Benchmarks of Performance forTruck and Loader Fleets

G. B. Woodrow, Caterpillar of Australia

Third Large Open Pit Mining Conference

Mackay, August 30 - September 3, 1992.

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Benchmarks of Performance for Truck and Loader Fleets

G B WOODROW1

ABSTRACT

The cost of production from truck and loader fleets is influenced bymanagement development of the culture of the organisation, workpractices, systems and procedures of the production and maintenanceteams. Establishing if the cost of production is the best that can beachieved then requires the measurement of results against establishedstandards of performance. This paper provides a series of discussionpoints of the factors that influence the cost of production from men andmachines for large scale open pit mining operation and provides somesuggested performance standards in the form of Benchmarks. Most of thereferences have been drawn from established large scale deep pit mines inUSA, Canada and Australia which have had to implement and constantlyfine tune cost efficiencies in order to survive. The discussion provides:

a review of priorities or the relative importance of the various costelements for a mining system;

suggestions of systems and procedures for the operation andmaintenance of machines which are considered to yield the bestoverall results;

examples of operations that have developed and implementedmanagement systems and controls that are achieving good resultsin specific functions; and

suggested benchmarks of performance.

INTRODUCTION

In order to review and discuss the cost of production from amining system, it needs to be broken down into individual workfunctions or cost elements. Each of these work functions can

then be analysed as a unit while rernembering that they areinterdependent and when added together provide the total cost ofthe system.

As each work function has a different impact or weighting onthe total cost of production, !he initial discussion will providesome reference to the establishment of priorities.

The paper ,will then follow on to discuss and providereferences for individual work functions or cost elements thatcombine to yield the cost of production under the followingheadings:

production efficiency;

potential capability of men and machines, and

efficiency of the system, potential versus actualproductivity;

mechanical availability;

measure of reliability of machines, and

quality of maintenance practices;utilis ation;

that part of total scheduled time that the system isactually producing;

operating costs;

cost of operating the machines.

PRIORITIES FOR COST OF PRODUCTION

The ranking order of importance for each element of cost mustfirst be established. This then provides the potential priorities foreffecting !he greatest reduction in the cost of production. For thisanalysis the cost of production has been broken down into three

1. Caterpillar of Australia Ltd, PMB 4, Tullamarine Vic 3043.

Third Large Open Pit Mining Conference

subjects: Major Work Functions, the Machine System cost andthen the Machine cost.

Major work functions

Most mining operations consist of drilling and blasting the wasteand ore, loading the fractured material, hauling the material to adump or hopper plus the cost of support operations to theseproduction tasks such as maintaining cut and dump area, andmaintaining haul roads. Each project should be reviewed on it'sown right to establish which part of operation has the highest costand hence priority for further review. As an example Figure 1shows a typical cost breakdown for a deep pit mine.

Machine system costs

If it is accepted that the primary contributing factors to the cost ofproduction for a machine system are productivity, utilisation,availability and operation costs, then we can establish the rankingorder of these factors as they influence the cost of production.Again such as analyses would need to be established for eachoperation as the results will be site - specific. Nevertheless, somegeneral observation have been made from various mine studies.The most important factor is usually productivity followed bymechanical availability. As an example Figure 2 shows a typicalcost sensitivity review for a deep pit mine.

Machine costs

The cost of operating a machine can be broken down into its costelements such as fuel, tyres, ground engaging tools, repairs,lubrication, preventative maintenance and operators. An analysisof these elements will identify the higher cost item which ifimproved, will have the most impact. Figure 3 shows an examplefor a truck working in a deep pit mine. Again each operationwould need to be reviewed using its input data as job conditions,haul grades and lengths etc will playa role in changing thesepriorities.

This part of the review identifies the primary or key factors thatinfluence the cost of production. If we use the examples as perthe Figures 1, 2 and 3, then the potential priorities for effecting areduction in the cost of production would be repair andmaintenance and productivity of the haulage machines. Otherimportance factors are cost and effectiveness of supportequipment, mechanical availability and fuel costs. Havingestablish the priorities, it is now a matter of deciding to whatextent can change be implemented that will cause a realisation ofpotential cost reduction.

For this part of the analysis we need to know what is thecurrent level of performance, what is a reasonably achievablebenchmark and how easy or hard it will be to move to thebenchmark.

The next section of this paper discusses some procedures ormethods of operation and maintenance practices which areconsidered to yield the best overall results.

PRODUCTION EFFICIENCY

This section has been divided into four subjects being:

human resources. work practices;

efficiency of an existing fleet;

cost benefit of new technology; and

job efficiency practices.

Mackay, 30 August - 3 September 1992 11g

~

G B WOODROW

Based on deep open pit, 100,000 tonne/day mIne

Drjll 7.00/0Blast 8.0%

Haul 40.0%Load 20.0%

Support 25.0%

FIG I -Typical mining system cost distribution.

Based on a deep open pit, 100,000 tonne/day mineA 5% Improvement in...

Utltlut/on

e.oProductivity

MeCMn1c81

8V8D8bDlty3.4

Opera Un"COlt.

0 12345

yields this percentage reducffon Incosts/tonne

6

FtG 2 - Typical sensitivity of costs.

120 Mackay. 30 August. 3 September 1992 Third Large Open Pit Mining Conference

BENCHMARKS OFPERFORMANCEFORTRUCK AND LOADER OPERATIONS

Based on deep open pit, 100,000 tonne/day mine

Lube/OIl/Filters 2.8%Tyras 11.8%

Wear Items

Fuel/electricity 24.1%

28.5%

26.6%

FIG 3 - Typical operating cost distril;mtion.

Human resources and work practices.

While this paper concentrates on the management of machines, itis recognised that the attitude and motivation of people is perhapsthe real issue in maximising productivity and minimising costs.The paper accepts that quali fied and practically experiencedmanagement and supervisory personnel are in place and thathuman resources policies and procedures provide theenvironment for high work ethics and personnel satisfaction fromachievement of work standard by the work force.

The development of the cultUre of an organisation is beyondthis discussion. Nevertheless the following represents some ofthe factors that are generally in place, can be observed andprovide a measure of an operation that is achieving good overallresults of productivities, quality and cost-effectiveness.

Management driven safe working practices.

Good housekeeping - clean, tidy work stations withplanned methodical work flow.Effective real communication of the company's vision andmission to all levels of the work force. Employees knowwhat the company objectives are, who are the customers,the financial status of the company and so on.

Management work to a plan and employees know the plan.Management are pro-active. A competitive spirit exists.Employees consider themselves part of a team.

Now let us move on to some of the more practical aspects ofmachine management. We will review only the miningoperation, that being the extraction and haulage of the waste andore to the dump, input hopper or plant. We will not consider oreprocessing or other infrastructure costs.

Efficiency of an existing fleet

It is impractical to compare unlike operations to establish theefficiency of an existing fleet on a particular project. JobconditiQns, materials, haul distance and grades vary such thatfleet productivity comparisons from job to job are not usually of

value. The suggested best method of establishing the efficiencyof an existing fleet on a particular project is to carry out anon-the-job study/analysis in conjunction with a theoreticalanalysis of the systems potential performance using computersimulation and modelling. ActUal weekly or monthly productionachievements can then be compared to fleet maximum potentialproduction as established by job analysis and simulation.

The objective of the on-the-job study is to establish thepotential fleet productivity by undertaking a time and motionstudy and weighing program whereby all inefficiencies areeliminated such as wait time, mismatch, bunching, stoppages.Experienced operators should be used and machines should beallowed to operate at maximum performance. Machinemanufacturer and dealer engineers carried out many such studyand can assist with the methodology of ajob study.

CompUter simulation and modelling can also be an effectivetool to establish maximum potential fleet productivity. Givenaccurate job data combined with field experience, fleet potentialproductivity can be established with good accuracy usingcomputer simulation software usually available from themanufactUrer or dealer for the machines. Similarly manufactUrersor dealers can provide job stUdies of machines which willprovide at least an initial benchmark for that machine. As anexample Figure 4 is the summary of a field production study for awheel loader. Operations that consistently achieve fleet efficiencyof 85 per cent and better when measured against maximumpotential fleet capability are considered good.

New technology

The usual question is can a lower cost of production be achievedby the introduction of new technology. This is a complete subjecton its own where productivity, costs, availabilities and risks ofexisting versus new needs to be assessed. Generally however,machine manufacturers are gradually introducing newtechnologies but rarely does a completely new machine concept

Third large Open Pit Mining Confere~ce Mackay, 30 August. 3 September 1992 121

G B WOODROW

FIG 4 -Wheel loader production study.

evolve. These new products are only successful if they reducethe cost of production. Each case needs to be analysed on its ownmerits in consideration of the particular job conditions,requirements, short and long term plans etc.

To assist with this type of analysis, software programs areavailable from machine manufacturers and given accurate fieldexperienced data can be a valuable tool. These programs arebased on large spreadsheets which can analysis and provideguidance on the decision to either repair. rebuild or replace with anew like machine.

Job efficiency practices

This is perhaps the most imp:Jrtant subject in this section.Knowing what is good practices and what is not is the key tomaintaining excellent long term fleet efficiency. Job efficiencyguidelines have been developed over a number of years byobservation and field study and are usually available frommachine manufacturer and dealers.

It was suggested earlier in the paper that productivity of thehaulage machine is p:Jtentially a LOp priority for managementattention. Because of this importance, optimising truck and haul

road economics is also potentially an area where overallproductivity gains can be achieved. For example, thesignificance of trucks being able to operate at their maximumspeed at all times without speed restrictions caused by haul roadlayout, high rolling resistance, traffic congestion, road surfaceconditions, sharp non super-elevated curves, poor or inadequatemachine braking performance. Job layout, haul road design andoperating procedure, manuals and reference materials can usuallybe obtained from machine manufacturers.

MECHANICAL AVAILABILITY

Mechanical availability is defined as machines being available forwork during scheduled hours. Mechanical down time is any timewhen the machine is not available for work such as lubrication

and services, preventative maintenance, testing and inspections,break down, component replacement, repairs. Comparingmechanical availability between sites is an effective method ofestablishing a benchmark. However, achieving valid comparisonsis often difficult and requires knowledge of other aspects of theproject. In comparing mechanical availability achievementbetween sites, scheduled hours versus total available hours canoften invalidate comparisons. Mechanical availabilityachievement comparison also need to consider the capital that isinvested in the maintenance, warehousing and logisticaloperations. For example, high mechanical availability of anoperating fleet can be achieved by high capital investment instandby or spare machine/s or on-site inventories of parts andcomp:Jnents or logistical or infrastructure costs. Anotherpotentially hidden cost that can effect comparisons between sitesof mechanical availability is technical or sUPp:Jrt division ordepartments within a mine or at head office that support theoperation of machines. This is particularly true when the costs ofthese personnel are not charged directly to the operation of themachines.

Mechanical availability and operating costs are interdependent.Generally, it has been observed that fleets achieving highmechanical availability on a 24-hour seven-days a weekoperation with low overhead/logistic/infrasrrucLUre costs alsoachieve commendable operating costs.

Mechanical availability depends mainly on three factors:

a machine which provides high reliability of its minorcomponents, with regularly predictable life of its majorcomponents;

a maintenance management system that works to a plan, issponsored and endorsed by senior management and hascontrols and measures of performance based on a repairbefore failure concept; and

a developed partnership between the mine, the servicingindustry and machine manufacturers.

Maintenance management

The following points have been observed as inherent in mostgood maintenance management systems.

Routine lubrication and servicing is undertaken atrecommended intervals or modified intervals to match

local conditions with approval of the manufacturer.Deviations to standards are monitored for their impact.

Between 80 per cent and 90 per cent of all repair work isscheduled and planned as opposed to emergency orunscheduled work.

Active and complete machine evaluation routines are inplace (such as system checks and inspections, oil sampling,wear metal analysis and trending, operator comments).These routines are used LO take remedial actions andforecast scheduled maintenance, repairs and rebuilds.

122 Mackay. 30 August - 3 September 1992 Third Large Open Pit Mining Conference

Passes(Loading Cat 78S Trucks) 4 4 4 4

Bucket Size 16m' 16m' 18m' 18m'

Face Dozer Face DozerMethod

Loading Assisted Loailing Assisted

Loader Cycle Time O.5S 0.54 0.61 0.S9

Loader Time '" Excbange Time 2.20 2.16 2.44 2.36

No. ofTmcks LoadsIHr. (60 min) 27.30 27.80 24.60 25.4

Tmck Payload - Tonn.. 131.5 138 138.2 149.S

fronnes Per Bucket Pass 32.9 34.S 34.6 37.4

Volumc m' Per Bucket Pass 19.1 20.1 20.2 21.8

Bucket Fill Factor (by Volume) 119% 126% 112% 121%

Bucket Fill Factor (by Weight) 104% 109% 109% 118';'

Tmck Body Capacity (m') 78 78 78 78

Volumc m' Loaded In Tmck 76.S 80.3 81 87

Loailin8 TonnoslHour 3,592 3,837 3,400 3,828

Combined Methods -TonnoslHour 3715 3614

Advantage In Tonnes 100

Advantage By Percent 3%

BENCHMARKS OF PERFORMANCE FOR TRUCK AND LOADER OPERATIONS

A machine information record system is in place whichcaptures sufficient detail to track each component of amachine, and provides data on why it was repaired, whatwas the cause and what actions were taken.

A management control system exists from which accurateforecasts of activities, personnel requirements, componentor parts requirements, and cash flows can be establishedwith ability to make comparison of performance.

The following are some suggestions on how to assess amaintenance management system:

As outlined above, there is a plan, with targets, controlsand measures.

Work orders are labelled 'scheduled' of 'non-scheduled'.Variances from a considered target ratio are reviewed.Machine history files are reviewed at fixed periods toidentify required improvements.

Record systems show when the servicing occurred versusthe target date.Records systems are amended/altered to keep up withchanging technology of machines, conditions of operationetc.Record system provide meaningful repair indicators thatcan be confidently used to predict problem areas. Thesystem also produces the detail required to research aproblem when it is highlighted.

It was suggested earlier that a good maintenance managementsystem incorporates a developed parmership with the servicingindustry and machine manufacturers. It is observed that for agood system to work effectively there must be common goalsbetween the parmers and a free open sharing of information.Most good maintenance management systems use a centralscheduling system, which obtains informaiion from and providesinformation to the activities of maintenance controlled by themine, the servicing industry and the machine manufacturers suchas:

preventative maintenance and services,

component remove and install.component overhaul,condition monitoring system,

problem management,

parts inventory management, andcost record system.

The paper by Mills (1991) addresses all of these maintenanceactivities, showing their inter-relationship and importance ofinformation flow both within and without the mine.

Mechanical availability targets

As mentioned earlier, mechanical availability achievements needsto be reviewed in conjunction with other factors such as operatingcost and scheduled versus total available time. The system orprocedures that are used are possibly the most important aspect ofachieving high mechanical availabilities. The following are somemining and constrUction operations who are recognised as havinggood maintenance system and procedures and are generallywilling to share information.

BHP Ok Tedi mine

Highland Valley Mine

PNG

British Columbia Canada

Cypress Serrita Mine

Phelps Dodge China

Tuscon, Arizona

Silver City, New Mexico

Western Excavation Cornwall, UK

Salt Lake, UtahRTZ Bingham Mine

Peter Kiewit USA contractor

USA contractorH B Zachary

Some examples of mechanical availability being achieved forlarge fleets of trUck operating in high load factor applicationssuch as deep pit mines is provided in Figure 5. Mostly theseexamples are 24-hour, seven-day a week non stop operations(except for two to four days per year). In these examplesmechanical availability is based on down time being all timeswhen the machines are not available to and for production.

Copper Mine,

Papua Now Guinea

Truck Fleet 1st. year or operation 94%

Truck Fleet AVOl3l!e for 25 unim to 28,500 hows 90%

Copper Mine TmcI< Fleet AVOl3l!e for 88%

British Columbia, Canada 25 unim to 21,000 bows

Copper Mine

Now Mexico, USA

Truck Fleet AVOl3l!e ror

26 unim to 21 ,000 hOUIB

1st year

2nd year

90.4%88%

3rd year 86.2%

Copper Mine,

Arizona, USA

Truck FI..t Average for

14 unim to 25,500 hows

92%

Copper Mine, Truck Fleet Average for

24 unim to 27,300 hows

94%

UtIh, USA

Copper Mine, Truck FI..t Avera8e fot17 unim to 23, 000 hours1st year2nd year3rd year

4th year 88%

Chile93%95%92%90%

Oil Shal. Min.,Truck Fleet Average for 15 unim to 24,000 hoUB 88%

Canada

Gold Mine, Truck FI..t Average for

17 unim to 37,600 hoUB

90%

Nevada, USA

Gold Mine,

Nevada, USA

Truck Fleet Average for 88%

26 unim to 35,000 hour.!

FIG 5 -Mechanical availability for large high hour truck fleets based

on 24-hr, seven-day a week, mining operations,as at December 1991.

UTILISATION

Production utilisation is that time for which the mining system isactually producing and is usually compared to the total availableor scheduled hours in a year. Production utilisation is totalavailable time minus production delays and minus mechanicaldowntime. It is in effect a measure of how hard the investedcapital in the mining system is being used for productive work.High utilisation is a ultimate measure of many of the factorspreviously discussed particularly for mines that operate on a24-hour seven-day a week non-stop basis. High utilisation canalso be looked on as a overall measure of managementcapabilities, human resources practices, machine reliability,maintenance management systems and the parmership/teamarrangements with supporting service industries.

Third Large Open Pit Mining Conference Mackay, 30 August - 3 Seplember 1992 123

G B WOODROW

Example of mining operations which are achieving highutilisation from truck fleets is shown in Figure 6. What isexcellent utilisation will vary from site to site, but based onobservations some operations are approaching 7500 hours of realproducing machine hours per year from mobile mining fleets.

8 Unused for 12 months during II1IIlsfer between mines (no adjustment made).

..Includes 4 months strike in 1989 (no adjustment made).

FIG 6 - Truck fleets achieving high utilisation,as at December 1991.

OPERATING COSTS

The key factors or cost elements effecting machine operatingcosts are fuel, operator, and maintenance/repair as referred to inFigure 3. It is not considered within the scope of this paper todiscuss ownership costs. However, by this comment it is notsuggested that ownership costs are not part of the equation norare they not important. For this review, we have addressed theongoing task of minimising and controlling operating cost., afterthe machine!fleet goes into operation. Mostly the control andminimisation of operating costs is covered in the previoussection. If good maintenance management systems are in placethen the result will also be low operating costs.

Fuel consumed is a major cost. It can vary from 25 per cent to33 per cent of the total cost of a machine life cycle. This suggestsgood fuel management should also be in place. It is an

124

observation that this significant cost is often overlooked.Forexample:

Is fuel efficiency taken into consideration in the evaluationof mining systems or machines?

Is fuel consumption or energy required taken intoconsideration in mine designs, haul road layouts, grades,rolling resistance?Is haul road construction and maintenance considered inrelation to fuel usage?

AIe machine operating practices implemented to minimisefuel consumption (amount of idle time, unproductive travelfor machines)?

Is fuel purchased on price per gallon or to a specificationthat will yield lowest cost of production. Same applies tooils as relates to maximising component life-time betweenoverhauls etc?

Diesel engine injector life and engine component life tooverhaul is directly related to fuel consumed and quality.

The maintenance and repair cost for most machines areforecastible and can be budgeted either based on historicalrecords or for a new type of machine based on a combination ofsite specific historical records and information provided by themachine dealer and manufactUrer. Most machine dealers canprovide budget operating costs or guaranteed firm price servicecontracts over fixed periods. These service contracts are usuallybased on machine component before failure rebuilds usingvolume based tooling and factory rebuilding systems,Manufacturer-recommended reuseability guides and standardtimes. Similarly for removal and installation of components,manufactUrer or dealer volume based experienced standard timesand used.These service contracts can provide a benchmark orbudget data.

There is a definite trend in the mining industry worldwide toreduce operating costs by using a partnership between the mineand a local servicing dealers. Generally it relates to therecognition of 'who is the lowest cost source or who is moreefficient commensurate with capital and manpowerrequirements'. It is also noted that many mines incur high on-sitemanpower costs usually relating to the history of industrialagreements and the past need for self sufficiency. With thegradual introduction of modern technologies in volumemanufactured machines coupled with modular componentreplacement and the developed cost effectiveness of volumebased repair facilities, these partnerships and off site servicecontract agreements have resulted in reduced total maintenancecosts, re-alignment of skills for on-site labour and a reduction inon-site labour. For mines using service contracts, maintenanceman hours pcr operating hour of 0.25 has been recorded inremote or high infrastructure cost locations.

These product support agreements generally result in operatingcost efficiency by using the developed skills of the partners. Theminer does what he can do best and the machine dealer does whathe can do best. The reasons for the trend relate to budgeting andsharing- the risk, the establishment of known costs up front.reductions in mining company's investment in people, training,tools, inventories, and other associated non productiveinfrastructure.

These partnerships are also becoming popular as a way ofdefining or fixing total operating costs over a long period andsharing the responsibilities, rewards and risks associated withmining machines.

CONCLUSION

The work function or cost elements that combine in a truck andloader fleet mining system to yield the total cost of productionhas been reviewed. Some suggestions have been provided ofsystem and procedures that should prav ide high productivitycommensurate with low operating costs. Based on observationsand recorded data, some benchmarks of performance for each

Mackay. 30 August. 3 September 1992 Third Large Open Pit Mining Conference

Delivery Months of Total Annual

DateService HaUlS Hours

of Fleets

Gold Mine Nevada, USA Scp86 61 37,600 7,397

British Columbia,Coal Mine June 86 64 35,000 6,563

Canada

Gold Mine Nevada, USA Jun87 52 32,000 7,385

Copper Mine Papua New Guinea Scp88 39 28,500 7,230

Copper Mine Utah,USA Jan 88 45 27,300 7,280

Copper Mine Arizona, USA Mu88 43 25,500 7,116

Copper Mine New Mexico, USA Nay 87 847 2,5000 6,383

Iron Ore Mine Quebec, Canada Jan 88 45 24,700 6,587

Copper Mine New Mexico, USA Nay 88 35 21,200 7,269

British Columbia,Copper Mine Jul88 ..39 21,000 6,462

Canada

Copper Mine Arizona, USA Jul89 27 16,000 7,111

BENCHMARKS OF PERFORMANCE FOR TRUCK AND LOADER OPERATIONS

work function has been suggested. Follows a summary of thesesuggestions.

Benchmarks of performance

Productionefficiency

MechanicalavailabilityMaintenancemanpower

Actual fleet production exceed 85 percent of maximum fleet productionpotential.

Fleet Average exceeds 90 per cent tomachine economic life.

Maintenance man hours per operatinghour less than 0.25.

Maintenance

efficiency

Operating costs -

Utilisation

Eighty-five per cent of all workshoprepair work is planned and scheduled.

Achieve or reduce manufacturers/dealersstandard times and component cost.

Fleet operating hours are 90 per cent oftotal available or scheduled hours.

REFERENCES:

Mills, D, 1991. Managing Maintenance of Heavy Mobile Equipment(BHP Newman Maintenance Management Conference).

Third Large Open Pit Mining Conference Mackay. 30 August - 3 September 1992 125