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General manager Demand Chain
Mike Lomman
Pit to Port Optimisation
Bulk Materials Handling
24th June 2015
Project location
1
Roy Hill overview
18+ Year Mine Life
More than 2.3bt of +50% Fe iron ore
comprised of more than 1.2bt of +55%
FE iron ore
Open cut mine operating multiple pits & 55 Mtpa wet
processing plant
344km heavy haul railway & two berth
wharf in Port Hedland
2
Roy Hill Mine superimposed on Perth
Roy Hill – a project of national significance…
Only independent iron ore project with
Australian majority ownership
Significant participant in the iron ore market
$10 billion construction budget.
Just under twice the size of 2015/16 federal infrastructure
budget & exceeds WA’s infrastructure budget for
2015/16
Full production export revenue approx.
US$4b per year
3
Project progress – Construction
Project more than 81% complete
More than 5000 people working on site across
the Project (>6500 employed)
More than 24 million hours worked on site to
date
All Long Lead Items delivered & being installed on site
Significantly de-risking the Project
5
Safety 7 to 10 times better than industry LTIFR data
Greenfield Business - The opportunity
Build what we need to now to
easily incorporate innovation &
technology later
Ability to adapt & implement
learnings from the field
Provides flexibility to easily adopt
further cost optimisation
6
Thinking culture, focused on productivity
Production constrained by 55Mtpa port allocation, so
innovation key driver of margin focused business
Innovative thinking drives
business & productivity
improvements & cost optimisation
Embrace technology as a core element to
deliver 55Mtpa of iron ore to our
customers competitively
7
Building a culture of innovation
Encourage & empower our people to find
better & smarter ways of doing
things
Combine cross industry methods, technology & the experience of our people to create
innovative solutions
Encourage genuine
collaboration, to share knowledge & experience to foster innovative
thinking
9
Productivity driven by the Remote Operations Centre (ROC)
10
End to end integration of operations, marketing and corporate services
functions
Coordinated & integrated approach to planning,
operation & overall management
Drives productivity & continuous improvement by focusing Operations,
Marketing & Corporate –to effectively operate
together
Drives the maximisationof throughput and quality
conformance while managing variation to
minimise operating costs
Innovation in action – Remote Operations Centre
11
Technology used to gather, validate & report
real time & near real time operational data to support & drive key operational decision
making
ROC centralises asset management practices & engineering disciplines to
improve reliability & productive rates of
equipment across site operations
Maximising throughput is the objective of the ROC,
not site operations
This drives a fundamental change to how we
manage productivity
ROC extends the focus on planning & scheduling into the supply chain.
This provides a supplier facing approach to delivering effective
maintenance outcomes
Innovation in action – Remote Operations Centre
To optimise the Roy Hill ‘Demand System’
and the Roy Hill ‘Supply system’
TO DELIVER BETTER BUSINESS OUTCOMES
12
Integrating Demand and Supply - Demand
Demand ChainMaximise Revenue
Mine Process Rail Port Ship Customer
13
Production constraint
Customer Relationship focus
Integrating Demand and Supply - Supply
Maximise Availability
Maintain constraint
Supplier PickupDeliver
Central Receipting
Freight Site Warehouse Deliver MaintainOperate
14
Supplier and Contractor Relationship Focus
Integrating Demand and Supply
Integrated Optimisation of Systems
Mine Process Steel MillShipPortRail
Supply Chain Plan Maintenance PlanDemand Chain
Plan
Supply Chain Schedule
Maintenance Schedule
Demand Chain Schedule
MaintainDemand Chain
ExecuteSupply
Execute
Monthly Production Reporting
Daily Production Reporting
Business Improvement
Supplier Relationships & Contracting
Contracts
15
Optimising Operational Strategy
CapacityExpansion Major
UnplannedEvents
Equipment Performance
Execution
SchedulingPlanning
Simulation Modeling
Operating Philosophy
Philosophy by which Roy Hill will be operated to
minimize incidents, optimize demand chain throughput, optimize shipped quality and
minimize operating costs.
Operating Strategy
Strategy by which the Demand Chain will plan.
The Strategy is the Normal Operations Mode and sets
System KPI priorities.
Operating Mode
Mode by which the Demand Chain will
schedule around exceptions in order to
meet System KPIs as set by the strategy and return to
Normal Operations.
15
If you don’t follow your plan, how do you improve your planning.
To enable discipline in execution we need to plan and schedule effectively.
But to plan and schedule effectively, we need to have correct assumptions.
The Required Discipline in Execution
In 1928 a statistician named Walter Shewhart proposed a way of presenting data that will help to analyse the variation.
The Control Chart
Shewhart
Real Time Statistical Process Control
Business Improvement Specialists
Historical analysis of data
Challenge to understand what happened to cause a change
Traditional use of control charts
Real Time Statistical Process Control
Online dashboard, automatically updating every hour.
Operational Superintendents, supervisors with their teams every day, every shift.
Assessing performance change in drivers of business outcomes
Capturing the reasons for change by the people who saw it happen.
Roy Hill use of control charts
Real Time Statistical Process Control
Same tool
General Managers and Managers
Longer term performance of business outcomes
Roy Hill use of control charts
Real Time Statistical Process Control
We don’t have shift production targets.
We don’t report excuses.
We investigate what really cause performance changes.
This enables us to improve our understanding and assumptions
What is different
Real Time Statistical Process Control
Innovation in action – Remote Operations Centre
11
Technology used to gather, validate & report
real time & near real time operational data to support & drive key operational decision
making
ROC centralises asset management practices & engineering disciplines to
improve reliability & productive rates of
equipment across site operations
Maximising throughput is the objective of the ROC,
not site operations
This drives a fundamental change to how we
manage productivity
ROC extends the focus on planning & scheduling into the supply chain.
This provides a supplier facing approach to delivering effective
maintenance outcomes
Building a culture of innovation
Encourage & empower our people to find
better & smarter ways of doing
things
Combine cross industry methods, technology & the experience of our people to create
innovative solutions
Encourage genuine
collaboration, to share knowledge & experience to foster innovative
thinking
9
Thinking culture, focused on productivity
Production constrained by 55Mtpa port allocation, so
innovation key driver of margin focused business
Innovative thinking drives
business & productivity
improvements & cost optimisation
Embrace technology as a core element to
deliver 55Mtpa of iron ore to our
customers competitively
7