Recently a number of Contract Mining Companies have engaged PIP to help them make improvements in their already lean businesses

Why have they come to PIP?

• Margins tightening due to:
  • Competitive tendering driving margins down
    • Often tighter than they been able to deliver to
    • At risk of losing contracts (in some cases)
  • increasing costs (fuel, labour, tyres, capital all increasing steeply)
    
• Competition with Owner/Operators. Owners:
  • No longer seeing the value add of contractors
  • Own improving their businesses at significantly faster rate than contractors are
    
• Worsening performance
  • High turnover of people in the industry
• Many of the best operators with Owner/Operators
• Experience/Approach diluted
• Major firms have reviewed bringing in-house and looking at “transitioning out contractors” at a number of sites

What have we found?

• Traditionally tight control (performance and cost) has been lost over-time

Figure 1. Traditionally high levels of active supervision was lacking

• Volume opportunities in the order of 10-20% along with cost opportunities have been evident
  • Draglines
  • Truck and Shovel
  • Tonne kilometres

  These include:

• 20% improvement in Hitachi 5500 performance including:
  • 7% increase in operating time
  • 11% increase in operating rate
• 17% improvement in truck performance
• 22% increase in Hitachi 3600 Load and Haul volume including:
  • 5% increase in “dig time”
• 11% in cycle time
• 5% improvement in “Load factor”

Figure 2. Greater than 10% opportunity identified in increasing operating rates alone

Rapid results were needed

Rapid results were needed on some of these contracts, due to urgency to show results to owners or to rectify significant losses. These included:

• Crew re-balancing (spreading better operators between shifts has proven to lift crew performance)
  

Figure 3. “Quick Wins”, immediate opportunity through crew “re-balancing”

• Fleet re-balancing (the lost opportunity caused by the mixed fleet outweighed the cost benefit of having some lower cost trucks).
• Increasing load factor through coaching and active supervision
• Training supervision in Short Interval Control to raise performance
• Tighter cost management techniques
• Renegotiating key purchases to bring cost base down quickly

Figure 4. Short Interval Control – methodology used to tighten frontline management

More systemic wins included:

• Re-development and implementation of systems driving accountability to the front -line
• Improved reporting of and root-cause-elimination of delays
• Systematic reduction in maintenance costs
• Frontline development / coaching
• Continuous improvement system including Idea Generation, Prioritization and Pipeline Management

Figure 5. Re-development and implementation of systems driving accountability to the front -line Click for full size diagram