Exam
1
University of Idaho someone
Bus 439
Scott Metlen
[
]
How well FCX displays process management techniques

Executive summary ..................................................................................................................... 3
Management processes .......................................................................................................... 3
Operational Processes ............................................................................................................ 3
Support processes ................................................................................................................... 3
Conclusion ............................................................................................................................... 3
Introduction ................................................................................................................................ 4
Management Processes .............................................................................................................. 4
Operational Processes ................................................................................................................ 5
Support Processes ....................................................................................................................... 6
Conclusion ......................................................................... Ошибка! Закладка не определена.

Background (why are you doing this, what is the purpose)
The goal of this report is to show the process management capabilities of Freeport-
McMoRan. Freeport-McMoRan is referred to as FCX in this report. FCX is a mining and processer of essential metals such as copper, gold, molybdenum and others. This is a very large company that is operated on an international scale. The information is gathered from the FCX website, news releases, and 10-k reports. The findings of this report show strong process management throughout the FCX Corporation. There are some shortfalls in the information presented by the company yet they are minor.
Scope methods
Findings Management processes
The management processes of FCX start at the board of directors. From here they dictate the goals, policies, and rules of the company. The board must follow the same policies as well and have a guidance document to enforce their responsibilities and act as a system of checks and balances. By creating a strong set of policies that encompass the goals of the company and show strong links to process management, this always refer to which ‘this’ you are referring to has been seen as a crucial part of FCX unity and culture.
Findings Operational Processes
Since FCX is a large company operations is a very in depth section of the company.
There are hundreds of operational processes in manufacturing alone. Manufacturing and production seems to be the focus of FCX’s information. The other operational processes such as sales and purchasing have nearly no information. This is an important part of the company but is also not easily relayed information to the general public. It is assumed that these processes have process management links but none have been found. This would be an area to improve.
Findings Support processes
The accounting and HR processes are examples of a support process. Little information is given about the accounting processes except the standard governmental regulations on accounting. The HR process is a highlight for FCX. This process shows great process management and information is abundant.
Conclusion (should be recommendations)
FCX strengths come from the board of directors showing strong process management abilities and this is reflected down the structure of the company.

Freeport-McMoRan is an international mining and processing company of copper, gold, and molybdenum. Freeport-McMoRan (FCX) is headquartered in Phoenix, Arizona with mines and production facilities in North and South America, Europe, Africa, and Indonesia. Due to the size of the company, 146 th in the Fortune 500, FCX is able to lead the essential metal mining industry in technology advancements in operational process efficiencies. Besides the operational processes, FCX has to manage their business processes and support processes. All of the processes within FCX need to work together to create a collaborative effort in achieving what FCX considers its primary goals. These goals are to continue to maximize free cash flows, maintaining a strong financial profile and to actively pursue project pipeline and exploration.
The tools to achieve collective business activities are TQM, BPM and Process Management.
Process Management is the focus of this report. Within each of the categories of FCX’s processes (Management, Operational, and Support) covered will be; design implementation, management/control, and continuous improvement.
FCX’s website states “Overseeing and running a worldwide mining operation is a complex undertaking, requiring a dedicated and diligent global workforce in common cause”
( http://www.fcx.com/company/management.htm
). The management processes within FCX are to give the company guidance, policies, and rules to adhere by in all levels of the business. FCX uses a board of director’s design and implement sentence structure (SS) these policies. This team has created a Corporate Governance Guidelines document that dictates the rules and responsibility of the corporate management process.
( http://www.fcx.com/ir/corp%20gov/FCXCorpGovGud_2010.pdf
). This document covers the basic format of the board as well as how they are to manage the company and themselves. The control of a management process is critical because without someone to answer to there is no limit to the control of this board. So to control their actions there is a detailed outline of committees that audit themselves and control different aspects of the company. To continually improve the board of director’s management process, new CEO development programs are in place and it is written that continued education and seminars are not required but highly recommended. These actions as well as annual reviews on spending and performance encourage the management process to continually improve.
The rules and policies that this board sets for FCX are listed on the website. The company’s policies on business conduct, community, environment, human rights, safety, and even mountain climbing are linked and covered in great detail.
( http://www.fcx.com/envir/policies.htm
). For instance the business conduct policy is a 17 page document covering financial documents policy to the company’s stance on corruption and bribery. ( http://www.fcx.com/ir/corp%20gov/Principles_Business_Conduct-english.pdf
). The policies also show the companies stance on the stakeholders. It addresses the community,

environment, employee, shareholder, and customer. FCX doesn’t mention the suppliers, but it is still a strong showing that all the stakeholders are addressed. Due to the high level of process this is, the policies will show up on all the processes in the company and they should adhere to these policies and consider these stakeholders in the design of any process. This shows that the process management of the management processes in FCX is thoroughly addressed throughout the design, implementation, control, and improvement phases.
To execute these goals and strategies that the board of directors gives FCX is the organizational structure. The company is split into Freeport-McMoRan, Atlantic Copper, and PT
Freeport Indonesia. The design of this structure is based off of geographic location and acquisitions of other companies
( http://www.fcx.com/company/pdf/FCX_world_org%20chart_Jan09_10K.pdf
). This is where the different areas of the company split up to use the management’s strategies to create the right product.
The operational processes that FCX has information on are mostly manufacturing and purchasing. Multiple processes are mentioned in its news releases. They are mostly expansion and efficiency projects on these manufacturing processes. These always refer to which ‘these’ you are referring to
are listed out by region and product. In North America FCX is planning on restarting a mine in
Miami, AZ and a mill in Morenci, AZ. (5 http://www.fcx.com/news/2010/012110.pdf
). The process management that went into this decision is slightly lacking in the design. They have only listed a few financial and efficiency reasons for this decision and do not mention any stakeholders except for the environment and how they will improve upon reclamation projects.
The goals of the company are considered, mainly growth and profits to the company. The implementation is already in place and they will benefit from the pre-existing machinery and mine. The control and management of the newly reopened mining and milling process are not mentioned, but improvements to the processes are. FCX is going to improve both of these processes to exceed historical tonnage and production rates.
The process addressed in South America copper is the converting the current copper ore facilities into a sulfide ore mining and processing facility. Since there is a large sulfide ore deposit in the same area as the copper deposit FCX is changing this copper process into a sulfur process. The design part of the process management is accounting for the goal of growth by expanding into a new market. FCX doesn’t mention other stakeholders. This is a very large project and a sign that the design is being considered heavily is that this conversion has been in the planning for nearly 10 years. This isn’t proof they are doing it well but due to the policies the company has in place about all the stakeholders and social responsibility it can be inferred that it is being covered strongly. The implementation is in progress and they are continuing to

build the structure to mine the sulfide ore. Management aspect is not addressed and since this is a conversion many improvements are going to take place at the current facilities, in the range of $700 million.
The other operational processes such as sales and purchasing are not addressed specifically and this is a weakness in what seems to be proof of a strong process management program at FCX. I would recommend that FCX gives its investors and other visitors some information on the supply chain process they undergo. The basic model is given on the site but little information is there about after the production phase.
( http://www.fcx.com/metals/fmi/index.html
)
The support processes of a business are the accounting and HR processes. FCX has a strong HR process which focuses on the employee as well as all other stakeholders. The website is full of information on the policies of the employee hiring process. FCX promotes local hiring, diversity, and also recognize the right to unionize under their Human rights policy
( http://www.fcx.com/envir/labor.htm
). The design part of this process has been very carefully considered due to the abundance of information present on the topic. By hiring locally they promote the association of community and local suppliers, and by the policies written much effort has been given toward the design of the HR process. Managing the HR process is shown in the website by how they dealt with the recession.
( http://www.fcx.com/envir/reductions.htm
). They had to lay off over 4000 employees and by offering severance and retirement packages this was no small ordeal. The HR department can handle something on this scale, so it must be managed well. The HR process also involves career fairs and college opportunities. The improvement on the HR process is shown through the expanding reach of the company. As the company expands the HR process must expand as well.
FCX uses multiple processes to run its business. The website, news releases, and 10-k forms all give information on current process and the projects and information related to them.
The company manages these processes well individually, but it is the company’s unification in this process management that stands out. FCX is a large company and it takes long hours and many employees to manage this many processes. They seem to have spent the time and money to get process management right. Since they have such strong upper level management processes this effect trickles down to the operational and support processes. Even though some information wasn’t given on individual processes it can be assumed that since the basic considerations of process management is in the company policy that the management of these sub level processes is also strong.