Successful outsourcing of maintenance in the mining industry : methods and principles
- Authors: Visagie, Christoffel Johannes
- Date: 2012-08-27
- Subjects: Contracting out , Maintenance , Mineral industries
- Type: Mini-Dissertation
- Identifier: uj:3197 , http://hdl.handle.net/10210/6610
- Description: M.Phil. , Production uptime and plant availability is the primary aim of present-day maintenance strategy making. In the past, this was accomplished by building in redundancies and excess production capacity, or by following an aggressive schedule to rebuild or overhaul critical systems. Both approaches are inherently inefficient. Redundant systems and excess capacity tie up scarce capital that could otherwise be deployed in a producing activity. Today we live in a world where change is not only common, but also inevitable. Mining companies and their people are all exposed to the massive scientific and technological explosion occurring and will need to adapt to be competitive or be doomed to oblivion. The mining businesses that are not prepared to change, will very quickly find that they have priced themselves out of the market and will be relegated to being dinosaurs from the past. Maintenance has undergone a metamorphosis in the past few decades and is now entrenched as a vital part of the industry. The availability, reliability and operability of assets have become imperative, demanding that maintenance methods and strategies become even more sophisticated. Excessive downtime and breakdowns of assets have become critical factors to the point of being totally unacceptable. Maintenance thus needs to become more efficient, contributing maximally to the profitability of the industry by coordinating operational readiness with production demand. The purpose of this study is to investigate the successful use of outsourced maintenance methods, principles as a way of achieving this efficiency. It furthermore seeks to identify the benefits of such an outsourcing approach to the mining industry. While a mining business can take advantage of transformational outsourcing at any point in its life cycle, "once a business leader has decided change is required, (whether, as a course correction or in response to economic cycles), outsourcing becomes a viable alternative business strategy to enable that transformation more rapidly, with less risk and with more flexibility" according to Jay Ward, from the outsourcing institute. Outsourcing delivers value beyond cost reduction. During the outsourcing process, the maintenance organisation of a mine is really looking for results such as improvement of its profit margin, by such things as inventory reduction, increased maintenance service efficiency, reduced cycle times, reduced meantime between failures, improved operating performance, and the availability of expert skills and cutting edge technologies. The question that this dissertation seeks to answer is: "how does the maintenance outsourcing process work in the new maintenance world, and what and how much maintenance should the mine management outsource?" The study focuses on the changing world of maintenance, maintenance policy making and World Class best practice maintenance strategies. It looks for ways of closing the gaps that exist in present maintenance practice in mining organisations, through maintenance outsourcing as one of the "best practice" drivers through which such organisations can position themselves for present economic realities. It thus serves to guide the individual mining business to be able to chart its own course to achieve flexibility and accelerate its business in ways that consistently minimise risk while delivering value to stakeholders.
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The role of outsourcing in the project house - mining house relationship
- Authors: De Villiers, Tielman J.
- Date: 2008-11-18T09:08:18Z
- Subjects: Contracting out , Mineral industries , Project management
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/388910 , uj:14728 , http://hdl.handle.net/10210/1732
- Description: M.Phil. , The relationship between the Mining House / Owner and Project House can be spectacularly successful for both partners (and has resulted in the emergence of a few successful new project houses and plant operation companies all over the world), but can also be disastrous for both parties, if managed incorrectly. The main requirement for a successful relationship between a Mining- and Project House is that there must be something in it for both parties. This is not only measured in customer perception of value for money (Mining House) and profits by the Project House, but is also affected by mutual respect, the working relationship and the perception that both can profit from the relationship by the following activities: • Procurement of goods and services. • Providing assistance in absorbing and adopting process technologies. • Addressing environmental concerns like Environment Impact Assessment, HAZOP studies as well as disaster management plans. • A project management team who can ensure proper control and timely reporting to the financial institutions, ensuring there are no cost and time overruns. • Provide due diligence in order to assign proper value to the assets, business portfolios, brand equity, technology/product, etc. • For retrofits, revamps, technical/ energy audits, upgrading the processes / quality of product through minimal investment routes. • In ensuring all aspects of quality management right from the concept to commissioning stage, involving corporate commitment to the quality management process enabling the companies to follow good manufacturing practices. • To provide knowledge management services i.e. depth of knowledge rather than the breadth. Until recently, most Mining Houses locked outsourcing in the back room - using it to pass off unimportant functions and processes to competent specialists so that managers could focus on more critical activities and core business. This is all changing as outsourcing is increasingly making its way into executives' strategic toolkits. In other research studies [5; C; K; N] three types of outsourcing relationships have been identified namely conventional, collaborative and (business) transformational outsourcing. Mining Houses can use conventional outsourcing to generate cost efficiencies in support processes. Collaborative outsourcing is used both to upgrade business processes and to provide flexibility to respond to changing business needs. Business transformation outsourcing holds a higher standard and is a comprehensive approach to create both new capabilities and to use them to achieve a clear strategic objective.
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