A decision on how to go about implementing effective asset management often comes down to choosing between doing it in-house or under contract. E&MJ asked two top providers to present roadmaps for either choice.

By Russell A. Carter, Managing Editor

Despite having advanced condition monitoring programs and enterprise resource planning (ERP) tools at their disposal, many operations remain trapped in a reactive maintenance cycle.
Despite having advanced condition monitoring programs and enterprise resource planning (ERP) tools at their disposal, many operations remain trapped in a reactive maintenance cycle. As a result, it’s estimated that maintenance teams perform at least 60% of all maintenance activities in an unplanned manner.

There are other industries as asset-intensive as mining, but few that have the high levels of operational variability typically experienced by primary mine-site production equipment. Adding further complexity is that as mining operations grow larger and more mature, the spread of fixed and mobile assets can stretch from the pit or shaft to a concentrator, smelter, refinery product transport system and port or terminal.

Despite the inherent variability stemming from local conditions, equipment types, age, availability and utilization rates, mining companies may stand to profit or perish depending on the degree to which they cater to one unavoidable constant: how well they manage those equipment assets. When machines aren’t running, mines don’t make money; and when machines run at less than optimal rates, a company’s mining plan, ROI projections and overall financial performance suffer accordingly.

Many of today’s leading general-purpose enterprise asset management (EAM) platforms initially focused largely on providing support for conventional industrial scenarios: factories, assembly lines and other manufacturing facilities that have a controlled environment, ranks of similar equipment, and consistent, repetitive tasks—a setting that is typically a world away from most mine sites and that, in the past, prompted the industry’s usual answer to inquiries regarding adoption of better EAM strategies, higher rates of innovation and standardized best-practices implementation: “We aren’t running factories. Every mine is different. What works at one site doesn’t always work well at another.” And to a certain degree, that is correct—local conditions, culture and available resources can differ substantially from site to site.

However, the industry has been nudged by both external and internal pressures to accept that there are, indeed, valuable lessons that can be learned from other industrial sectors. With costs of materials, labor and equipment rising steadily while overall productivity rates stagnate, the concept of “the mine as a factory” is receiving increased attention. But even if the future of mining, when viewed from the 20,000-ft level, were to include a distant landscape in which mines operate as consistently and efficiently as today’s top-tier manufacturing facilities, the current state of the industry demands effective asset-management systems that are highly customizable and scalable to fit the evolving characteristics of site- and enterprise-wide equipment fleets.

Several options are available to companies seeking to implement or improve their asset-management capabilities. All-encompassing, integrated platforms such as IBM’s Maximo are designed to provide companies with an end-to-end view of each asset. Systems such as these allow customers to look at any or all areas pertinent to EAM, such as work management, asset management, inventory management, procurement management, contract management and service management. And, more specialized new solutions continue to appear on a steady basis; as this article was being written, Hexagon Mining’s Leica Geosystems group, for example, announced the release of Jasset, an asset tracking system for mobile and semimobile equipment. Producers also may opt to shift the task of asset management, particularly for their mobile equipment fleets, to a specialist company or service on a contract basis.

To provide a clearer picture of how companies can benefit from state-of-the-art asset management systems, whether conducted in-house or by a contractor, E&MJ spoke with a leading provider in each sector. Modular Mining Systems’ vice-president of product innovation, Michael Lewis, sketched out the underlying need for mining companies to streamline equipment maintenance planning and execution, and how Modular’s latest real-time maintenance management product, MineCare 3, can assist in that effort. Comment was also sought from Babcock International Group’s Mining & Construction group. Babcock is a leading U.K.-based engineering support services organization, with extensive experience in asset and infrastructure management.

Setting up a proactive maintenance methodology with condition-based management practices that facilitate longer equipment service lives requires systematic collection and integration of equipment health information.
Setting up a proactive maintenance methodology with condition-based management practices that facilitate longer equipment service lives requires systematic collection and integration of equipment health information.

As Modular’s Lewis explained, fluctuating metal prices, declining ore grades, and increased operational costs are driving mines to look for ways to increase efficiencies and decrease costs. Maintenance continues to represent a significant percentage of operating costs of a mine, and an area of increased focus to assist mines in meeting their goals—but an area not without challenges.

Mine maintenance departments face numerous obstacles in their attempts to optimize processes to achieve maximum equipment uptime and availability. Despite having advanced condition monitoring programs and enterprise resource planning (ERP) tools at their disposal, many operations remain trapped in a reactive maintenance cycle. As a result, according to Modular, most maintenance teams perform at least 60% of all maintenance activities in an unplanned manner. Unexpected component failures frequently stem from recurring problems that have been repeatedly patched up and worked around, thus leaving the root-cause undetermined and delaying the issue for someone else to address down the line. This behavior not only has a lasting negative impact on mean time between failure (MTBF), it also leads to a culture of “forever fixing” as opposed to the ideal scenario of “fix forever.”

Another common difficulty is the optimization of maintenance labor utilization. Traveling between work locations, picking up parts from the warehouse, manually entering workflow information, and tedious, hands-on diagnostics are typical time-wasters. It is estimated that, on average, maintenance personnel spend less than 30% of their time on actual productive tasks. This can have a huge impact on the efficiency of a maintenance organization and negatively affect worker morale, equipment uptime and overall costs.

Issues also arise from an inability to automatically capture important workflow and component-level health information, such as hours of operation, equipment condition and maintenance history. Manual data collection is far from cost effective and rarely sustainable over long periods of time, and the process of combining it into a comprehensive information system can present additional complications.

Lewis explained that mines are pushing the practical service lives of their mobile production equipment to unprecedented levels. “Ten or 15 years ago, a mine might count on getting 50,000 to 60,000 hours of service from, say, a haul truck. Nowadays, those mines may be counting on that haul truck to have a service life of 100,000 hours—and some of our customers that are already getting 100,000 hours are interested in pushing beyond that. If that’s the goal of an operation, it makes parts consumption rates, avoiding catastrophic failures and similar maintenance-related incidents even more important.”

In order to implement a proactive methodology with condition-based maintenance management practices that facilitate longer equipment service lives, systematic collection and integration of equipment health information is vital. Working against this is the fact that today’s business climate limits organizations’ ability to make the large-scale infrastructure and information systems purchases needed to implement and support a traditional site-based maintenance management system. These capital investment restrictions can pose a significant barrier to organizations advancing into the proactive maintenance domain.

Evolution of maintenance management
Modular introduced its MineCare Maintenance Management solution—one of the industry’s first real-time equipment maintenance management options—in 2002, offering numerous Modular-developed OEM interfaces that collect and process alarm, trend and real-time sensor data from the onboard monitoring devices of most heavy equipment units. This information is transmitted to a central computer for instantaneous analysis, display and storage, with the goals of generating real-time, intelligent alarms and snapshots, and identifying longer-term predictive and preventive trends.

MineCare 3, said Lewis, was designed with three principal goals in mind that are consistent with all of Modular’s offerings. “We focus on three areas—improving availability, performance and utilization—while taking into account the wide variability of equipment types and operating conditions encountered in mining applications.

“And, like all of our recent products, Mine Care 3 can be deployed as a stand-alone solution or can be integrated with other Modular programs. Obviously, there’s an advantage to be gained by integration,” he noted.

Since coming to market, Modular said the MineCare solution has demonstrated proven savings of more than $100,000 in downtime avoidance per equipment unit, per year. Now, with more than 35 years of mine management experience and relationships with more than 250 mines, Modular looks to redefine maintenance management with the 2015 release of the MineCare 3 solution. This latest evolution delivers benefits such as remote “anytime, anywhere” equipment health monitoring, advanced analytics, the ability to interface more than 175 OEM components, and cloud computing capabilities.

“When developing MineCare 3, we leveraged cutting-edge user experience trends and innovations to create a dynamic visual tracking tool for equipment health monitoring and mine‐wide maintenance workflow management,” said Modular’s product manager for maintenance systems, Simon Van Wegen. Powerful data collection intelligence assists the user in acquiring the right data at the right time, which is a crucial factor for informed, efficient and effective decision making.

Real-time visual location tracking and event management
Undetected pit and road hazards can cause equipment damage, work slowdowns and other operational problems. The MineCare 3 solution’s Live Map View provides high visibility into the mine via real-time event markers highlighting all equipment maintenance events occurring anywhere across the site.

Streamlined system dashboards enable at-a-glance display of information, such as recent faults, potential equipment problems, KPI scorecards and current monitoring sessions. Interactive, multimachine comparison charts and snapshot graphs provide one-click configuration options and intelligent data display for informed decision making. The equipment tracking module provides a component-level, one-stop view of operating and maintenance status, operator name, fluid levels, service hours, fuel consumption, payload and more.

Taking control of Big Data
Recent strides in information technology have resulted in the hardware and software used in the mining industry becoming increasingly complex. In addition, the onboard computer systems on today’s trucks, shovels and other heavy equipment units now generate massive amounts of information about the machines they monitor.

The MineCare 3 solution offers an intelligent alternative to information overload by providing maintenance personnel with relevant, real-time data to optimize uptime, maximize equipment and personnel utilization, and reduce overall maintenance costs. The solution uses state-of-the-art data collection algorithms to give mines the flexibility to capture the right amount of data required for their organization, and enables maintenance professionals to make the right decision on how to maintain the equipment. Built-in intelligence also allows users to specify real-time, conditional, or aggregate data monitoring, alone or in combination, depending on the current data analysis needs. Raw, real-time machine-specific data can be collected continuously, or as frequently as desired, and adjusted to suit the rate of change of the parameter over time.

This avoids collecting non-value-adding data that may ultimately affect network bandwidth, system performance and storage capacity. Data aggregation can also be applied to further reduce bandwidth requirements, if necessary. Whether a maintenance organization wants to collect all of the data, all of the time or just equipment-specific conditional data from certain times during a shift, it’s available with MineCare 3.

Condition-based maintenance for advanced detection
By applying intelligence to data collection, MineCare solution users have been able to adopt a condition-based maintenance methodology and detect deterioration in condition up to months in advance of a failure.

In one example, a customer used the MineCare solution to integrate onboard and oil analysis data, maintenance history details, and component stock movement to develop a proactive maintenance plan. In doing so, the customer was able to accurately predict various degrees of engine degradation, including fuel injector failure and loose or broken top-end components, up to weeks in advance.

“By responding to these occurrences in a proactive, planned—versus unplanned—manner, the mine avoided complete engine breakdowns across their fleet, saving millions of dollars and substantial downtime,” said Van Wegen.

In another example, a customer experienced repeated gear train failures on the engines in their trucks. The trucks’ OEM monitoring system failed to provide any warnings related to the failures. However, by utilizing the MineCare solution’s analytical capabilities, the customer was able to create an algorithm to predict the onset of the failures weeks before any secondary damage occurred. Once again, use of the MineCare solution resulted in significant cost and downtime savings for the mine.

By using the MineCare solution to identify detrimental operating practices, mines gain the opportunity to improve operator best practices through behavior coaching and instruction. Customers have reported up to 98% reductions in undesirable practices—nearly eliminating improper operating habits entirely.

Why Cloud-based maintenance management?
Cloud computing, according to Modular, provides customers with the best total cost of ownership (TCO). With the cloud-based model, installation is simplified, issues can be resolved quickly and with little interruption to daily workflow, application updates can be quickly deployed to multiple devices simultaneously and with less disruption, and dynamic resource allocations enable more efficient resource management based on needs.

Centralized management facilitates the combining of information and configurations across multiple mine locations, making this an ideal solution for large enterprise organizations. In addition, said Modular, the MineCare 3 solution is highly scalable for any capacity—from a single piece of equipment through thousands of units, reducing capital investments and support costs.

London-headquartered Babcock International Group manages more than $70 billion worth of assets around the world on behalf of customers in the nuclear, defense, mining and aerospace sectors. It recently announced receipt of a £41 million ($61.3 million) five-year contract (with a five-year extension option) to provide fleet managed service for LaFarge Tarmac’s heavy mobile equipment throughout the U.K. Simon Purchon, business development director for Babcock’s Mining and Construction group, responded to questions submitted by E&MJ.

E&MJ: Babcock’s maintenance activity and experience encompasses equipment fleets from a variety of industry sectors, including military, civil and commercial. In what way does a typical surface-mine haulage fleet, for example, differ from heavy-duty fleets in other industries in terms of complexity, primary maintenance issues and objectives, and performance expectations? Can off-highway fleet operators learn anything from fleet operations in other industrial sectors?

We always adapt and customize our approach and processes to fit the customer’s requirements.

The challenging environment in which the equipment operates is one of the most critical factors when planning maintenance within the surface mining sector—anticipating wear and tear caused by the commodity being handled, operating temperatures and terrain, promoting best practice to drive efficiencies, and building into our procurement processes when sourcing new equipment or parts.

When using an outside organization for asset management services, engaging effectively with different stakeholders—operators on site, for example, as well as OEMs and other outside suppliers—is a key element for ensuring future improvements
When using an outside organization for asset management services, engaging effectively with different stakeholders—operators on site, for example, as well as OEMs and other outside suppliers—is a key element for ensuring future improvements

We use our proven industry approach, ALCAMiE, to manage fleets of critical and complex equipment. This combines a customized set of systems and processes designed to optimize the total cost of ownership for assets. It does this by helping customers to progress along the maintenance evolution scale, to move from what might be a purely reactive approach to one that is more informed and analytical.

At Babcock, we see the maintenance evolution cycle comprising several stages. The first is where equipment is run until it fails and only repaired then. As the least effective approach, this can increase maintenance costs by more than tenfold, and have an even greater impact on site operations through decreasing fleet availability.

The next stage is to take a preventive approach to maintenance, with services undertaken at fixed times, but this can still cost more than twice what it should.

The third stage is to take a more predictive approach, to use condition monitoring to identify any trends before they become an issue. This is a great improvement on reactive or preventive approaches, but will not optimize the total cost of asset ownership. To achieve that, you need to implement an analytical approach that examines the total cost of ownership data from across a pool of common assets. ALCAMiE is designed to help customers achieve that, to gather the information that enables customers to move up the maintenance evolution scale.

There is much that fleet operators working in different sectors can learn from one another. The breadth of our fleet management experience and expertise enables us to share best practice approaches and innovative ideas from across the sectors we operate in. A good example is telematics, which has been used in the aerospace industry for many years, providing real-time data on ground support equipment used to service airports. Our experience in this sector has taught us the benefits of real-time monitoring, which not only assist in a preventative maintenance strategy but in driving efficiencies such as reducing fuel burn. So where we are responsible for purchasing or specifying assets in the mining and construction sector, we ensure that telematics are fitted to all new assets.

We will also work with customers to standardize equipment, where possible, as this not only reduces complexity of an asset, enabling it to be re-assigned within a business, but also reduces the whole life cost through reducing the supplier base of equipment. For example, Babcock now has a single supplier of video cameras and auto-lube systems across all new assets.

E&MJ: From Babcock’s point of view and business strategy, what are the primary and necessary foundation elements of a good maintenance program for off-road fleets?

At the heart of a good maintenance program is information. To plan and implement the right program for a fleet, we work with customers to understand every asset within it, from its age and history to how it is used and how critical it is to the operation. Once this data is known, we will have a solid understanding of what is essential to production and can plan the right maintenance program around it.

One of the key benefits that we deliver to new customers is the mobilization of a common operating model. This is the critical foundation that enables us to standardize maintenance policies specific to clients’ business needs and industry best practice. Our experience within the sector highlights that many organizations over a number of years have developed a wide range of regional policies around fleet management and maintenance and find it hard to move to a single approach. Babcock delivers this benefit from day one: a new agreement so that as the maintenance risk is transferred to Babcock, we can determine the future maintenance policy moving forward as the cost of maintenance is now our responsibility.

Finally, engaging effectively with different stakeholders is also key to providing solid foundations for the future. Babcock’s approach does create significant change for the machine operators and managers: It forces them to change the way they operate, by highlighting operator behaviors that impact availability and cost. Our approach delivers significant savings over the long term and to do that, change is inevitable. Our role is to deliver those savings and with it an improvement in performance. It creates a step change in performance. To manage that change, we have to spend time explaining the difference in our strategy and the evidence to support it. We have to manage different stakeholders all with different views—from operators to OEMs—to deliver the optimum results for the customer.

E&MJ: How are these elements implemented in practice, and once in place, what is Babcock’s scope of responsibility; i.e., maintenance scheduling, repair, parts ordering, maintenance worker training, operator awareness, etc.?

When managing and maintaining equipment, Babcock implements ALCAMiE, a set of customized set of systems and processes that supplies “true data,” from across our contracts to compare manufacturers’ products to the operational uses. This statistical information provides an accurate whole-life cost of each asset in reference to the environment it is to be used in and its application, as well as bringing together the whole life servicing costs, the projected component life history, the cost of replacements, and perhaps most importantly, the fuel costs. This information is critical to helping drive customer’s strategic fleet decisions as well as helping OEMs both identify component/ design issues and in providing greater understanding of how their equipment performs against other OEMs and post warranty.

We are able to anticipate the likely demand for parts over the year. This enables us to negotiate better terms for our customers, and for suppliers to book orders in one hit, rather than seeing them trickle in site by site, month by month. Administration is reduced on all sides; the customer only processes one invoice to Babcock as opposed to several thousand each month, and the supplier has just one point of contact instead of potentially several hundred sites.

The level of responsibility transferred to Babcock is up to the individual customer. We will always tailor our approach to fit their needs. However, the more that we are responsible for, the wider the benefits will be felt. A good example is identifying when and what new equipment needs to be added to the fleet. Babcock is agnostic of OEMs and equipment suppliers, ensuring that we only select and recommend the best equipment or parts for the job to customers. Transparency is critical, and we use clearly defined and proven procurement practices in the selection process.

The work does not stop once a purchasing decision is made. Before being deployed on site, Babcock ensures that all the relevant safety systems that are needed be put in place. With new equipment, this includes staff training, the maintenance schedule for the new kit and a thorough data monitoring and capture process to inform future purchasing decisions. Customers also potentially benefit from more opportunity to engage and influence OEMs through Babcock’s independence in managing a number of fleet management accounts. This has been the case in other long-term contracts within the defense, aerospace, and emergency services markets where Babcock has worked with OEMs to address component and design issues.

E&MJ: What type of modern technological tools and systems (machine health monitoring, predictive maintenance scheduling, data collection and management, etc.) can Babcock offer a client? Conversely, what areas of fleet maintenance aren’t typically helped by higher technology, if any?

We recognize that there are large benefits in real-time monitoring, which not only assist in preventative maintenance strategy, but in driving efficiencies such as reducing fuel burn. Where Babcock is responsible for purchasing or specifying assets, we would ensure that telematics are fitted to all new assets. We are continually striving to streamline the methods of receiving data from machines, and ensuring it is relevant to making the right decisions. All too often, data is captured but rarely used, simply because there is too much or it adds no real value. So we are focusing reports and alerts on key events.

However, incorporating telematics across a mixed fleet can present problems in pulling together the collation and analysis of data from different systems and we are working collaboratively with customers and suppliers/OEMs on both centralized platforms and identifying which equipment will provide the best ROI from the investment.

One of the benefits of Babcock being both agnostic and having the overview across fleets, is that we can continually evaluate what will both work and modify to suit the customer’s needs. To aid this, Babcock is investing in systems to enable us to combine differing OEM telematics reporting suites into a single dashboard for ease of use and comparison purposes. As part of this, we are sharing best practice from our experience in managing fleets within the commercial and defense sector—in particular, our contract managing the construction fleet for the army where telematics have played a large part in ensuring availability and driving efficiencies.

E&MJ: Given today’s typical off-road fleet acquisition, operating and maintenance costs and parameters, where might typical significant savings occur for a customer contemplating a fleet management relationship with Babcock?

By providing more transparency over the total life cost of the machines that make up a fleet, we are able to give more accurate whole life costs of ownership. In simple terms, our approach ensures that machines are worked efficiently, and this provides clear savings. As no operation, and no site, is the same this will differ from customer to customer. On average, we expect to deliver savings of 10% to 15%.

An annual review of the fleet with the customer is critical to this. We review utilization, performance, repair history and the future requirements of the site in terms of hours of equipment availability. This clearly shows under-utilization or reinforces decisions to replace equipment, either from an age perspective or to gain flexibility over a number of sites.

By far the largest saving achieved is through increasing fleet availability and facilitating the identification of surplus older assets that are no longer required. Babcock has a track record in optimizing fleets across all its asset management contracts, and fleet reductions of more than 10% are often achieved within 18 months without reducing service/production output levels.