Process Improvement Out With The Old And In With The New...•Lets start with: –Calibrating...

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Process Improvement— Out With The

Old And In With The New

Speaker: Todd Creasy

1-2:30pm, Friday 7th March 2014


New ways are fought…..everywhere!

From Pixar’s “A Bug’s Life”

• Short video clip from “A Bug’s Life”


Abstract

• The traditions, methods, and approach the

quarry industry grew up with no longer give us

the results we want and need in our “New

Normal” business climate.

• Costs are higher, safety and compliance

standards are significantly more stringent, and

the market volumes required to cover costs and

deliver profits are coasting along at roughly half

the levels we enjoyed during the boom-

expansion era.


Abstract (cont’d)

• This presentation will look at the technical,

economic, and human functional dynamics that

must be addressed to make process

improvement succeed in delivering

organizational safety and profit objectives in the

“New Normal.”


Learning Objectives

1. Implement profitable integrated process

improvement strategies in your day-to-day

operations.

2. Understand the limits of 6-Sigma and Lean

methodology as they apply to aggregate quarry

operations.

3. Build a process improvement team with

management and associates working together

to form a true team dynamic.


US Aggregates Market Volume

367

340

325

330

335

340

345

350

355

360

365

370

Q3 - 2013 Q3 - 2012

US Crushed Stone – Million Metric Tons Comparison

8% increase

279

256

240

245

250

255

260

265

270

275

280

285

Q3 - 2013 Q3 - 2012

US Construction Sand & Gravel Million Metric Tons Comparison

9% increase

http://www.pitandquarry.com/crushed-stone-sand-and-gravel-consumption-increase

http://www.pitandquarry.com/crushed-stone-sand-and-gravel-consumption-increase/














2014 Aggregates Business Ratings

Forecast

Source: http://www.aggman.com/2014-aggregates-business-ratings-forecast/

http://www.aggman.com/2014-aggregates-business-ratings-forecast/










US Sand and gravel revenue (2012)

Forecasters are predicting positive

growth – but declining positive growth.


The “New Normal”

• Federal Government shut-downs

• Pressure from government federal and state budgetary

forces

• “With three years of sustained growth, it is exciting to

imagine this as the start of a boom. The verdict,

unfortunately, is out as many factors can impact this rise

in construction, including impending changes in Federal

Reserve policies, fluid macro economic conditions and

more”. – AggMan Jan 2, 2014



Diesel Price Fluctuations

4.8%

44.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Before 2004 After 2004

$.03/Gal. Jump in Diesel Fuel

1.4%

21.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%


$0.05/Gal. Jump in Diesel Fuel

0.2%

3.6%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%


.10/Gal. Jump in Diesel Fuel

http://www.aggman.com/3-tips-for-sustaining-growth-in-the-new-normal/


















Fluid Workforce 2012 vs. 2013


Source: http://www.aggman.com/fluid-workforce-continued-in-2013/ /











Quotes from Leaders in our

Industry…

“…and public works construction, including highways, they

see down 5%. (McGraw-Hill’s) concern is federal focus on

deficit reduction is going to make highway funding more

difficult as we move into '14. – Don James – Vulcan Materials – Q3 2013 Earnings Call Transcript

“….and while the annual sales growth in North America

is anticipated to be only 4.3 percent, the lowest of any

(global) region, it is still positive growth”. – Freedonia

Group – Pit & Quarry Jan 2014


So these times are tough?

Lets recall 1981…

• Jack Welch took over as CEO of GE in 1981.

• He had to deal with…..

• Good management is about leading change

7.5%

7.7%

7.0%

7.5%

8.0%

1980-1981 2012-2013

Unemployment

11.9%

1.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1981 2013

Inflation Rates

17.5%

3.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

1981 2013

Interest Rates


CEO Change Leadership

Regarded as “the

generation’s greatest

CEO”, Jack Welch

trumpeted Six Sigma

philosophies and

methodologies as one of

the keys to GE’s success.


How did GE Perform?

0

20

40

60

80

100

120

140

160

180

1

6

11

16

21

26

31

36

41

46

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61

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71

76

81

86

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1

106

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1

11

6

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14

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196

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6

251

GE's Stock Close During Welch's Reign

Close

Linear (Close)

Stock Splits

Six Sigma

Applied


From Jack Welch In his own words….

Video clip of Jack

Welch speaking about

Six Sigma


Short History of Improvement

Attempts

It was reported that King

Henry VIII in 1574

observed and marveled

at the Venice Arsenal

build a small, but

complete galley ship in

less than 1 week using

continuous flow

processes.


Short history… (2 of 5)

Benjamin Franklin in the 18th century

established principles regarding waste and

excess inventory.



In the 18th century, Eli

Whitney developed

“interchangeable parts”

for his cotton gin.



In the early 20th

century, Frederic W

Taylor established the

ideas of “standardized

work” and “best

practices” among

businesses and

organizations. It is now

called “Taylorism”.



Henry Ford revolutionized

production with:

• “mass production”

• Incorporated continuous

process flow (“the

assembly line”)

• reduced inventory

• interchangeable parts

• standardized work

stations

•best practices


Origins of Productivity Improvement

Short video clip of Ford’s early days


Very short history of “lean” (1 of 2)

Taiichi Ohno, production manager

for Toyota, determined after

visiting the Ford “Rouge” plant

that Ford’s mass production

system would not work in Japan.

They needed something more

customer focused, flexible, nimble

and efficient due to the costs of

materials in Japan. He got the idea

from a “Piggly Wiggly”…..

They called it the

“Toyota Production

System” or TPS for

short.

http://images.google.com/imgres?imgurl=http://www.optiprise.com/FilesCustom/HTMLEditor/Images/Taichii_Ohno_large.jpg&imgrefurl=http://www.optiprise.com/History of Lean/61/&h=551&w=500&sz=20&hl=en&start=2&tbnid=32DvonfvVeoTxM:&tbnh=133&tbnw=121&prev=/images?q=Ohno&gbv=2&hl=en


History of Lean… (2 of 2)

Professors from MIT studying automotive

production techniques in the US and Japan

noticed some unusual aspects to the Toyota

model. They noticed:

•it needed less effort to design, make and

service their products;

•required less investment to achieve

production capacity;

•produced products with fewer defects;

•used fewer suppliers;

•performed in less time with less inventory

In other words, the system was kinda…..lean.


Enough already….

…what is “Lean” then?

Lean (also called the Toyota Production System) was developed by Taiichi Ohno to do primarily two things:

– Drive out waste (“muda”) in all it’s forms. Waste is defined as unnecessary time, activities, scrap and any other resources

– Improve “flow” of production and ultimately satisfy the customer/consumer.


History of Six Sigma…

•World War II

•Statistics and the A-

Bomb

•Joseph Juran (left) and

Edward Deming (right)

•Statistical process

control and quality


What is Six Sigma then?

Developed by Americans Edwards Deming and

Joseph Juran and practiced widely in Japan after

WWII. It’s aims are to:

– Reduce the number of product defects to near zero

– Remove production variation and thereby improving

predictability, manageability and quality


Lean and Six Sigma’s Theme?

Measure, Analyze, Improve… (Measure,

Analyze, Improve… Measure, Analyze, Improve…)

A picture of ant on “A Bug’s Life”

We’re going to start simple with: •Measurement tool calibration

•5S

•Kanban

And get more sophisticated with: •Quarry Phases

•Cycle times

•Capacity Charts


Human functional dynamics of

process improvement

• Selling the idea.

– Very hard to argue with improving safety

– Get buy-in from stakeholders (e.g. unions)

• Lets start with:

– Calibrating weighbridge and loader scales

– “5s” – sort, straighten, shine, standardize and sustain

– “Kanban” – order what you need before you need it to

keep from disrupting operations


Calibration – “Sell What You Ship!”

Be sure your measuring devices are accurate.

Calibrate often and correctly to ensure you

receive every $1 you’re working hard to earn.


DOES THIS AREA LOOK LIKE THIS TODAY?

All On-site Improvement Begins

with…safety! Being organized and clean

supports a strong safety culture.


Kanban systems for stock

replenishment

• Re-order point is when the disks get down to the

red tag. The tag has the part number and re-

order amount. .


Stop over using and paying for

expedited shipping fees!

Screen cloths are set in individual

racks with a visual indicator

of 6 as the maximum volume. When

each cloth is used the tag

is flipped over. When it gets down to

2, this becomes the re-order trigger


5-S – “Before”


DOES THIS AREA LOOK LIKE THIS TODAY?

5-S – “After”


This crusher score a “B”(85 points)

….why not an “A” (100 points)?

Trip

Hazard.


Improvement Methodologies

• Six Sigma – seeks to reduce variation

and improve quality

• Lean – seeks to remove any of the

seven forms of waste and improve

flow

• Theory of Constraints – seeks to increase

production flow by removal of process

“bottlenecks”

37


Synergy Opportunities?

Theory of

Constraints “TOC”

?

38


Synergy Opportunities?

Theory of

Constraints “TOC”

? “6TOC”

39


Now….we’ll get a little more

sophisticated

“Quarry Phases”

Haul Roads to

Primary

Secondary to

Stockpiles

PHASE I PHASE II PHASE III

Load out to

Ticketing

PHASE IV – Preventive Maintenance


6Sigma “Capabilities Chart”

What is a capabilities chart? It’s a tool used to help

determine where a bottleneck (or constraint) is in

your crushing circuit (or system).

1540

550 566

0

200

400

600

800

1000

1200

1400

1600

1800

Loader TPH Trucking TPH Crushing TPH

To

ns p

er

ho

ur

Six Sigma Capacities Chart


Cycle Time

• What is a cycle time? – It’s the time it takes for the haul truck to

dump his load, return to the loader, get loaded, return to the hopper and dump his load again.

• There are four parts to a cycle time 1. Time to load

2. Travel time to the jaw

3. Dump Time

4. Empty Return Time

http://images.google.com/imgres?imgurl=http://www.dkimages.com/discover/previews/853/35049319.JPG&imgrefurl=http://www.dkimages.com/discover/Home/Technology/Tools-Machines-Instruments/Timekeeping/Stopwatch/Stopwatch-09.html&h=544&w=512&sz=34&hl=en&start=11&tbnid=kPkeFQ-ljzAPaM:&tbnh=133&tbnw=125&prev=


How is loader time in the pit used?

Load Area Activity of Wheel Loader

Preparing to Load

17 %

Loading Truck

54 %

Non-Loading

Activities

30 %

Clean Floor

3 %

Predig Pile

8 %

Remove Oversize

17 %

Maintain Floor

2 %


“Time to Load”

Standard Operating Procedure LOAD TIME

– Defined as: Time it takes for the pit loader to load a truck

– Start Time: When Loader tilts bucket for first load

– Stop Time: When Loader Sounds Horn

– Other Data to Capture: # of buckets per truck

– # of tire rotations when loading (tires need to be painted)

Video clip of

loader and

haul truck

loading


“Travel Time To Jaw”

Standard Operating Procedure TRAVEL TIME TO JAW

– Defined as: Time takes for a truck to leave the pit and be positioned to dump at the Jaw

– Start Time: When horn Sounds that truck is able to move

– Stop Time: When tires come to a rest against the block at the jaw

– Other Data to Capture: Who is the driver

– Any obstructions/vehicles that slow the process

– Any other observations about differences between trucks

Video clip of

haul truck

headed to

crusher


“Dump Time”

Standard Operating Procedure DUMP TIME:

– Defined as: Time it takes for truck to dump load into the primary

– Start Time: When wheels of truck hit the bumper block to stop

– Stop Time: When wheels start to roll from block

– Other Data to Capture: What truck/driver is dumping

– Notations whether the truck is having to wait for anything.

Video clip of

loader dumping

into crusher

bin


“Empty Return Time”

Standard Operating Procedure RETURN EMPTY TIME:

– Defined as: Time from dumping at the primary to return to the pit and be ready for the loader to dump it’s first load

– Start Time: When wheels move from block at the primary

– Stop time: When loader tilts bucket for first load

– Other Data to Capture: What truck/driver

– Obstructions during travel

– Things that appear to cause slowdowns

Video clip of

haul truck

dumping load

and leaving


Line-ups and “bunching” are all

signs of “bottlenecks” and its

costing you $$$$$$$$$$$$$$$$$$$$


Does all this matter?

(small example)

• Two drivers – Bill and Tim; posted below are their cycle times by part; assume each drives a 65 ton haul truck and carries approximately 62 tons on each haul. What is the difference in tons per hour for each driver?

• Bill – Time to load avg. = 2.14; Travel time to jaw avg. = 4.13; Dump time avg. = .34; Empty return time avg. = 3.12

• Tim – Time to load avg. = 2.18; Travel time to jaw avg. = 4.50; Dump time avg. = .31; Empty return time avg. = 4.00

• TPH for Bill _________________ ?

• TPH for Tim ________________ ?


Now….we’ll get a little more

sophisticated

“Quarry Phases”

Haul Roads to

Primary

Secondary to

Stockpiles

PHASE I PHASE II PHASE III

Load out to

Ticketing

PHASE IV – Preventive Maintenance


Map your operation


2"C&R7's 57's

5's

Surge Pile

Primary

Crusher

Screen

Tower

“Deduster”

Wash

PlantSecondary

Crusher

Cone

Crusher

Screw

Bin

Indicates capacity measure

analysis

Control

House

Gallatin

Quarry

Phase II

Plant

Schematic

NEW

BELT

SCALE

Indicates new belt scales installed by

May 12th; SOP for maintenance

established

MAP

YOUR

QUARRY!


BELT SCALES

Some belts had them…..and some

did not.


Improvement begins with measuring

your current performance.

54


Building a process improvement

team

• Who

– Plant manager must own the improvement initiative.

It’s his baby.

– Best practice employees must train others to their

same level of expertise. Teach them the “tricks of the

trade”. Coach them to better performance.

• Roles

– Everyone is a learner. There are no “forever experts”.

If you don’t know if an idea will work or not – “pilot it”.

• Define objectives

– What are the daily, weekly and monthly goals? Report

progress toward such.


Not all operators are the same

• Identify ‘A’ operators

• Assist ‘B’ and ‘C’ operators

– (In cab feedback from loader scales –

need this data from Simon)


Human: Communication

• Communicate KPI’s – Daily, weekly & monthly

targets for Safety, Delivery, Cost & Quality


Human: Communication


How to implement process

improvement strategies (part 1)

Start small and simple:

• Calibrate your weighbridge at least quarterly Sell everything

you load. Establish an SOP for such and audit.

• Calibrate loader scales daily before operations begin –

avoid over/under loading – both of which negatively impact

productivity. Audit these activities.

• Begin with 5S organizing and Kanban inventory system




Continue to stay simple…

• Use tire management systems for proper inflation – saves

gas, tire wear and improves productivity.

• Clear all haul roads of boulders and any materials that can

cause tire malfunction as necessary but at per shift.

• An inexpensive way to get a few more tons on each truck is

to install side-boards. Be careful so as to not overload the

truck which could lead to equipment malfunction.

• Be sure to enforce driving patterns within quarry by

mounting signage as to “left-hand” or “right-hand” driving

patterns. This helps with visitors, corporate personnel,

inspectors, etc. to ensure a safe environment and help

prevent productivity issues.




• “Right-of-way” – establish right of way rules for loaded trucks,

empty trucks, water trucks and visitors.

• In between loads, have the pit-loader “wind-row” large

boulders for the rock hammer in a location that doesn’t

impede production.

• Label stock piles in yard for easy identification for customer

trucks.

• Plan stock yard so as to lesson queues at the scale-house

and improve productivity; install “automated ticketing”

• Blasting – the most inexpensive place to crush rock is in the

blast. Are you getting to coarse material or material too fine?

Work with your blasting professional on various shot patterns

to hone in on your quarry’s “sweet spot” for blasting


Limits of 6-Sigma and Lean

methodology

• This requires measurement, analysis and piloting.

“Flying by the seat of the pants” or “rules of thumb” often

prove damaging to the effort and projects.

• There are very few “quick fixes”.

• Employee behaviours will NOT change overnight – it

takes coaching, training and patience.

• It takes constant attention by senior management to

prove that this isn’t a “flavour of the month”

• Sustaining the good results is often the most difficult yet

the most important. It requires an employee

communication system to be continuously profitable.


Questions?

Process Improvement Out With The Old And In With The New...•Lets start with: –Calibrating...

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