Thursday, October 29, 2015

Recognizing waste is a "Golden" Opportunity at Kinross Round Mountain Gold Corporation

Ernie and I have been blessed to be a part of the learning journey with our friends at Kinross Gold Mine, in Round Mountain, Nevada.  We had the distinct pleasure of meeting several of their continuous improvement team back in 2012, and it is been a true learning "excursion" for us all.   We often admit they are one of our unique clients in location and their gemba is just indescribable (see pic above). The term "going to the gemba" has been redefined for us at Kinross to say the least.  There was absolutely nothing that could prepare us for the trek outward to Round Mountain (4 hours from Las Vegas).

  The sheer natural beauty that surrounds the mine, residing at approximately 6065 ft. elevation; as well as the internal anxiety I had my first trip out.  So imagine if you can for a moment going "home" (within eyeshot of your work every day), and all your neighbors are your co-workers.  Imagine going to the local grocery store and you know everyone's face that surrounds you.  Think of a place where there is no traffic, no stop lights, no Walmart or shopping opportunities, no fast food or restaurant chains,  just people living simply between spectacular mountain ranges where a vast amount of wild animals roam freely. 
Each worker, regardless of their level in the organization, goes to their process each day as if they were an owner which invests them all towards their future.  Without the efforts put into succeeding, failure would most likely result in uprooting their families, one that now have children who work there.  The town of Round Mountain combined with the mine and the workforce have created an all-inclusive community for their people which includes a K-12 school, library, recreation center, fitness center, golf course, post office, gas station, grocery store, daycare and churches. 

Our Kinross family enjoyed watching us "acclimate"  at our very first session in 2013 to life between the mountain ranges, but what we all didn't realize that it was the start of a great opportunity to visualize together how to do business a bit differently.  We excitingly admit that after a "Kinross training session" we can feel the enthusiasm for change in the air and the urgent motivation from everyone to get back to their roles and make an impact.  The energy there is contagious, and the discipline and accountability for actions are inching towards the norm.  After almost two years of training (customized for Kinross by Teaching Lean Inc.) and demonstrating learned knowledge at the gemba their recent improvement efforts at the mine have shown early success.  This has created an environment where the majority of the workforce are empowered and have become invigorated by the opportunity to extend the mine life and improve the way they do business.  They are evolving towards an environment where employees feel like they can share their ideas and make change happen.  Much of their workforce has taken ownership in the overall improvement effort and the need to change for the better.

As many of you know the price of gold is controlled by the market so flexibility and adaptability is crucial to when prices are on the lower side.  As history has shown us when the price of gold drops; so can employment in the form of layoffs, and cutbacks and mines may have to close the doors to their operations.  As Ernie and I make that trek from Las Vegas to Round Mountain, we are often reminded along the way of the once booming towns that are now just an eerie remnant of what the market can do if an organization does not apply forward thinking.  Round Mountain Gold is working diligently through developing their people and improving processes to avoid another deserted town in the canyons of Nevada.  They are very aware that the price of gold and ore reserves will determine the mine life unless they are all willing (entire value stream) to do business differently. 

Everyone is vested and realizes their job security depends on their ability to think their way into mining more effectively and efficiently.   RMGC is comprised of 900 employees – approximately 1,000 (including contractors at the mine).  Their vertical roles start with their General Manager “equivalent President level", Department Managers, Superintendents, General Foremen, Supervisors, Leads, and workforce.  All the functional areas (silos) of the mine have to work together to optimize production & efficiency of mining/processing.

Some have been intrigued and asked - "What is the value stream of a mine?"  So at a high level I can describe that it starts with: 

Geological determination (where does the gold reside) >> Mine planning>>Mining>>Hauling>>Processing>>Milling>>Leaching>> Refining>> Gold Bar

Let me share just one example of how waste was discovered at RMGC through the development of people.  So looking a bit closer at the "hauling" value stream:

Some of the work is done with excavators and front end loaders, so the areas of focus that can impact company KPI's are-- (productivity,hang, load and operational delay time)

Once loaded, hauling is an integral part to getting the ore to the next step of the value stream which is processing.  RMGC utilizes a fleet of 785 (150 ton), 789 (200 ton), 793 (260 ton) type hauling trucks.  (I will have to admit the tires on some of these are almost as tall as my house).   The granular value stream steps they are keying on are:   Motion waste, truck exchange time, load time, travel w/load time, dump time, travel empty back to loading equipment.  This is all considered cycle time.

So, in short- optimum utilization of haul trucks (improve productive time) & loading equipment is crucial to their business:
        Reducing operation delays
o   equipment inspection
o   fueling
o   blasting
o   scheduled break times
o   shift & shift change

There are various value streams but looking at one focus area>> a 793 Haul Truck with a capacity of 260 tons, a grossly generalized number would be about 1 oz of gold per load (~$1,150/oz.) With 800 loads per day, and the improvement of overall utilization of equipment; an extra five loads per day can be achieved. This practice demonstrates the application of the "One Second Rule" we often use in our sessions and have written about in previous blogs.  So if waste can be reduced in the value stream, then five extra loads of ore moved per day equates to approximately 2,000 more ounces each year.  You can do the math.  Amazing when you look at each specific value stream how it can contribute to the overall in grand ways. We call this cost translation.  This is one of many examples of waste elimination that results in adding more value and positively affecting productivity and costs.   

So rather than accepting closure of the mine as the fate of many before them, the employees of Round Mountain Gold are proactively working together to raise the "gold" bar and continue to learn and build on the successes they are achieving each day.  They have to lead, empower, engage and challenge each other believing that future "mine life" is totally possible and attained through continuous improvement and people development.

Kinross Round Mountain Gold mine with the support of Teaching Lean Inc. will be telling their "story" of how they are changing the way they are doing business differently to extend the life of their mine and uniquely created community at the Lean Transformation Summit in March of 2016 in Las Vegas, Nevada.   If you are interested in learning more about them and being a part of the Summit, go to  

Ernie and I would like to personally thank:
Frank Wagener, Vicente Ramirez, and Deanna Hall for all their hard work and willingness to share some insight to their business practices and helping us share this very unique blog.  They are part of the continuous improvement team at Kinross Round Mountain, they are truly visionaries and change agents for Kinross, and we are thankful to call them friends.  We look forward to seeing your future evolve through people development.

Until next time, 
Tracey and Ernie Richardson 

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