Page 3: Asset management and optimisation
Like any other company Anglo American manages a value chain. The value chain is the chain of activities involved in making a product more desirable to the end user. For Anglo American this involves extracting natural resources which may be thousands of metres underground. Minerals and metals then need to be transported and treated before they can be made into finished products. Anglo American seeks to add value in every process that it is responsible for in the chain. Adding value often involves reducing waste, cutting costs, saving time and improving efficiencies.
Anglo American’s approach to adding value is referred to as Asset Optimisation (AO). AO is a programme of activities designed to ensure that operational performance is maximised relative to cost.This is achieved by owning the most attractive assets i.e. the natural resources, capital, technical know-how and workforce skills that give the biggest returns. Optimisation is the process of achieving the best possible performance across the organisation. This is achieved by using the learning from Operational Reviews (ORs) across the organisation. Combining the expertise of the central technical team with local teams provides ideas for new ways of working that can be applied across Anglo American.
Business improvement will only be sustained if it is backed up by change management. People’s attitudes and ways of working need to positively support change. This is referred to as an ‘improvement culture’. The culture of an organisation is the typical way of working and thinking. A ‘yes we can’ approach to working is required where employees are willing to suggest better ways of working and commit themselves to these new methods. The third fundamental aspect of making a business improvement culture 'stick' is to have certain controls in place. In the case of AO this is achieved through an auditable reporting system that aims to track project delivery and financial impact.
Asset Optimisation therefore helps Anglo American to:
- unlock the value of its resources, equipment and people
- establish an improvement culture within the organisation
- create improvements across the value chain from resources right up to the customer.
The important thing to understand about AO is that it is not just a one-off programme. It is continuous and ongoing. The AO programme therefore links closely to the Japanese concept of Kaizen. Kaizen is also known as continuous improvement. It involves all workers within an organisation making ongoing improvements to quality in their work. For it to get results, the culture of continuous improvement must filter through the entire organisation. Workers are empowered to make decisions affecting quality. This leads to lower wastage levels and reduced costs.
Anglo American’s people need to understand what AO means. This is achieved through communication, learning and development opportunities.
- AO communication involves providing messages across the whole of the organisation. These messages show what is involved in AO and outline the success stories achieved through ORs. Company magazines, posters and newsflashes are used to drive awareness and understanding to all workers.
- AO Academy Training involves providing training opportunities for employees to learn about all aspects of AO and ORs. Participants are able to share experiences of introducing improvements. The academy fosters the skills and culture needed to deliver AO results for the business.