Pitfalls and the Profits in Quarry Load Out

by on JUNE 20, 2013

Whitepaper:

The Pitfalls and the Profits in Load out Reduce time and increase your profitability Prepared for LOADRITE by Michael van Koeverden, Quarry Mining Systems Pty Ltd, Australia www.quarryminingsystems.com.au Background Load out within any quarry operation is an important stage that needs to be well designed and considered. There is scope to save time and increase profits by understanding the specific needs of your quarry weighbridge and stockpile areas and how the interface between these operations directly affects your quarry productivity and profit. From the time the quarry gates open first thing in the morning to the end of the working day, the handling of quarry stock is a dynamic and important process that involves many movements of plant and equipment and many interactions between quarry workers and other staff. Every time we touch quarry products with plant and equipment it increases costs in wages, tyre wear, fuel spend, machine hours etc. Therefore we need to minimise our interaction with quarry products by automating processes where possible and when manual processes are required understanding them fully to maximise production output and quarry reliability.

This paper explores the key issues for stockpile management and load out and discusses the benefits that may be realised in utilising available technologies. Some of the key issues include: Measuring and improving load out cycle times within a quarry site What are the real costs of delays in loading and weighbridge holdups? Unnecessary fuel costs from inefficiencies in the load out process How automating and streamlining load out can benefit your business How to get real efficiencies in your mobile plant and equipment Reducing load out cycles times Cycle load out times are the measure of how quickly a customer will be loaded and ticketed across the quarry weigh bridge and have left the site. When our customers are kept waiting in our quarry they are losing their truck utilisation and therefore profit. This poor performance in quarry cycle times will impact the quarry owner / operator, as unhappy customers shift their business to competitors.

Anything that impacts quarry load-out cycle times will be costly to your quarry operation; and the correct matching of mobile equipment is essential to realise the full efficiencies in this area. Quarry operators must train their people to ensure established processes and procedures are understood, clearly communicated and repeatable to maximise quarry profits. Where there is a mismatch in load-out equipment, processes and staff knowledge; problems creep in and profits fall directly as a result. Truck Productivity

Our quarry customers operate in a highly competitive environment, where margins are tight, and they are very focussed on efficiencies in truck utilisation. Hauling aggregate is most profitable when the trucks are kept full at all times. Back loads on a trucks return journey are not always available and as a result cartage costs climb rapidly as the trucks drive empty. Most contracts/projects are priced on a set number of loads per day to achieve slim margins to tight construction time frames. When delays occur, especially within a quarry, this is seen by our customer as unplanned delay and across a shift or day, may lead to a reduction in the number of loads completed and therefore customer revenue is lost. In the following example we explore the real measurable costs of longer cycle times within the quarry, expressed in Australian Dollars (AUD) The Average cost per kilometre may be broken down approximately as follows: Truck Driver hourly rate AUD 1.40 / km Finance/Lease Cost AUD 0.55 / km Road Charges (where applicable) AUD 0.10 / km Fuel AUD 0.70 / km Tyres AUD 0.10 / km Tolls (where applicable) AUD 0.05 / km Total Operating Cost (TOC) per km AUD 2.90 / km Lets say that a 15% margin applies on the transport (TOC) of the quarry material supply. The truck transport cost then becomes = AUD 2.90 / km * 1.15 = AUD 3.34 / km

Note: These costs are based on the truck achieving a given number of cycles per day. If the number of cycles are not achieved then the costs, especially for the driver will increase. Lets review the reduced transport margin if a cycle is dropped due to truck delays. Based on: a cycle of 60 kilometres return, a truck is expected to undertake 7 cycles during a shift 1. Total transport costs payable by client (when 7 cycles are completed as budgeted)

= AUD 3.34 / km x 60 km x 7 cycles= AUD 1402.80 / shift If due to delays the truck only manages to do 6 cycles: 2. Total transport costs payable by client (when 6 cycles are completed due to delays) = AUD 3.34/km x 60 km x 6 cycles = AUD 1202.40 / shift That equals a loss in transport cartage revenue AUD1402.80 AUD1202.40= AUD 200.40 /shift % loss in Cartage Revenue = (AUD 200.40 / AUD 1402.80) * 100= 14% loss Note: There will be incremental reductions in costs of road charges, fuel, tolls and tyres. However the truck operator is losing approximately 14% in cartage revenue; which may make the business unprofitable into the future, due to holdups in load out at the quarry.

Therefore it is vitally important that cycle times within quarry are reduced to a minimum. As indicated in the example above, the cost to the truck operating company will be approximately AUD 200 which they will want to recover back from the quarry operation. In cases where a company owned truck fleet is used for product delivery the increase in cycle times directly affects the profitability of the operation(s) Load and haul cycle times are influenced by a number of factors that need to be considered. Time in quarry The average time in quarry is dependent on a number of factors, most of them outside of the control of our customers. Therefore it must be the quarrys task to measure time in quarry and put relevant Key Performance Indicators (KPIs) on the different elements of this process with a plan to reduce overall times. Time in quarry can be broken down into Truck (TARE) weighed / recorded and travel time to relevant stockpile Truck waiting to be loaded Truck loaded and application of tarpaulin if required Truck travel to the weighbridge and if required queuing to be weighed before exiting the quarry Stockpile/weighbridge layout reducing bottlenecks Once a customer has entered site, effective stockpile layout will minimise congestion and time spent in the stockpile area. Having fast moving products close at hand or easily accessible will allow for quicker loading; slow moving products should be given a lesser priority for position

within the stockpile area. By having an intuitive layout the customer is directed to position their trucks naturally in the best location for quick load out. The quarrys stockpiling area should be designed to ensure that there is sufficient room for mobile plant and customers trucks to operate effectively. Where possible all vehicles should be able to move past each other with sufficient room. Pinch points should be kept to a minimum or designed out. Where there is not sufficient space for this to happen, implementing a one way system can be effective in reducing vehicles operating in close proximity. The design of a one way system should be intuitive. Once a truck has passed over the weighbridge and entered the stockpile area, the drivers route around the stockpile should be easily identifiable. Providing adequate signage indicating direction of flow and general traffic rules assists, as does providing well-planned stockpile layout maps at the weighbridge and guidance as required. If there are cross roads where traffic merges, especially at the weighbridge, this can add to congestion during high or peak periods. One way systems will reduce congestion at these points. Where possible the weighbridge should be designed so that dockets can be issued via a drive up window. This means that drivers do not have to leave their vehicle to collect their docket which offers advantages both in terms of reducing drivers time on site, and from a safety perspective reduces the amount of pedestrian activity in the quarry environment. Information sharing In the traditional quarry environment, information sharing throughout the site is usually done verbally by use of open channel 2 way Ultra High Frequency (UHF) radio.

This includes communications between the weighbridge and the stockpile loud out area and haul trucks. While this system is cheap and easily expandable by simply purchasing more hand held units, it relies on clearly spoken and clearly heard communications. Whether it is a bin truck, light vehicle, water cart, haul truck or loader, multiple communications across open 2 way channels can lead to mistakes where high volume of traffic is experienced. In some cases it may be that the wrong material is loaded out and is picked up at the weigh bridge where it is returned back to the stockpile area to be tipped off with the truck re-loaded with the correct product(s). In the worst case the wrong product may be sent to site where it may be used in the wrong application incurring potential re-construction costs or it may simply be returned to the quarry unpaid for. In any of these scenarios the quarry and the customer are losing profit. The importance of clear and accurate communication can never be overemphasised. By adopting electronic technologies these risks may be minimised and ideally with the right balance eliminated completely. If both the weighbridge and the loader operators can clearly see individual material product identification, linked to a visible job number or a customer request, and the length of time a customer has been onsite is visible, the management of time in quarry can be measured. If it can be measured it can be managed. Clear communication between the weighbridge and the stock load-out area is key to ensuring that the correct product is loaded and in a timely manner. This can both reduce the time that customers have to spend on site, and mitigate the risk of communication errors to improve both

the accuracy and efficiency of the loading process. Dedicate communication solutions may also be sought through loader bucket scales interfacing with the weighbridge to further remove errors. Measuring loader performance Loader performance is a key consideration for operations management and ideally the loader should be operating at peak capacity for as much of the day as possible. However with quarry customer traffic typically varying throughout the day, loader usage will also vary. Monitoring loader performance allows operators and management to understand current performance, spot where improvements can be made and to implement a plan. Loader Operation Loading Patterns Ideally the loader should be working in a V pattern, moving in and out of the face in loading the truck, and when viewed from above creates a V pattern. While this is the ideal, it is difficult to perform in many cases and relies on loader operators understanding of how important it is to load as close as possible to the v-type optimum. This will ensure the minimum distance is traveled to get the truck loaded and on its way.

Figure 1: V-pattern loading for efficiency

Figure 2~4: V Pattern Loading

Mobile equipment efficiency To ensure a high level of performance, mobile equipment needs to be carefully monitored, and for this we refer to a common manufacturing facility evaluation tool. How effectively a manufacturing facility is utilised is evaluated through the Overall Equipment Efficiency (OEE) protocol which was first developed in the 1960s and measures three factors: Performance actual throughput vs. target throughput Availability actual plant hours vs. planned plant hours Quality product produced to specification for number of units produced. Each of the three factors is calculated as a percentage and multiplied together to give a top line metric. A world-class quarry may achieve 85% or higher in this metric. While a mobile plant, involved in load out, is quite different the same concept can be applied to establish existing efficiency and work towards improving it. The three measures that can be used are availability, utilisation and load accuracy and they are discussed below.

Availability Loaders should achieve key availability targets that relate to their ability to work as and when required. A high score in this measure is dependent on the maintenance regime in place, particularly preventative maintenance. Where there is no robust plan in place, or the quarry has purchased problematic mobile plant (poorly engineered, defective, cheap, and so on) this metric is expected to be low. Availability can also be affected by a shortage of operators. Having correctly trained staff on site and ready to operate equipment is a key day-to-day management issue. A lack of available operators will adversely affect the availability metric.

The availability metric is determined by dividing the number of loader hours over a determined time period by the planned number of loader hours required. The result is expressed as a percentage. Utilisation Utilisation is the performance of the loader operating in a stock storage and load out area. However there are different ways that the metric can be calculated based on access to information and key stockpile area objectives. The simplest way is to monitor the tonnage per hour that the mobile fleet has loaded in stockpile area operations. By recording the number of hours that loader(s) are working in the stock area and dividing this by the tonnes sold per day, a utilisation metric can be determined. This can be compared with the target tonnage for the rated performance of the stock area mobile fleet and expressed as a percentage. Alternatively, the stock fleet utilisation metric can be determined by measuring how the fleet is being operated; including fuel consumption, idling time or other telematics that give an indication of how the equipment is being operated. For example, under the Toyota Production System (TPS), idling would be considered wasteful. Beyond loading or unloading, mobile plant should be actively loading customers, carting product to the stockpile (where applicable), undertaking housekeeping, or parked up. Idling reduces overall mobile plant effectiveness and training should be implemented to ensure that it is kept to a minimum. The results of an on-going focus on reducing idling through staff training are illustrated in Figure 1. In early 2009,

management within a given quarry operation implemented a tracking system to monitor and understand loader effectiveness. A training plan for loader operators was implemented as a result which led to a significant drop in idling time in the loader fleet. Over the next two years the idling time gradually increased again, but a renewed focus on idling once again reduced idling times to a target maximum of 5%.

Figure 5: Idle Time Monitoring brings benefit Turning off equipment when not in use requires loader driver education because the prevailing belief is that the constant stopping and starting of mobile equipment is not good for general wear and tear. Staff education is vital to provide an understanding of the real benefits in fuel saving by turning off the loaders instead of idling and the associated wear and tear issue of loader stop / start. In addition to the fuel saving benefits of reducing idling time, there is also a benefit to be gained in plant hire costs. Where units are hired, this should be done on an hourly basis, and those hours should be managed by parking up whenever possible in order to reduce hire charges, Load accuracy The quarry has a duty of care to ensure that customers trucks are not loaded beyond the maximum weight they are legally allowed to carry. Releasing a truck that is overweight

could have serious consequences for both the quarry and the customer alike. It is primarily the loader drivers responsibility to ensure that customers trucks are not overloaded, and in cases where this does happen, the load must be unloaded and reloaded. This can cause lengthy delays, especially at peak times. The TPS would characterise this kind of rework as wasteful. On sites where there are issues with loading inaccuracy, operators should be given additional training/supervision to increase their success rate. Metrics on performance should be implemented, and discussed with relevant staff to ensure that the performance review is transparent. Where it is being monitored there is usually an initial performance improvement. Example of mobile equipment efficiency Assume that Quarry A has 3 loaders operating and has the following targets in place for load out. Rated hourly capacity of loader fleet of 360 tonnes per hour Average daily sales of 3,300 tonnes 11 hours per operation Total loader hours of 32 hours. Operator breaks covered Total 112 trucks loaded (29.5 tonne average weight), 3 trucks reloaded Availability- 32 actual hours / total 33 hours = 97%

Utilisation- 110 tonnes/hour per loader / 120 tonne per hour loader capacity = 92% Loader Accuracy- 109 trucks loaded to correct weight/ total112 trucks = 97% On this given day the mobile equipment efficiency would be 87%. Typically we would be targeting greater than 85%.

By implementing a number of the concepts and best practice discussed in this white paper you will be able to realise benefits to your operation. If the stockpile area of your business is not run efficiently the extra costs may not be immediately obvious to your operation, but will be for your customers profit. Stockpile areas should be well considered and the loader operators understand their importance to the load out process. Adopting technologies that limit error in the load out process and at the weighbridge will ensure that the right quantity of the right product gets loaded. This will provide greater returns by repeat business and satisfied customers.