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Go for Gold: Take Barrick’s maintenance improvement journey

Tuesday April 03, 2012 Written by  Robert Cronin
Over the past three years, Barrick Gold Corp. has been on a maintenance improvement journey, taking important steps to improve its maintenance function. Here’s why and how. Barrick is the world’s largest gold mining company by production and reserves. It’s a Canadian company with its head office in Toronto, but Barrick is truly a global company with 26 operating mines and numerous development projects and exploration activities worldwide. Its vision is to be the world’s best gold company by finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. The Maintenance Challenge It should not surprise you to learn that the mining industry is capital intensive. Indeed, Barrick has billions of dollars invested in plants, equipment and infrastructure. One large haul truck may cost more than $2.5 million, and Barrick has hundreds of them. A single large tire can cost $60,000. We are currently investing about $7 billion to build two large new mines: Pueblo Viejo in the Dominican Republic and Pascua-Lama on the border of Chile and Argentina. All of this plant and equipment requires on-going maintenance for peak performance and maximum life, so maintenance is one of the largest costs in our business. The mining environment is rugged and it’s tough on equipment. Blasting and digging generates a lot of dust. Operating conditions include temperatures ranging from –40°C in the mountains of South America to as high as 50°C at some of our Australian sites. Some operations are at high altitude — up to 5,500 metres above sea level at our South American operations. In all of these conditions, our equipment works hard. These conditions can affect reliability and performance. In every sense of the word, our maintenance challenge is significant! Good maintenance makes good business sense because it improves safety and equipment reliability, and that improves production uptime. Planned and regular preventive maintenance ensures safe and smooth running of equipment and processes. Lack of proper maintenance can result in bad outcomes in terms of safety, production and cost. When we experienced a number of mobile-equipment fires, we initiated a major review of our maintenance function and found areas for improvement. Our analysis showed a high level of unplanned maintenance, so we recognized we could reduce our costs with better planning and scheduling. We saw the need to improve training and career opportunities for our maintenance staff to improve their effectiveness and encourage retention. Barrick, like many other mining companies, has often grown by acquisition. The result was a variety of approaches and practices at various sites. We realized we needed a common set of standards and systems across the company, as well as a standard set of key performance indicators to evaluate and manage performance. We needed to focus on reliability and develop a true strategic asset management approach. Starting the Journey So we set out on a maintenance journey. The first step was recognizing these issues and acknowledging the value of the maintenance function. We mapped out the existing maintenance situation at our sites, documenting lists of people and structures. We brought together the maintenance leaders from each region for a global meeting to start the conversation about how to improve the maintenance function. It was an opportunity to understand their issues and challenges — and to offer support to help drive improvement. Involving everyone up front was critical for gaining momentum for this program. At the same time, we presented the case to the senior leadership team. Several key points gained their support. Poor maintenance was creating safety issues, such as equipment fires. Poor maintenance was causing breakdowns that interfere with production. Our current spend on maintenance was high because of the percentage of unplanned work. With improved practices, we could actually reduce the overall annual maintenance costs over time. The leaders saw the value and made maintenance improvement a priority for the company. We developed an asset management policy in consultation with our regional maintenance leadership team. It states our fundamental principles about management of our assets from design to disposal. The policy conveys our belief that all equipment failures are preventable. It also commits the organization to develop clear policies and standards and to provide leadership for implementing the asset management strategy across the organization. It’s signed by our senior executives. This one-page document became our mandate. We distributed it widely, and it’s posted at Barrick sites and regional offices worldwide. Working with the regional teams, we developed our maintenance management system in late 2009. It sets out the company’s minimum standards for maintenance across the organization. It’s a very useful guide that helps maintenance leaders put the right plans and structures in place to achieve good results. It sets standards for nine key areas, including leadership, structure, strategic planning, performance measurement and others. The system also recognizes the interdependence with other functional areas, such as production and supply chain. To help everyone work in a standardized way, we needed to implement standardized business processes. We worked closely with our supply chain colleagues to define and enhance our business processes. Then, we needed a single computerized maintenance management system (CMMS) platform — which at Barrick is the Oracle eAM. Tools and Training Fundamental to a good business process is the fact that everyone must know and understand their job responsibilities. We reviewed our organizational structure to align the roles and responsibilities across corporate, business regions and sites. Our maintenance management system outlines the recommended organizational structures to support maintenance. We identified gaps and filled those positions. As we proceeded, we recognized we had a shortage of mechanical and electrical engineers. But just adding more people was not enough. We also needed to make sure their roles were clearly defined and that we had a support structure of training and career development to help them succeed. We prepared information and tools to help them do their jobs. We developed a set of maintenance standards that cover most of the key topics. These are intended to answer the question, “What does the organization expect from us?” We also developed a series of guidance notes on how to implement important tasks. These are intended to answer the question, “How do I do that?” We organized all these standards, templates, reference materials, and tools into a Maintenance Knowledge Centre on our company’s intranet site. We included a global contact list, which makes it easy for them to contact each other to discuss common problems and share information. We intend to build on this sense of community through collaborative forums in the future. The centre includes a set of computer-based training modules on a range of topics, including basic mining, diesel engines, financial analysis, project management and more. We worked closely with some of our OEMs to ensure the training relates specifically to the equipment we use. The modules follow the curriculum for our in-house graduate engineering training program. Each module has a questionnaire that must be completed by the graduate program participants. We track the traffic to see which documents and tools people use. This information helps us enhance the site. All employees, not just maintenance staff, have access to the site and the modules so they can increase their knowledge of maintenance and engineering. Marketing Our Maintenance To promote maintenance across the organization, we worked with the our communications department to produce professional materials and to announce our progress through features stories on the intranet and in the corporate global newsletter. These efforts helped us gain and sustain momentum for the program. The publicity has raised the profile of the maintenance function within Barrick and has helped our maintenance employees feel recognized and appreciated. We Are Now Here Members of the global maintenance team have now visited every Barrick site to conduct a site review. During these visits, we assess the site’s activities against the requirements set out in the maintenance management system. We discuss the results with the site managers and develop plans to address any gaps. We don’t approach this like an audit; we approach it like a coaching session. We are there to help the site improve. We monitor the results and document the improvement actions. We have just commenced our second round of site reviews, and we will track the progress since the first review. The results so far have been encouraging as sites show considerable commitment and improvement. In addition, we recently surveyed maintenance leaders across the organization, and we will use their feedback to further improve. We’ve come a long way on our maintenance improvement journey. We have a lot of the key foundation elements in place — policy, systems, standards, site reviews, training and other processes. All of our business regions and sites have plans in place to drive maintenance improvement. The challenge now is to keep the momentum going. It takes time and hard work to implement change in any large organization. We want maintenance improvement to become part of Barrick’s culture. This will ensure work will continue and be independent of individuals. We are pleased at the progress we have made so far and still have some distance to travel — but we know we’re headed in the right direction and we’re determined to get there. Our success will be rewarding for everyone in the maintenance function, and it will create significant value for our company. Robert Cronin is the senior manager of maintenance at Barrick Gold Corp. in Toronto. For more information, visit www.barrick.com.

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