AAOM Handbook

[OFFICIAL]

INTERNAL USE ONLY

CONTEXT Whilst the Operating Model underpins all strategic initiatives such as Sustainable Mining Plan, Future Smart Mining, Breakthrough Performance P101, Elimination of Fatalities, Operational Risk Management, Capital Efficiency, Digitalization and others, its purpose is to deliver all Business Expectations established with Executives. The Set Business Expectations and Operational Planning components of the Operating Model both use Business Structure Performance models at each level of complexity either as:

1. Horizontally interdependent Value Stream flow or 2. Vertically interdependent Value Driver Trees.

Operational Planning specifies the most cost-effective way to operate the business and has three Management Routines that drive operations to deliver Business Expectations on a quarterly and monthly basis, these are:

1) Communication of Business Expectations 2) Scenario Review 3) Operating Master Schedule/Expenditure Schedule Review

The first two of the Management Routines are enabled by Business Structure Performance (BSP) models. The Operational Planning loop sets performance targets and that the BPS models are used to understand and integrate dependencies, constraints and opportunities across the Business Value structure levels. It assists in doing this through a Theory of Constraints analysis which reveals opportunities that then inform the development and testing of operating scenarios through the other elements of Operational Planning. The third routine is enabled by the OMS/EPS scheduling model. These models show whether and how it is practical to meet the performance levels suggested by the scenario modelling. This Operational Planning loop is iterated until we have either met or modified the Business Expectations. The performance targets are the outcomes of the OMS/EPS, which at that point should align with the performance levels suggested by the BSP model of the scenario. Executives are accountable for Level of Work 7, 6, 5 BSP models that Set Business Expectations. General Manager or configured LoW4 role is accountable for the Operation (Level of Work 4) BSP models and Department Heads are accountable for the (Level of Work 3) BSP models, respectively. This Roleholder Manual focuses on describing building of both types of the BSP model i.e., modelling interdependencies across a level and modelling interdependencies between levels using Excel and @Risk tools. It is important to note that a Digital Operational Planning project is underway and nearing completion to release a cloud-based platform for Operational Planning and BSP modelling.

PURPOSE To provide guidance for the Business Structure Performance model.

Operational Planning: Building a Business Structure Performance Model Page 2 of 39