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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
C e n t s h a f t s -
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
C e n t s h a f t s -
3 L H
, 4 L D
, 4 T
C e n t s h a f t s -
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.