get results, change the culture along the way”
Barrick’s CI Launch - 2002

   • Top down support
   • Operations focused
   • Quick, high impact improvement at Goldstrike
     property (pilot)
   • Expanded to all 9 sites (now 25)



 “Get results, change the
  culture along the way”
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
Barrick CI Vision




 “Everyone Engaged in Improvement Every Day”
Barrick CI – Critical Success Factors
 1.   Leadership
 2.   Focus on Process
 3.   Measurement
 4.   People & Teamwork
 5.   Communication and Visibility
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 BI Team
Barrick CI – Critical Success Factors
 2. Focus on Process:
    • Extensive use of all applicable lean/CI tools
    • Operations Review Teams (ORT’s) embedded in business cycle
      (PDR or PDCA)
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 Commitments
                                                                                                           PLAN
Tactical Plan
                                                                                                             PLAN
Execution                                                                   DO

   ORT Process
                  1. Review                          2. Plan                            3. Do
                     (Assessment)                      (Site Visit)                        (Execute)

                  Objectives                         Objectives                         Objectives

                  •   Current state                  • Leadership support and           • Develop & execute action
                  •   Opportunity                      commitment                         plans
                      Identification                 • Design solutions                 • Monthly Follow-up

                                                     “Go to Gemba”
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
Barrick CI Value Creation
   Value Creation




                    2003   2004   2005             2006       2007         2008   2009       2010
                                         Quality    Cost   Throughput   Total


                                                                                         (Illustrative)
Barrick Culture Scorecard
                                                                        Current 12 month
      Sections                           Elements                        Score   Target    Key Themes To Close Gaps
                        Vision & Values                                  1.8      2.5
                        Business Strategy and Value Streams              2.0      2.3
     Foundation         Standardized Processes                           0.7      2.3
                        Culture of CI                                    2.0      2.0
                        Foundation Total                                 1.6      2.3
                        Recruited for Fit                                1.7      2.3
                        Employee Performance and Development             1.4      2.4
 People & Leadership    Talent Management                                1.8      2.3
                        People and Leadership Total                      1.6      2.3
                        Clear Targets and Goals                          1.3      2.0
                        Visual Workplace                                 1.0      2.0
     Business
                        Regular Structured Reviews (Plan-Do-Review)      2.0      2.5
    Performance
                        Workplace Organization (5S)                      1.0      3.0
    Management          Organization Structured for Performance          1.3      2.0
                        Business Performance Management Total            1.2      2.5
                        Employee Involvement and Problem Solving         1.4      2.3
    Learning &          Knowledge Sharing                                1.0      2.0
 Knowledge Sharing      CI Resources/Support                             1.0      3.0
                        Learning & Knowledge Sharing Total               1.3      2.4
                        Corporate Social Responsibility                  0.8      1.8
External Relationship   Sustainable Community Development                0.3      1.0
    Management          Suppliers, Vendors, Contractors & Consultants    1.3      2.3
                        External Relationship Management Total           0.8      1.7
                                   Overall Score                         1.3      2.2
Barrick Cultural Measurement Framework

                                                                                  S3
                                                                                Everyone
                                                                              Engaged In CI




Results
                                                          S2
                                                     Strong results in
                                                       critical areas
                                 S1
                               Getting started,
                               limited results
            S0
               Not happening
                                                                                       Time
          Major gaps in        Strong leaders     Focused initiatives    Enterprise-wide CI
          basic planning       making big,        in structured          culture
          and operating        often tough,       process to deliver     (INDEPENDENT)
          standards            changes            high impact
          (CHAOS)              (PUSH)             (DEPENDENT)
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 Culture Score = Greater Value Creation
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
Barrick CI Awards
Recognize and reward employees for improvements made during the
year in the following 4 categories:
1. Employee involvement and participation
2. Idea generation / innovation
3. Achievement of significant results
4. Knowledge seeking and application
Barrick CI – Critical Success Factors
5. Communication and Visibility
  • Create formal systems
  • Establish Best Practices
  • Share success
                                   Continuous
                                   Continuous
                                  Continuous Improvement
                                         Handbook

    (it’s contagious!)            Improvemen
                                  Improvemen
                                    t Pocket
                                    t Pocket
                                      Guide
                                      Guide

                                           First Edition
                                          First Edition
Our Current Business Environment
 • Volatile economic forces
 • Fluctuating Gold Prices
   (+/- 15% in 1 month)
 • Inflationary cost pressures
 • Labour & commodity shortages
Summary
  2 Dimensions
    • Value Creation
    • Culture


  Critical Success Factors
    • Leadership Commitment
    • Focus on Process
    • Measurement
    • Communication and Visibility
    • People and Teamwork
Thank You

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Barrick SME (Mar 2011)

  • 1. Transformation Towards A Continuous Improvement Culture Trevor Krawchyk, Business Improvement Specialist March 2011 – SME Denver
  • 2. Today’s Presentation Barrick’s Culture of Continuous Improvement: • Why and how we started • Our implementation strategy • The critical success factors • Summary • Q&A
  • 3. About Barrick • Gold Industry Leader • 20,000+ Employees • 25 Operating Mines • One of Canada’s Largest Companies
  • 4. Background: Change needed? “It is not necessary to change. Survival is not mandatory.” Dr. Deming
  • 5. Barrick’s opportunity (need) for change! 2002 State: • Low gold prices • Tight margins • Rising costs • Poor equipment effectiveness (OEE)
  • 6. Background: Benchmarked The Best Two common themes: 1. Formal CI System 2. CI Culture
  • 7. Dimensions of CI at Barrick FOCUS ON CULTURE OF VALUE CONTINUOUS CREATION IMPROVEMENT “Get results, change the culture along the way”
  • 8. Barrick’s CI Launch - 2002 • Top down support • Operations focused • Quick, high impact improvement at Goldstrike property (pilot) • Expanded to all 9 sites (now 25) “Get results, change the culture along the way”
  • 9. 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
  • 10. Barrick CI Vision “Everyone Engaged in Improvement Every Day”
  • 11. Barrick CI – Critical Success Factors 1. Leadership 2. Focus on Process 3. Measurement 4. People & Teamwork 5. Communication and Visibility
  • 12. 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 BI Team
  • 13. Barrick CI – Critical Success Factors 2. Focus on Process: • Extensive use of all applicable lean/CI tools • Operations Review Teams (ORT’s) embedded in business cycle (PDR or PDCA)
  • 14. 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 Commitments PLAN Tactical Plan PLAN Execution DO ORT Process 1. Review 2. Plan 3. Do (Assessment) (Site Visit) (Execute) Objectives Objectives Objectives • Current state • Leadership support and • Develop & execute action • Opportunity commitment plans Identification • Design solutions • Monthly Follow-up “Go to Gemba”
  • 15. 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
  • 16. Barrick CI Value Creation Value Creation 2003 2004 2005 2006 2007 2008 2009 2010 Quality Cost Throughput Total (Illustrative)
  • 17. Barrick Culture Scorecard Current 12 month Sections Elements Score Target Key Themes To Close Gaps Vision & Values 1.8 2.5 Business Strategy and Value Streams 2.0 2.3 Foundation Standardized Processes 0.7 2.3 Culture of CI 2.0 2.0 Foundation Total 1.6 2.3 Recruited for Fit 1.7 2.3 Employee Performance and Development 1.4 2.4 People & Leadership Talent Management 1.8 2.3 People and Leadership Total 1.6 2.3 Clear Targets and Goals 1.3 2.0 Visual Workplace 1.0 2.0 Business Regular Structured Reviews (Plan-Do-Review) 2.0 2.5 Performance Workplace Organization (5S) 1.0 3.0 Management Organization Structured for Performance 1.3 2.0 Business Performance Management Total 1.2 2.5 Employee Involvement and Problem Solving 1.4 2.3 Learning & Knowledge Sharing 1.0 2.0 Knowledge Sharing CI Resources/Support 1.0 3.0 Learning & Knowledge Sharing Total 1.3 2.4 Corporate Social Responsibility 0.8 1.8 External Relationship Sustainable Community Development 0.3 1.0 Management Suppliers, Vendors, Contractors & Consultants 1.3 2.3 External Relationship Management Total 0.8 1.7 Overall Score 1.3 2.2
  • 18. Barrick Cultural Measurement Framework S3 Everyone Engaged In CI Results S2 Strong results in critical areas S1 Getting started, limited results S0 Not happening Time Major gaps in Strong leaders Focused initiatives Enterprise-wide CI basic planning making big, in structured culture and operating often tough, process to deliver (INDEPENDENT) standards changes high impact (CHAOS) (PUSH) (DEPENDENT)
  • 19. 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 Culture Score = Greater Value Creation
  • 20. 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
  • 21. Barrick CI Awards Recognize and reward employees for improvements made during the year in the following 4 categories: 1. Employee involvement and participation 2. Idea generation / innovation 3. Achievement of significant results 4. Knowledge seeking and application
  • 22. Barrick CI – Critical Success Factors 5. Communication and Visibility • Create formal systems • Establish Best Practices • Share success Continuous Continuous Continuous Improvement Handbook (it’s contagious!) Improvemen Improvemen t Pocket t Pocket Guide Guide First Edition First Edition
  • 23. Our Current Business Environment • Volatile economic forces • Fluctuating Gold Prices (+/- 15% in 1 month) • Inflationary cost pressures • Labour & commodity shortages
  • 24. Summary 2 Dimensions • Value Creation • Culture Critical Success Factors • Leadership Commitment • Focus on Process • Measurement • Communication and Visibility • People and Teamwork