Mine operators are being forced to sharpen their focus on operational excellence with coal and iron ore prices at the lowest levels experienced in recent years. They must drive inefficiency out of their business at every given opportunity to remain profitable. BHP Biliton's iron ore business in Western Australia has significantly reduced production costs to remain profitable, initially to $50 per tonne trending down to $25 per tonne. Fortescue Metals has extended its working rosters to two weeks on and one week off to save money on airfares.
As a very large organisation that was able to react quickly, BHP has been able to weather the storm. It and fellow mining giant Rio Tinto expect to drive iron ore costs down by another 25 per cent. Smaller operators like Atlas Iron have not been so fortunate. It was recently forced to suspend operations because production was costing the business money for every tonne pulled out of the ground. Mine operators are doing everything they can to cut costs but every business is hurting.
Whether you're a large multinational or a smaller local operator, improved fleet management is one way to drive greater operational efficiency. This includes everything from light vehicles to heavy machinery and stationary assets like lighting towers. There are huge efficiencies to be found in having real-time visibility across your fleet. This can be broken down into four main areas:
Failure to closely monitor your fleet operations means you're not able to understand when a vehicle needs attention. This means you could be doing insufficient maintenance, leaving your business open to equipment failure. Equally, you could be doing excessive maintenance and burning unnecessary cash. On one customer site alone, with about 350 light vehicles, we delivered a 20 per cent saving in maintenance costs during the first six months of operation. That equated to $140,000 without factoring in savings experienced from additional efficiency metrics.
The key focus here is always on improving safety but there are also operational efficiencies to be achieved from improving driver behaviour. Fleet management technology allows you to highlight any areas of concern with individual drivers and schedule the training they need to raise their game. This will have a positive impact on fuel bills, reducing general wear and tear and the likelihood of serious incidents while increasing the life expectancy of a vehicle. Serious incidents have the potential to close a mine site and loss of production is the ultimate penalty for any mine operator.
The greatest efficiency with lighting towers and other stationary assets is removing the human element. These sites operate around the clock and might have 75 of these towers spread across large geographic areas. Somebody on a six-figure salary has to go around turning these on every evening and switching them off again in the morning. Every minute they are on before sundown and after sunrise is burning unnecessary fuel. It might take three hours to go around turning them on or off during each shift. Now this can be done automatically, smart fuelling cycles take the guess work out of refuelling and maintenance procedures are improved by tracking a set of fault codes. For example, if a lighting tower stops working during night shift and production grinds to a halt, issues can be identified before they become a problem. This means maintenance can be scheduled during the day when they are not in operation.
As a mine operator there's great efficiency in uniform haul cycles because it removes costly bottlenecks. These bottlenecks create inefficiencies as trucks wait around in a queue to be loaded. So which drivers are speeding or spending too much time idling? If somebody is regularly speeding they will also be burning excessive fuel. The burn rate can reach 280 litres an hour. When a 300-tonne dump truck hits a pothole, it can burn excessive fuel just from being forced to drop down a gear thus road maintenance is critical. Fleet management technology means dispatch can send direct messages to any driver that is in danger of causing a bottleneck and resolve the issue before it starts costing money. They also have hard data they can use for future reference as junior drivers go through training.
When markets are tough in any industry, operational efficiency is crucially important to your business. Improved fleet management simply has to be part of part of that strategy if vehicles are part of your operations. With the right tools at your disposal it's never been easier to measure performance and implement policies to improve it.