Rio Tinto = Productivity = Efficiency = Innovation = Sustainability = Profits

Rio Tinto leads the world in using business improvement tools to streamline their operations, making them the cheapest producer of iron ore in the world, as well as being the second largest.

Sam Walsh, Rio Tinto’s iron ore chief, attributes this advantage through smart use of technology and innovation.  “It’s about thinking of mining as a factory”, Mr Walsh says[1].

By taking ideas from the car industry, which happens to be one of the largest customers, Rio Tinto has been able to adopt the principles and approaches to innovation and sharing of ideas.

It is a little know secret to many that Mr Walsh stems from the car industry.  Utilising the same leadership and management techniques that transformed the Japanese manufacturing sector, Mr Walsh has been able to implement these across several Rio divisions.  The key concepts used are problem solving methods, eliminating variations and removing waste.

Sam Walsh says “If I look at the various things I have shamelessly lifted from the car industry, the most obvious is the business improvement model”[2].

One of the areas that Mr Walsh highlighted was that Mining is no different to any other business and that data is of high importance.  His vision is to create a seamless and controlled environment comparable to a well-oiled production line, allowing the handling of billions of tons of dirt annually in a smooth manner.  The aim is to utilise automation enabling repeat processes and clear forecasting.  Just like in a car factory that combines many different parts to build the car, the mining operations have the same principles apply to them in areas such as planning, scheduling and product flow.

On the forefront of all this is communication backed up by knowledge of individuals and data to support the operations.  Principles like JIT (Just in Time) are readily used and form critical foundations for the day to day operations.  Mr Walsh discusses change as an important part, driven by a centralised decision making structure.

With the concept of running the Pilbara with the principles of a Toyota factory, the results were to look at the processes required, and the control needed to ensure a smooth supply chain supported by data.  Mr Walsh told the Federation of Automotive Products Manufacturers: “What they now see is a business that is very sophisticated and in some ways more sophisticated than areas of the automotive industry”[3].

I would highly recommend that you read the article by Peter Roberts from the AFR Boss Volume 13 in October 2012.  It further proves the case and need for implementations like our Lean Resources and Lean Construction to ensure long term sustainability of these industries.

One are Mr Walsh did not directly address, but which is critical to the success of any change and business program is leadership and culture.  Through the right leadership we can foster a culture that will create innovation from within.  The Chase leadership and culture programs address just this.

Lean in resources is widely used and with the use of government incentive programs, we can deliver programs over a twelve to eighteen month period, with a pay back of less than two months in most cases.  All programs are delivered on site, and focus on project implementation, and supporting the organisation with extra resources enabling their resident lean improvement specialists to achieve even better outcomes.

Have a look at one of our case studies with Leighton's HWE Mining or read up on how we are assisting over 700 people at Bluescope Steel in the same way.  There are many more case studies, but at the end, we will collaborate with you and create a partnership that will allow for the creation of a program that suits your business, whether it is supporting what you already do, or implementing a whole new program.

For more information, please contact us at Chase Performance on 1300 880 338 or contact us through our web site www.chaseperformance.com

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[1] Roberts, P (Oct 2012), Drilling Down, Australian Financial Review: Boss, Innovation Section (pages 16-24)

[2] Roberts, P (Oct 2012), Drilling Down, Australian Financial Review: Boss, Innovation Section (pages 16-24)

[3] Roberts, P (Oct 2012), Drilling Down, Australian Financial Review: Boss, Innovation Section (pages 16-24)

Harnessing Employee Engagement

An interview with Toyota Motor Corporation`s former Senior Managing Director, Mr. Yasuhito Yamauchi

Angela Corriero of Chase Performance had the opportunity to sit down with Mr. Yasuhito Yamauchi to discuss his views on  sustaining continuous improvement and harnessing internal know and innovation.

Managing Success

“Effective TQM and improvement implementation starts with the thorough implementation of the job`s basic work standards. After a work standard has been decided, it has to be practiced exactly. 

In order to practice the standards perfectly, staff must know the true meaning and value of each standard – not only in theory. They must have the skill and knowledge to put it into practice. Then, it is the supervisor`s duty to check and confirm the standards have been put into practice exactly.

The role of the supervisor is a very important one. Education and training to supervisors is essential.

We create standards based on the supervisor`s skill and knowledge; with the benefits for the company in mind. 

Supervisors are the link between the front line staff and upper management.

When is it time for improvement?

Sometimes, implementation of the work standards is not enough.  The operators may carry out the work sequence and standards but feel some uneasiness – this is the time for them to suggest improvement.

The key: create a working environment where workers can suggest improvements.

Work standards must be followed, but once staff realise that a particular standard is not enough,  it is the time for change.

When there is a need for improvement, supervisors must be able to improve the work sequence or fix the problem.

On workforce management

Upper level (above supervisors) must understand the continuous improvement philosophy.

Actually, it`s front line staff`s ideas and suggestions which must be absorbed into the upper levels of management. Continuous improvement implementation is truly a bottom- up approach to effective management.

In the West, there is a separation between blue collar and white collar workers.  Blue collar workers must follow white collar rules.

This inhibits effective improvement, total participation and employee motivation – This inhibits cost reduction and profit maximization.

Good Communication breeds success.

How success is culminated, one step, one worker at a time.

A company is built up by a culmination of individual efforts. Section to department to Company wide.

This is something we`ve been doing at Toyota from the beginning.  It`s nothing special, just the way of doing business.

Material costs are pre-determined by the market. Therefore, our strategy has long been:

Increase Performance Rates to

Increase Profit.

The Key: recognise waste and minimise it.

When busy, it is very difficult to reduce waste, and implement continuous improvement and 5s consistently.  After the Global Financial Crisis, it became easier to do this as we had lower production demands.  The results have been impressive.                                                                      

Although, we have not reached our Global Financial Crisis production levels, our profit level has been increasing rapidly.

This is the power of the Toyota Production System fundamentals of  standardisation, 5s and continuous improvement.

Motivation is Key!

Unless we have vitalised front line staff, we cannot be successful.  They are the ones who actually produce the product and the profit.

Our job in management, is to make them energised.The corporate culture must be vitalised.

At the factory sites, I tell staff, “you are the people who actually create profit through your skills and wisdom. Material costs are pre-determined by the market.  How do we increase profits? You. Through your skills and performance.”

Unless employees are motivated, we cannot create a good, attractive company.

Managers, directors and supervisors must understand this or their system won`t work.

“As a leader, I have to communicate the corporate vision to all members of the company and must show that we are very concerned about our vision and our future direction.

Whenever I have time, I visit the Gemba of all divisions. I visit people. Because I am in a high position, If I call others to come, it`s no good. No, I go to them.”

Mr. Yamauchi praised Proctor and Gamble`s corporate philosophy, “Proctor and Gamble share the same idea. They pay good attention to employees.  We see things in common among excellent companies throughout the world.”

Motivation in the Workplace

In light of the recent addition to the Chase Performance team, Angela Corriero, and the subsequent connection to Process Improvement Japan (http://www.process-improvement-japan.com/), we have learnt even more about the importance of culture in a company in regards to Lean.  The below article is a direct copy of the information on Process Improvement Japan (http://www.process-improvement-japan.com/motivation-in-the-workplace.html).  For more information please visit the Process Improvement Japan site, the Chase Performancec site (http://www.chaseperformance.com) or contact us at sales@chaseperformance.com.  We would be happy to discuss this further directly with you, and with offices around Australia one of our consultants or coaches is never far ayay.

Motivation in the workplace is key!An exclusive interview with Executive Vice Chairman Yasuhito Yamauuchi, Aisin Seki, Japan.
Aisin Seki is one of the major Toyota Group companies. It is also a fortune 500 company. Mr. Yamauchi, elected Vice Chairman in 2009, served as the President of Aisin Seki from 2005 to 2009. Prior to that, he was Executive Managing Director of The Toyota Motor Corporation from 2001 to 2005. Managing all production plants internationally. 
Photo above: Mr. Yasuhito Yamauchi, Aisin Seki left, Ms. Angela M. Corriero, Process Improvement Japan, right.

Process Improvement Japan had the opportunity to sit down with Mr. Yasuhito Yamauuchi to discuss his views on Total Quality Management and Lean Kaizen implementation. What came out was the link between successful lean management and motivation in the workplace. An understanding, Mr. Yamauuchi says, excellent companies around the world have in common.

Managing Success

“Effective Total Quality Management and Lean Kaizen implementation starts with the thorough implementation of the job`s basic work standards. After standardization has been decided, it has to be practiced exactly. In order to practice the standards perfectly, workers must know the true meaning and value of each standard – not only in theory. They must have the skill and knowledge to put it into practice. Then, it is the supervisor`s duty to check and confirm the standards have been put into practice exactly. The role of the supervisor is a very important one. Education and training to supervisors is essential. We create standardization based on the supervisor`s skill and knowledge; with the benefits for the company in mind. Supervisors are the link between the front line workers and upper management.To become a supervisor at Toyota Motor Corporation or Aisin Seki, takes a lot of experience.

Where Gemba kaizen comes inSometimes, implementation of work standards is not enough. The operators may carry out the work sequence and standards but feel some uneasiness – this is the time for them to suggest kaizen.
The key is to create a working environment where workers can suggest improvements.
Work standards must be followed, but once workers realize that a particular standard is not enough, it is the time for kaizen. When there is a need for Kaizen, supervisors must be able to improve the work sequence or fix the abnormality. Motivation in the workplace creates momentum for effective gemba kaizen implementation
Photo above: A worker explains his gemba kazien suggestion.

For details on kaizen and lean manufacturing principles, click here.

On workforce management

Upper level (above supervisors) must understand the Kaizen philosophy and the importance of motivation in the workplace. Actually, it`s front line workers` ideas and suggestions which must be absorbed into the upper levels of management. Kaizen implementation is truly a bottom- up approach to effective management. In the West, there is a separation between blue collar and white collar workers. If blue collar workers must follow white collar rules, it inhibits effective Kaizen, employee engagement and employee motivation – This inhibits cost reduction and profit maximization.

How success is culminated, one step, one worker at a time:
A company is built up by a culmination of individual efforts. Section to department to Company wide. This is something we`ve been doing at Toytota from the beginning. It`s nothing special, just the way of doing business.Material costs are pre-determined by the market. Therefore, our strategy has long been:

Increase Performance Rates to increase Profit.

Key in The Toyota Production System: The Elimination of Waste
When busy, it is very difficult to reduce waste, implement continuous kaizen and lean 5s consistently. After the Lehman shock, it became easier to do this as we had lower production demands. The results have been impressive. 
Although, we have not reached our pre-Lehman production levels, our profit level has been increasing rapidly.
This is the power of the Toyota Production System fundamentals of Standardization, Just-In-Time manufacturing, lean 5s and continuous kaizen.

For more details on The Toyota Production System`s view on profit and the elimination of waste, click here.

Motivation in the Workplace is Essential

Unless we have vitalized front line workers, we cannot be successful. They are the ones who actually produce the product and the profit. Our job in management, is to make them energized. The corporate culture must be vitalized. At the factory sites, I tell workers, `you are the people who actually create profit through your skills and wisdom. Material costs are pre-determined by the market. How do we increase profits? You. Through your skills and performance.`
Unless employees are motivated, we cannot create a good attractive company.

Managers, directors and supervisors must understand this or their system won`t work. Leadership Styles are important.
As a leader, I have to communicate the corporate vision to all members of the company and must show that we are very concerned about our vision and our future direction. Whenever I have time, I visit the Gemba of all divisions. I visit people. Because I am in a high position, If I call others to come, it`s no good. No, I go to them.”

CASE STUDY: Motivation Theory & Employee Engagement, click here.

How to motivate employees, click here.

Mr. Yamauuchi praised Proctor and Gamble`s corporate philosophy, “Proctor and Gamble share the same idea. They pay good attention to employees. We see things in common among excellent companies throughout the world.”

For Mr. Yamauchi`s view on employee engagement, click here.