Optimising equipment utilisation and
improve turnaround time
Underground Logistics Case Study
Carel Coetzee, Sasol Mining
Session Overview
Project background and approach
Monitoring and recognising improvement
Information gathering and modelling
Tools and techniques
Identifying and comparing impacts
Evaluating and comparing alternatives
Conclusions
copyright reserved 2007, P&TS, Sasol Mining
Background
Case for Change
Operational cost
Effective vs. Efficient
Safety requirements
Equipment replacement strategies
Should we spend the money on the current system or should we
redesign the logistics system?
copyright reserved 2007, P&TS, Sasol Mining
Approach
Sasol Business Development & Implementation model (BD&I)
Systematic approach for the development and implementation
Based on traditional stage gate process
Value Add
Align leadership, business, operational and technical efforts
Helps us to do the right thing at the right time
Guides us through a sequence of clear decision gates
copyright reserved 2007, P&TS, Sasol Mining
Focus:
Business Definition
Idea
Generation
Track Deliverables
Phase objectives
Idea
Packag ing
Front End Loading
Prefeasibility
1
2
Basic
Feasibility
3 Development
Operation
7
8/1
• Implem ent with
mini mum c hanges
• Facility & business
s ystems ready for
start-up
• Owner quality
ass uranc e
• Product quality
ass uranc e s ystems
in place
• End-of j ob
documentation
• Stead y oper ation
• In s pecific ation
product
• SBU acceptance
• Performance tes t
• Start business
support
• Post proj ect audit
• Product accepted
in m arket
• Product Quality
ass uranc e
• Legal &
governance
complianc e
• Opportunity
identification
• Technology
support
• Technical support
•Asset management
• End–user s upport
The Business
Running Entity
Post Audit Report
Technical Integrity
Start-up
Assistance
Performance
Certified
Project Execution
Plan
Project as per
Execution Plan
Project Close-out
& Rev iew Report
Project Close-out
Report
Project Charter
Gov ernance
Gov ernance
Gov ernance
• Identify & assess
opportunity
• Assess busi ness
alternati ves,
uncertai nties &
risks
• Company Strateg y
Alignment
• Accurac y + 50%
•Develop & select
best
alternatives
(logistics systems)
•Select Technology
(equipment to
support selected
system)
•Execution & D esign
philosophies
•Develop Business
opportunity
•Accuracy + 30%
•Optimised & fully
defined scop e
•Authority
Engineering
•Execution Plan
•Accurac y + 10%
•Product
acceptan ce b y
mar ket (detail
design of
suggested system
accepted, incl.
interfaces)
Business/
Operations
Business Case
Business Plan
Final Business
Plan
Engineer ing/
Technical
Preliminary Eng.
Proposals
Conceptual Eng.
Proposal
Basic Eng.
Package
Project
Managem ent
Project Execution
Assessment
Sponsor
Feasibility Charter
Project Execution
Philosophy
Basic
Dev elopment
Charter
• right business
solution?
• continue/ abort/
rewor k
• principle
approval
• accept next
phas e pl an
Evaluation
6
Optimise oper ation, maintenan ce
& products
•Opportunity
scanning
• Brain
stor ming
• R&D Stage
Gate Model
• Business
enquiries
• right
opportunity?
• continue/abort/
rework
• accept next
phas e plan
Start-up
5
Evaluation to
ensure project
meets objectives
Project Planning
• strateg y fit
• continue /
abort
• accept next
phas e pl an
Execution
4
Safe start-up of the
assets and
business systems
Facilit y Planning
70%
Continuous
Improvement
Provide assets
according to
Business Plan
Business Planning
50%
Operate Business
Implementation
Strategic
alignment
Probability of Business
Dev elopment proceeding30%
Gate Criteria
Business Establishment
95%
• project
authorisation
• optimum project
definition
• continue/ rework/
abort
• accept next phas e
plan
100%
• RFO
• approve start-up
100%
• beneficial
operati on
• stable operating
plant
• quality produc t
• all objecti ves
met
• acceptanc e of
post audit &
close-out
reports
Optimise
business &
product
Optimise plant
saf ety, reliability &
integrity
Project
Gov ernance
Corporate
Gov ernance
100%
• busi ness
management
governanc e in
plac e?
• busi ness c ontinuation still feasible/
ec onomical ?
Copyright: © Sasol T echnol ogy (Pty) Ltd 2005, revision 5, 1 J une 2005
Pre-feasibility (Monitoring and recognising improvements)
Information gathering
Underground observations / Interviews / Business information (SAP)
Time studies
Material movement and process
Equipment
Utilisation
Costs
Safety record
Simulation model
Opportunity quantification
copyright reserved 2007, P&TS, Sasol Mining
Time Study
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Material Movement and Process (1)
106 logistical needs identified
Driven by
Breakdowns
Production
Schedules
Deliveries
Ad-hoc work
Main areas
Material movement to sections and other areas
In-section movement
People movement
copyright reserved 2007, P&TS, Sasol Mining
Material Movement and Process (2)
Supplier
delivery
1
Offload (1 and 6)
Forklift
Manual
Unhitch (1 and 9)
Shaft stores
2 and 8
Load (2)
Forklift
Manual
Hitch (2)
NFP Tractor
Empty trailer
Hitch (8)
NFP Tractor
Full trailer
3
Unhitch (3)
Main
shaft
Hitch (4)
FP Tractor
Full trailer
Unhitch (7)
Offload (3)
Manual
4
Section
Load (4)
LHD
Manual
Unhitch (5)
LHD/SC/Manual
FP Tractor
5
FP Tractor
6
7
FP Tractor
Empty trailer
copyright reserved 2007, P&TS, Sasol Mining
A
Offload (5)
LHD
Manual
Hitch (6)
Machine /
working face
Equipment Utilisation
Type
LHD
Number
(Percent)
Adapted
Utilisation
5%
41%
Tractor
12%
21%
FEL
1.5%
8.5%
LDV
18%
12.5%
63.5%
N/A
Trailer
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Equipment Cost
Total cost (R000's)
Annual Equipment Cost
Tractors
LHDs
2003/2004
2004/2005
Year
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2005/2006
Simulation Model
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Safety Record (Logistics related)
Category
First Aid Medical
Case
Treatment LWDC Total
Fall of Material
1
Machinery
1
Material Handling
7
4
1
12
Mobile Machinery
3
4
6
13
Slip and Fall
2
2
Tools and equipment
1
1
Grand Total
15
1
2
1
8
8
31
Based on Sasol Mining June 05 to Feb 07 –
copyright reserved 2007, P&TS, Sasol Mining
Contributor to Sasol Mining RCR – Target < 0.5
Opportunity Quantification – Equipment Numbers
Type
LHD
As-is
Centralise Centralise
As-is
Centralise
improve non-critical
all
U-frames U-frames
-5%
-10%
-15%
-
-10%
Tractor
-10%
-25%
-35%
-
-25%
LDV
-1.5%
-
-
-
-
Trailer
-10%
-33%
-33%
-75%
-75%
copyright reserved 2007, P&TS, Sasol Mining
Opportunity Quantification – NPV’s
NPV of alternatives
U-frame bucket
NPV (R Million)
U-frame trailer
Brakes
Tractor capital
LHD capital
Trailer maint
Tractor maint
LHD maint
As-is
As-is impr.
Cent. non-crit.
Cent. all
Alternative
copyright reserved 2007, P&TS, Sasol Mining
As-is U-frames
Cent. with Uframe
Feasibility Phase (Identifying and comparing impacts)
Alternatives generation
Brainstorming and interviews with end-users
Benchmark (RSA & USA)
Conceptual design of alternatives
Alternative screening
Simulation models of alternatives
Evaluation of alternatives
copyright reserved 2007, P&TS, Sasol Mining
Evaluation Criteria
Service levels
Waiting/delivery time of materials
Costs
Utilisation
Fleet size
Safety
Qualitative
copyright reserved 2007, P&TS, Sasol Mining
Summary of Alternatives
Current system
All trailers with brakes
Replace tractors and LHD’s with new units
Diesel and flame-proofing in section
More equipment
Centralisation of fleet
Decentralisation of transport
Materials down at satellite shafts
Old oil and ISO at both satellite shafts
U-frames
Articulated tractors
Communication system
In-section battery scoops and/or utility vehicles
24h deliveries
copyright reserved 2007, P&TS, Sasol Mining
- R 3 5.00
copyright reserved 2007, P&TS, Sasol Mining
- R 3.2 1
-R 6.08
S c he du led de liv er ies
Ce nt s haf ts 5 LH ,9 LD ,9T
Ce nt s haf ts 3 LH ,4 LD ,4T
R 10.1 8
C e nt a ll at s ha fts
R 1.68
A r t ic u la ted tr ac t
- R 0. 30
S tor e s at s h afts
R 10.18
C en t LH D +T r a c M ain
s h aft
R 1 0.18
Ce nt T ra c to r M a in
S h aft
C en t LH D M ain - 5
R 8 .98
C en t LH D M ain - 3
R 1 5.00
C en t LH D M ain s h aft
C e nt L DV M a in s ha ft
R 0 .00
U- fr a m e M a in 15,8
-R 1.02
U - fr am e M ain1 2,6 ,L3T
- R 5.00
- R 1 .02
U- fr a m e M a in 12,6
R 5.00
U- fr a m e M a in 16,2
A s is
NPV (R millio n)
R 3 5.00
R 2 5.00
R 12 .22
5.0
R 2.97
0.0
- R 4.64
- R 1 5.00
- R 9.55
- 5.0
- R 15.92
- R 2 5.00
- 10.0
- R 27 .51
- 15.0
Ave service level difference (min)
Alternative Comparison (Capital)
Ca pita l diffe re nce (NP V)
15. 0
10. 0
-R 10.0 0
- 10.0
-R 15.0 0
- 15.0
S S annua l dif f
copyright reserved 2007, P&TS, Sasol Mining
Cap dif f er enc e ( NP V )
Ser v ic e lev e l
-R 1.99
S c hedu led deliv e ries
Ce nt s h afts 5LH ,9LD ,9T
-R 0.51
Ce nt s h afts 3LH ,4LD ,4T
C ent a ll at s h afts
-R 0.10
A r tic u late d tr ac t
R 1.53
S tor e s at s hafts
R 2.73
C ent L HD +T r ac M ain
s h aft
R 2.73
C ent Tr a c tor M ain
S h aft
Cen t LH D M ain - 5
R 0.00
Cen t LH D M ain - 3
R 5.0 0
C ent L HD M a in s haft
C ent LD V M ain s h aft
-R 0.80
U - fr am e M ain15, 8
-R 0.52
U - fr am e
M a in1 2,6,L 3T
-R 0.52
U - fr am e M ain12, 6
U - fr am e M ain16, 2
A s is
Cost difference (R m illion)
R 15.00
15 .0
R 10.00
10 .0
R 4.77
R 2.73
5.0
R1.53
R 0.0 0
R 0.08
-R0.51
0.0
-R 1.81
-R 5.0 0
-R 5.47
- 5.0
Ave service level difference (min)
Alternative Comparison (Operating & Capital)
Stea dy state total cost diffe re nce per yea r
Conclusions
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 Logistics
System and the improvement of the turnaround time of logistics
equipment.
copyright reserved 2007, P&TS, Sasol Mining