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Cleaning the ‘barnacles’ off tracked plant production

Obviously one of the first things that we learn in the aggregates business is that when it comes to a processing system, production is “good” and downtime is “bad”. But do we fully understand why?

Keeping a processing plant up and running is about more than just putting material on the ground – it’s about meeting whatever demand or deadline exists.

As an operator or working as part of a crew on a mobile plant, to maintain a competitive edge and remain profitable, it is critical to learn how and where to identify “waste” within an operation and, most importantly, how to reduce or eliminate wasteful activities.

Cleaning 'Barnacles'

Let’s consider a simple analogy. Cleaning the barnacles off the bottom of a cruise ship in no way provides a more memorable experience for the tourist sleeping in the stateroom. However, this task is absolutely essential for the vessel to remain seaworthy.

{{quote-A:R-W:300-Q:"To maintain a competitive edge and remain profitable, it is critical to learn how and where to identify “waste” within an operation and how to reduce or eliminate wasteful activities."}}Using this mindset, I am sure that if you look around your work station or organisation you can quickly and easily identify such “barnacle” tasks which are necessary, yet add absolutely no value whatsoever to the actual product or service of the business itself.

Examples might include pressure-washing the equipment, changing crusher liners and screen media, or relocating a plant. While these tasks are critical, they add absolutely no value to the consumer of the material the plant will be producing.

Unfortunately, such functions of “non-value activity” incur a real cost that must be built into the “price” and absorbed by the “customer” nonetheless. Accordingly, the most successful operations are the ones that constantly strive to reduce or eliminate such costs.

To state the obvious, it costs money to operate a mobile plant. The cost depends on many variables, including the size and number of machines within the system, the number of operators, the number of loaders and other equipment required to feed and support the plant, plus the productivity and the efficiency of the equipment and the crew.

Generally speaking, after the hourly costs are calculated and then divided by the tonnes produced, on average a typical portable plant will cost around $AUD4.50 per tonne to operate. Variables include local market wages, fuel costs, material wear characteristics and so forth.

Escalating production costs

The costs to tear down, haul equipment, make repairs, and set up the plant between moves must also be absorbed. The dollars can add up very quickly between moves, depending on the size of the plant and the number of moves per year.

Employees are still incurring wages, and trucks and loaders are still consuming fuel.

{{quote-A:R-W:300-Q:"When the plant is not running, it is bleeding money. When the plant is not running, costs can skyrocket."}}The difference is that the equipment isn’t generating any revenue to pay for itself. As a result, there is a simple mindset to adopt:

When the plant is not running, it is bleeding money. When the plant is not running, costs can skyrocket.

As you’ve probably figured out by now, “production” is the economic “sponge” that absorbs the costs of operating the plant.

Let’s consider some numbers for a traditional rubber-tyred portable plant that requires 18 loads capable of producing about 300 tonnes per hour (tph). For this example, let us assume this plant will be relocated 10 times per year and requires a crew of four guys working one week to tear down, move, and set up the plant between locations. Therefore, the plant is actually running about 1680 hours per year, allowing for annual production of about 500,000 tonnes.

For such a plant, let’s assume trucking costs run to $AUD32,000 and labour costs are $11,000 per move. In addition, a crane must be rented at a rate of $3000 per move. Therefore, the total expenses of relocating the rubber-tyred plant between moves is $46,000 — or $460,000 per year.

Or put another way, it costs $0.91 per tonne to just absorb the annual relocation expenses. Those are some barnacles!

Of course, the real waste comes in the form of lost production. As stated, the plant is capable of 300 tph and it requires an average of five days to relocate the plant. Since the plant is normally working eight-hour shifts, at 300 tph the lost production for each move is 12,000 tonnes. If that material is worth $9.50 per tonne, the lost revenue is $115,000 per move — or $1.15 million per year.

Reducing downtime

{{image2-a:r-w:300}}The solution is to identify methods to reduce the time between moves that will capture some of the lost production, which can reduce the cost per tonne, thereby reducing the amount of waste.

If we assume that a similar 300 tph tracked system is used in its place, we could reduce the number of loads from 18 to five, and 40 hours of lost production could be reduced to two hours per move. This means that relocation costs would fall from $326,000 to $95,000 for savings of $231,000. The need to rent a crane for each move would be eliminated, saving $27,000 per year.

However, the major advantage is that we are capturing almost $1 million in additional revenue that the plant can be producing by not being down between moves.

As a result, the cost per tonne will be far less with a tracked system. These economics are obviously what has been driving the popularity of tracked plant around the world.

While it might not be realistic to eliminate waste completely from the operation, there will always be opportunities for improvements that can add to the bottom line. All that is required is a desire to find and remove the barnacles.

Paul Smith is the international marketing manager for the Astec Aggregate & Mining Group.

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