CUT HEAVY EQUIPMENT COSTS WITH SMART MANAGEMENT PRACTICES

As commodity prices start to slide, mines are focusing on cutting operating costs and making their heavy equipment go further. The keys are picking the right equipment in the first place, good maintenance programs, upgrading your equipment, good operating practices, and hiring good operators.

Let's start with picking the right equipment. Picking rugged heavy equipment is often ignored by small mine and quarry operators. Equipment with cheaper, lightweight frames will develop cracks as the equipment undergoes heavy pounding from operations.In the long run, equipment with more metal will last longer. Light equipment is only a good choice if the mine is interested in buying a piece of equipment that will be rarely used. Even then, it may not be the best choice as equipment rentals can fill that need.

Then there is maintenance. According to information Caterpillar has compiled from its dealers and Cat customers, operating costs are a major factor in a mine's profitability. It's a well known fact that for about every dollar spent in buying a piece of heavy equipment, three dollars will be spent on operating and maintaining that equipment. And, since heavy equipment breakdowns can seriously impact production and profits, every dollar saved in operating costs, adds $1.50 to $3.50 to the bottom line. If a mine wants to stretch the life of their equipment, in order to lower operating costs, they need to develop a preventive maintenance program before the equipment is purchased and continue it until it is disposed of.

Earth moving equipment is the heart of a mining operation and the most likely to help profit margins if there are no unforeseen failures. According to Cat data, a 980G transmission that is repaired at 15,000 hours, before a failure costs $12,800. However, the same transmission that is repaired after failure at 17,000 hours costs $27,800 because of addition costs related to failure or contamination of additional parts, lost downtime, and the reduced cost of a rebuild instead of a repair. Consequently, many manufacturers offer PMS programs for most operations. One important part of these programs is oil sampling to detect problems before they occur and schedule repairs.

Another way to lower operating costs is to upgrade or retrofit your equipment. For instance, Caterpillar has developed a new undercarriage system that has improved reliability and lowered operating costs in all applications and conditions by an average of 53%. Machine owners currently using the new system in a variety of applications report they expect undercarriage life to increase by 50 percent or more depending on application and site conditions. In severe applications, the undercarriage can double the life of previous undercarriage designs.

Remanufactured parts can also save money and make your heavy equipment fleet more productive. In fact, a mine can buy remanufactured parts that have like-new guarantees, have the latest productivity improvements on them, and yet cost less that a comparable new part. Critical parts can be pulled and replaced during scheduled maintenance, which will give you an upgraded piece of equipment that is more productive - all without the cost or scheduling problems associated with bringing in new equipment.

Today, Caterpillar is the remanufactured parts leader. Once a returned core arrives at a Cat Reman facility, it is disassembled down to the smallest part, cleaned, and inspected to see if it can be effectively salvaged. Accepted components are then reused after a rebuilding process. Physical vapor metal deposition is used to increase the durability of remanufactured injectors. This process allows Cat to apply a precise coating to the plunger to improve surface hardness and wear resistance. This coating process was developed by Cat Reman but is also used on new Caterpillar injectors

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Another advanced metal deposition salvage technique uses a high density laser beam to deposit new material, restoring the wear surface to original specifications even to the micron level.

Finally, don't forget the operator. A good operator recognizes problems before they occur and informs maintenance personnel before a costly failure occurs. They are less likely to push a piece of equipment beyond its capabilities. Just as important, they can get the most from the equipment, which means that more earth can be removed between maintenance periods.

Unfortunately, good heavy equipment operators are getting harder to find. Fewer young people are interested in becoming heavy equipment operators, and the industry is facing a net loss in skilled operators in the next five years. Some of these losses can be offset by teaming up with community colleges like Caterpillar is doing or by mines focusing on operator training.

Training makes sense according to data. According to a recent industry research report, companies investing an average of $1,595 per employee for training had 24% higher gross profit margins and 218% higher income per employee than firms which invested only $128 per employee. Not only that, the higher incomes also reduce employee turnover and lowers the costs associated with hiring.

Don't forget to improve the work environment of the operator. Loud, uncomfortable environments quickly tire operators and lower their efficiency. Operator cabins with working heaters and air conditioners can easily improve productivity by 10% over the eight hour work shift.

Obviously, there are many different ways to reduce operator costs, especially if the mine management is committed to long term improvements instead of short term solutions. Some of these solutions may seem to cost more in the short term, but the long term savings are well worth it.