AA APW RD 1 ANGLO PROJECTS WAY – WORK BREAKDOWN Version 2

STRUCTURE GUIDELINE 12 January 2012

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ANGLO PROJECT WAY - WORK BREAKDOWN

STRUCTURE GUIDELINE

1 Policy 3

2 This Guideline – Purpose and Scope 3

2.1 What is it for? – Purpose 3

2.2 What does it cover – Scope 3
3 Introduction to Work Breakdown Structure (WBS) 3

3.1 What is it? – Description 3

3.2 What is it for? – Purpose 3
3.3 Who does what? Responsibilities 4
4 Overview 4

4.1 Overview of Key steps 6

5 Key Step Details 7

6 How to use this Guideline 11

Appendix A: Referenced documents 13

Appendix B: Record of Amendments 13

Appendix 1 – Simple WBS Working Sample 14

Appendix 2 – Simple Example of a WBS Dictionary Extract 15

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Approval
The following signatures approve this document for implementation across the Anglo American
group (listed in alphabetical order)

Anglo American plc.

Anglo Copper

Anglo Iron Ore Brazil

Anglo Metallurgical
Coal

Anglo Platinum

Anglo Thermal Coal

Kumba Iron Ore

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1 POLICY
Reference to AA PLC “Anglo Project Way” Policy to be included

2 THIS GUIDELINE – PURPOSE AND SCOPE

2.1 What is it for? – Purpose

The purpose of this guideline is to set out a logical explanation and method that serves as
a generic, standard and best practice guideline for compiling and applying a
comprehensive Work Breakdown Structure (WBS) and WBS Dictionary to the process of
managing and controlling capital projects.

2.2 What does it cover – Scope

The scope of this guideline is to describe a standard methodology for structuring a project
WBS and WBS dictionary that evolves during the project development stages and is
finalized as an investment stage gate deliverable.
The Guideline is applicable to all capital projects.

3 INTRODUCTION TO WORK BREAKDOWN STRUCTURE

(WBS)

3.1 What is it? – Description

A WBS (Work Breakdown Structure) is a simple and effective project management tool.
It is a deliverables oriented hierarchical decomposition of the scope of work to be
executed to accomplish project objectives and achieve delivery.
The WBS sub-divides (decomposes) the project scope of work into smaller more
manageable pieces, in a way that reflects the desired level of organisation and control for
the project.
It organizes and defines the total scope of the project.

3.2 What is it for? – Purpose

The principal purpose of a Work Breakdown Structure (WBS) is to facilitate the

decomposition of the total project scope of work into definitive components that are
separable and measurable, and that can be resourced, priced, scheduled, executed,
progress measured managed and reported; and to provide a framework for planning,
estimating and control of the project.

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3.3 Who does what? Responsibilities

For ensuring facilitation and compliance with the standards set out in this guideline
- the Project Executive within the Owner Business Unit.
For ensuring the standards are implemented in practise – the Owner Project
Manager

4 OVERVIEW

Standard
a) As set out in the AGADS, the development and application of a WBS is
mandatory for all capital projects.
b) The development and application of a WBS should commence as soon as a
structured project scope statement has been compiled (See Scope
Management Standard and Guideline AA_APW_RD_X).
c) The initial project WBS should be delivered at pre-feasibility stage (PFS),
based on the technical solution option selected for feasibility study (FS).
d) The deliverable of a WBS, together with a WBS dictionary, is an investment
stage gate review mandatory requirement.
e) The WBS evolves and develops during the PFS and FS development stages,
commensurate with the increase of the level of detail and certainty in the project
scope definition and development of the project execution strategy.
f) The WBS must be created from the project scope definition as a precedent to
any planning, estimating, scheduling, structuring of control information
data, or any other information collation or structuring for management purposes
being undertaken on the project, and not as a product of either.
g) WBS hierarchical numbering code identifiers should be used in project scope
statements. Planning documents, estimates, schedules and budget structures
must reflect the same WBS structure.

Timing of WBS creation

1 2

Creating WBS Planning Scheduling Estimating

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Guideline
The WBS supports effective project management in several ways during the life of a
project by:
a) Separating project deliverables into component parts ensures that the ultimate
project plan and planning documentation matches and incorporates the
total scope
b) Decomposing project scope into simpler components, and providing a primary
method for managing complex projects
c) Providing a foundation for integrating the work package and intermediate
deliverables with all other aspects of project planning, execution, monitoring,
controlling and closing
d) Assisting in the determination of resource requirements
e) Facilitating the reporting and analysis of project progress and performance
data
Thus the WBS provides a common communication framework for the whole project
life-cycle

Best practice of WBS creation

 The WBS is created in pre-feasibility stage, evolves and develops during

the feasibility stage and serves as a basis for all further estimating, costing
and scheduling activities

Common pitfalls: Purpose of WBS unclear

What the WBS is not:

 A statement of planned action or a project plan

 An exhaustive list of required activity.
 A chronological representation or schedule of work to be done.
 A reflection of scheduling logic and dependencies.
 A structure based on existing attribute coding models

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4.1 Overview of Key steps

Standard Guideline
What is required? How is this applied?
Key step 1 a) Project scope to be a) Logically structured project
decomposed into deliverable break-down enabling
Project WBS packages top-down progressive WBS elaboration
to be set up
b) Each deliverable package to b) Common high level approach,
contain only one deliverable room for individual
that is described in nouns requirements
exclusively
Key step 2 a) WBS hierarchical component a) WBS component ID can be
identification code to be used used as the primary integrator
WBS component as primary core deliverable of project information
ID-numbers to be recognition code.
b) Lower level component
assigned
b) Identification numbering to collectively relating to the next
follow the parent to child tree highest component in the
structure branch
Key step 3 a) The detailed content of the a) The WBS dictionary supports
components contained in a the WBS by providing added
WBS dictionary to WBS to be listed in the WBS detailed information for each
be created dictionary component
b) The WBS dictionary is to b) Delivers detailed statements of
indicate other various work that provide an
descriptors and database identification of the
attribute codes deliverables and a description
of the work
Key step 4 a) If project scope changes are a) Rigorous control over changes
authorised, changes to the to the WBS ensures, that WBS
Project changes project WBS need to be still reflects 100% of the
to be identified, and the WBS project‟s scope
incorporated into amended.
b) The use of a change
WBS
b) Changes in the WBS are to be management system is a
identified and authorized recommended best practice
through the change throughout development, and
management system mandatory during
implementation.

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5 KEY STEP DETAILS

Key Step 1: Project WBS to be setup

Standard
a) Decomposition of the project based on a deliverables focused top-down
approach
b) The configuration of the WBS and its component relationships to be represented
by a family tree structure
c) Each lower level component (child) will collectively relate to the next highest
component in the branch (the parent), with progressive parental roll-ups
culminating at ‘the project’ level
d) Incrementally all parts on each level to be broken down to the next lower level
until lowest part in the WBS hierarchy, the „deliverable package’ is reached
e) Each ‘deliverable package’ shall contain only one deliverable
f) Because of its deliverable nature, only nouns to be used in the WBS, not action
descriptors
g) No WBS component identity shall be repeated
h) Thorough review of scoping documents and definition is required to ensure the
WBS is complete and aligned
i) Sum of the deliverables must equate to 100% of the project scope
j) Review and refinement of content of the WBS required to ensure it can be
used successfully to complete project planning and drive out the desired
results
k) The WBS and WBS dictionary need to be signed-off and frozen at the
feasibility stage gate
l) All WBS elements must be integrated regardless of the delivery strategy

WBS family tree structure

Example See Appendix 1 for a

Project more detailed example

Mining Infrastructure Processing ...

Shaft Power Crusher ...

Equipment Roads Milling ...

Piped
Ventilation Reagents ...
Services

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Guideline
Benefits of top-down methodology:

a) Starting with overall project level deliverable and then iteratively determining
sub- elements is simpler than building incrementally bottom-up
b) Structuring the project logically and conveniently for status reporting
c) Of high value for brainstorming project deliverables
d) Accommodating additional deliverables as they are discovered or come to
light
e) Allowing for progressive understanding and elaboration of the WBS as it is
developed
f) Helping to gain progressive understanding, with stakeholders participation and
input, of final scope development

Best practice in setting up a WBS

 The project is decomposed based on a deliverables based top-down

approach
 Decomposition of levels follows a consistent prescribed methodology
 Each deliverable package only contains one deliverable
 Reviewed and refined WBS reflects 100% of the project scope

Key Step 2: WBS component ID numbers to be assigned

Standard
a) A primary WBS component identification number is to be assigned and
allocated to all WBS elements in the parent to child family tree structure
b) This identification numbering system and structure will follow and reflect the
parent to child tree structure vertically and horizontally signifying each WBS
elements position in hierarchy
c) The primary WBS component identification code is to be used as the primary
deliverable recognition and integration code in all project information
documents and control structures.
d) WBS component ID number must not be repeated within a given project WBS
(Appendix 1 to this guideline provides a simple working example)

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WBS structure and component identification number

Example Project
01

Mining Infrastructure Processing ...

01.01 01.02 01.03 01.04

Shaft Power Crusher ...

01.01.01 01.02.01 01.03.01 01.04.01

Equipment Roads Milling ...

01.01.02 01.02.02 01.03.02 01.04.02

Ventilation Piped Services Reagents ...

01.01.03 01.02.03 01.03.03 01.04.03

Guideline
The WBS component ID structure should provide the primary foundation on which
the capital estimate, and all planning and control is structured. In this way, the WBS
component ID is used as the primary integrator of project information.

Key Step 3: Create the WBS dictionary

Standard
a) The detailed content of the components contained in a WBS are to be described
in the WBS dictionary (Appendix 2 to this guideline contains a simple working
example).
b) The WBS dictionary shall include the following attribute descriptors or codes
(as applicable) for each WBS component:
1. Coding identifiers on the Area, Sub-area, Facility, Equipment and Package
2. Capital Code: Cost element and the code number must be aligned with
those used by One Anglo Supply Chain (User Manual Job Codes 822E05
Rev4)

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In addition, but at the BU discretion:

3. Code of account identifier
4. Description of the scope or statement of work
5. Responsible organization
6. List of schedule milestones
7. Contract information
8. Quality requirements
9. Technical references
10. List of associated schedule activities
11. Resources required
Estimate of cost

Guideline
a) The WBS dictionary supports the WBS by providing detailed information for
each component
b) It is a companion element to the WBS
c) The WBS dictionary provides detailed statements of work that provide an
identification of the deliverables and a description of the work within each
WBS component required to produce each deliverable

Key Step 4: Project Changes to be incorporated into WBS

Standard
Authorised changes to the project requires a corresponding change in the
project WBS
a) If project changes are authorised, any corresponding changes to the project
WBS must be identified
b) Changes to the WBS are to be authorised through the project change
management system (See Change Management Standards and Guideline
AA_APW_RD_1)
c) For changed or new components in the WBS, WBS component IDs are to be
assigned using a logical extension of the hierarchical numbering system, but
should not be duplicates or repeats of previously allocated component ID
codes.
d) Any planning, estimating, scheduling or cost control activities based on the
original WBS structure are to be similarly adjusted to reflect WBS changes

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Guideline
a) Rigorously controlled changes to the WBS, based on scope changes, ensure,
that WBS still reflects 100% of the project‟s scope
b) The use of a change management system is a recommended best practice
during the FS stage but is mandatory in the implementation phase, subsequent to
the investment stage gate WBS when change is approved
c) Following the completion of the steps in the process set out in this guideline, the
WBS descriptor and hierarchical code should be used as the basic information
descriptor in the project management information system database.

6 HOW TO USE THIS GUIDELINE

The “WBS guideline” is a comprehensive and holistic document that provides project
management staff with all required information needed to successfully set up a WBS for
any given project.

As an exhaustive guide it details all key areas and addresses major issues, required
actions, benefits and best practice approaches as well as common pitfalls.

Each key area in the process of creating a WBS is covered by a separate section of the
“WBS Guideline”. In these sections each step is detailed on a standard, guideline and
procedural level (if a applicable) and marked as such:

Standard WHAT – what is it that must be done (requirements)

Procedure HOW – how to accomplish the goals (step by step actions & tools)

WHY – why tasks should be done in a certain way (benefits &

Guideline
opportunities)
These key areas outline the concept of WBS by addressing topics such as structure,
coding and relative timing aspects. They illustrate the methodology and process steps as
well as the benefits of using WBS.
To make this guideline more practical and useful as a reference document, important
aspects and key areas are highlighted in specific call-out boxes throughout the document.
Key focal points are represented throughout by the symbols shown:
Concept – Illustration of concept, approach, strategy etc.
Timing – Depiction of the right order of steps within a process
Checklist – List of process steps that need to be accomplished
Warning – Description of common pitfalls and mistakes
Best Practice – Example of best practice approach

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Using the information provided in these marked sections will help in the methodology of
creating a WBS by demonstrating best practice approaches, pointing out common pitfalls,
illustrating the concept and timing as well as providing checklists to verify that all
necessary steps have been accomplished.

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APPENDIX A: REFERENCED DOCUMENTS

AA APW RD 1, Work Breakdown Structure Guideline

AA_APW_RD_1 : Work Breakdown Structure

APPENDIX B: RECORD OF AMENDMENTS

Issue 0 : New Document (T Davis)

Version 2 : Issued to reflect the latest Anglo American version control and document
format and numbering protocol (January 2012)
This re-issued document is a direct transcript of AA_APW_BPG_1 which
was previously approved for general publication and use. This version is
now published only to reflect:
a) A recently revised document numbering and version control protocol.
b) A change to references contained within the document to „BPG‟
documents to reflect the new „RD‟ prefix.
c) Standardisation of the form of document.
No other change to the substance of the document from the originally
approved BPG format has taken place.

The BPG document approval signature page is included in the front of the
document

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APPENDIX 1 – SIMPLE WBS WORKING SAMPLE

Typical WBS Component ID Numbering to Level 3

Level 1 Project Level

Level 1 01

Level 2
Level 2 Infrastructure Mine Ore Prep Plant Calcining Electric Furnaces Refinery
Reagents & Auxilliary Buildings
PIM Processes
Consumables & Facilities
01.01 01.02 01.03 01.04 01.05 01.06
01.07 01.08

Concrete
Ore Preparation foundations Building Structural Fuel Storage &
10.01.01 General Rotary Kiln Offices
Plant building Steel Distr
01.02.01 01.04.01 01.08.01
01.03.01 01.05.01 01.06.01 01.07.01

Electrical Power Mine Crushing Plant Peletising Plant Electric Furnace Ladle Furnace Reductant Laboratory
01.01.02 01.02.02 01.03.02 01.04.02 01.05.02 01.06.02 01.07.02 01.08.02

IT Telecoms Ore Calciner Transfer

Geology Kiln Off Gas Plant Metal Granulation Reagents Store Workshops
01.01.03 Homogonisation System
01.02.03 01.04.03 01.06.03 01.07.03 01.08.03
01.03.03 01.05.03

Calcinig Area unit Slag Granulation Gases &

Pipe racks Mine Equipment Drying Plant Slag Treatment Main Stores
Sub-station & Hndlg Distribution
01.01.04 01.02.04 01.03.04 01.06.04 01.08.04
Level 3 01.04.04 01.05.04 01.07.04
Level 3
Electric Furnace Storgae handling
Roads Mine General Unit Substation Calcining Area Refinery General Compressed Air
Off-gas Plant & dispatch
01.01.05 01.02.05 01.03.05 PLC 01.06.05 01.07.05
01.05.05 01.08.05
01.04.05
Landscaping & Ore Prep Area Central Control Refinery control Reagents &
Main Gate
earthmoving PLC Room room Consumables
01.08.06
01.01.06 01.03.06 01.05.06 01.06.06 Area Sub-station
01.07.06
Sewage System & Electric Furnace Refinery Area
Reagents & Production Office
treatment Plant sub-station Sub-station
Consumables 01.08.07
01.01.07 01.05.07 01.06.07
Area PLC
N 01.07.07
Water Supply & Electric Furnace Auxill Building &
Refinery Area PLC facilities Area Sub
Distribution PLC
01.06.08 station
01.01.08 01.05.08
01.08.08
W E

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APPENDIX 2 – SIMPLE EXAMPLE OF A WBS DICTIONARY EXTRACT

Level WBS Component ID Definition Area Capital Contract Cost Equipment Equipment Region
Responsibility Code Package Type ID No.
No.

1 WBS 01 Project Project Brazil

Manager
(Name)

2 WBS 01.02 Mine Area Manager 1100

(Name)

3 WBS.01.02.04 Mine Equipment Sub Area 4100

Manager
(Name)

4 WBS.01.01.04.01 Haulage Trucks 4120 PROC 001 Direct

5 WBS.01.01.04.01.01 230t CAT 4120 PROC 001 Direct HTR 001

5 WBS.01.01.04.01.02 120t CAT 4120 PROC 001 Direct HTR 002

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