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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
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
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.
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