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Annual report suite 2012

Project One: Business Process Framework

Project ONE is AngloGold Ashanti’s critical business improvement programme.

CASE STUDY

The future of mining: technology and innovation in the 21st century

The Technology Innovation Consortium was established by AngloGold Ashanti to develop innovative technological solutions, improve safety and enhance mining efficiencies by collaborating with industry partners as well as partners beyond traditional mining borders.

See case study: South Africa – The future of mining: technology and innovation in the 21st century

Project ONE consists of two components: the Business Process Framework (BPF) and System for People. The BPF relates directly to three of our strategic goals – maximising margins, managing the business as an asset portfolio and growing the business. The entire AngloGold Ashanti business is considered as a portfolio of assets in which we use the BPF to analyse and identify our strengths and weaknesses. Based on this analysis we can assess what should be done to optimise our portfolio.

What we said we would do

Launched in August 2008, the BPF is a scientific and rigorous system for creating a solid link between stakeholders’ expectations and business results. The BPF provides tools to routinely analyse the flow of product, costs and value through our operations, supporting the identification of the constraints to value generation, and hence the opportunities for optimising results. The approach to opportunity delivery is defined through production and service strategies, and master schedules. These intentions are, in turn, reliably and correctly delivered via a rigorous work management process. Application of the BPF will ensure the business delivers in line with its expectations and potential.

Until the end of 2011 the major effort of the BPF implementation was on work management, with some initial work on the fundamentals of measures and analysis. This was because strong capability in these areas is the foundation for delivery of performance.

With substantial progress made in these areas, the focus during 2012 shifted to the BPF areas related to process optimisation, in other words, how the BPF process can be used to add further value to AngloGold Ashanti.

Our performance in 2012

The process data gathered through the performance measures have been used to develop, optimise and apply statistical performance models for each of our operations. A statistical model allows us to understand the interaction of capacity, variability and interdependence between the components of our operations. Using these techniques we have been able to identify and quantify the value of improvement opportunities far more effectively than was previously possible.

In the performance modelling, all potential risks (ranging from those that are routine to those that are rare) were considered, so as to determine the realistic confidence of targets being met. The results from the models assisted the executive committee to determine what targets could be met with an acceptable level of confidence. The identification and modelling of risks have also guided our ability to devise contingency plans for the most significant risks, further increasing our confidence of meeting our growth and production targets. Through these BPF processes AngloGold Ashanti has begun to obtain a clearer view of our assets, and we are now assessing the full potential of individual assets to deliver value.

The BPF design has also provided the foundation processes for the implementation of SAP as an integrated, company-wide, enterprise resource-planning system. SAP brings together all the transactions (finance, supply chain and work management) necessary to ensure that we can reliably deliver the right work. SAP will provide a sound and sustainable platform for the work management aspect of the BPF, and is scheduled to go live in South Africa in February 2013.

Major challenges

The major challenges encountered in the implementation of the BPF have been the result of the size and diversity of the group. Traditionally, there were many different views on how best to define, organise and complete our work. The evidence was clear that not all of these approaches were equally successful. Through Project ONE we are harvesting the best and most innovative elements from this diversity, bringing it into our BPF operating model and aligning the work of every area and function to that operating model. With over 60,000 employees, this is a significant management challenge. In order to maintain impetus and to ensure that its benefits are sustained, the aim is to make the BPF a way of life at AngloGold Ashanti.

Next steps

Priorities for the year ahead will be to plan the implementation of the business analysis and to complete elements of the BPF in order to release more of the latent potential of our operations.

Key performance indicator

Value created for AngloGold Ashanti since inception of BPF in 2008