Fortescue Metals Group digs up AU$30m in savings

Fortescue Metals Group has managed to save AU$30 million in a year, after spending very little on developing on a new business process management support system to manage its mining fleet.

Since Australia's fourth largest iron ore producer, Fortescue Metals Group, overhauled its business process management (BPM) strategy nearly a year ago at its Cloudbreak mining site, its operating expenses yielded nearly AU$30 million in savings.

Speaking at the Gartner BPM Summit 2014 in Sydney today, Peter O'Dea, Fortescue Metals Group senior business improvement manager, said the company figuratively "spent nothing" working on developing a simple Short Interview Control (SIC) decision support that would help maximise the utilisation of its mining fleet, and provide real-time visibility and decision support.

"We had a lot of data but it wasn't in a usable format that we could get to," he said.

"What would happen is, we would load this data in the dreaded spreadsheet at the end of the day, and we'd give it to the supervisor to show how the day went, but too bad the supervisor couldn't do too much with that.

"Where we want our supervisors is out in the pit looking after the 40 or 50 people and AU$300 million assets they have under their control. When we benchmarked all our fleet and normalised it for the density and distance internally and with other companies around the world, we could see we weren't using the data as well as we could, and that was the drive that got us going."

At the Cloudbreak mining site, the company had a total of 100 trucks on-site, including 20 long haul trucks and 20 diggers that moved 200 million tonnes of earth a year. With the implementation of SIC, over a six month period, the company saw diggers efficiency increase by 11 percent, with each machine producing an additional 340 tonnes of ore per house. Meanwhile, the trucks were 30 percent more efficient, hauling an additional 90,000 tonnes per kilometre per truck per week.

Fortescue Metals Group CIO, Vito Forte, said when a lot of the reporting happened through Excel, it created "FUD" and moved supervisors off-site to desks that resulted in "a lot of averaging of data, which didn't give good decision support".

Forte continued to say that the company took an integrated team approach to make the rollout happen.

"One of the key things for us was to make sure the director of operations was on board, because his sponsorship at this level was a critical component. It ended up bringing together the right players, and to find out what they needed, when they needed it, and for us to meet that," he said.

According to Forte, the Cloudbreak mining site project is just phase one for what the company has planned.

"We have two other mines to rollout to. This, at the moment, only covers the pit performance aspect. We hope the savings will translate two, or three, or four times amount over the coming 12 months," he said.