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Optimising equipment utilisation and improve turnaround time Underground Logistics Case Study Carel Coetzee, Sasol Mining

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Optimising equipment utilisation and improve turnaround time

Underground Logistics Case StudyCarel Coetzee, Sasol Mining

copyright reserved 2007, P&TS, Sasol Mining

Session Overview

Project background and approach

Monitoring and recognising improvement Information gathering and modellingTools and techniques

Identifying and comparing impactsEvaluating and comparing alternatives

Conclusions

copyright reserved 2007, P&TS, Sasol Mining

Background

Case for Change Operational costEffective vs. EfficientSafety requirementsEquipment replacement strategies

Should we spend the money on the current system or should we redesign the logistics system?

copyright reserved 2007, P&TS, Sasol Mining

Approach

Sasol Business Development & Implementation model (BD&I)Systematic approach for the development and implementationBased on traditional stage gate process

Value AddAlign leadership, business, operational and technical effortsHelps us to do the right thing at the right timeGuides us through a sequence of clear decision gates

Project Gov ernance

Execution

Provide assets according to Business Plan

• Implement with mini mum changes

• Facility & business systems ready for start-up

• Owner quality assurance

• Product quality assurance systems in place

Probability of Business Development proceeding

Post Audit ReportRunning EntityThe BusinessFinal Business Plan

Business PlanBusiness CaseOptimise

business & product

Performance Certified

Start-up AssistanceTechnical Integrity

Basic Eng. Package

Conceptual Eng. Proposal

Preliminary Eng. Proposals

Optimise plant saf ety, reliability &

integrityProject Close-out

ReportProject Close-out & Rev iew Report

Project as per Execution Plan

Project Execution Plan

Project Execution Philosophy

Project Execution Assessment

Safe start-up of the assets and business systems

• End-of j ob documentation

• Steady operation• In specification product

• SBU acceptance

Evaluation to ensure project meets objectives

• Performance tes t• Start business support

• Post proj ect audit• Product accepted in market

Optimise opera-tion, maintenance & products

• Product Quality assurance

• Legal & governance compliance• Opportunity identification

• Technology support

• Technical support•Asset management• End–user support

Business Planning

• Identify & assess opportunity

• Assess busi ness alternati ves, uncertai nties & risks

• Company Strateg y Alignment

• Accuracy + 50%

Facil it y Planning

•Develop & selectbest alternatives(logistics systems)•Select Technology (equipment to support selected system)•Execution & D esign philosophies

•Develop Business opportunity

•Accuracy + 30%

Project Planning

•Optimised & fully defined scope

•Authority Engineering•Execution Plan•Accuracy + 10%•Product acceptance by market (detail design of suggested system accepted, incl. interfaces)

Gov ernanceGov ernanceGov ernanceProject CharterBasic

Dev elopment Charter

Feasibility Charter Corporate Gov ernance

Business Definition Operate BusinessBusiness EstablishmentFocus:

Continuous Improvement

OperationEvaluationStart-upBasicDevelopmentFeasibilityPre-

feasibilityIdea

Packag ing

ImplementationFront End LoadingIdea Generation

• rightopportunity?

• continue/abort/ rework

• accept next phase plan

• strateg y fit• continue / abort

• accept next phase pl an

• right business solution?

• continue/ abort/rewor k

• principleapproval

• accept next phase pl an

• projectauthorisation

• optimum project definition

• continue/ rework/abort

• accept next phaseplan

• RFO• approve start-up

• all objecti vesmet

• acceptance ofpost audit & close-outreports

• beneficial operati on

• stable operating plant

• quality produc t

• busi nessmanagementgovernance in place?

• busi ness contin-uation still feasible/ economical ?

Sponsor

Phas

e ob

ject

ives

Trac

k De

liver

able

sGa

te C

riter

ia

Engineering/ Technical

Project Management

Business/ Operations

•Opportunity scanning

• Brain stor ming

• R&D Stage Gate Model

• Business enquiries

Copyright: © Sasol Technol ogy (Pty) Ltd 2005, revision 5, 1 June 2005

5 64 7 8/11 2 3

30% 50% 100% 100%70% 95% 100%

Strategic alignment

copyright reserved 2007, P&TS, Sasol Mining

Pre-feasibility (Monitoring and recognising improvements)

Information gatheringUnderground observations / Interviews / Business information (SAP)Time studiesMaterial movement and processEquipment

UtilisationCosts

Safety record

Simulation model

Opportunity quantification

copyright reserved 2007, P&TS, Sasol Mining

Time Study

copyright reserved 2007, P&TS, Sasol Mining

Material Movement and Process (1)

106 logistical needs identifiedDriven by

BreakdownsProductionSchedulesDeliveriesAd-hoc work

Main areasMaterial movement to sections and other areasIn-section movementPeople movement

copyright reserved 2007, P&TS, Sasol Mining

Material Movement and Process (2)

1

Shaft stores

Offload (1 and 6)ForkliftManual

Supplierdelivery

2 and 8Load (2)

ForkliftManual

Unhitch (1 and 9)

NFP TractorEmpty trailer

3

Hitch (2)

NFP TractorFull trailer

Unhitch (3)

Main shaft

Hitch (4)4 Section Machine /

working face

FP TractorFull trailer

Offload (3)Manual

Load (4)LHDManual

AUnhitch (5) LHD/SC/Manual

Offload (5)LHDManual

Hitch (6)FP Tractor

56 FP Tractor

7FP TractorEmpty trailer

Unhitch (7)

Hitch (8)

copyright reserved 2007, P&TS, Sasol Mining

Equipment Utilisation

63.5%

18%

1.5%

12%

5%

Number(Percent)

N/A

12.5%

8.5%

21%

41%

AdaptedUtilisation

Trailer

Tractor

LHD

LDV

FEL

Type

copyright reserved 2007, P&TS, Sasol Mining

Equipment Cost

Annual Equipment Cost

2003/2004 2004/2005 2005/2006

Year

Tota

l co

st (R

000'

s)

TractorsLHDs

copyright reserved 2007, P&TS, Sasol Mining

Simulation Model

copyright reserved 2007, P&TS, Sasol Mining

Safety Record (Logistics related)

8

6

1

1

LWDC

31815Grand Total

11Tools and equipment

22Slip and Fall1343Mobile Machinery

1247Material Handling

11Machinery

21Fall of Material

TotalMedical

TreatmentFirst Aid

CaseCategory

Based on Sasol Mining June 05 to Feb 07 –

Contributor to Sasol Mining RCR – Target < 0.5

copyright reserved 2007, P&TS, Sasol Mining

Opportunity Quantification – Equipment Numbers

-75%

-

-

-

As-isU-frames

-33%

-

-35%

-15%

Centraliseall

-33%

-

-25%

-10%

Centralisenon-critical

-75%-10%Trailer

-25%-10%Tractor

-10%-5%LHD

--1.5%LDV

CentraliseU-frames

As-isimproveType

copyright reserved 2007, P&TS, Sasol Mining

Opportunity Quantification – NPV’s

NPV of alternatives

As-is As-is impr. Cent. non-crit. Cent. all As-is U-frames Cent. with U-frame

Alternative

NP

V (R

Mill

ion

)

U-frame bucketU-frame trailerBrakesTractor capital

LHD capitalTrailer maintTractor maint

LHD maint

copyright reserved 2007, P&TS, Sasol Mining

Feasibility Phase (Identifying and comparing impacts)

Alternatives generationBrainstorming and interviews with end-usersBenchmark (RSA & USA)

Conceptual design of alternativesAlternative screeningSimulation models of alternatives

Evaluation of alternatives

copyright reserved 2007, P&TS, Sasol Mining

Evaluation Criteria

Service levelsWaiting/delivery time of materials

CostsUtilisationFleet size

SafetyQualitative

copyright reserved 2007, P&TS, Sasol Mining

Summary of Alternatives

Current systemAll trailers with brakesReplace tractors and LHD’s with new unitsDiesel and flame-proofing in sectionMore equipment

Centralisation of fleetDecentralisation of transport

Materials down at satellite shaftsOld oil and ISO at both satellite shafts

U-framesArticulated tractorsCommunication systemIn-section battery scoops and/or utility vehicles24h deliveries

copyright reserved 2007, P&TS, Sasol Mining

Alternative Comparison (Capital)

Capital difference (NPV)

R 0 .00

- R 1 .02 -R 1.02- R 3.2 1

- R 0. 30

R 8 .98 R 1 0.18

-R 6.08

- R 15.92

R 10.18 R 10.1 8

R 1.68 R 2.97

R 12 .22

- R 9.55

- R 27 .51

- R 4.64

- R 3 5.00

- R 2 5.00

- R 1 5.00

- R 5.00

R 5.00

R 1 5.00

R 2 5.00

R 3 5.00

As is

U-fra

me

Mai

n16,

2

U-fra

me

Mai

n12,

6

U-fr

ame

Mai

n12,

6,L3

T

U-fra

me

Mai

n15,

8

Cen

t LDV

Mai

n sh

aft

Cen

t LH

D M

ain

shaf

t

Cen

t LH

D M

ain -3

Cen

t LH

D M

ain -5

Cent

Tra

ctor

Mai

nSh

aft

Cen

t LH

D+T

rac

Mai

nsh

aft

Stor

es a

t sha

fts

Artic

ulat

ed tr

act

Cen

t all a

t sha

fts

Cent

sha

fts -

3LH

,4LD

,4T

Cent

sha

fts -

5LH

,9LD

,9T

Sche

duled

del

iver

ies

NPV

(R

mill

ion)

- 15.0

- 10.0

- 5.0

0.0

5.0

10. 0

15. 0

Ave

ser

vice

leve

l diff

eren

ce (m

in)

copyright reserved 2007, P&TS, Sasol Mining

Alternative Comparison (Operating & Capital)

Steady state total cost difference per year

R 0.00

-R 0.52 -R 0.52 -R 0.80 -R 0.51

R 1.53R 2.73

-R 0.10

-R 1.99

R 2.73 R 2.73R 1.53

R 0.08

R 4.77

-R 0.51

-R 5.47

-R 1.81

-R 15.0 0

-R 10.0 0

-R 5.0 0

R 0.0 0

R 5.0 0

R 10.00

R 15.00

As is

U-fr

ame

Mai

n16,

2

U-fr

ame

Mai

n12,

6

U-fr

ame

Mai

n12,

6,L3

T

U-fr

ame

Mai

n15,

8

Cen

t LD

V M

ain

shaf

t

Cen

t LHD

Mai

n sh

aft

Cent

LH

D M

ain

-3

Cent

LH

D M

ain

-5

Cen

t Tra

ctor

Main

Shaf

t

Cen

t LHD

+Tra

c M

ain

shaf

t

Stor

es a

t sha

fts

Artic

ulat

ed tr

act

Cen

t all a

t sha

fts

Cent

sha

fts -

3LH

,4LD

,4T

Cent

sha

fts -

5LH

,9LD

,9T

Sche

duled

del

iverie

s

Cos

t diff

eren

ce (

R m

illio

n)

- 15.0

- 10.0

- 5.0

0.0

5.0

10 .0

15 .0

Ave

serv

ice

leve

l diff

eren

ce (m

in)

S S annua l d if f Cap d if f er enc e ( NP V ) Ser v ic e lev e l

copyright reserved 2007, P&TS, Sasol Mining

Conclusions

The BD&I Model provides roadmap for the process

Pre-feasibility and feasibility work form the basis of every project

Data integrity and analysis of data critical for decision making

Decision criteria for every gate

Change Management

Application of a process – Result will be optimising of Logistics System and the improvement of the turnaround time of logistics equipment.