OPERATIONAL PERFORMANCE DASHBOARD DEVELOPMENT FOR OREFLOW DEPARTMENT CONCENTRATING DIVISION PT FREEPORT INDONESIA ARIF PRIYAMBODO NIM: 29107120 Date of Final Exam: Date of Graduation: Graduate Program Magister Business Administration School of Business and Management Institut Teknologi Bandung, 2009 Advisor: Dermawan Wibisono, Ph.D
ABSTRACT Oreflow Operation Department is part of Concentrating Division PT Freeport Indonesia. PT FI has implemented Key Indicator Performance (KPI) as a guideline to achieve production target every year. In year of 2009 PT FI would like to increase production following the mine sequence. Root cause analyzes concludes that oreflow department requires improvement of integrating performance measurement thus KPI target can be achieved in effective and efficient manner. The focus of the project is to develop a Performance Dashboard for operational purpose. The method starts with brain storming and top down interview internal and external department to carry out general idea of the problem, analysis and solution. The study has assumed qualitative approach in order to compare between existing system and Integrated Performance Measurement System (IPMS) from various literatures. The expected result of performance dashboard is to simplify scattered data, report, minimize mistake, avoid redundancy, and provide accurate information so that decision can be taken in effective and efficient manner. Dashboard is proposed into three group categories (1) executive, (2) supervisor and (3) operator. The executive dashboar contains score card, portal to safety, people, cost and production report and equipment monitoring display. The supervisor dashboard is designed to assist record daily acitivities, heavy equipment usage, document corrective action report, request repair for maintenance and roller replacement. Operator dashboard is to store manual measurement of scale, any down time event, tonnage and manual measurement of crusher gap. Development Performance dashboard shall be continued with training and maitenance along with middle management involvement and commitement.
Keywords: Key Performance Indicator, Integrated Performance Measurement System, Operational Performance Dashboar, Root Cause Analysis
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PENGEMBANGAN OPERASIONAL PERFORMANCE DASHBOARD FOR OREFLOW DEPARTMENT CONCENTRATING DIVISION PT FREEPORT INDONESIA ARIF PRIYAMBODO NIM : 29107120 Tanggal Lulus Ujian Akhir : Tanggal Wisuda : Program Magister Administrasi Bisnis Sekolah Bisnis dan Manajemen Institut Teknologi Bandung, 2009 Pembimbing: Dermawan Wibisono, Ph.D
ABSTRAK Departemen Oreflow Operasi adalah bagian dari Divisi Concentrating PT Freeport Indonesia (PT FI). PT FI telah menerapkan Key Performance Indicator (KPI) sebagai pedoman untuk mencapai target produksi setiap tahunnya. Tahun 2009 PT FI akan meningkatkan produksinya sesuai dengan mine sequence. Root cause analisis menyimpulkan bahwa department oreflow memerlukan perbaikan kinerjanya dengan mengintergrasikan pengukuran kinerja sehingga target KPI akan dicapai dengan cara yang lebih efektif dan efisien. Fokus utama dari proyek ini adalah untuk mengembangkan sebuah performance dashboard untuk operasional. Metode yang dilakukan pertama kali adalah dengan melakukan brainstorming dan top down interview yang dilaksanakan baik di dalam ataupun di luar departemen oreflow untuk memperoleh gambaran yang sama. Proses studi menggunakan pendekatan kualitatif untuk membandingkan antara sistim yang sekarang dan Integrated Performance Measurement System (IPMS) dari berbagai literature. Hasil yang akan dicapai dari adanya performance dashboard adalah untuk menyederhanakan data yang tersebar, pelaporan, meminimalkan kesalahan, meniadakan duplikasi, dan menyediakan informasi yang lebih akurat sehingga keputusan dapat diambil dengan cara yang efisien dan efektif. Dashboard diusulkan untuk dibuat dalam tiga kategori (1) executive, (2) supervisor, dan (3) operator. Dashboard untuk executive berisi scorecard, portal untuk safety, people, cost, laporan produksi, dan display untuk memonitor peralatan. Supervisor dashboard berisi hal-hal yang membantu untuk menyimpan aktifitas-aktifitas harian, perlatan berat, dan penggantian roller. Operator dashboard untuk menyimpan hasil pengukuran manual timbangan, kejadian peralatan berhenti, tonase dan pengukuran manual gap crusher. Proyek pembuatan dashboard ini harus dilanjutkan dengan training dan pemeliharaan disertai dengan ikut sertanya dan komitment dari middle management. Kata Kunci: Key Performance Indicator, Improve Productivity, Integrated Perfornance Measurement System, Operational Performance Dashboard |Page
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Table of Contents ABSTRACT ......................................................................................................................... i ABSTRAK ………………………………………………………………………………..ii TABLE OF CONTENT…………..……………………………………………..….…...iii LIST OF APPENDIX……………………………………………………………………vi DEFINITION……….……………………………………………………………..……vii ACKNOWLEDGEMENT………………………………………………………..……vii CHAPTER 1.INTRODUCTION ...................................................................................... 1 1.1 PT Freeport Indonesia ................................................................................................ 1 1.2 Concentrating Division .............................................................................................. 3 1.3 Concentrating Division Vision .................................................................................. 4 1.4 Concentrating Division Mission ............................................................................... 5 1.5 Performance Management System ........................................................................... 5 1.6 Concentrating Division Performance Management Development ..................... 7 1.7 Safety and Hygiene ..................................................................................................... 7 1.8 Environmental ............................................................................................................. 9 1.9 People……….…………………………………………………………………….....10 1.10 Production ................................................................................................................ 10 1.11 Business Issues ......................................................................................................... 11 CHAPTER 2. BUSINESS ISSUES EXPLORATION .................................................... 14 2.1 Background ................................................................................................................ 14 2.2 Root Cause Analysis ................................................................................................. 17 CHAPTER 3. BUSINES SOLUTION ............................................................................ 18 3.1 Scope of Thesis ......................................................................................................... 20 3.2 Development of Vision, Mission and Value ........................................................ 20 3.1.1 Vision ....................................................................................................................... 20 3.1.2 Mission..................................................................................................................... 20 3.1.3 Value ........................................................................................................................ 20 3.3 Integrated Performance Measurement System ................................................... 22 3.4 Development of Operational Dashboard ............................................................. 26 |Page
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3.4.1 Definition................................................................................................................. 26 3.4.2 Function of Dashboard .......................................................................................... 27 3.4.3 Performance Dashboard Criteria ......................................................................... 30 3.4.4 Building Oreflow Operation Performance Dashboard .................................... 31 3.4.4.1 Current Data Flow ........................................................................................... 32 3.4.4.2 Report Generating ............................................................................................ 33 3.4.4.3 Measurement of Material Balance ................................................................. 34 3.4.4.4 Measurement of System .................................................................................. 36 3.4.4.5 Measurement of Crusher ................................................................................ 37 3.4.4.6 Measurement of Conveying .......................................................................... 40 3.4.4.7 Performance Dashboard Methodology ........................................................ 40 3.4.4.8 Identification .................................................................................................... 43 3.4.4.9 Design ............................................................................................................... 43 3.4.4.10 Prototype ........................................................................................................ 45 3.4.4.11 Trial and Review ........................................................................................... 47 3.4.4.12 Deployment and Maintenance .................................................................... 49 CHAPTER 4. BUSINES SOLUTION ............................................................................ 51 4.1
Understanding Needs of Customers................................................................... 51
4.2
Determine User Group .......................................................................................... 52
4.3
Prototype ................................................................................................................. 54
4.4. Recommendation ..................................................................................................... 79 REFERENCE .................................................................................................................... 80 APPENDIX ……………………………………………………………………………..81
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APPENDIX APPENDIX A
: Concentrating Division KRA/KPI ……………….….….….81
APPENDIX B
: Oreflow Operation Department KRA/KPI ........…….…..…81
APPENDIX C
: Down time Definition ………………………………………..86
APPENDIX D
: Flow chart Safety KRA/KPI ………………………………....87
APPENDIX E
: Flow Chart Environmental KRA/KPI……….………………88
APPENDIX F
: Sample of Dashboard Minute Meeting …………………....89
APPENDIX H
: Oreflow Production Daily Report by Metallurgy………...90
APPENDIX I
: Oreflow Production Daily Report by Operator…………..91
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FIGURE Figure 1.1 Current and Future Ore Deposit of PT Freeport Indonesia …………....2 Figure 1.2 Concentrating Mineral Processing Overview…………………………… 3 Figure 1.3 Concentrating Division Departments……………………………………. 4 Figure 1.4 Schematic Process of Performance Appraisal …………………………....6 Figure 1.5 KRA Weight Standard Distribution……………………………………….8 Figure 1.6 Safety and Industrial Hygiene Objective ………………………………...9 Figure 1.7 Oreflow Department Organization Structure…………………………...13 Figure 2.1 Flow chart of Thesis Methodology……………………………………….15 Figure 2.2 Root Cause Analyses……………………………………………………... 17 Figure 3.1 The Context of Performance Dashboard…………………………...........47 Figure 3.2 Current Operational Data Flow ……………………………………….…50 Figure 3.3 Current Operational Reporting Flows………………………………….. 51 Figure 3.4 Ore Material Balance Flow………………………………………………..53 Figure 3.5 Step by Step Performance Dashboard Methodology …………………..60 Figure 3.6 Dashboard Entrance ……………………………………………………....71 Figure 3.7 Security Privilege..………………………………………………………....71 Figure 3.8 Executive Dashboard Main Feature……………………………...………71 Figure 3.9 Executive Production Performance Score Card……………………….72 Figure 3.10 Executive Mechanical Performance Score Card ………………………72 Figure 3.11 Safety KPI Portal……………………………………………………….…73 Figure 3.12 Employees Database KPI Portal………………………………….….….75 Figure 3.13 Production KPI Dashboard……………………………………...……….76 Figure 3.14 Daily Production KPI Dashboard……………………………...………..78 |Page
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Figure 3.15 Production Summary 24 hrs from real time 2hrs data………….…….81 Figure 3.16 Split Camera Portal……………………………………………………….82 Figure 3.17 Size Distribution Result from Split Camera…………………..………..81 Figure 3.18 Correlations between Throughput and Crusher Power……………...81 Figure 3.19 Correlations between Throughput and Truck Light Dump………….82 Figure 3.20 Correlations between Mantle Position and Power…………………….82 Figure 3.21 Ore Bin Level ……………………………………………………………..83 Figure 3.22 Mines Production and Mill Process………………………….…………84 Figure 3.23 Crusher and Conveying Dashboard…………………………...……….85 Figure 3.24 Crusher Mechanical Measurements………………………………….…85 Figure 3.20 Correlations between Mantle Position and Power ……………………83 Figure 3.25 Crusher Parameters……………………………………………………....86 Figure 3.26 Mantle Position by Manual Measurement…………………..…………86 Figure 3.27 Rock Breaker Status………………………………………….………..….87 Figure 3.28 Individual Downtime Explanations for each System…………..……..87 Figure 3.29 Variance and SPI Score Card……………………………………………88 Figure 3.30 Operational Crew Activity Report Portal………………………………89 Figure 3.31 Mobile Equipment Activity Portal……………………………………...90 Figure 3.32 Roller Replacement Management Portal……………………………….91 Figure 3.33 Request for Maintenance Repair Portal…………………………...……91 Figure 3.34 Corrective Action Template and Reporting……………………..…….92 Figure 3.35 Operation Down Time Report………………………………………..…93 Figure 3.36 Figure Scale Manual Record …………………………………………….94 Figure 3.37 Crusher Manual Measurement Portal……………………………….....95
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TABLE Table 1.1 Sample of Safety and Industrial Hygiene Accident Rate………………..10 Table 2.1 Production throughput comparison year 2008 and 2009………………..16 Table 2.2 Production System Availability comparison year 2008 and 2009…...…17 Table 2.3 Summarize Issues and Current Status…………………………………….19 Table 3.1 Comparison of Each Conceptual Framework……………………………42 Table 3.2 Data Type between Manual and Real Time……………….…………..….51 Table 3.2 Definition Measurement of Equipment System ……………..….….……53 Table 3.3 SIPOC Description of Proposed Performance Dashboard……….….….61 Table 3.3 Proposed Improvements through Performance Dashboard…….…..….65 Table 4.1 Result of Top-Down Interview…………………………………………….68 Table 4.2 Dashboard Group and Report…………………………………………..…69 Table 4.3. List of Reporting for Production Dashboard………………………..…...75 Table 4.4. List of Reports in the Production Report Dashboard………….………..77
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DEFINITIONS Accountability The obligation of person, group or organization assumes for the execution assigned authority and/or the fulfillment of delegated responsibility.
of
Corrective Action Action taken to rectify conditions adverse of quality and, where necessary to preclude repetition. Crushing Process of broken material to smaller size using crusher machine. Crusher A Machine that is designed to reduce large solid material into smaller pieces. Crusher gap Measurement of distance between mantle and concave. Flotation Process of physical separation valuable from non valuable mineral using chemical reagent. Gaitronic Name of a communication device that normally used in the plant. Material Balance Distribution of material on each measured point. Ore Rock contain with valuable minerals. Objective A statement of desired result to be achieved within a specified time. Performance Measure A quantitative or qualitative characterization of performance.
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Performance Measurement The process of measuring the performance of an organization, a program, a function or a process. Prototype The original from of something which has the essential features and is the model for subsequent forms. Real Time Actual time of occurrence during which something happens. Root Cause The basic reasons for conditions adverse to quality that, if correct, will prevent occurrence or recurrence. Smelter A plant to smelt concentrate become metal. Split Camera Camera is used for capturing ore and analyzed its size distribution Tagname Attribute code to particular measurement. Throughput Tonnage from measurement of scale. World Wide Web A system for accessing, manipulating and downloading a very large hypertextlinked document located on computer connected through the internet.
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ACKNOWLEDGEMENT There are a lot of people who has contributed to making this possible project. First and foremost we would like to thank Mr. Dermawan Wibisono my thesis advisor who has been great support during the whole process and contributed with advice and opinion. Further we would like to thank to PT Freeport Indonesia for the opportunity to join MBA program that give us new insight on managing business. Concentrating Division and Oreflow Operation Department team for letting to receive valuable information and input for completing the project that would not have obtained without their assistance and time. Hopefully that developed dashboard will assist to monitor, measure and analyze the process more efficient and effective. We would like to thank especially to Erwin Simanjuntak for his dedication and outmost contribution in finishing development of dashboard programming. Finally we would like to thanks to my lovely family and friend Yayuk, Yessy, Dary and Vania for not being with them during busy time to complete this thesis.
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