Introduction

Traditionally, Mining organizations have focused on the key measures of Plant Availability and
Utilization to measure equipment performance. This paper sets out to demonstrate that these measures
alone are insufficient to make informed decisions about equipment strategies. It also sets out to
demonstrate that, in practice, there is one factor, often overlooked, that has a significant impact on
Equipment performance and that is Equipment Reliability. A focus on Reliability is revolutionizing the way
that mining companies look at Improving Short-Interval Scheduling, and improving equipment
performance.
Production Scheduling Timeframes
The following diagram indicates the different timeframes with which Operations and Maintenance are
Planned and Scheduled.
Timeframes of Maintenance and Operations Planning Diagram
In the longer term, Life of Mine Plans help to determine the quantity and type of equipment required for
achievement of that plan (and vice versa), thereby maximizing equipment availability and utilization.
In the medium term, Operations plans interface with the Maintenance plan in order to maximize
equipment availability and utilization by
• adjusting planned maintenance start times due to changes in production schedules or shipping
schedules.
• taking advantage of maintenance windows as they become available.
• ensuring preventive maintenance on critical equipment is carried out.

• ensuring equipment is available for maintenance when planned.

These concepts are well understood, and are generally well implemented in most mining organizations
today, but this is not the focus of this paper. In this paper, we will focus on short interval planning and
scheduling - the planning and scheduling that occurs on a week to week, shift by shift basis. It is in this
area that the reliability revolution is occurring.
Availability, Utilization, and Reliability
Before continuing, it is important to make sure that we all have the same understanding of the terms
Availability, Utilization and Reliability, and introduce the concept of Overall Equipment Effectiveness.
Availability: the proportion of time the equipment is able to be used for its intended
purpose.

Utilization: the proportion of the time that the equipment is available that it is used for its intended
purpose.

It is important to realize the difference between availability and reliability. While availability measures
the proportion of the total time that the equipment is available, reliability measures the frequency with
which it breaks down.
Reliability: how often the equipment does not fulfill its intended purpose - usually
measured by Mean Time Between Failures (MTBF).
 Clearly Reliability and Availability are related, but not necessarily directly - it is possible to have a piece
of equipment that breaks down frequently, but for short periods, which as a result has a reasonable level of
availability. Similarly, it is possible to have a piece of equipment that is highly reliable, but has a low level
of availability because it is out of service for maintenance for long periods at a time.
The traditional view of Availability and Utilization maintains that achieving high equipment Availability is
a Maintenance responsibility, while achieving high utilization is a Production responsibility. By maintaining
both high equipment utilization and high equipment availability, maximum output will be achieved from the
equipment.
Consider, however, the situation where a haul truck is operating, but, because of a problem with the
engine, it can only haul at 80% of its normal speed. The truck is available, and being utilized, according to
our definitions, but clearly maximum output is not being achieved.
Consider also, for example, the situation where a shovel trips, causing a 15 minute delay while it is
reset. During this time, the Haul trucks queue at the shovel. Once again, those trucks are available, and
being utilized, but maximum output is not being utilized.
Clearly, we need a better measure of overall equipment performance.
We achieve this by including an additional measure - which I will call Production Efficiency.
Production Efficiency: the ratio of actual output from a machine (which meets the required
quality standards) to its rated output, during the time that it is operating.

Poor reliability, while having some impact on equipment availability, is likely to have a bigger impact on
Production Efficiency, due to the inefficiencies associated with starting up and shutting down equipment,
and the time and effort that it takes to get the production operation back to a steady state situation. It is fair
to say that the costs of poor reliability, generally show up in lower Production Efficiency. This is a measure
that is often not given the same emphasis as Availability or Utilization measures, and in any case is
generally considered to be a Production responsibility, with the impact of Maintenance on this figure
generally being ignored.
Furthermore, analysis of reliability figures at many mining operations indicates that the Mean Time
between Failures (i.e. process interruptions), can be as low as a few hours. Not unsurprisingly, Production
output in these operations falls well short of the theoretical rated capacity. In these operations, the impact
of poor reliability far outweighs the costs associated with equipment availability and utilization (which are
generally quite high).
A relatively new measure being used for Equipment performance is Overall Equipment Effectiveness.
This gives an overall measure of how effectively an asset is being used and is given by the following
formula.
Overall Equipment Effectiveness:

Overall Equipment Effectiveness is closely linked to the accounting measure, Return on Assets, and
provides us with an indication of how well we are using our investment in Plant and Equipment.
If Availability, Utilization and Production Efficiency were all equal to 90%, we might be tempted to think
that we are doing a pretty good job, but in fact, the Overall Equipment Effectiveness for this example only
equals 73%. This means we are only getting 73% of the total potential output out of this equipment.
Increasing this figure will mean that we can produce more with the same equipment, or potentially, could
produce the same amount with less equipment - with an investment of in excess of $2m required for a
large haul truck, the savings could be considerable.
The Scheduling Process
The scheduling process (indeed any planning or management process) is made up of four key
activities, as shown below:

In short Term Mine Scheduling, forecasting is the activity that most determines the success, or
otherwise, of the schedule. It is only when we can forecast with some degree of certainty, that we will be
able to achieve the schedules that we have established. This, in turn, has a direct impact on equipment
availability, utilization, and operating and maintenance costs
For example, when scheduling routine haul truck services (typically done a week in advance), a
forecast is made of the date and time at which the service will become due. In most Maintenance
Management packages, this forecast is based on the Service Meter Unit (SMU) reading at the time the
forecast is made, and a projection of the average running hours per day for the truck, based on past usage
patterns. However, a breakdown, or some other process interruption, can significantly affect the running
hours for the truck - to the extent that the service is now performed (unnecessarily) early - with increased
maintenance costs, and increased downtime. Alternatively, a change in the forecast running hours of the
equipment could lead to the service being performed late, with the implication of potentially increased
engine wear, and future reliability and maintenance problems.
Once again, it is reliability that has the greatest impact on the degree of certainty that we can have
regarding forecasting - poor reliability means a high level of uncertainty regarding forecast operating hours
for individual machines. This leads either to equipment being serviced, and components repaired, earlier or
later than optimal, or equipment being given maintenance at short notice, and therefore in an unplanned
manner, which increases the level of downtime associated with the service, overhaul or repair.
The Reliability Revolution
So, to summarize so far, better mining operations are realizing that:
• Poor reliability has a far greater impact on operating efficiency, and therefore unit operating costs,
than it does on the traditional measures of availability and utilization.
• The cost of poor reliability is, for the most part, hidden to most mining operations today.
• When measured, the true cost of poor reliability in most mining operations is very significant.
• Poor reliability also has an adverse impact on our ability to provide accurate short term forecasts
for equipment operating hours. This, in turn, leads to either:
• Equipment services being performed unnecessarily early, with resulting increases in maintenance
costs and downtime, or
 • Equipment services being performed late, leading to the risk of in-service failures and reduced
equipment life, or

• Equipment services being performed at short notice, in an unplanned manner, increasing the
downtime associated with these services.
These better mining organizations are beginning to focus less on the traditional measures of equipment
performance - availability and utilization, and are starting structured programs to address reliability issues.
A new shift in paradigm is occurring, which I term the Reliability Revolution.
Factors Impacting on Reliability
As defined previously, reliability is the frequency with which equipment does not fulfill its desired
purpose. Anything, therefore, which causes an interruption to the normal operation of the equipment can
be defined as a failure. While it is common to consider reliability as being primarily a Maintenance concern,
in fact, there are generally as many Production issues that cause interruptions to normal operations. The
factors that could interrupt normal operations include:
• Geology - Variability in digging conditions can lead to the need for shovels or trucks to stop, even
momentarily. Similarly, ore grade that is different from what is expected also can cause the need
for an interruption to production.
• The Mine Plan - The mine plan generally calls for equipment to be moved periodically as different
areas are to be mined. This causes an interruption to a steady-state production process.
• Accident Damage - A production issue, which causes an interruption to the production process if
the equipment must be taken out of service for inspection or repairs.
• Equipment Failure - Clearly a Maintenance issue, which causes an interruption to the production
process.
• Routine Maintenance - Routine Servicing, Component Replacements and Overhauls cause
interruptions while the equipment is taken out of service.
• Weather - Rain or fog can interrupt the production process.
• Downstream Processes - If in a direct tipping situation, if the downstream process stops, this can
cause an interruption to the mining operation. If during this stoppage, ore is tipped onto a
stockpile, a further interruption is experienced when the downstream operation starts up again.
• Shift Changes and Crib Breaks - Every shift change and crib break causes an interruption to the
steady-state nature of the operation.
• Spillage and Housekeeping - The need to stop to clean up spillage in the vicinity of the shovel, or
in the dump area, also causes an interruption the process.
• Minor Production Stoppages - "Comfort stops", mirror adjustments and other minor stoppages
interrupt the production process
• The Blast - Often there is a need to stop the equipment during a blast.
• Ineffective Blasting - If the blast is ineffective, this can lead to problems with diggability in certain
areas. This also causes equipment not to operate reliably.

• Refueling and Lubrication - Stopping equipment to refuel and lubricate them also interrupts the
production process.
Improving Reliability
So where to from here?
The first step is to measure the number of times your equipment is stopped, together with the reasons
for those stoppages. It is a truism that "What cannot be measured cannot be managed". Clearly those
organizations with automated pit control systems will find it easier to record the number of stoppages than
those without these systems, but in either case, it is vital to be able to accurately record the reason for the
stoppage - and this is a human issue, not a technology issue.
 The second step is to perform a Pareto Analysis on the data collected in the first step - that is, identify
the few reasons that account for the majority of the stoppages. Focus your attention on these stoppages,
because a small improvement in reliability in these areas will have the greatest impact on overall
equipment performance.
The third step is to analyze these high frequency stoppages, and identify the opportunities for
improvement. It is worth noting, at this point, that the possible causes of stoppages listed above can be
categorized as being either planned or unplanned stoppages - that is, the stoppage is generally known
about in advance, or it is not. These are tabulated below.

Planned Unplanned

The Mine Plan Geology

Routine Maintenance Accident Damage

Shift Changes and Crib Breaks Equipment Failure

The Blast Weather

Refuelling and Lubrication Downstream Processes

Spillage and Housekeeping

Minor Production Stoppages

Ineffective Blasting

Clearly, for those stoppages that are planned, the strategy should be to combine the stoppages, and
reduce their duration - for example, conduct blasts during crib breaks, or refuel at shift change. These
concepts are generally well understood and applied in all mining operations. However, some lateral
thinking may suggest some innovative approaches - for example, performing "pit stop" services during crib
breaks, with the aim being to turn the equipment around within the time allowed for crib.
For unplanned stoppages, the aim should be to eliminate them or reduce their frequency, or to convert
the stoppages into planned stoppages that can be combined with other planned stoppages. There are a
number of analytical techniques available to assist in achieving this objective, such as Ishikawa or "Fish
Bone" diagrams. For analyzing Equipment Failure issues, Reliability Centered Maintenance (RCM)
techniques have had significant success with both fixed plant and mobile plant in a mining environment -
doubling reliability in some instances.
It is not the intention of this paper to go into detail on these analytical techniques, rather, if, after this
conference, you all return to your minesites with the determination to formally measure, analyze, and
improve the reliability of your equipment and production process, then this paper will have achieved its
aim.

DEFINITION

Optimized production technology is a proprietary scheduling system using, computer

software which was originally developed by Dr. Eliyahu Galodratt and colleagues who
recognized that one of the most complex problems facing manufacturing organizations was
that of shopfloor scheduling
The system is based on the concept that there are two fundamental manufacturing
phenomena:

• Dependent events. All processes rely upon the completion of preceding operations.
• Statistical fluctuations. Process times fluctuate around an average.

The effect of these phenomena is that the capacity of a plant must be unbalanced and therefore
bottlenecks are inevitable.

As defined by Johnson, the OPT method of scheduling dictates that material should only be
launched on to the shopfloor at the rate at which it is consumed by the bottleneck.

Furthermore, a time buffer of work should protect the production in the bottleneck.

This means, that work scheduled for day three arrives on day one, creating a buffer of two days
as protection against disruption in operations before the bottleneck.

MAIN FEATURES OF OPT

The main features of OPT are described by Fax as follows:

• Balance flow not capacity.

• The level of utilization of any part of the system, which is not a bottleneck, is dependent
on other constraints in the system, not the potential of the worker.
• The utilization and activation of a resource are not synonymous.
• An hour lost at the bottleneck is an hour lost for the total system.
• An hour saved at a non-bottleneck is just a mirage.
• Bottlenecks govern both throughput and inventories.
• The transfer batch may not, and many times should not be equal to the process batch.
• The process batch should be variable, not fixed.
• Schedules should be established by looking at all the constraints simultaneously.
Lead times are the results of the schedule and cannot be predetermined.

DEVELOPING OPT

The steps used to develop OPT consist of the following:

• Preparation. Measuring performance, project planning and identifying hardware

and software requirements.
• Plant analysis. Analyzing the manufacturing processes and how they are managed.
• Bottleneck analysis. (A bottleneck is defined as a resource 'where capacity is equal to
or less than the demand being placed upon it'.) This is conducted by analyzing work
in progress and shortages vs. excesses (potential bottlenecks are those resources
which appear on the shortage list but not the excess list).
• Computer modeling. This is the process of developing the engineering network and
instructing the OPT scheduler how to interpret details concerning the manufacture
 of products such as dependent set-ups, critical material, fixed batch quantities, maximum
batch quantities, consumable tools, rework and uninterruptible processes. Data will be
fed into the model concerning routines, bills of material and customer demand.
• Data definition. Establishing what data is required to be fed into the system.
• Defining outputs. The output will be a master production schedule (MPS), which is
achieved by constraint capacity planning. This provides the basis for the process of
demand management using the OPT software to carry out the scheduling - the OPT
identifies the relevant demand and controls the build accordingly.

OPERATING OPT

OPT is operated through OPT software which has been developed to control complex
manufacturing processes. The software will model the process and produce the schedules in
the shape of material and capacity plans using the OPT bottleneck forward-loading
techniques. The shopfloor control system will then monitor progress against the schedule
and initiate any action to overcome shortfalls.

BENEFITS

The benefits claimed for OPT are that it will schedule finite resources in order to achieve
maximum factory effectiveness.

The scheduling system:

• Addresses the key problem of bottlenecks.

• Improves profitability by simultaneously increasing throughput.
• Reduces inventory and operating expenses.
• OPT is a proprietary software package for production planning and scheduling owned by
Creative Output, Inc., of Milford, Connecticut. The objectives of OPT is to schedule
production so that production output is maximized. Because of the limited information
available about the inner workings of the scheduling procedure used in OPT, it is difficult
to assess whether OPT represents a new methodological approach. Nevertheless, the
framework employed by OPT contains some useful ideas applicable to a number of
production/operations situations. The key distinctive feature of OPT is its ability to
identify and isolate bottleneck operations and focus on these bottlenecks to determine
production plans and schedules for the entire shop. This simple idea could lead to the
better utilization of manufacturing resources, resulting in greater productivity and lower
costs. Given as an illustration the advantage of using a bottleneck operation is to drive the
planning for the remaining operations by means of a simple example.
• Consider two products, 1 and 2, that are manufactured by the process. The process
consists of three operations, A, B, and C. The set-up times and production rates for the
three operations and are identical for the two products. We assume that 40 hours per
week are available for production and that equal amounts of the two products must be
made available at the end of each week.
• From the chart below, clearly, operation B is the bottleneck operation in the production
process. Let us make several observations about the implications of bottleneck operation
B for the preceding operation A and the succeeding operation C.
• OPN A B C
• Set up time 1 hr 6 hrs 2 hrs
Prodn rate 80 40 60
Units/hr
• First, if operation A, which precedes the bottleneck operation, is not controlled, inventory
will accumulate between A and B because A will produce at the rate of 80 units per
hours, whereas B will only use the output of A at a rate of 40 units per hour. Second, if
the capacity of B is increased by one unit (through overtime or by adding facilities) then
the throughput of the entire system will be increased by one unit, resulting in an increase
in profit equal to the contribution of the whole product (and not merely the relative
contribution at stage B) . Conversely, a loss in capacity for operation B (through
improper scheduling or a maintenance problem) will result in a decrease in profit equal to
the contribution of the whole product. Third, an increase in the number of set-ups for
operations A and C, to the point these operations themselves become bottlenecks,
produces no incremental cost to the company. Thus, fewer set-ups and larger lots for the
bottleneck operations and more frequent set-ups and smaller lots for non-bottlenecks
operations often make economic sense. Finally, if the production lot size for operation B
is 400 units, it is not necessary that we transfer the product to operation C only after all
400 units have been completed at operation B. Doing so will result in a high level of
inventory between operations B and C. To reduce this inventory, it may be practical to
transfer in lots of 40 (one hour’s worth of production) or some other quantity smaller
than 400 units. Thus, in general, production lot size and transfer lot size may not be
equal. It may be economical to use a larger production lot size and smaller transfer lot
size. This distinction is important in OPT, and the procedure selects appropriate
production and transfer lot sizes for each operation.
• Shown here is careful scheduling for operation B will improve the production rate of the
system. Recall that for product mix considerations we are required to supply equal
amounts of products 1 and 2 by the end of a week. A simple rule then is to produce
product 1 for the first 20 hours of the week and product 2 for the next 20 hours or vice
versa. In this plan, since 6 hours are required for set-ups for bottleneck operation B, we
will be able to produce 40 units per hour X 14 hours = 560 units of each product per
week. These 560 units of production are limited by the capacity of operation B. Of
course, operation A could produce the 560 units in 8 hours (set-up time of one hour +
production time of 560/80 = 7 hours). To reduce inventory, production at operation A
should not begin at time 0. Otherwise, by the time production begins at operation B, we
will have accumulated 5 hours of production output (400 units) from operation A.
Further, by transferring small amounts of product from operation A to B we can maintain
a low level of inventory between operations A and B. Similarly, operation C should be
carefully scheduled to reduce inventory between B and C while meeting weekly
requirements.
• Since operation B is the bottleneck, a longer production run at B will improve the output.
For example, we can produce product 1 for the first entire week and product 2 for the
 next entire week at operation B. Thus, each product is produced only once in two weeks
at operation B. The weekly output for operation B under this plan would be as follows:
• Week Product 1 Product 2
• 1 1360 0
2 0 1360
3 1360 0
4 0 1360
• However, operation C must deliver equal amounts of products 1 and 2 each week. To
achieve this, 680 units of inventory must be carried between operation B and C. Hence in
week 1, operation C will require 680 units of both product 1 and product 2. Since 1360
units of product 1 are produced by operation B, the ending inventory for week 1 for
product 1 will be 680 units. However, operation C must draw 680 units of product 2 from
beginning inventory to be able to manufacture the requirements for week 1.