A leading provider of large-scale mining solutions to Australia's major resources companies, HSE Mining has embarked on a continuous improvement program that has seen it emerge as a flexible, safe, lean and client-responsive company after a tough 24 months.
HSE Mining is known for its expertise in providing pre-stripping and mining services in coal, iron ore, copper, zinc, nickel and gold mining. It also owns and operates significant fleets of ultra-class and ancillary equipment.
In the last two years, the company’s focus on improving every aspect of the way it does business has been its strongest asset.
As a mining services operator that provides everything from supply equipment to human capital to maintenance, HSE Mining is a small but agile player in the mining industry, which gifts it the ability to be flexible and responsive in line with clients’ requirements.
This unique point of difference has allowed the company to “emerge a stronger and fitter company after what has been a pretty tough 18-24 months in the resources sector,” says Managing Director Allan Fidock.
Fidock, who has worked in the mining industry since 1980, began his career with HSE Mining in August 2014, first as General Manager of Mining Services and then as Managing Director.
“We pride ourselves on our nimbleness to accommodate our clients’ requirements. We aim to provide the right solution they require, whether it’s the supply of equipment, expertise or a total service provision solution, so we are flexible in our approach,” he explains.
“Recently, like all of our clients and competitors, market conditions have forced us to relentlessly drive improvements in our operations. There were a number of areas where we could see we could substantially improve.”
“The first area of focus was improving our safety performance. I am pleased we have made substantial improvements in lead and lag indicators, which I believe are now industry leading. This result is a credit to our employees who benefit from a workplace where incidents are uncommon and they can finish their work days without injury. During the past two years we’ve spent considerable effort embedding safety as part of our day-to-day operations, because we understand that safety excellence equals operational excellence. Safe operations are essential to attract and keep the best employees and for customers to consider you for contracts.”
“Outside of safety, our improvement program has focused on improving processes to maximise efficiencies, reduce costs and increase productivity.”
HSE Mining has focused on four key areas: inventory management, strategic procurement, maintenance cost management and data capture.
At the outset, there was only one way to tackle inventory management, Fidock explains, and that was to strip back to basics.
“We analysed item by item what we had on hand, what we were ordering and if we were using the parts we were ordering. The goal was to understand what stock we have in place across half a dozen sites, so we could implement an easily repeatable process to improve our inventory program,” he says.
“Now we’re systemising that process across our sites, so we’ll have a standard approach.”
In taking count of inventory across various sites, “there were a few surprises”, Fidock admits. For instance, he found that they had more stock than they expected, in terms of both quantity and value.
“It’s been a very valuable process, as we’ve been able to fully understand the breadth of assets we have at each of the different locations where we have contracts. For our customers, this means faster, leaner asset maintenance as we can source a part from another site rather than having to order immediately from the supplier,” he continues.
After this process concluded, the next step was a more strategic procurement program, a part of the business that HSE Mining “hasn’t had as a capability up until now”.
“We felt we needed more assurance around our procurement, both in terms of ensuring we’re getting the right quality for the best price for the parts and materials we procure for our business, but also ensuring a consistency and timeliness of supply and managing our risk, in terms of supply contract terms and conditions,” Fidock says.
“Over time we’ve had many, many different suppliers for similar parts so we needed to rationalise: what are the key groupings and how can we get a more orderly arrangement around the companies we trade with?
“We are still assessing our current spend, looking at key suppliers, and approaching them for opportunities for improved contracts,” Fidock adds. “The key here is to work closely with suppliers to find the most timely and cost effective outcome, not simply a cost reduction which can be counter productive when the ultimate result needs to be sustainable for all parties.”
There’s much commonality across the areas of inventory management and procurement, and they go hand-in-hand with HSE Mining’s third pillar of process improvement: maintenance cost management.
“Maintenance is something we’ve always been really proud of, in terms of our ability to properly maintain equipment to a great standard. But that said, everything is open to review,” Fidock says.
“Those are the key areas we’re working through now, to give us confidence that we’re moving in the right direction.”
Lastly, the final piece of the puzzle as HSE Mining consolidates, is a revamp of its data capture and processing systems.
“Historically, the integration of our claims data into a format that suited our client was proving to be problematic, and we could also see opportunities to improve our efficiencies and capture our own data better,” Fidock explains.
“For instance, each of our contracts has different conditions around payment, and at the end of each month, we need to collate data accurately to ensure claims are provided to our clients efficiently and effectively. We now have a program to capture the right data and provide our customers with the information they need quickly, consistently and efficiently, while also leveraging that information to continue improving our own processes.”
There remains “a whole range of opportunity out there” to adopt further technologies, to enable processes within their business that have historically been largely paper-based, and Fidock is exploring opportunities to streamline day-to-day operations.
All of these elements, which have been focused on driving excellence in operations and continually improving processes, have combined to put the company in the position of strength it is in today.
“The driver behind these programs is the fact that we’re preparing ourselves to be absolutely match fit, for when new opportunities come along and market conditions improve,” Fidock says.
The relatively new ownership structure is also helping HSE Mining to build upon a firm foundation for future success.
“Three years ago, HSE Mining was bought by the Swire group. Previously we were owned by one entrepreneurial and successful individual who started the business 25 years ago. We have evolved from that foundation into a business now owned by a very large international, family-owned company,” Fidock says.
“Swire brings a strong values base to our business. We’re in the middle of reinforcing the strong values of what is a 200-year-old family business and for us, integrating those values into the way we work has not been a difficult process – because that culture and values already exist in our business.”
As well as reinforcing its values, new ownership has put a floor under HSE Mining’s financial stability, he adds.
“This is still a very competitive market. Everyone is really tentative around calling the recent improvements in commodity pricing as the ‘end’ of the bad period, but regardless of economic conditions, our goal is to continue to operate safely, cost effectively and cost efficiently.”