Presentation on theme: "Confidential & Proprietary-Page 0 Graduate School of Business Aluminium Smelting and Communities of Practice by Miles G Nicholls."— Presentation transcript:
Confidential & Proprietary-Page 0 Graduate School of Business Aluminium Smelting and Communities of Practice by Miles G Nicholls
Confidential & Proprietary-Page 1 Graduate School of Business This presentation is based on a paper delivered to the 36 th Meeting of the Decision Sciences Institute in San Francisco, USA, November 19 th – 22 nd, 2005: “ The Role of Communities of Practice in Determining Best Practice in Production Processes Involving ‘Alchemy’ – A Mixed- mode Modelling Approach” Miles G NichollsBarbara J Cargill Graduate School of BusinessFaculty of Business and Enterprise RMIT UniversitySwinburne University of Technology
Confidential & Proprietary-Page 2 Graduate School of Business The Portland Aluminium Smelter Initially a consulting project The aim was to model the entire smelter with a view to determining ‘best practice’ (commenced 1988 – finished 1998) The smelter is an approximately $2b plant, a green-field 250 acre site near Portland, Victoria, Australia (largest smelter in Southern Hemisphere) Unique management structures operating and providing an unusual occurrence of a ‘real’ bi-level model.
Confidential & Proprietary-Page 3 Graduate School of Business Problem Summary The smelter takes in raw materials (primarily alumina, coke and pitch) and places them in a “bath” of chemicals in a special “pot”. Large quantities of electricity are then passed through the bath via anodes (blocks of carbon) suspended in the bath (the cathodes are underneath). The molten aluminium then collects at the bottom of the pot and is syphoned off. The task was to model the entire plant in order to “maximise production of aluminium and keep ancillary plant activities to a minimum”.
Confidential & Proprietary-Page 4 Graduate School of Business The Site
Confidential & Proprietary-Page 5 Graduate School of Business The Site
Confidential & Proprietary-Page 6 Graduate School of Business The Process
Confidential & Proprietary-Page 7 Graduate School of Business The Monthly Mathematical Model
Confidential & Proprietary-Page 8 Graduate School of Business The Monthly Mathematical Model Only two variables, kilo Amperes (kA) and Setting Cycle (SC) (1.1) relates to all kA based raw material consumption (1.2) relates to all SC based raw material consumption (1.3) ensures the anode will not be ‘overused’ (1.4) relates to kA and SC based consumption of Coke (1.5) and (1.6) are maximum and minimum limits of ‘spent’ anodes that are used in the making of new anodes kA and SC are typically 300 and 28 respectively The multiple month model more complicated and involves more variables.
Confidential & Proprietary-Page 9 Graduate School of Business The ‘Behind the Scenes’ Link Theoretically, the production of aluminium is calculated thus: AT t = kA t PD t (2) Estimated output is arrived at as follows: AE t = kA t CE t-1 PD t (3) where: CE t-1 = AS t-1 / AT t-1 (4) and AS t is the actual aluminium siphoned from the pot Note that AE t and CE t-1 are averages over all pots and that every constraint (other than (1.2)) contains CE t-1
Confidential & Proprietary-Page 10 Graduate School of Business Real World Problems The Current Efficiency (CE), a key parameter, has three major problems : it is a lagged estimation (CE t-1 ) it is variable and often highly unpredictable on a pot to pot basis (limited success in modelling pots in a ‘real world’, ‘on- line’ and in a real time mode – thus no accurate CE) it is inaccurate because the actual production of aluminium cannot be measured (other than in a laboratory pot) Therefore the solution of the model provides a “best practice” solution that could be some distance from the “optimal”
Confidential & Proprietary-Page 11 Graduate School of Business The ‘Alchemy’ Pots are very individual in their behaviour. If they run too hot, or drop to too low a DC voltage they will become less productive and may take many days to recover Pots often suffer an ‘anode effect’ which is a disaster for a pot. This effect sees molten aluminium behaving like a wave and this disrupts productivity, often for many days Power is frequently turned off by the suppliers on agreed ‘power outages’ arrangements and this also destabilises the pot All these problems are left to the ‘Operators’ to deal with in their own way based on their ‘experience’ and ‘shared knowledge’. This is the ‘alchemy’.
Confidential & Proprietary-Page 12 Graduate School of Business Communities of Practice Aluminium smelting has been around since the late 1890’s and much “folk lore” has built up over that time as to how to deal with pots To some extent the smelter’s Operators had already formed a ‘Community of Practice’, but it was very tenuous and fledgling With encouragement, such a Community of Practice could potentially save millions (a 1% increase in CE could mean a $2m - $5m increase in the bottom line depending on the size of the smelter) Communities of Practice are not only limited to ‘pot rooms’ in a smelter, but it is the point of biggest impact
Confidential & Proprietary-Page 13 Graduate School of Business Communities of Practice Communities of Practice (C of P) are essentially informal groups of people in a single organization (as in the case of ‘commercial in confidence’ operations of smelters and other manufacturing entities) or in more ‘common knowledge’ areas, across organizations as well. As Louis (2005), Davies et al (2003) and Burk (2000) indicate, the C of P are founded on common knowledge or common work tasks where the coming together of people to share stories and discuss work practices (i.e., sharing explicit and tacit knowledge) gives support, knowledge and a sense of belonging to people. These interactions can occur in a real or virtual sense depending on the nature of the organization and whether the C of P exists beyond one such work site.
Confidential & Proprietary-Page 14 Graduate School of Business Communities of Practice Communities of Practice (C of P) in this paper are classified as a hybrid of ‘best practice’ and ‘knowledge stewarding’ (Vestal, 2003) Membership of C of P is not necessarily fixed but may vary considerably (as will its leadership) The aluminium smelting industry is ideally suited to the informal emergence of C of P which are essentially (in this instance) a sharing of experiences of the pot room Operators Anecdotally, at least one C of P was in existence within the Portland smelter (Urpani, 1996)
Confidential & Proprietary-Page 15 Graduate School of Business Communities of Practice It is clear, where there exists aspects of the production process (i.e., the sub-process) that are not well understood and for which a ‘model’ can’t be constructed (‘soft’ or ‘hard’) in order to determine the ‘best practice’ operation of the process, a combined approach of ‘hard’ modelling coupled with a C of P associated with the sub-process will provide the focus, knowledge improvement and long term better understanding of the operations Further, it should be noted that a critical value of the C of P is the learning loop for the perpetuation of knowledge in the operators over time. Unless there is some process in place that nurtures the C of P and also attempts to bring the tacit knowledge into more explicit forms, there is a risk to the enterprise of knowledge loss over time
Confidential & Proprietary-Page 16 Graduate School of Business Mixed-mode Modelling
Confidential & Proprietary-Page 17 Graduate School of Business The Solution Methodology The solution approach used for this problem is illustrated in Figure 3 and is termed ‘mixed-mode modelling’ Mixed-mode modelling in this application sees the combination of hard and soft models ‘solved’ by a heuristic involving C of P and non- linear bi-level programming (for the multiple month model) Employing this approach will not only see an increase in the ‘bottom line’ of the business but also a retention of the bodies of explicit and tacit knowledge possessed by the Operators and thus the company
Confidential & Proprietary-Page 18 Graduate School of Business The Solution Methodology
Confidential & Proprietary-Page 19 Graduate School of Business Conclusion Many problems in OR/MS appear ‘crisp’ and their parameters seem robust and meaningful However, in many industries, the key process parameters and indeed parts of the processes themselves are not really understood or able to be reliably estimated or codified respectively. The aluminium smelting industry is such an example This paper suggests a mixed mode modelling approach (combining Communities of Practice and mathematical programming) to arrive at best practice and also perpetuate the existence of essential explicit and tacit knowledge within the aluminium smelter
Confidential & Proprietary-Page 20 Graduate School of Business Conclusion – Gains A decrease in the variability of a pot’s production An increase in the quality (purity) the aluminium produced Better behaved pots and a consequential more even temperature leading towards less build up of bath around the sides of the pot leading to a more accurate estimation of a pots production A reduction in pot disturbances leading to the greater reliability is any estimates of production obtained from it Consequential increases in current efficiency (which is also a more reliable ‘guestimated’ figure) Providing a more realistic basis for determining best practice from the solution of the macro model of the smelter