When prices for commodities come under pressure so do the margins of operators. In order to maintain margins and reduce costs in a sustainable manner, it is essential to remove loss and waste. Costs can be reduced in the short term by delaying maintenance expenditure and at times this may be necessary, but to reduce costs without risking throughput it is necessary to eliminate loss and waste in a systematic manner.
Bluefield was asked to identify the opportunities for sustainable cost reduction in maintenance at a Queensland Coal mine. Bluefield was able to identify many millions of dollars in sustainable cost reductions by reviewing the key areas that Bluefield has identified that represent the greatest areas of loss and waste in mining maintenance. Some of these are as follows:
- Major components that do not reach their full potential life
- Time taken for tradespeople/artisans looking for parts or tools, especially during scheduled work
- Lost parts and core return charges
- Unnecessary hire equipment on site, eg. cranes, lighting plants
Mine site costs were too high and with a softening market, the mine needed to take action to maintain a margin.
- Mining cost per unit too high
- Maintenance costs too high
- Situation not sustainable
Review the normal areas of loss and waste for this type of equipment.
More than $10 million per annum in cost savings identified.