AAOM Handbook

PS.00 Set Production Strategy

Context

Within the Operating Model three terms 1 are used to classify different types of activity that can be applied to a process. These are; 1. Production Work – activities directly involving transferring, transforming or storing materials or information within a process. For example: a) in a mining/mineral processing environment; blasting, hoisting, stockpiling, grinding, smelting. b) in a power generation environment; transferring fuel, transforming energy (e.g. oil to heat, rotation of alternator to electricity), transforming voltage & current levels and transmitting power over lines. c) in a procurement and supply environment, placing orders, receiving, warehousing and issuing goods. Note: The world is full of interconnected processes, and the output of one process may produce and/or deliver an output (materials or information) that is an input (ingredient, reagent or consumable) in another process. In such cases the process that is delivering the input may sometimes be described as providing a 'service' to the primary process, and hence it may be tempting to classify all work taking place in the source process as ‘service’ work. This approach does not fit with the definition of Production and Service work adopted within the Operating Model, since the 'service' process is also transferring, transforming or storing materials or information. Hence, in the Operating Model, all activities involved in transforming, transferring or storing materials or information, in any process, are defined as the Production work of that process. 2. Service Work – activities involved in identifying and managing threats (to both the process and its environment) associated with a Process. For example: a. in a mining/mineral processing environment; monitoring and maintenance of environmental controls, monitoring and maintenance of ground support or pit walls, monitoring and maintenance of roads, monitoring and maintenance of equipment. b. in a power generation environment; monitoring and maintenance of environmental controls, monitoring and maintenance of equipment. c. in a procurement and supply environment; stocktaking, contract compliance assessment and turning of bearings on warehoused spare equipment. From this definition of Service work it should be obvious that setting a Service strategy is a process of risk management. It follows then that in

1 These terms are adapted from the work of Macdonald Associates.

© McAlear Management Consultants 2006

Operational Planning: Set Production Strategy

Updated: August 2018

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