-Docs-Optimising Equipment Utilisation and Improve Turnaround Time v2

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Optimi s ing equipm ent u t i l i sat ion andimpro ve tu rnaround t ime

Underground Logistics Case Study Carel Coetzee, Sasol Mining


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copyright reserved 2007, P&TS, Sasol Mining

Session Overview

Project background and approach

Monitoring and recognising improvementInformation gathering and modelling Tools and techniques

Identifying and comparing impactsEvaluating and comparing alternatives

Conclusions


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Background

Case for ChangeOperational cost Effective vs. Efficient Safety requirementsEquipment replacement strategies

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


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Approach

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

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


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ProjectGov ernance

Execution

Provide assetsaccording toBusiness Plan

Implement withminimum changes

Facility & businesssystems ready forstart-up

Owner qualityassurance

Product qualityassurance systemsin place

Probability of BusinessDevelopment proceeding

Post Audit ReportRunning En ti ty The BusinessFinal Bus inessPlan

Business PlanBu siness Case Opt imise

b u s i n e s s &p r o d u c t

Per formanceCertif ied

Start-up Assistanc eTechnical I ntegrity

Basi c Eng.Package

Con ceptu al Eng.Proposa l

Preliminary Eng.Proposals

Optimis e plantsafety, reliability &

integrityProject Close-out

ReportProject Close-out& Review Report

Pro ject as perExecuti on Plan

Project ExecutionPlan

Project ExecutionPhilosophy

Project Execution Assessm ent

Safe start-up of theassets andbusiness systems

End-of jobdocumentation

Stead y operation In specification

product SBU acceptance

Evaluation toensure projectmeets objectives

Performance test Start business

support Post project audit Product accepted

in m arket

Optimise opera-tion, maintenance& products

Product Qualityassurance

Legal &governancecompliance

Opportunityidentification

Technologysupport

Technical supportAsset management

Enduser support

Business Planning

Identify & assessopportunity

Assess businessalternati ves,uncertai nties &risks

Company Strategy Alignment Accuracy + 50%

Facilit yP lanning

Develop & s elect bestalternatives

(logistics systems) Select Technolog y(equipment tosupport selectedsystem) Execution & D esign

philosophiesDevelop Business

opportunityAccuracy + 30%

Project Planning

Optimised & fullydefined scop e

AuthorityEngineering

Execution PlanAccuracy + 10%Productacceptance bymarket (detail

design ofsuggested systemaccepted, incl.interfaces)

Gov ernanceGov ernanceGov ernanceProject Charter Basic

Developm entCharter

Feasibility Charter CorporateGov ernance

Business Definition Operate BusinessBusiness EstablishmentFocus:

ContinuousImprovement

OperationEvaluationStart-upBasicDevelopmentFeasibilityPre-

feasibilityIdea

Packaging

ImplementationFront End LoadingIdeaGeneration

r ight opportuni ty?

continue/abort/rework

accept nextphase plan

strateg y fit continue /

abort accept next

phase plan

right businesssolut ion?

continue/ abort/rewor k

principle approval

accept nextphase plan

project author isa t ion

optimum projectdefinition

continue/ re work/abort

accept next phaseplan

RFO approve start-up

all objectivesmet

acceptance of post audit &close-outreports

beneficialoperation

stable operatingplant

quality product

businessmanagementgovernance inplace?

business contin-uation still feasible/economical ?

Sponsor

P h a s e o

b j e c t

i v e s

T r a c k

D e

l i v e r a

b l e s

a t e

r t e r a

Engineering/Technical

ProjectManagement

Business/Operations

Opportunityscanning

Brainstorming

R&D StageGate Model

Businessenquiries

Copyright: Sasol Technology (Pt y) Ltd 2005, revision 5, 1 June 2005

5 64 7 8/11 2 3

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

Strategicalignment


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Pre-feasibi l i ty (M oni tor ing and recognis ing i mpro vements)

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

UtilisationCosts

Safety record

Simulation model

Opportunity quantification


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Time Study


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Material Movem ent an d Proces s (1)

106 logistical needs identifiedDriven by

BreakdownsProduction

SchedulesDeliveries

Ad-hoc work

Main areasMaterial movement to sections and other areasIn-section movement

People movement


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Material Movem ent an d Proces s (2)

1

Shaft stores

Offload (1 and 6)ForkliftManual

Supplier delivery

2 and 8Load (2)

ForkliftManual

Unhitch (1 and 9)

NFP Tractor Empty trailer

3

Hitch (2)

NFP Tractor Full trailer

Unhitch (3)

Mainshaft

Hitch (4)

4 SectionMachine /

working face

FP Tractor Full trailer

Offload (3)Manual

Load (4)LHDManual

AUnhitch (5) LHD/SC/Manual

Offload (5)LHDManual

Hitch (6)FP Tractor

56

FP Tractor

7FP Tractor Empty trailer

Unhitch (7)

Hitch (8)


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Equip m ent Uti l isat ion

63.5%

18%

1.5%

12%

5%

Number (Percent)

N/A

12.5%

8.5%

21%

41%

Adapted Ut i l i sa t ion

Trailer

Tractor

LHD

LDV

FEL

Type


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Equipm ent Cost

Annual Equipment Cost

2003/2004 2004/2005 2005/2006

Year

T o

t a l c o s t

( R 0 0 0 ' s

)

Tractors

LHDs


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Simulat ion Model


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Safety R ec ord (L ogist ics related )

8

6

1

1

LWDC

318 15 Grand Total 11Tools and equipment

2 2 Slip and Fall

1343Mobile Machinery

12 47 Material Handling

11Machinery

2 1Fall of Material

Total Medical

Treatment First Aid

Case Category

Based on Sasol Mining June 05 to Feb 07

Contributor to Sasol Mining RCR Target < 0.5


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Opp ortuni ty Quant i f icat ion Eq uipm ent Numb ers

-75%

-

-

-

As-is U-frames

-33%

-

-35%

-15%

Central ise al l

-33%

-

-25%

-10%

Central ise non-cr i t ica l

-75%-10%Trailer

-25%-10%Tractor

-10%-5%LHD

--1.5%LDV

Central ise U-frames

As- is improve Type


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Op portun ity Quantif icat ion NPVs NPV of alternatives

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

Alternative

N P V ( R M i l l i o n

)U-frame bucket

U-frame t railer

Brakes

Tractor capital

LHD capital

Trailer maint

Tractor maint

LHD maint


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Feasib i l i ty Phase (Id en tifyin g an d comp aring im pacts)

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

Conceptual design of alternatives Alternative screening Simulation models of alternatives

Evaluation of alternatives


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Evaluati on Criteria

Service levelsWaiting/delivery time of materials

CostsUtilisationFleet size

SafetyQualitative


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Summ ary of Alternat iv es

Current system All trailers with brakesReplace tractors and LHDs with new unitsDiesel and flame-proofing in section

More equipment Centralisation of fleetDecentralisation of transport

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

U-frames

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


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Alternat ive Com parison (Capi tal) Capital difference (NPV)

R 0.00

- R 1 .0 2 -R 1.02-R 3.21

-R 0.30

R 8.98 R 10.18

-R 6.08

-R 15.92

R 1 0.1 8 R 1 0.1 8

R 1.68 R 2.97

R 12.22

-R 9.55

-R 27.51

-R 4.64

-R 35.00

-R 25.00

-R 15.00

-R 5.00

R 5.00

R 15.00

R 25.00

R 35.00

A s

i s

U - f

r a m e

M a i n 1 6

, 2

U - f

r a m e

M a i n 1 2

, 6

U - f

r a m e M a i n 1 2

, 6 , L

3 T

U - f

r a m e

M a i n 1 5

, 8

C e n t L D V

M a i n s h a f t

C e n t L H D

M a i n s h a f t

C e n t L H D

M a i n

- 3

C e n t L H D

M a i n

- 5

C e n t T r a c t o r M a i n

S h a f t

C e n t L H D + T r a c M a i n

s h a f t

S t o r e s a t s h a f t s

A r t i c u l a t e d t r a c t

C e n t a l l a t s h a f t s

C e n t s h a f t s -

3 L H

, 4 L D

, 4 T


5 L H

, 9 L D

, 9 T

S c h e d u l e d

d e l i v e r i e s

N P V ( R m

i l l i o n

)

-15.0

-10.0

-5.0

0. 0

5. 0

10 .0

15 .0

A v e s e r v

i c e

l e v e l

d i f f e r e n c e

( m i n )


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Alternat ive Com parison (Op eratin g & Capital)

Steady state total cost difference p er 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 2.73R1.53

R 0.08

R 4.77

-R0.51

-R 5.47

-R 1.81

-R 15.0 0

-R 10.0 0

-R 5.0 0

R 0.00

R 5.00

R 10.00

R 15.00

A s i s

U - f

r a m e M a i n 1 6

, 2

U - f

r a m e M a i n 1 2

, 6

U - f

r a m e

M a i n 1 2

, 6 , L

3 T

U - f

r a m e M a i n 1 5

, 8

C e n t L D V M a i n s h a f t

C e n t L H D

M a i n s h a f t

C e n t L H D

M a i n - 3

C e n t L H D

M a i n - 5

C e n t T r a c t o r M a i n

S h a f t

C e n t L H D + T r a c

M a i n

s h a f t

S t o r e s a t s h a f t s

A r t i c u l a t e d t r a c t

C e n t a l l a t s h a f t s


3 L H

, 4 L D

, 4 T


5 L H

, 9 L D

, 9 T

S c h e d u l e d

d e l i v e r i e s

C o s t

d i f f e r e n c e

( R m

i l l i o n

)

-15.0

-10.0

-5.0

0.0

5.0

10 .0

15 .0

A v e s e r v

i c e

l e v e

l d i f f e r e n c e ( m

i n )

S S annua l dif f Cap dif fer enc e ( NP V) Ser vic e lev el


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Conclus ions

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 LogisticsSystem and the improvement of the turnaround time of logisticsequipment.

Documents

-Docs-Optimising Equipment Utilisation and Improve Turnaround Time v2