Tag Archives: SPH Kundilila

THREE TIPS FOR MEETING PRODUCTION TARGETS

Mines are dynamic environments with loads of pressure on managers, department heads and procurement officers to keep up the pace, but there are three key bases to be covered if they are to consistently meet daily goals and keep the wheels turning smoothly.

These must-haves are communication, trusted role players and resource capacity, according to SPH Kundalila group commercial officer, Werner Cloete.

“Managers and procurement officers decide on crucial aspects that can make or break a project,” says Cloete. “When key actions are regularly taken – making them habits instead of emergency responses – it can revolutionise the way a site functions.”

Firstly, good communication is vital, so that everyone is clear on the target and the strategy and they can all play their roles in meeting daily production targets. Managed well, the regular morning meeting can be a powerful tool allowing progress to be tracked through role-players reporting back.

“In this forum, changes to the production plan can be easily shared and discussed,” he says.

It is important that communication methods should be practical and timeous. This means a judicious balance of verbal and written communication. The message must also reach all parties involved, so communicators must ensure that everyone has access to optimal communication tools.

Secondly, the project must have trusted role players who have been vetted and chosen on their ability to finish work within the allocated timeframe, and have the experience to conduct work effectively.

“All teams on a project must also function well with others from different contractors, without causing unnecessary conflict or problems,” he says. “Such problems can cost time and money.”

Thirdly, the project’s resource capacity will determine whether it is able to adjust to new production targets at a moment’s notice. This might occur when commodity prices change – demanding higher output – or when there is a breakdown on site.

“This is when it pays to have a well-resourced mining contractor like SPH Kundalila,” says Cloete. “In these situations, the mine does not want the uncertainty of whether the contractor can increase its capacity in a short time.”

Meeting the challenge of increased production means having proven back-up plans already in place, which leverage off the contractor’s access to a large enough fleet, and to enough skilled personnel to get the work done.

“This is one of SPH’s guarantees which help put clients’ minds at rest,” he says. “The company’s flexibility and resources can handle almost any unexpected scenario.”

THREE STEPS TOWARDS MORE COST EFFECTIVE PROCUREMENT

With current cost pressures on mines in South Africa and elsewhere, the role of procurement officers in saving unnecessary expenditure has become vitally important.

Procurement officers are being increasingly relied upon to save money for the mine, according to SPH Kundalila group commercial and operations manager Graeme Campbell. He suggests a few practical ways in which these individuals can do this while achieving optimal results from their purchases.

Firstly, says Campbell, procurement officers must know when and how to negotiate. This begins with learning more about every aspect of mine procurement that they are required to control. While not being expected to be experts in every field, they can learn a lot by sitting down with contractors and service providers to gain insights into the work that is to be done.

“Suppliers can actually be important assets that many procurement officers fail to tap into,” he says. “Contractors like SPH Kundalila, for instance, have decades of experience and have acquired expert knowledge of the field they function in, from industry costs and new products right through to insights into important role players in the sector and the pioneering technology available.”

Armed with this kind of industry knowledge, procurement officers can negotiate more beneficial and cost saving contracts with better levels of service provision.

The second way to ensure good value for mine expenditure is to define an accurate scope of work, says Campbell.

“A tender bid can be a daunting and time consuming process, and more time can be lost when trying to compare contractors’ quotations when the scope is too vague,” he says. “The answer is to start off a tender process by stating exactly – and in detail – what the scope of the work will be. Getting contractors to quote according to these specifications will makes comparisons easier, and expose any hidden costs.”

Issuing a clear and detailed tender will also serve as a ‘dry run’ to gauge a contractor’s quality of service, he argues. Experienced companies, such as SPH Kundalila, have trained personnel and support teams who understand the tender’s requirements, and can quickly clarify any point of a quote or contract.

Thirdly, urges Campbell, draw from the expertise inside your own company. He says the bidding process is really an opportunity for all the mine’s departments to find the best possible contractors for their purposes.

“Bringing the input together from colleagues and department heads during a bidding process requires strong, trusting relationships between them,” he says. “Procurement officers should invest time in building these relationships with other departments, as colleagues may know of affordable service providers in the market that procurement officers are unaware of.”

A unified approach motivates all departments – and even contractors – to work together for the greater good of the mine.

An air separator in an iron ore application.

WHAT IS YOUR REAL COST PER TON?

When mines go out to tender on the goods and services they require, procurement officers should be looking beyond the service provider’s rates to the contribution they make to the mine’s cost per ton of minerals produced; not an easy task when there are so many hidden factors at play.

In fact, says SPH Kundalila group commercial and operations manager Graeme Campbell, a proper investigation into costing is vital before the correct buying decision can be made.

Contractors need to have the flexibility to move equipment and people around from one area to another.

“One of the central problems that mines face with procurement is when contractors charge lower rates but then don’t perform in line with expectations. This can result in losses for the mine,” says Campbell. “Under-performance basically increases the cost per ton, and may also make the mine liable for expenses not previously anticipated.”

He emphasises that contractors need to have the flexibility to move equipment and people around from one area to another.

“If the contractor does not have additional equipment and people that can be brought in as ‘backup’ when additional work is sourced, this hampers production levels,” he says. “Many contractors create this problem for themselves when they do away with backup services in order to keep wages and maintenance costs low. In the end this becomes a hidden cost to customers as they don’t get the required level of service.”

He also highlights the effect on pricing that is exerted by the age of a contractor’s equipment. If the application is ‘soft’, the work conditions easy and the working hours short, then a small scale contractor can generally provide an adequate service.

“However, when the application changes to medium or hard conditions which have higher impact loads, this could lead to older equipment starting to break down,” says Campbell. “This immediately affects targets, which are not met and which therefore bring down profits.”

He points to the significance of fleet size in the lowest-cost-per-ton equation. While small scale contractors can often offer a cheaper rate per ton on a limited quantity of material, they usually have to hire in equipment for dealing with larger quantities. This could affect the mine’s profits and safety levels.

“Due to the cheaper rates charged, it is not always possible for them to hire the right quality of equipment to perform the work, and this sub-standard equipment can put the profitability and safety of the operation at risk,” he says. “A health and safety incident, for example, can trigger a section 54 stoppage, which invariably results in revenue loss for the customer.”

Mines need in-depth vetting to ensure that their service providers have the necessary capacity for any conditions that they may encounter, and a record of past success.

“At SPH Kundalila, for instance, we manage the biggest Caterpillar 950 loader fleet in the southern hemisphere,” he says, “and our safety performance is reflected in the number of safety awards we have been awarded by the Aggregate and Sand Producers Association of South Africa (ASPASA).”

Campbell concludes that the real cost per ton is not only represented by a contractor’s rate, but by the value that the contractor will add to the mine’s profitability in terms of time saved and productivity.

“A low rate charged by the contractor is never a saving if it costs the mine millions in lost production,” he says. “Customers choose SPH Kundalila because we ensure that production runs efficiently and smoothly, so that targets are met and profits are made.”