Triple/S Dynamics Presentation - Belt Conveyor vs. Horizontal Motion Conveyor
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Transcript of Triple/S Dynamics Presentation - Belt Conveyor vs. Horizontal Motion Conveyor
The purchase of capital equipment is a significant decision and often requires the involvement of many
internal professionals including engineering, purchasing, maintenance, finance, and Quality Control.
Hitting The
Target
• Equipment that Delivers
Many times the purchase price is just the tip of the iceberg. Therefore it is important to consider
all of the cost elements.
Developing an Understanding of “TOTAL COST OF OWNERSHIP” and how that impacts
“RETURN ON INVESTMENT” for industrial minerals processors.
METRIC #1
RETURN ON INVESTMENT (ROI)
A performance measure used to evaluate the savings and/or revenue increase credited to the equipment after initial and ongoing costs are considered.
Simple ROI = Amount of Financial Gain Total Investment Amount
METRIC #2
TOTAL COST OF OWNERSHIP (TCO)
A performance measure meant to uncover all the lifetime costs associated with the equipment both before and after it is purchased.
Currently, there is no broadly accepted formula for computing TCO. The main objective is to make sure all relevant costs are considered when evaluating equipment ROI.
CAPEX + OPEX = TCO Capital Operational Total Cost of Expenditures Expenditures Ownership
Purchase price and installation costs often times account for a very small
percentage of the Total Cost of Ownership.
10%
90%
Capital Expen-ditures
Operational Expenditures
TCO COMPONENTS
Equipment Costs Installation Costs Engineering Costs Shipping Cleaning/Spillage/Waste Environmental Costs/Impact
Energy Costs Training Operating Labor Maintenance Spare Parts Controls Disposal Costs Unscheduled Maintenance/Downtime
METRIC #3
OVERALL EQUIPMENT EFFECTIVENESS (OEE)
A performance measure that determines actual production performance against expected production performance.
OEE = Availability X Performance X Quality
Availability – Takes into account downtime loss which can be defined as any event that halts planned production.
Performance – Takes into account Speed loss which can be defined as any event that causes a process to produce less than its expected rate.
Quality – Takes into account production loss which can be defined as equipment performance that contributes to material not meeting Q & A standards.
Why is OEE important to TCO and ROI
Calculating OEE can help identify “downtime loss” and “material waste” which can be a major contributor to total cost of ownership and have
a major impact on return on investment.
Material handling equipment (conveyors) play an important role in the mining, processing, transporting,
and storage of bulk materials.
While it is usually difficult to identify and quantify the benefits associated with material handling
equipment, it is much easier to identify and quantify the costs.
Conveyor downtime can have a major impact on plant
production which leads to lower revenues and
profitability.
Cost/Benefit analysis of belt conveyors compared to horizontal differential motion conveyors.
Belt Conveyors have always been an essential component of the mining and processing of
industrial minerals.
Horizontal Differential Motion Conveyors are beginning to find there place in the world of mining and industrial minerals processing.
ROI Analysis – Total cost vs. benefit analysis
Projected Costs
Direct – One Time Cost Direct – Ongoing Cost Indirect – Ongoing Cost
1) Engineering2) Procurement3) Equipment4) Installation5) Shipping6) Controls7) Existing Equip.
Removal8) Start-Up Assistance
1) Maintenance2) Operating Labor3) Spare Parts4) Utility Costs5) Engineering
1) Unscheduled downtime
2) Material Spillage (Waste)
3) Contamination4) off-spec material5) Equipment Cleaning6) Clean-up
Projected Benefits
ROI Analysis – Total cost vs. benefit analysis
Direct/Indirect Benefits
1) Revenue Increase - Higher Capacity - Better Product Quality2) Labor Savings - Reduced Attention - Reduced Staff3) Reduced Spare Parts
4) Reduced Maintenance5) Reduced Engineering -Redesign6) Reduced Material Waste7) Reduced Unscheduled Downtime8) Reduced Clean-up9) Improved Employee Satisfaction
100 foot conveyor – year 1 cost/installationApplication – 60 TPH Lime
Belt & Roller Conveyor
Triple/S Slipstick Conveyor
Equipment Cost $60,000.00 $125,000.00
Installation Cost $25,000.00 $45,000.00
Drive System Drive System
Motor Motor
Belt N/A
Idlers N/A
Total Initial Cost $85,000.00 $170,000.00
10-year Lifecycle Cost Comparison
Lifecycle Costs Failure Ratio-Annually Failure Ratio-Variable
Lost Bearings/Supports 5 per/yr. 5th & 10th year-typicalCost of Bearings/supports $150 X 5
($750.00)$800 X 2
($1,600.00)
Cost for Labor $35 hr. X 2 hrs. X 5($350.00)
$35 hr. X 2 hrs. X 2($140.00)
Downtime Hours 10 hours 4 hoursCost of Downtime per hour (60 tons X $200/ton) $15,000.00 (60 tons X $200/ton)
$15,000.00
Annual Cost $151,100.00 N/AYear 1 Capital + Operating Costs $85,000 + $151,100 = $236,100.00 $170,000.00
Year 1 Savings $66,100.00
Year 10 Operating Costs $1,511,000.00 $61,740.00
Year 10 Savings $1,359,900.00
10-year Lifecycle Cost Comparison
Rate of Return on Replacing Belt Conveyor with
Slipstick Horizontal Motion
Conveyor
$175,000 (equipment cost)/ $151,100 (annual maint.) = 1.16 X 12 = 13.9 months (ROI)
When purchasing equipment, many processors tend to focus on achieving a competitive
purchase price and will often overlook opportunities to increase their bottom line.
Vendor 1 Vendor 20
50
100
150
200
250
12560
45
25
6 1503.5
1.1
Purchase price InstallationUnscheduled Downtime Spare Parts
The Slipstick Conveyor