THE MANAGEMENT OF SURFACE MINES

NAME OF AUTHOR: A.C. VAN DER WESTHUIZEN

Submitted as a partial requirement for the course POY 783

DATE: 14 MAY 2010

ABSTR ACT THE MAN AGEMENT OF SURFACE MINES ALBERT VAN DER WESTHUIZEN
In a surface mining operation there are a number of core processes or systems that make up the mining value stream. These processes or systems however cannot function effectively without the contributions from service functions that provide specialised services in support of their activities. In order for the mining systems to effectively deliver on their mandate, coordination between the departments responsible for systems and sub systems within the mining value stream as well as between these departments and service departments are paramount. The purpose of this assignment was to review and analyse the management structure in a surface mine taking into account both the departments involved in the main value stream as well as service departments and how communication and integration between departments, processes and systems are achieved. The information and insights presented were obtained from literature study as well as from observations by the author of organisations, including a surface mining operation, over the last 18 years.

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TABLE OF CONTENTS
1. INTRODUCTION

2
2 2 2 2

1.1 Background to Assignment and General Information 1.2 Problem Statement 1.3 Objectives 1.4 Methodology 2. RESULTS FROM LITERATURE STUDY

5 12 14 28 31

3.
4. 5. 6.

RESULTS
ANALYSIS AND EVALUATION OF RESULTS CONCLUSIONS RECOMMENDATIONS

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LIST OF FIGURES
Figure 4.1 Figure 4.2 Figure 4.4.1 Figure 4.4.2 XXXXX Colliery organisational structure...p15 XXXX organisational structurep16 XXXXX Colliery mining value stream mapp17 Organisational structure driven by geographical and functional considerations...p18

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LIST OF SYMBOLS
XXXXX CSG GPS HRD HS&E IR IT JIT JV KPI MBO MDW MIS MLM MTPA RBCT ROM SIPOC SLA SMS SOP XXXXXX XXXXX XXX South Africa Customer Sector Group Global Positioning System Human Resource Development Health Safety & Environment Industrial Relations Information Technology Just In Time Joint Venture Key Performance Indicator Management By Objective Mission Directed Work teams Management Information System Multi Level Meeting Million Ton Per Annum Richards Bay Coal Terminal Run Of Mine Supplier Inputs Process Outputs Customer Service Level Agreement Short Message Service Standard Operating Procedure

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 1 MOTIVATION FOR THIS STUDY

Chapter 1 details the problem statement, objectives to be achieved and the methodology to be used.

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Chapter 1 Motivation for this study

1. INTRODUCTION

1.1 Background to Assignment and General Information

Surface mining operations, like all other organisations, have an organisational structure through which the activities of the organisation are directed in order to achieve its primary and secondary objectives. Although the core value stream processes are to a certain extent unique to a surface mining operation, the service departments, and the ways in which they support the core functions, as well as how communication, integration and coordination take place are similar to other organisations.

1.2 Problem Statement

Conduct a review and analysis of the management structure in surface mines and address the methods by which a surface mine is managed. Specific emphasis is to be given to:
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Management and service departments The role of service departments The role of sub-system departments within mining How various departments communicate and integrate in terms of services provided and the role in overall mine management.

1.3 Objectives
In order to address the problem statement as defined the following objectives were set: 1.3.1 1.3.2 1.3.3 1.3.4 Conduct literature study Review management structure of a surface mining operation Review role of support departments Review methods used to communicate and integrate between departments

1.4

Methodology

In order to satisfy the objectives of the review the following methodology was followed: i. Literature search a literature search was done focussing on: a. management and organisational design principles and their application in organisations

Chapter 1 Motivation for this study

b. methods used in organisations to achieve control, coordination, communication and integration ii. Case study XXXXX Colliery and XXXXX was analysed as a case study in order to observe the practical implementation of the aspects researched during the literature study.

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 2 LITERATURE STUDY

Chapter 2 summarises the outcome of the literature study done on how organisations are structured, the factors that influence the structure of a particular organisation and the methods that organisations use to communicate and integrate the activities of various functions.

Chapter 2 Results of literature study

2. RESULTS FROM LITERATURE STUDY

2.1. Management Approaches

A management approach is the overall method of management which aims to enable all employees to manage input factors in such a way as to achieve the desired output. Modern management approaches consist of components from a variety of management approaches developed and used since the start of the Industrial Revolution. These approaches can be grouped into so called classical and contemporary approaches. Classical approaches include the following management approaches:
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Systematic Scientific Bureaucratic Administrative Human relations and resources

Classical approaches had serious limitations even when used jointly. The following contemporary approaches developed over a span of approximately 50 years post World War II as business leaders and planners sought to overcome the challenges of the modern organisation:
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Quantitative Organisational behaviour and human behavioural Systems theory Contingency theory

2.2 Organisational structure

Organisational structure refers to:
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the way work is divided and how the organisation achieves coordination between various work activities.

The design of the organisational structure needs to take into account the following principles:
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division of labour or specialisation distribution of authority

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Chapter 2 Results of literature study

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departmentalisation span of control line and staff unity principle

2.2.1 Division of labour or specialisation

Division of labour or specialisation refers to the scope of individual tasks. A high degree of specialisation in an organisation implies that work is broken down into relatively small subtasks that are allocated to individuals and at which they can achieve a high level of expertise through task repetition. This principle is the key advantage achieved from grouping people in order to produce output. Automobile assembly plants are good examples of specialisation.

2.2.2 Distribution of authority or delegation

Distribution of authority or delegation is the giving of the legitimate right to influence or direct employee activities. Coordination problems not solved by standardisation require escalation in order for resolution to take place. Furthermore, all work in an organisation cannot be performed by the manager alone; he/she needs to accomplish goals through the efforts of others. Effective delegation depends on 5 major principles: i. Equal authority and responsibility: Employees to whom a task has been delegated should also be given the commensurate authority required to accomplish the task. ii. Delegate to lowest organisational level possible: Tasks should be delegated to the level at which employees with the right knowledge and training can act responsibly on behalf of the organisation. iii. Manage by exception: The manager should only become involved personally in decisions when an exception to the work routine of the subordinate occurs. iv. Tell the What and the How when delegating: An effective delegator ensures that the employee not only understands the what that needs to be accomplished when a task is delegated, but also ensures that the subordinate understands how the task is to be carried out. v. The delegator remains accountable: Superiors do not escape responsibility for the performance of subordinates once a task has been delegated.

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Chapter 2 Results of literature study 2.2.3 Departmentalisation

Departmentalisation refers to the way jobs are grouped together in an organisation in order to accomplish work. As work units grow in size it becomes necessary to subdivide the organisation into smaller work units so that unit managers are not overwhelmed by too many subordinates. Several different bases exist from which to choose when setting up departments e.g. function or purpose, territorial and product divisional. A 4th type, the Matrix design, overlays a project or product design with a functional design in organisations where complex projects are frequently executed e.g. aerospace firms.

2.2.4 Span of control

Span of control is the number of subordinates who report to a given manager. Span of control is impacted upon by the following factors: i. ii. iii. iv. v. Degree of interaction between personnel or units being managed. Degree of dissimilarity of activities being supervised. Incidence of new problems in the supervisors units. Degree of physical dispersion of activities. Extent to which supervisor must carry out non-managerial duties and the demands on his time from other people and units. As the incidence of these factors increase, the burden of supervision increase and number of subordinates that can effectively be managed i.e. the span of control, diminishes. Span of control is a key consideration in organisational design when attempting to maintain a balance between the number of hierarchical levels and the span of control i.e. tallness vs flatness of the organisational structure. As the organisation grows in size and/or complexity, hierarchical levels are often added in order to keep span of control at manageable levels. Tall hierarchical structures however add considerable disadvantages in the form of high overhead costs and complicated communication and decision making mechanisms.

2.2.5 Line and staff

Classical theory recognises that situations often arise where a manager does not have the specialist knowledge in order to accomplish the task at the desired standard. Staff roles exist in organisations to support the manager with specialist knowledge when required. A staff role may only give advice; the authority and responsibility for decisions remain with line.

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Chapter 2 Results of literature study 2.2.6 Unity principle

The unity principle refers to the clear reporting relationship from the bottom of the hierarchy to the top. Ambiguity and the possibility of conflicting instructions from different managers are avoided.

2.3

Coordination in an organisation

The formalised, operating practices in the organisation provide it with a framework for controlling the work behaviour and work expectations of employees. Written rules and regulations transmitted through an organisational design do not however ensure coordinated effort and the accomplishment of organisational goals. In order to achieve coordination, managers need to employ a number of additional methodologies. Coordination is the set of mechanisms a manager uses to align the actions of organisational subunits in order to achieve the desired outcomes. The extent of coordination required is driven by the amount of information that needs to be processed during task accomplishment. Uncertain and changing environments increase the amount of information to be processed and therefore the amount of coordination that is required. Information processing capacity, as facilitated by coordination, needs to be developed in both the vertical and horizontal dimensions.
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An increase in vertical coordination results in a decrease in the number of exceptions to be resolved by the organisational hierarchy.

An increase in horizontal coordination results in improved integration of workflow.

2.3.1 Vertical coordination mechanisms

i. Groups - by increasing group decision-making through the use of task forces, or socalled collateral organisations comprised of people from different subunits, to identify and solve problems that span organisational levels and functions. ii. Direct supervision chain of command is the traditional means of establishing vertical coordination through the actions of supervisors and managers. iii. Standardisation of work processes in certain environments by using technology results in highly standardised work processes that dictate the pattern of coordination with very little interference required.

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Chapter 2 Results of literature study

iv. Standardisation of outputs seeks to specify the nature of the output through the use of physical and economic standards. The emphasis of coordination shifts from the how work is done to the output standards to be conformed to. v. Performance appraisals are used to communicate organisational goals and expectations and in order to direct individual performance in this regard. If used correctly the process can support goal alignment and coordination. vi. Management Information Systems (MIS) facilitate vertical coordination by providing accurate, consistent and relevant information across the organisation for use in decision making at various levels.

2.3.2 Horizontal coordination mechanisms

i. Direct contact is the simplest and least costly form of horizontal coordination and describes the conversations that take place between functions or process owners when a situation calls for an increased level of coordination. ii. Liaison roles are formally established to coordinate workflow between two of more organisational subunits. As organisations grow in complexity the need for liaison managers tend to increase. iii. Horizontal task forces are usually temporary structures set up to provide horizontal coordination in situations where problems occur involving numerous departments. Members from the affected departments are drawn into a task force in order to deal in a focussed manner with the issue. iv. Permanent teams to manage reoccurring workflow problems are used when organisations find that horizontal coordination problems persist.

2.4

Control in an organisation

Control is the set of mechanisms used to keep action and outcomes within predetermined limits. Control deals with the setting of work standards, measuring results against plan and initiating corrective action. Management control systems can focus on methods of work i.e. process controls or on the control of results of work i.e. objective setting.

2.4.1 Process control

Process control refers to the standardisation of task performance and is achieved through the specifying of work methods and setting work standards.

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Chapter 2 Results of literature study 2.4.2 Results oriented control

Results oriented control refers to a system that achieves control by specifying the results to be obtained by employees and their work units. Management by Objectives (MBO) is a widely used example of such a system. MBO systems attempt to ensure the setting of specific measurable goals, the monitoring of progress against towards these goals and the receiving of rewards based upon the outcomes.

REFERENCES
Child, J. 1987. Organization. 2nd ed. Harper & Row Ltd, London. Dailey, R. 1990. Organisational Behaviour. 2nd ed. Pitman Publishing, London. Gouillart, F.J. & Kelly, J.N. 1995. Transforming the Organization. McGraw-Hill, Inc., NY Hrebiniak, L.G. 1978. Complex Organizations, 1st ed. West Pub. Company, NY. Pinchot, G. & E. 1994. The End of Bureaucracy & the Rise of the Intelligent Organisation. 1st ed. Berret-Koehler Pub., San Francisco Robey, D. 1982. Designing Organizations. 1 st ed. Richard D. Irwin, Inc., Illinois. Stone, J.D. 2008. The development of a comprehensive, practical and integrated management method with specific reference to the South African mining industry. PhD thesis. University of Pretoria. Tomasko, R.M. 1993. Rethinking the Corporation. 1st ed. Amacom, NY

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 3 RESULTS

Due to the nature of this assignment no field observations or measurements were conducted.

Chapter 3 Results 3. RESULTS

Due to the nature of this assignment no field observations or measurements were conducted.

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 4 ANALYSIS AND EVALUATION OF RESULTS

Chapter 4 discusses the application of organisational design and structure as well as how communication and integration between core and support functions are achieved in a surface mining operation.

Chapter 4 Analysis and evaluation of results

4.

ANALYSIS AND EVALUATION OF RESULTS

4.1

Organisational structure of a surface coal mine

The majority of mining organisations are structured according to a functional organisational design. In a functional design the structure is a logical reflection of the organisations functions. Organisations that have a functional structure achieve departmentalisation, or the grouping together of jobs to accomplish work, through the grouping of employees performing aspects of the same function e.g. maintenance or finance. When the functional units grow in size, as they typically do when an organisation grows in size and complexity, they are subdivided into smaller work units. This has the effect of decreasing the span of control of leaders, but tends to add levels to the hierarchy of the organisational structure.

XXXXX Colliery has a functional organisational design. See figure 4.1. It must be noted that the XXXXX Colliery processing facility is part of a joint venture and is operated by a 3rd party that is managed through a board consisting of representation from both parties. For this reason the processing plant functional structure is not included in the mines organisational structure.

The 2 main advantages of such a functional structure are as follows:

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The structure follows specialisation where employee are grouped into teams that have expertise in the carrying out of a certain function e.g. Maintenance is responsible for and has a high level of expertise in the carrying out of planned and breakdown maintenance activities.

The structure drives efficiency through the use of a common language which eliminates the wasting of time due to explanations and the potential misunderstandings that may occur due to the use of terms not common to all participants.

Several disadvantages also exist:

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Overspecialisation can lead to narrow business viewpoints that contribute to silo thinking and behaviour and as a result negatively impact on the effectiveness of the organisation as a whole.

The development of managers is limited to their functional areas.

In an organisation with a functional design it is important that departments achieve functional competence through specialisation whilst still maintaining a wider business perspective. In order to achieve this objective, coordination and control mechanisms are the very important

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Chapter 4 Analysis and evaluation of results

formal and informal links between employees and departments that ensure connectedness and the alignment to a common purpose.

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Colliery Integrated Planning Department

Mining Department

Maintenance Department

HSE Department

Human Resources

Finance

Drill & Blast Section

Track Section

Health Section

Short Term Planning Section

Dragline Section

Tyre Section

Safety Section

Geology Section

Coaling Section

Instrumentation

Environmental Section

Survey Section

Contractor Minipit Section

Dragline Section

Control Room

Figure 4.1 XXXXX Colliery organisational structure

4.2

Centralisation

Mining operations owned by large mining houses also tend to display a high degree of centralisation, where the authority to make decisions are retained by top management. This tendency is driven by mainly 2 factors:
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The requirements of the Mine Health and Safety Act together with the high degree of regulation in place to ensure health and safety in the mining environment.

The need of large organisations to maintain control and the attempt to reduce the management effort required to manage a large number of disparate operations.

In centralised organisations employees follow uniform procedures and policies formulated and enforced by higher management. Such an organisation also exhibit high levels of formalisation with many written rules, regulations and procedures that guide employee behaviour and decision making. Centralisation also tends to trigger standardisation where variations in behaviour are limited through set work procedures and processes. In the surface mining environment where the health and safety risk is high and where many of the controls that mitigate identified risks are administrative i.e. rule based, in nature, centralisation
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Chapter 4 Analysis and evaluation of results

becomes a distinct advantage and even a necessity. Too much room for deviation from the standard leads to unsafe practices and conditions that increase the risk of injury or worse.

4.3

Centralisation vs decentralisation in XXXXX

Within XXXXX there are functions that have a centralised structure whilst others have a more decentralised structure. Functions that are structured in a centralised manner include the following functions such as Development, Business Planning, Project Execution, Human Resources, Sustainability and Commercial. Decentralised structures exist in Operations, Maintenance and HS&E. Mine General Managers for example have full line authority over Operations, Maintenance and HS&E, but only dotted line authority over HR and Finance resources on site. See Figures 4.1 and 4.3.

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Figure 4.3 XXXXX organisational structure

4.4

Functions and sub-functions in a surface coal mine

Functions that are directly involved and responsible for delivering on the process steps of the value chain can be described as core functions and at a high or level 1 process level include processes such as Mining and Processing or Beneficiation. In some organisations the planning function may also be referred to as a core function.

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such as topsoil stripping, burden stripping, burden drilling, blasting, etc. See fig. 4.4.1. Although level 2 processes can be broken down into more detailed process steps at level 3 etc. this is in the majorit of instances the lowest level to which work units will be sub divided except for the division into teams in order to allow for 24/7 operations. For mining operations with a large geographical span of control, each geographical distinct area might have its l own similar structure. See fig. 4.4.2. Functions that support the core functions are referred to as service or support functions and include organisational functions such as Maintenance, Finance, Human Resources, Buying, Stores, etc.
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The mining department is responsible for the total mining value chain including topsoil stripping, soft burden stripping; burden drilling, burden blasting, burden stripping, coal drilling, coal extraction and rehabilitation.

Topsoil stripping the top layer of fertile soil is removed and stockpiled for use during rehabilitation once the ore has been extracted. It is ideal to direct place topsoil i.e. instead of stockpiling to place the topsoil in the position where rehabilitation is already taking place and the soil can be used immediately.

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Chapter 4 Analysis and evaluation of results

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Figure 4.4.2 Organisational structure driven by geographical and functional considerations

Soft burden stripping depending on geology, a layer of soft non-fertile soil may be present below the topsoil layer that requires removal before the hard burden is reached.

Burden drilling the rock layer above the coal seam is drilled with pre-split and infill holes according to a drill pattern that depends on hole size, rock characteristics, burden thickness, etc.

Burden blasting the drilled holes is filled with explosives and pre-split and production blasts are set of using pyrotechnics or electronic detonators to shatter the rock burden to a sufficient fragmentation for the next process. Casting of a portion of the burden into the void is a desirable secondary outcome of this process.

Burden removal the blasted burden is removed in order to expose the coal seam. Various methods or a combination of them can be used including production dozing, dragline or truck and shovel.

Coal drilling once the coal is exposed the coal is drilled according to a pattern design that depends on hardness, thickness, etc.

Coal blasting explosives are pumped into the drilled holes and the coal block is blasted to create a fragmented coal seam.

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Chapter 4 Analysis and evaluation of results

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Coal extraction the fragmented coal seam is loaded onto haul trucks that transport the coal to the run of mine (ROM) tip or to a ROM stockpile.

Rehabilitation once all the seams have been mined out the resulting void is filled, levelled according to contours set out in a rehabilitation plan, covered with a layer of topsoil and seeded in order for natural vegetation to be re-established.

In addition to the activities that form part of the mining value stream there is a number of mining support activities that need to take place in order to support these activities. Such mining support services include water management, control room operations and haul road construction and maintenance.

Water management the management of water is of utmost importance in a surface mining operation. Due to the nature of the operation i.e. the creation of a large hole and the inescapable effect of gravity, water tends to accumulate in the area where operations need to take place. Diverting water away and preventing it from entering the pit is preferred, but is in even the best scenario only partially possible. Water in the pit, accumulating at various low points needs to be pumped out and, due to the fact that it is now affected water, needs to be managed by means of dams and usage in order to prevent decanting into the environment. At XXXXX Colliery a dedicated team is responsible for the laying of pipes and the positioning and operation of the pumps used to clear the production areas of water.

Haul road construction and maintenance ramps and haul roads are constructed as part of the initial establishment of the mine. As the cut advances, ramps needs to advance with the cut in order to maintain the optimal gradients and haul roads moved as current routes become inefficient or mined through. The impact of rain and wear on the haul road surface also takes its toll and is very dependent on the quality of the initial construction. The placing of road signs, creation of roadside berms, etc. would also fall into this category. The driver used to allocate responsibility for haul road construction and maintenance can vary between the following: i. most dependant user is the mining sub function most dependant on the quality of the haul roads. In a surface mining operation this would most likely be the coal extraction team. In this scenario the team responsible for the haul road also has the most to gain from a quality outcome which results in a self-regulating system. Sections not used by the responsible team might be neglected though. ii. owner of equipment this principle allocates responsibility to the sub-function that has operational control over the equipment used to execute the task. Control

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Chapter 4 Analysis and evaluation of results

over the factors of production is key to this method of allocation. The same advantages and disadvantages as per the previous scenario is however prevalent. iii. dedicated team the equipment and so-called pit services functions can also be grouped into a mining support services team that support the core mining processes through the provision of a variety of activities that may include haul road construction and maintenance, water management, etc. This scenario supports specialisation through departmentalisation and allows for increased focus. At XXXXX Colliery a combination of the above options are currently in place. Ramp construction is the responsibility of the coaling section, water management is done by a dedicated team also reporting into the Coaling function and haul road construction and maintenance is part of the responsibilities of the contractor mini pit superintendent. Allocating haul road activities to the contractor mini-pit

superintendent is mainly a consequence of the balancing of span of control and does not necessarily deliver the best outcome. Equipment allocation that is aligned to this distribution of responsibilities is only partially in place and requires some inter function coordination for activities to run smoothly.
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Control room operations this function can play a significant role in the overall coordination of activities and the efficiency and effectiveness of operations. The effectiveness of this function is multiplied if staff is competent and effective fleet management and communication systems are in place. Functions of the control room include, but is not limited to:

The monitoring of and reaction to increased cycle times, waiting times and other changes in conditions that may require a reallocation of resources.

The coordination and monitoring of the response to breakdowns on critical equipment in order to ensure rapid response in terms of repair and return to service.

The communication and coordination of out of normal situations e.g. hazardous road conditions, lightning alerts, evacuations for blasting, response to injury or other emergency situations, etc.

The recording of production and other data used for the generation of the reports that support decision making across the organisation.

At XXXXX Colliery the control room is responsible for the activities as described. The control room has a number of resources to their disposal including a fleet management system, radio, telephone, email and SMS communications, weather and lightning warning systems, camera surveillance, SCADA, SAP interface, etc.

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Chapter 4 Analysis and evaluation of results

4.4.2 Planning department

The planning department, also sometimes referred to as the technical services department, is responsible for long and short term planning as well as various specialist services such as survey, geology, rock mechanics, etc. Reporting on resource availability and utilisation, as required by the Energy and Minerals Act and as a result of an organisations listing on the stock exchange, is usually done by this function and requires the involvement and signof of f competent and accredited persons. Due to the nature of specialisation and impartiality required it makes sense for these activities to be grouped in this manner.

Long term planning involves the development of a life of mine plan using the geological model obtained from exploration drilling for the resource as input. Estimated equipment production rates, availability and utilisation hours are used as inputs into modelling software such as XPAC in order to predict topsoil, burden and ROM volumes. This output provides the basis for long term planning and informs decisions such as number of each equipment type, equipment size, procurement timing of equipment, starting of additional mining areas, etc. 5 year plans and budgets also use the output from the modelling exercise.

Short term planning informs the day-to-day production activities and typically has a 3 month rolling window, although this may differ between organisations. The output from short term planning includes drill block layouts and plans, blasting plans and dragline dig plans.

Survey is responsible for the measuring and reporting of volumes moved as well as the identification in the field by means of physical markers the boundaries to be adhered to by the production personnel. In some instances the task of marking in the field is being taken over by GPS guided production execution systems. A typical example is the Aquila system on burden drills, where drill plans are wirelessly downloaded to drills and where the operator is then guided through a high precision GPS system to drill positions.

Geology and rock mechanic functions are other specialist functions that play quality and safety roles in the surface mining environment.

4.4.3 Maintenance Department

The maintenance department is responsible for the both the corrective and preventative maintenance of equipment and infrastructure. Maintenance departments in surface mines are usually structured either by function or geographical location or a combination of these. Due

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to the fact that XXXXX Colliery is geographically concentrated it has a functional structure with sections looking after the dragline, track equipment, tyre equipment, instrumentation, facilities and electrical reticulation.

4.4.4 Health, Safety and Environment Department (HSE)

The HSE department is the custodian of systems that manage the health and safety of employees and the protection of the environment. It is important to note that even though they are custodians of the systems, line remains accountable for adherence to these systems.

Health the monitoring of factors that may have an influence on the health of employees and the subsequent recommendation of corrective measures should excursions exceeding the Occupational Exposure Limits as set out in the Mine Health and Safety Act be noted.

Safety - the safety function monitors the implementation and adherence to safety rules and standards, ensure that safety risk management is carried out as per the Mine Health and Safety Act and report on safety statistics. A safety program that is proactive in nature and that focus not only on conditions but also on behaviour is managed and adherence by the organisation is tracked in order to ensure adequate coverage of all employees and all high risk activities.

Environment this function monitors adherence to environmental laws as well as to the Environmental Impact Assessment (EIA) conditions under which the mine is operating and include factors impacting on water, air, soil, vibration, etc.

4.5 Service departments

4.5.1 Human resources
The Human Resource Department is a support function that delivers a range of services to the organisation focussed around its workforce.
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Recruitment when vacancies occur in the organisation it is the HR departments role to facilitate the recruitment process the processes such as advertising, short listing, assessing, interviewing, appointing and on-boarding. It is vital that the customer function remain involved in the steps as listed in order to ensure that the right individual for the vacancy is identified and recruited.

Human Resource Development (HRD) to ensure a skilled workforce that will support the organisation in achieving its objectives employees needs to be trained and developed in the right development areas. HRD covers a wide spectrum of training

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and development areas including skills, leadership, supervisory, health and safety, IT, etc.
y

Industrial Relations (IR) the IR function are the custodians of industrial relations processes within an organisation. The main processes are the grievance process and the disciplinary process. It is required from the IR function to remain impartial, to maintain and update systems and procedures and to ensure that the process followed in procedurally correct and fair.

Remuneration the weekly and/or monthly payment of employee salaries is the responsibility of the remuneration function. Payroll systems support the capturing of hours worked etc. against which varying pay rates are applied for the calculation of salary payouts.

4.5.2 Finance
y Management accounting the management accounting function is forward looking in

its approach and tracks and reports on the current performance of an organisation in such a way that timely remedial action by managers is possible.
y Financial accounting the financial accounting function is responsible for drawing up

of financial statements, mainly used by persons external to the organisation, that reflect the financial status of an organisation over set period of time e.g. a fiscal year.

4.5.3

Supply
y Procurement the need in the organisation for goods and/or service required as s

production or business inputs trigger a procurement response. The procurement function manages the process of researching supply options for the good or service, requesting and comparing prices and entering into a supply agreement for the good or service.
y Stores organisations require goods such as spares and consumable at short notice, s

usually much shorter that can be accommodated by the supply process although in special cases such as Just In Time (JIT) systems this is achieved to a certain degree. A buffer stock is held in a store to compensate for the lead time in delivery of goods through the procurement process.

4.6

Communication and integration

In order for an organisation and in this case a surface mining operation to be successful, all departments needs to be aligned to and work together in a coordinated manner towards the organisational objectives. It is not sufficient for an organisation to have all the necessary

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Chapter 4 Analysis and evaluation of results

functions in place in an organisational structure. Communication and integration within core and support functions and between functions are crucial in order to ensure that the quantity, quality and timing of delivery is realised. According to the Collins Dictionary communication is the imparting or exchange of information, ideas or feelings and to integrate means to make or be made into a whole. When discussing communication and integration in an organisation it is impossible to not also mention control and coordination since the concepts are so closely linked and interdependent. Methods of coordination and control that organisations deploy were briefly discussed under sections 2.3 and 2.4 of this assignment. I will therefore now discuss methods deployed at XXXXX Colliery to ensure good communication and achieve integration between functions.

Life of Mine and 5-year plans these documents provide a single version of the mining operations over the life of the mine and over the next 5 years respectively and provide a common base from which planning, business improvement and other processes can take place.

2 year budget the budget provides a more detailed representation of the mining operation over the next 2 years and is based on the Life of Mine and 5 Year plans and contains details of the expected volumes, qualities and costs. All decisions in the organisation are to be measured against and aligned to the achievement of the budget.

Business plans the XXXXX business plan is the outcome of a planning process where the management team deliberated and made decisions on key performance areas to be focussed on, initiatives to be implemented and projects to be executed in order to achieve the budget. Once the mine business plan has been formulated, departmental business plans that support the mine business plan are deve loped in each functional area. KPIs that measure the progress and performance in the identified focus areas are identified.

Mission Directed Work teams (MDWs) XXXXX Colliery use a system of MDWs to ensure goal alignment, encourage function interaction and facilitate employee involvement. Level 1 to 4 MDW teams cover the vertical cross section of the organisational structure from operator level to management level. KPIs identified as critical to the success of the business and the achievement of the budget is cascaded down the organisational hierarchy in such a way that the KPIs at each level is aligned with the organisational goals whilst still being line of sight for the team in question. Teams have meetings at relevant frequencies and focus on corrective actions in performance areas where targets are not achieved. Monthly Multi Level Meetings (MLMs) bring representatives from all teams in a function together for presentations

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Chapter 4 Analysis and evaluation of results

by each team on team KPI performance and innovations implemented. Teams need to identify their customers and assess their satisfaction with the service provided by the team. Corrective actions are required for issues identified through this process.
y

Meetings a number of meetings that occur daily, weekly or monthly ensure cross functional communication and integration. The following are a few examples: i. Morning production meeting (daily) maintenance, mining and planning functions meet to discuss safety, equipment and production performance over past 24 hours and coordinate activities for next 24 hours. ii. Morning maintenance meeting (daily) maintenance function meets to discuss safety and equipment performance over past 24 hours and coordinate activities for next 24 hours. iii. Morning heads of department production meeting (daily) heads of department meets to discuss safety and production performance over past 24 hours and month to date and to coordinate activities for the week. Other relevant topics are raised, discussed and decisions made. iv. Planning meeting (weekly) mining, maintenance and planning functions meet to review past performance and agree on production and maintenance schedule for the following week.

SIPOC The Supplier Input Process Output Customer (SIPOC) is a business optimisation tool used on an ad hoc basis to improve workflow in an organisation. It pays particular attention to the interfaces between processes, but also has a component that focus on the process itself. The outcome of the exercise is a clear understanding of the inputs required and the outputs that needs to be delivered and at what quality. The outcome is usually captured in a series of Customer Service Level Agreements (SLAs) that detail the expectations and commitments between parties. SLAs are a requirement of the MDW system and are required for a team to move beyond a certain maturity level.

Standard Operating Procedures (SOPs) These documents describe the method in which a task is to be done and supports the standardisation of tasks. The controls selected to mitigate the health, safety and environmental risks inherent in a task during the risk assessment process, would be detailed in this document. The use of SOPs as the documented way of doing something supports integration between functions.

Process maps Both the activity of drawing up a process map as well as the process map itself support integration and communication between functions. A process map provides a clear understanding of the sequence of events to achieve a certain outcome

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Chapter 4 Analysis and evaluation of results

and clarifies responsibilities for each process step. Error proofing is built into well designed process maps making the process self regulating and reduces the need for management intervention and therefore has a positive effect on span of control.
y

Work groups and steering committees Ad hoc work groups and steering committees are created to address particular problems identified or to ensure coordination between functions during the implementation of cross functional systems or initiatives.

Reports The distribution of a number of reports that provide information on progress against targets or adherence to work standards further ensure goal alignment, communication and integration of functions.

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 5 CONCLUSIONS

Chapter 5 summarises conclusions to the objectives as set out in Chapter 1 based on the literature study and review as documented in Chapters 2 and 4.

Chapter 5 Conclusions

5.

CONCLUSIONS

5.1 Conduct literature study

A literature study was undertaken into management systems, organisational design and structure and the ways that organisations coordinate, communicate and integrate in order to ensure alignment and the delivery on the organisational objectives. Organisational design and structure determines how work is divided and the way that coordination of activities takes place in an organisation. Organisational designs differ depending on the design principle around which

departmentalisation has taken place for the specific organisation. There is no absolute superior structure, only structures that suite a specific organisation better than others. The geographical separation of business units, industry type, regulatory framework, etc. play a role in what structure supports organisational objectives best. Irrespective of the structure of an organisation, communication and integration is required. Some modern structures allow for the natural and informal flow of information whilst other, more traditional structures require formal systems in order to ensure that communication and integration occur.

5.2 Review management structure of a surface mining operation

The management structure of a surface mining operation is generally functional and hierarchical in nature. Departments are set up along lines of functional responsibility with teams responsible for areas where they have specific expertise. Hierarchical levels of management within departments allocate and control resources and intervene when issues occur in processes that deviate from the norm. Surface mining operations have a high degree of centralisation with most decisions being made at senior management levels in the organisation.

5.3 Review role of support departments

Service departments in surface mining operations are also functional and hierarchical in nature. Service departments, with specialist knowledge in a specific field, carry out activities that enable departments that are responsible for the mining value stream to be more effective.

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Chapter 5 Conclusions

5.4 Review methods used to communicate and integrate between departments

It is crucial for the activities of various core and support departments to be aligned towards the achievement of the goals of the organisation. Organisational alignment is achieved through the communication of the organisational objectives throughout the organisation both vertically and horizontally. Delivery of these objectives requires the selection and integration of all departmental activities in support of the organisational objectives. Employees and departments in a surface mining operation use a large number of mechanisms to ensure communication and integration. These mechanisms range from formal systems such as planning and budgeting processes to ad hoc type processes such as work groups .

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THE MAN AGEMENT OF S URF ACE MINES

CHAPTER 6 RECOMMENDATIONS

Chapter 6 contains recommendations to be considered in order to improve the functioning of the surface mining operation.

Chapter 6 - Recommendations

6.

RECOMMENDATIONS

6.1. Lower level of decision making

Surface mining operations should through a process of training and coaching work towards driving the level of decision making to lower levels in the organisation. Supervisory staff should be empowered to make the decisions required to ensure operational effectiveness and should be held accountable for such decisions. Managers should refrain from becoming operationally involved at levels where disempowerment of the supervisory level takes place.

6.2

Ensure alignment to organisational objectives

Engage in a sequential and systematic process of setting and cascading of organisational objectives in a top down manner throughout the organisation. The management team should at the right time during the business cycle engage in a systematic process to determine the critical success factors and critical activities that will be required going forward in order to achieve the organisations goals. Once this have been agreed upon, functional departments should engage in similar processes to decide upon critical success factors and activities on a departmental level.

6.3

SLAs with service departments

Departments central to delivering on the value stream should, through the use of a SIPOC process, indentify the inputs required from service departments and contract with them on the quality and quantity of such inputs by indentifying KPIs. The outcome of such an exercise should be captured in a Service Level Agreement and performance on KPIs should be reviewed on an appropriate frequency to ensure compliance. The use of MDW can be central to such a process.

6.4

Use cross functional teams

Deviate from pure functional structures and experiment with cross functional teams in certain areas of the business. Form teams that consist of both operational and maintenance employees that report into a production supervisor or manager responsible for a certain operational activity e.g. burden drilling. This structure encourages the alignment of objectives and may lead to improved production performance.

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