With prices recovering and the mining industry starting to pick up again, many sites are now looking at acquiring, expanding, or replacing their fleets. Bluefield regularly helps clients assess and optimise fleet acquisition and replacement strategies, and we’ve regularly written about our experiences (see here, here and here). Fleet evaluation and selection is critically important for a mining operation because its impacts last for years, if not decades. Making decisions based on clear criteria that align with your strategy and operating plan, free of bias, is essential.
I have recently been assessing fleet replacement options for a client. When the project began, the client was very excited about using a certain type of asset, and was sure the outcome of our assessment would be in its favour.
As always, we validated all data and formed our assumptions with the client, comparing the options without bias.
In the end, the findings were not as the client had expected, and there was no clear best for project option identified using Operation, Maintenance, Production and Capital inclusions.
The Lesson In This
This is quite often the case for us when it comes to fleet evaluation and selection projects. When we have ensured the data/assumptions are sound, validated and agreed, it is important to remember that there are also many other factors that influence the feasibility of any option for our clients.
Consideration must be given to not only the cost (although very important), but also to other non-economic or intangible factors It’s important to consider:
- Mine plan and buyer/contract volatility
- Pass/circuit matching
- Current site experience/skillsets for equipment types proposed
- Current site results for availability/maintenance execution
- Risk association of unproven new equipment and systems
- Continuity of site fleet and associated required maintenance, inventory, information, system requirements etc
- Equipment maintenance requirements – tooling, infrastructure, lubricants, training, skillsets, OEM support functions etc.
- Inventory, critical spares, insurance spares, rotable, identification/attainment, supplier relationships, capital requirements, support channels, availability and change management etc.
- Site data systems/telemetry equipment integration and process management
- CMMS master data development, integration and change management
- Operator training and change management required for equipment proposed
- Site culture and acceptance of equipment
A “business case” is not always purely financial …..
True, this list contains numerous factors, but it’s imperative to include all facets of asset management in the evaluation to ensure the analysis generates value. Most (but not all) of the items listed above can distilled to a cost or quantifiable benefit – you just have to keep asking the question: “what will happen and why?”
A few other thoughts on finalising your selection:
- If you’ve considered all of the cost/benefits for all options and still don’t have a winner, that still tells you something
- If your experience/instinct tells you this is not right – usually means you’ve missed something that should be included in one or more of the options
- If the financial outcomes are correct and still no winner: the decision should be based on other (non financial) considerations as per the list above.
To get more from assets requires thinking objectively and eliminating emotion and bias right at the start of the asset management cycle. The value that is created or destroyed by these decisions can last literally an asset’s life time.
By Rob, Senior Asset Management Specialist