john gullick & anthony gibson bluescope port kembla paper

Gullick, J. BlueScope Port Kembla: Fluor Australia Performance Improvement of an Extreme Axle Load Industrial Railway

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ARA Heavy Haul Rail 2015 of 5

BLUESCOPE PORT KEMBLA: PERFORMANCE IMPROVEMENT OF AN EXTREME AXLE LOAD

INDUSTRIAL RAILWAY

John Gullick BE(Civil), GradDipMgt Fluor Australia Pty Ltd

SUMMARY The Australian manufacturing industry has been hit very hard in recent years with many companies taking their business off-shore or closing completely. BlueScope has become an Australian model for future manufacturing by making many difficult yet necessary decisions to turn around their business in order to return to health. This attitude to business has allowed BlueScope to view the asset management planning Fluor undertakes on their rail infrastructure at Port Kembla Steelworks (PKSW) from a position of “return on investment”. This position has allowed Fluor to extensively improve the rail infrastructure at PKSW and thereby reap the benefit of a more reliable railway at reduced base cost. The example presented in this paper demonstrates the effectiveness and benefits from business-oriented asset management planning, adoption of proven technologies and the up-skilling of a workforce can bring to the performance of a key link in an industrial logistics chain. 1. INTRODUCTION Bluescope Steel Limited (BSL) evolved from the coming together of three Australian steel industry pioneers – BHP, John Lysaght and Australian Iron & Steel during the mid-20th century. BSL has since acquired New Zealand Steel and Butler Manufacturing in USA as well as several other small steel related businesses. BSL employs over 16,000 people in 17 countries and has over 100 manufacturing facilities world wide. With the merger of BHP and Billiton in 2001 a decision was taken to spin out and separately list BHP Steel in 2002. BHP Steel then changed its name to BlueScope Steel in 2003. Australian Iron & Steel (AIS) established a steelworks at Port Kembla, NSW in 1928, adjacent to the region’s high quality coalfields. Port Kembla is located approximately 80km south of Sydney in the Illawarra region. AIS was then acquired by BHP in 1935, and the site has continued to be the largest integrated steelworks in Australia. During the Global Financial Crisis (GFC), BSL was required to make the hard decision to reduce its 5.6 million tonnes steel making capacity by half by mothballing one of their two operating blast furnaces. The PKSW predominately produces steel slab, plate, hot

roll coil, metallic coated coil (Zincalume®) and painted coil (Colorbond®) for the domestic market. Much of this product flows to BSL’s own value-adding down-stream businesses.

Figure 1: Aerial photo of Port Kembla Steelworks 2. BACKGROUND Since the commencement of steel production at PKSW in 1928, rail has been the key mode of transport for most bulk materials.


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Figure 2: Platelayers at No. 1 Blast Furnace (date unknown) In addition to the schematics in Figure 3, rail is used to bring a variety of raw materials from local and domestic mines such as coal and limestone. Rail is also used to move molten iron from the blast furnace to the Basic-Oxygen Steel (BOS) making plant as well as hot slab from the Slab Caster to the Slab Yard. Finished steel product, such as hot rolled and coated coils are despatched interstate by rail to customers and to BSL’s own value-adding down-stream businesses.

Figure 3: Schematic diagram of the steel making process at Port Kembla. There is a significant variety of rolling stock that traverse the BSL rail network. Main line style locomotives, such as 81 and 82 class haul coal and limestone into the site. Internal shunting is undertaken by English Electric 850hp and 1,000hp locomotives, which will soon be upgraded to modern PB class NREC locomotives, by Pacific National. Wagons can vary from the typical 100T capacity coal and limestone wagons to slab wagons, tilt wagons for plate steel, coil wagons and flat top wagons. The key piece of rolling stock on site is a Torpedo Ladle. These ladles

transport molten iron from the No. 5 Blast Furnace and tip the molten iron at the BOS (refer figure 4). Individually, and when fully loaded, these wagons can weigh up to 500T, supported by 8 axles – being an axle load of 62.5T.

Figure 4: Torpedo Ladles transporting molten iron. No.5 Blast Furnace in the background. Track speeds vary from 25km/h on “main lines”, down to walking pace in and around operating facilities. Fluor has been contracted to BSL since 2001 to be the rail infrastructure asset manager and maintainer. This role involves taking full engineering and performance responsibilities for the track, structures, signalling systems and associated assets on the PKSW site. The PKSW site contains 70km of plain track, 254 turnouts, 75 level crossings and 12 bridges. As can be seen in Figure 5, the rail network has been laid out to suit the locations of the key operating facilities on site. The rail network has been altered many times to link new facilities as technological change and increased demand forced the construction of new and better steelmaking facilities.

Figure 5: Rail infrastructure layout at Port Kembla Steelworks Performance of the rail infrastructure is primarily affected by extreme axle loads, extreme temperatures from molten metals


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(refer to Figure 6), interaction with high axle load trucks, fouling of the infrastructure due to bi-product fall-out and wash away.

Figure 6: Heat affected rail at the Metal Dumping Pits at PKSW. 3. PERFORMANCE IMPROVEMENT METHODS 3.1 Asset Management Planning Annually, Fluor and BSL undertakes a cycle of asset management planning which underpins all investment decisions on the rail infrastructure assets and provides justification for budget requests. The Asset Management Plan reviews BSL’s business requirements compared to the current asset condition and performance and, by way of a risk assessment process, prioritises the key work to be undertaken. BSL and Fluor are currently in Year 7 of a 10 year strategy on upgrading of the plain track and turnout assets. This generally involves reconditioning or replacing 3.5km of track and 18 turnouts annually. The 10 year strategy will soon merge into a “steady-state” strategy for rail infrastructure investment which will allow annual upgrading targets to be reduced as the effects of improved maintenance practices and more durable components such as concrete sleepers and head-hardened rail have a greater affect on the rail network as a whole. 3.2 Focus on Business Needs An industrial railway is very different from most other types of railway. The railway assets themselves are of secondary importance compared to the primary role of the plant – in this instance, production of steel.

The key to an industrial railway is the ability to provide a safe, efficient and reliable link within the supply chain. To achieve this outcome, Fluor has focussed its asset management strategies towards eliminating, reducing or controlling risks that put people or steel production at risk – i.e. derailments, broken rails, level crossing upgrades, etc. 3.3 Value Creation Fluor and BSL share many common values. One of Fluor’s fundamental values is the concept of “Value Creation”. This aligns with BSL’s “Continuous Improvement” processes. During the 13 years where Fluor has been providing services to the BSL site at Port Kembla, “value creation suggestions” have driven on-going cost improvement, reduced unplanned downtime, cost-avoidance through major recycling programs. Typically, “value creation” of between 3-5% has been created each ongoing year. These savings have been put forward, investigated and implemented by Fluor, with the actual savings then validated by BSL. Cost savings have then allowed BSL to choose between banking them or re-investing in their rail infrastructure. Fluor has also embedded these improvements and efficiencies by using them as a basis for the next budget cycle. 3.3 Skills and Training In 2001, Fluor employed many of the existing BHP Steel rail maintenance employees. At the time it was very difficult to get any specific rail training as most of this training was undertaken by government railway entities. As a consequence, the rail maintenance workforce was “trained” by the experience workers, by passing on their personal knowledge. This allowed some incorrect maintenance practices to remain embedded within the work force, which contributed to unacceptable derailment rates, poor performance of turnout components and various “suspicious” home-grown maintenance technologies. The benefit of an open access training environment as has been achieved within the Australian rail industry over the last 10 years has been that private industry workforces such as Fluor’s maintenance crew at Port Kembla can benefit from professional industry training. This has resulted in many changes within the normal maintenance practices of the workforce such as changes to turnout construction


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techniques to ensure correct tracking of wheels through Vee-crossings, early detection of potential high consequence defects, gradual elimination of mechanical joints and a balanced direction of investment to ensure that low priority track was effectively ‘tied’, yet critical track was upgraded at an appropriate time. 3.4 Adoption of Technology The adoption of technology has been a double edged sword on the PKSW rail network. The network is riddled with legacies of previous “good ideas” such as housed points, raised check-rails, slag ballast, steel sleepers, etc. Many of these good ideas have had minimal impact on overall performance, as they have not addressed the widespread root-causes of poor network performance. Over the life of the contracts, Fluor and BSL have adopted proven technologies to achieve consistent improvement. They have included:

Resleepering with concrete sleepers exclusively.

Rerailing with 60kg/m head hardened rail exclusively.

Aluminothermic welding all joints in track and turnout reconditioning.

Repairing key turnout components such as Vee-crossings and switch-blades using hard-facing technologies.

Screening and re-using all spent ballast as bottom ballast on track reconditioning projects.

4. RESULTS ACHIEVED 4.1 Asset Performance The performance of BSL’s rail assets are constantly monitored and form a significant portion of Fluor’s key performance indicators. In a low speed, extreme axle load, high temperature rail environment the key focus is to keep rollingstock on the track. Derailments due to infrastructure failure have historically had a major effect on steel production and maintenance costs. As can be seen from the graph in Figure 7, in Fluor’s first full year in its contract with BSL in FY2002/03 the PKSW rail network experienced 34 infrastructure-caused derailments. Through targeted effort and expenditure, the number of infrastructure–caused derailments has dropped to zero in FY2013/14.

Figure 7: Infrastructure-caused derailments on the PKSW rail network In order to achieve such a major consistent pattern of improvement, a major commitment to consistent investment in its rail infrastructure was required of BSL. BSL met those requirements by annually funding the 10 year track upgrading strategy – presently in Year 7. With consistent investment levels, Fluor has been able to target the root-causes of infrastructure–caused derailments through the asset management planning process. This has involved targeting:

Track geometry deterioration through a track reconditioning program.

Turnout component failures through a turnout rehabilitation and reconditioning programs.

Spread-road derailments through targeted partial resleepering programs.

Broken rail derailments through re-railing and rail welding programs.

In addition to key investment strategies, many derailments have been avoided by improving the competence of track inspection, turnout lubrication and fault reporting from the operator. This has allowed many potential faults to be rectified prior to them reaching a level which has the potential to cause a derailment. The performance of the whole rail system is also one of the keys to avoiding derailments. A combination of more effective ballast structure through track reconditioning, improved rail condition through re-railing, fewer mechanical joints due to aluminothermic welding programs and consistent ultrasonic rail testing and repair, has resulted in consistent improvement (i.e reduction) in broken rail performance and a reduction in broken rail potential through effective reduction in internal rail defects. This is clearly shown through the graphs in Figures 8 and 9.

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15

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Total Derailments(Infrastructure Related)


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Figure 8: Broken rail incidents on the PKSW rail network.

Figure 9: Ultrasonic rail defect identification on the PKSW rail network. 4.2 Efficiency and Cost BSL’s on-going commitment to investing in their rail infrastructure and the consequent improvement in performance, has also aided in improved cost efficiency and workforce reduction. As can be seen from Figure 10, Fluor blue-collar workforce has reduced by more than 20% over the last 6 years. This workforce reduction has been carried out through natural attrition as some of Fluor’s ageing workforce have retired and have not been replaced. By up-skilling and multi-skilling the existing workforce through training, this workforce reduction has been achieved with no reduction in output or capability.

Figure 10: Changes in Fluor’s blue collar workforce at BSL Port Kembla. Reduced rail infrastructure defects, reduced rail failures and reduced workforce needs have

resulted in a net reduction in routine maintenance costs each ongoing year. Figure 11 demonstrates that over the last six (6) years there has been an 18% reduction in routine maintenance costs (note: calculated based on 2014 dollars).

Figure 11: Changes in rail infrastructure routine maintenance costs at PKSW. 5. CONCLUSION Fluor’s rail infrastructure maintenance services at Port Kembla Steelworks is an example of the benefits which asset management planning can bring, when directed at a business’ core requirements. Quality asset management planning can justify consistent investment in infrastructure and then this infrastructure can deliver the benefits of improved reliability and improved cost and thereby contribute positively to the client’s bottom line. 6. ACKNOWLEDGEMENTS The author would like to acknowledge: BSL – in particular Anthony Gibson and

Alex Hatherly from the Supply Chain & Processing group.

Fluor – Mark Hogarth and Stuart Reid for the assistance with the statistical analysis of performance at PKSW.

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1.8

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Broken Rails

Broken Rails/mth Linear (Broken Rails/mth)

147

46

127

5438

20

51

0

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40

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140

160

2007 2008 2009 2010 2011 2012 2013

Ultrasonic Rail Defects

100% 97% 97% 97% 91% 86%77%

0%

20%

40%

60%

80%

100%

120%

2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

Wages Workforce

100%87% 92% 90% 84% 82%

0%

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60%

80%

100%

120%

2008/9 2009/10 2010/11 2011/12 2012/13 2013/14

Routine Maintenance Cost Improvement

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