Today?s economy requires a re-think on how organisations within the sector manage one of their most critical and expensive resources ? their heavy mobile equipment (HME). Are internal resources best focused on managing non-core activities?
Have organisations the centralised control and full information across the business to drive efficiencies and improve availability? How can organisations benefit from reducing their capital outlay and seeking alternative financial models rather than owning or leasing equipment?
{{image2-a:c-w:620}}
Babcock, an international engineering support services organisation, is assisting customers like Lafarge, a global leader in building materials, to meet current and future challenges by optimising equipment performance, driving down cost and giving full sight of Lafarge?s fleet across the UK, US and Canada.
The 10-year $226 million tri-territory availability contracts cover full repair and maintenance service on over 1000 pieces of HME, as well as structured finance, procurement, condition monitoring and asset disposal. The contract relationship commenced in July 2011 and continues to grow, with Babcock currently managing Lafarge fleets across 300 sites in the UK, US and Canada.
COMPLEX MIX
At the heart of Lafarge?s business is its complex mix of mobile mining equipment, ranging from small forklifts to haul trucks and large hydraulic excavators. Compounding the challenge is their often specialist engineering design and the lack of standardisation due to the different usage requirements at each site.
Lafarge had managed its fleet in-house based around the needs of its individual businesses, limiting the global view of the fleet to inform smarter decision-making. In addition, the majority of the data gathered met the needs of its financial systems and was not always suitable for informing decisions about fleet availability, deployment, maintenance and procurement.
Babcock offered the proven combination of management, analytical and engineering capability and experience through its ALCAMiE model, a customised set ?toolbox? of asset management systems and processes which enable assets to be cost-effectively managed throughout their life. Further, Babcock enjoys a truly independent position in the market; Babcock is OEM-agnostic and advises on the best equipment for the job, always recognising the through life cost/availability trade-off.
MOBILISING LAFARGE
Critical to ensuring a swift and seamless mobilisation was gaining the trust of the Lafarge team and the supply chain that its fleet depended on. To achieve this, Babcock swiftly built a presence in all territories, establishing heads of operations, regional managers and dedicated managed service centres with fully trained, experienced teams.
{{image3-a:r-w:250}}This quickly built strong relationships with Lafarge?s people and suppliers, establishing regular lines of communication and sharing information in a way that is completely transparent and benefits Lafarge?s operations.
Key to delivery was the management of the 700 strong supplier network, from OEMs through to small businesses.
The supply chain was quickly categorised and segmented, ensuring appropriate engagement with all Lafarge suppliers. Following a gap analysis, Babcock established key accounts with Lafarge suppliers to ensure all scheduled and unscheduled maintenance never stalls through a lack of appropriate commercial agreements.
Babcock established dedicated control centres managing all calls and requests from Lafarge sites. Babcock?s Park Royal office in West London handles all UK inquiries, and the Timonium office in Maryland, USA, handles the North American inquiries, with live connectivity ensuring business continuity and all transactions being captured on ALCAMiE, enabling performance benchmarking.
These centres prioritise and manage all of the scheduled and unscheduled maintenance, while providing a comprehensive configuration control of all equipment real-time.
One of the most complex tasks was the gathering of data, which was required to understand the fleet and become the basis for optimising fleet and equipment performance. Using customised ALCAMiE software and continually validating with Lafarge, Babcock gathered information that had previously been difficult to capture to build a view of Lafarge?s fleet. Armed with this data, Babcock began the task of categorising assets according to their significance to Lafarge?s operation.
The final part of successfully mobilising the contract was developing and establishing a full annual review process. This ensured that site managers were provided with an integrated plan that in turn provided a clearer view of their equipment and vehicle requirements for the year ahead. This information allowed Babcock to commence early availability planning from day one.
By including this in the mobilisation process, Babcock immediately encouraged Lafarge to start thinking about its future fleet as well as its day to day operations.
WORKING IN PRACTICE
The working relationship is a partnership and communication remains key across the territories, including weekly meetings with Lafarge sites. The contract includes various guarantees in the form of service level agreements on agreed delivery and availability requirements that Babcock must meet without paying financial penalties. These are reviewed on a monthly basis, with more comprehensive reviews held quarterly and annually.
Sitting between the OEM/dealer and customer, Babcock is simplifying the management of Lafarge?s fleets. Babcock is taking on the risk of maintenance expenditure, including unexpected and planned machine maintenance/refurbishments while Lafarge pays an hourly rate for the use of the equipment and benefits from a significantly reduced amount of administration.
{{image4-a:r-w:250}}New plant and equipment is purchased by Babcock under this new arrangement, which has become much more efficient using the improved planning and availability forecasting tools.
Working in partnership with Lafarge, agreement is reached on when refurbishment is required, including planning for complete rebuilds to extend machine life as an alternative to a new machine in some cases.
Managing purchasing across many sites enables Babcock to standardise pricing for equipment and enhanced buying power.
The OEM also benefits by dealing with one contact as they can better plan their build cycles.
Critically, Lafarge receives a detailed monthly report summarising key performance criteria in terms of breakdowns/service time for all machines, including whether any planned defect fixes occurred in the planned timeframe. It also tracks configurations and material state condition of all machines, including new and decommissioned equipment to better understand the whole life cost and inform future procurement activities.
IMMEDIATE RESULTS
In the relative short time since the contract start, Babcock has demonstrated an immediate impact on Lafarge?s business. Working in partnership to deliver key outcomes, Babcock is constantly challenging Lafarge?s traditional approach in order to maximise the efficiency and the effectiveness of the fleet and ensure that the whole life cycle costs of an asset, including warranties and training, is reflected when making decisions. Most significantly, Babcock has:
? Ordered 63 new assets worth $38 million to replace aged or worn out equipment.
? Rebuilt 152 assets across all three territories.
? Met stringent equipment availability targets across the UK, US and Canada.
? Undertook over 10,000 jobs across the three territories in just under 18 months.
? Delivered more effective management of equipment warranty.
? Clustered maintenance events to dramatically reduce downtime and travelling expenditure.
Source: Babcock International Group