Regardless of whether it’s done in-house or by an outside organization, experts say successful fleet management starts with a basic premise: know your operation

By Russell A. Carter, Managing Editor

Surface mine operators often consider themselves to be masters of material movement, and the mining industry’s overall performance lends credence to that belief, with cumulative amounts of waste, ore, coal and overburden excavated and hauled annually reaching almost incomprehensible levels on a global basis. Much of this success is due to the fact that producers have access to a wide array of tools to plan, execute and validate mine plans, including increasingly sophisticated software suites for planning and production, a steady stream of new and more efficient haulage and loading equipment, and related technology that can monitor and report everything from individual bucket payload measurements to fractions of gallons of diesel fuel consumed per unit, per shift.

Taking into account the industry’s impressive physical capabilities to move dirt and rock, along with its ability to harvest mountains of data from its ongoing operations, it would seem that mining fleet management and optimization would be relatively straightforward routines—just a matter of plugging in the collected data, comparing the results with objectives, and making needed adjustments. Unfortunately, on-the-ground realities such as unscheduled downtime for critical equipment, operator error, adverse weather—not to mention equipment-purchase budget limitations—can highjack the most carefully laid plans. Even the basic definition of what constitutes fleet-optimization success can differ significantly from company to company, and site to site.

In some cases, a notable increase in fleet optimization might be achieved simply by identifying and correcting a downstream process bottleneck that skews fleet performance negatively; or it may be as complex as adjusting a long-term mine plan to provide higher overall excavation efficiency and more favorable real-world haulage routes and times. From a management perspective, the goal is generally to see a relatively smooth fleet-purchase curve, rising gradually from mine startup and declining in its final years, avoiding abrupt peaks and valleys that often represent reactive remedies to unforeseen problems.

Like most measures of mining activity, fleet optimization is an exercise judged by numbers. Numbers that “look good” upon cursory review may conceal ongoing, site-specific inefficiencies that rob productivity—but also may leave room for significant optimization improvements (See Unearthing Hidden Opportunity in Mobile Mining Equipment Utilization, p. 90). However, on a ‘big picture’ basis encompassing global industry performance, a recent analysis by a productivity expert indicates that general machine productivity is decreasing rather than improving, despite technological advances.

Adjusting Expectations
In many instances of unrealized machine productivity, the underlying cause may simply be unreasonable expectations, according to Graham Lumley, CEO of GBI Mining Intelligence, a Brisbane, Australia-based consulting company specializing in mining equipment productivity. The company has been gathering production data from trucks, rope shovels, front end loaders, hydraulic excavators, backhoes and drills since 1988.

In a 2011 paper titled Mine Planners Lie with Numbers1, Lumley asserted that the mining industry’s practice of benchmarking against industry standards—i.e., forecasting equipment performance based on data from a population of similar machines—can lead to wildly over-optimistic predictions of equipment performance rates. “This similar population may reflect make and model of equipment, commodity, geographic location, diggability, pit layout, etc.,” Lumley said. “This should not try to forecast what events will impact a particular piece of equipment but should rather attempt to place the piece of equipment on a statistical distribution of current outcomes for the population.

“Planners, in conjunction with [project] owners, must develop a rationale for likely performance,” he said. “It is the author’s experience that nearly all mine people believe they can perform in the 75th percentile or above, and this is where forecasts are often targeted. Logically, only 25% of mines using a particular make and model of equipment achieve this rate. This should not provide comfort to financiers and shareholders.”

In another recent paper2, Lumley examined surface-mine equipment performance data collected from the 1980s through 2010 in Australia and globally, and came to the startling conclusion that after a major rise in productivity that peaked in 2000–2001, productivity has declined steadily ever since—not just in Australian mines but in every major mining region of the world. The productivity slump essentially wiped out the gains achieved earlier and has left the industry performing at levels last seen in the mid-1980s.

The dropoff includes all major production equipment categories, including draglines. A sampling of the results:

  • Median performance (defined as repre-senting collectively what the industry is actually doing with a certain class or model of equipment, as opposed to best practice, described as theoretically what the class of equipment is demonstrably capable of) of rope shovels in hardrock and coal has dropped noticeably, ranging from Australia’s 47% decline to South America’s 28% falloff since 2000.
  • For hydraulic excavators, the decline is as high as 69% (Africa) in 2010 after peaking in 2006-2007. Australia, North and South America all follow the same general trend, falling between the higher productivity (Asia) and lower productivity (Africa) extremes.
  • Globally, median wheel loader output has dropped 39% during the past three years, topped only by a 41% slump in median haul-truck output over the past four years.
  • When comparing median performance for all the above machine categories with best practice results (i.e., the average of the top 10% of machine performance) over the past several years, the difference between the median and best-practice population is widening, with the gap growing in some cases to low triple-digit percentages.

Lumley did not attempt to list or interpret any specific causes of the productivity decline, leaving his results as a challenge to others in the industry to use the information to improve future performance.

Start with the Basics
Companies intent upon improving their fleet optimization performance can follow two separate avenues: do it in-house by selecting and applying either internally developed policies and criteria or adopting a commercial software solution; or, contracting part or all of its fleet management requirements to an FMS specialist organization.

Vivien Hui, a mining engineer who has written extensively on fleet management and optimization, recommends that a mine facing demands for increased production and reduced operating costs—both to be achieved without additional capital equipment—should look first at harvesting any ‘low-hanging fruit.’

Hui, who also publishes a blog from her website, offers a list of basic, performance-related questions that should be asked and answered before considering more drastic alternatives. With regard to loading and haulage, she recommends mine managers ascertain:

  • What is our shovel operators’ one-pass time?
  • What is the bucket fill percentage? Are our operators filling the bucket so that a five pass load doesn’t turn into six passes?
  • Is the operator getting the face ready while waiting for the new truck?
  • How often is our loading unit sitting idle? Are we over or under trucked?
  • Are we losing shovel teeth that are jamming the crusher? If so, should we be looking at technology to detect the metal and get to it before it gets to the crusher?
  • Are we tracking shovel payload to more accurately reconcile our end of month surveyed tons?
  • What are, and how long are, our major haul truck delays, including shift change?
  • Are we hot-changing to reduce equipment downtime and if not, is this something we should be considering?
  • What is our truck operators’ spotting time?
  • How many trucks do we have running at any given time and is this adequate to feed the crusher? Do we need to start parking some trucks because of frequent queuing at the shovels?
  • Do we have enough manpower for our equipment or are we parking equipment because we don’t have anyone to run it when there are no downstream restrictions (e.g., crusher capacity)?
  • What is the truck load profile? Are we leaving enough room at the back so we are not spilling rock on the haul road?
  • Are our truck scales calibrated? Do we check struts for calibration regularly during PM?
  • Is there carryback in our trucks that we should address with a specific type of lining or a new truck box design?
  • Are we entering our haul routes along with our equipment parameters into a haulage program to determine the target cycle time? Are we achieving this cycle time? If not, why?

If a decision is made to acquire a fleet management system, Hui warns there is not a single, universal objective that applies to every mine site; there are always different reasons behind each project: higher production, lower costs, better material blending, production monitoring, tire management, etc.

The key is to find the best fit, and the opening stratagem is to explore a list of evaluation criteria and functional requirements against which fleet management systems can be compared. A evaluation committee should determine the priority of each item listed; i.e., how important is this feature or that capability for the mine/company right now? Invite FMS vendors to respond to your functional requirements list, then calculate a weighted score of each based on the priorities of your business. Company culture, global footprint, challenges and vision will dictate which factors are more important than others.

Hui’s suggested list of evaluation criteria and functional requirements of fleet management systems is as follows:

  • Data collection, recording and production reporting.
  • Truck optimization algorithm.
  • Machine health/real time condition monitoring.
  • Machine guidance for LP and HPGPS.
  • Operator training capability and fast feedback.
  • Underground R&D–for companies that want to standardize systems at both surface and underground mines, this may be an important factor.
  • Sustainability–ongoing development, stability of company, vision and business plan, upgrade paths offered for next generation technology.
  • Integration with other systems (e.g., ERP, reporting software, maintenance user interface, machine sensors, etc.).
  • Regional service and support.
  • Cost–compare apples to apples (e.g., a turnkey proposal should be compared against a turnkey proposal including all, if any, integration costs).
  • Regular training programs offered.
  • Change management: in-house or third party.
  • Support modules available: payload, tire, consumables, fuel, material blending, languages, etc.
  • Requirements for dispatch personnel; option to run the system unmanned?

Under each subject above, there should be a subset of requirements that are further detailed; this subset of requirements may be created by the respective departments or by a third-party consultant if you do not have in-house expertise. For example, under payload monitoring, a mine may list payload monitoring system, payload recording events, carryback weight and conversion of wet weights as its second-level requirements.

Finally, after receiving responses from a vendor and creating a weighted scoring system, contact other clients using the vendor’s products or services to validate the information you’ve been given.

Setting Up an Effective FMS Contract
For companies that are interested in exploring the benefits of transferring the burden of fleet management to a specialist organization, thus allowing closer focus on its core business of extracting value from mineral deposits, the recent announcement of a £100-million ($158-million), 10-year fleet management contract between construction-materials giant Lafarge and U.K.-based Babcock Group International provides an example of the groundwork, information exchange and ongoing interaction between vendor and client needed to implement an effective FMS arrangement.

The contract covers fleet management services provided by Babcock to Lafarge’s North American aggregate and cement operations, and follows a £50-million contract awarded to Babcock by Lafarge in mid-2011 for similar services at its U.K. aggregate and cement sites.

Babcock’s mining and construction business director, Keith Holland, told E&MJ the scope of the Lafarge North America FMS contract covers full repair and maintenance service on all mobile equipment (ME) covered within the agreement, as well as procurement, condition monitoring and replacement/disposal. This applies to the ME within Lafarge’s Aggregates and Cement businesses in the U.S. and Canada covering 200 sites. Babcock will use fleet management experience from a range of industry sectors to improve performance and drive down the whole life costs.

A key part of the service, according to Holland, is management of the supplier network, from OEMs through to small businesses, that provide the services and parts required to maintain Lafarge’s fleet. Babcock ensured early engagement with the supply chain, recognizing it was a critical success factor for a swift and seamless transition. Suppliers were tiered 1–3 to ensure appropriate engagement reflecting their relationship with Lafarge. Before work started, Babcock established accounts with Lafarge suppliers to ensure scheduled and unscheduled maintenance never stalls through a lack of commercial agreements.

Holland explained that, currently, there are no Babcock personnel on site at Lafarge’s North American operations. Babcock’s dedicated Managed Service Center in Towson, Maryland, USA, manages calls and requests from all North American Lafarge sites. The center handles management of scheduled and unscheduled maintenance and maintains fleet management records on each item of covered equipment. Based on requirements, all maintenance and repair work is carried out on site within Lafarge workshops or through the established supply chain. Babcock’s regional managers work closely with the customer and local suppliers, conduct regular visits to sites, and schedule regular reviews with their Lafarge counterparts to review performance and service-level agreements (SLAs).

Holland said the contract award was preceded by roughly 15 months of negotiations and data collection activities with Lafarge, spanning initial conversations to mobilization of the system in the U.K. and North America. “It is critical for the success of the contract that the potential customer shares data, working practice, supplier experience, and performance history and business targets. This is obtained through a joint working party, site visits, and engagement with regional managers/key people and suppliers at an early stage.”

Applying customized software and ongoing interaction with Lafarge, Babcock gathered information that had previously been difficult to capture to build a view of Lafarge’s fleet. Armed with data that included a fleet list covering all assets, categorization of fleet items as critical, core, spare, etc., site and regional ‘seasonality’ and operating rules hours, and environmental considerations, Babcock implemented its core program by categorizing assets according to their criticality to Lafarge’s operation.

Holland explained that the arrangement includes various guarantees in the form of SLAs on agreed delivery and availability requirements that Babcock must meet. These are reviewed on a monthly basis, with more comprehensive reviews held quarterly and annually. As the contract progresses, it is expected to drive improvements in a number of key areas which could result in lower cost per ton for the customer, such as:

  • Improved fleet utilization and availability;
  • Increased machine productivity;
  • Increased component lives;
  • Implementation of industry and equipment management best practice;
  • Fuel burn reduction; and
  • Efficiency savings.

A key element of Babcock’s approach to fleet management is ALCAMiE, its proprietary solution that includes customized Web-based software generating information to enable correct strategic and operational decisions. Babcock describes ALCAMiE as a ‘transformational’ approach to managing the entire lifecycle of each asset, applying granular data and matching it with established asset-management practices (see accompanying diagram). It believes the benefits that ALCAMiE can deliver are not exclusive to one aspect of the mining and construction industry; the principles behind the approach can be used across the sector, giving customers the confidence to concentrate on adding value to their core operations.

1. Lumley, Graham. Mine Planners Lie with Numbers, GBI Mining Intelligence white paper, November 30, 2011.

2. Trends in Performance of Open Cut Mining Equipment, GBI Mining Intelligence white paper, February 20, 2012.

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