Operating model: a blueprint for strategy 

Effective operating models bring adaptability, and a low-cost culture dedicated to service quality.
An operating model is not just about structure; it is about orienting every part of a mining organization towards its strategic goals, such as growth through acquisition, specialization or cost leadership.

Functions such as human resources (HR), finance, procurement, information technology (IT), project management, security, facilities management and accommodation could all be run as shared services, reducing headcount and office space. Outsourcing shared services can further cut costs and increase the flexibility to scale up or down.

Across different locations, there may be scarcities or surpluses of people, equipment and vehicles. By pooling these resources in regional or global centers, they can be more efficiently deployed as needed. Companies operating in remote environments must gear their supply chain to securing equipment, energy and talent.

Speed is vital

Leadership should implement a new operating model within 12 to18 months to avoid losing momentum. Senior figures must give their full backing to the change, with incentives linked to the achievement of major milestones. Ultimately, reporting lines and accountability will be clearer, with a refreshed emphasis upon customer service.

Strategy before structure

KPMG’s professionals are immensely experienced in designing and implementing mining operating models. Our firms can help you clarify your goals, before making important decisions, such as ownership versus outsourcing, or whether to operate mines as regional units or as separate, independent businesses. By improving productivity with fewer resources, our models can deliver permanently lower costs.

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