Due Diligence Review

Industry: Mining Industry

Location: Tasmania

Type of contract: Fixed consultancy fee, travel & reimbursements

Duration of contract: 5 weeks

Summary:

Transfield Worley Solutions conducted a due diligence review of a maintenance operation at a mine, to provide the client with information for an outsourcing proposal.

Transfield Worley Solutions was able to offer comprehensive professional and technical services, calling on broad experience across several industries, to assess the client’s maintenance practices and systems.

By applying our combined knowledge of the best practices in asset management, maintenance engineering and risk assessment, Transfield Worley Solutions was able to tailor the review criteria and consequent recommendations around the specific needs of the client.

DUE DILIGENCE REVIEW

Scope & Approach:

The approach taken by Transfield Worley Solutions was to use a team of experienced practitioners in each discipline to:

• determine the current situation
• identify, quantify and qualify the risks in maintenance
• identify the opportunities for improvement

The scope of the due diligence review covered:

• maintenance processes, practices and systems
• equipment condition
• supply and stores management
• contractor management
• waste management
• the financial situation in the maintenance function

The review process included:

• interviews with key personnel
• interrogation of production systems and down time logs
• review of the data available from the computerised maintenance management system
• plant and equipment inspections
• financial analysis
• product market review
• comparisons of key operations ratios with recognised best practice

The review team conducted themselves professionally and were mindful of their presence on-site, sensitive to the potential effects on the workforce of possible future outsourcing.

Outcomes & Benefits:

The key outcomes of this exercise for the client was the ability to reduce their risks of entry into a contract through information-based decision making, rather than subjective estimates. It provided an understanding of:

• the current method of operation of the site, and means of utilising their personnel
• the potential risks involved in operating and maintaining the above-ground operations, and possible mitigation tasks
• the financial structure of the operation
• the condition of the plant and equipment for budgeting purposes
• the maturity of the operational and maintenance systems
• potential improvement opportunities based on observations and discussions with the site personnel

A review process of this type empowers a client in the formulation of a proposal to contract by providing them with:

• a documented review of the current and past production processes of a business
• a clear understanding of the operations, maintenance, stores, purchasing, financial situation and administration processes
• an understanding of operational risks and suggestions of mitigation tasks
• a list of identified improvement opportunities

In itself it is a relatively inexpensive and effective risk mitigation exercise, from which all medium to large contracts would benefit.