Launching continuous improvement for a
East European coal producer |
Context / Scope of project
The client, a major East European coal producer, asked PIP to help identify improvement opportunities involving both increased throughput and cost reduction. The goal was to use the identified opportunities as a platform for establishing a Continuous Improvement function at the company.
The company had a ‘Command and Control’ culture that facilitated rapid changes down the line and the mine leadership group had a track record of driving performance improvement. However, the infrastructure, basic tools and skills for sustainable Continuous Improvement did not exist.
Existing improvement initiatives were usually technologically motivated (improvement was normally associated with spending capex, rather than improving existing equipment) with limited business case backing. Moreover, the capex requests and spend were usually based on subjective perception, ‘loudest argument wins’, rather than a sound financial basis.
Our brief was to help them identify the improvement potential and propose approaches to: a) capture the value, as well as b) set up an internal Continuous Improvement function which would be positioned to continue driving improvement and capturing value.
Opportunities identified:
Throughput
- Increase mine volumes by 6-10% with the existing equipment and crews by reducing downtime and increasing throughput rate
- The downtime reduction would come from:
- Reducing the amount of time lost in less than 30 minute delays
- Reducing the longwall relocation time through better planning and closer execution management
- Optimising the time dedicated to preventive maintenance to reduce unnecessary downtime and increase the impact of the performed maintenance activities
- Throughput rate would be increased by focusing on:
- Reducing variability (not explained by geotechnical reasons) in cutting rate through best practice sharing, improved management and short interval control
Costs
- Identified $7-10m of cost reduction opportunities
- Improve material use and waste in the mines and eliminate delayed and flawed material supplies
- Reduce contractors by eliminating breakdowns in their activities and improving their labour productivity
- Apply strategic sourcing approach to reduce procured prices
- Train all layers of management in how to reduce and manage absenteeism
Plant
- Identified more than 1% increase in recovery from tighter operating procedures and management
- Reduce waste in the feed through improved communication and tighter operating disciplines, resulting in lower magnetite losses, energy consumption and total wear of the equipment
Overall
- Identified improvement opportunities worth $20 - 40m
- Set out a high level plan for capturing the improvement potential and ensuring that the change was sustainable
- Introduced Continuous Improvement concept, structure and tools that should be implemented in order to capture the identified opportunities and make business improvement continuous and sustainable, focusing on:
- A disciplined, systematic Idea Pipeline process
- Management meetings as a tool to evaluate performance trends and make sure all decisions are tracked to closure
- Coaching the workforce and, particularly, the foremen to produce the required change
- Defining a companywide Value Driver Tree that would help the management understand the main levers and prioritise opportunities
- Creating and coaching a team capable of driving and embedding Continuous Improvement in the company.
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