Working in Silos Could Cost Your Project Millions - Here’s How to Stop it!
In many large natural resource organizations, the mine planning, projects, geotech, operations and maintenance disciplines function as independent teams in their own department. They often work in silos with only a monthly meeting to bring everyone together and share updates.
How familiar does this sound?
Each department focusses on their metrics without focusing on how they impact the larger project.
Mismanagement across plans results in literal gaps in engineering designs.
Schedule dates don’t match, meaning projects come in after their target date and contractors go underutilized.
What often goes unseen is how these silos leave hidden opportunity, resulting in project teams spending extra capital.
When projects are under pressure to improve, each silo looks back at its plan and questions what it can improve. The siloed teams take the comments from other teams as gospel. There is rarely someone set up in the organization that can effectively challenge the other departments, and there is a reluctance to escalate design changes to leaders of other departments, even when the value at stake is significant.
There is huge upside potential here.
A single past comment or assumption can quickly become a hard design constraint, resulting in unnecessary capital being spent.
In situations like these, only the best teams can avoid becoming siloed.
How Working in Silos Almost Cost a Project $20M!
A mining company was working to install a new plant that needed a source of intake water to treat tailings. The project team scoped two main options:
Option 1: Engineering drawings showed an existing water line on site about 500m away from the plant had excess capacity. Estimated cost to tie-in: $2M
Option 2: Build a new water supply system consisting of 7 km pipelines and pumping barges. Estimated cost: $26M
Initially, the team selected Option 1 as it was a significantly lower cost. But throughout the design process, there were rumours that the existing line was performing poorly due to a fouling issue. The project team jumped to Option 2 to reduce risk and planned to build an entirely new system.
When approaching the project sanction milestone, the team was directed to drastically reduce costs. A Zero-Based Analysis exercise flagged the water intake system as a large opportunity. The project created a new integrated team with Operations to evaluate potential options, which confirmed the existing system's ongoing fouling issue. However, instead of a new system, the integrated team uncovered a better alternative - they could tie into existing de-commissioned assets that the project engineers thought Operations had removed. This design had a cost of $6M, saving $20M!
Working across silos identified a better design option that neither department would have developed on their own.
How to Effectively Work Across Silos to Drive Project Improvement
Develop an integrated project team where all involved departments have an active representative assigned in the design phase.
Ensure that all members of the integrated team can investigate design questions and challenges as they come up.
Present opportunities and risk with a clear understanding of value at stake without assumptions of what the others will think.
Escalate any contentious high-value design to leadership (without the fear of it reflecting poorly on the project team).
You need the all right people on the team working together, regardless of department.
Bridging business silos enables more informed project teams to make superior value decisions, savings millions in capital.
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