How Pre-PM Inspections Boost Profit

Sept. 28, 2010

Question: As long as you're changing the oil in your machines regularly, what more can you expect to accomplish with preventive maintenance—how much can an oil change improve a fleet's profitability?

Answer: Phelps Dodge Mining credits its seven-step basic PM with doubling the time between unscheduled downtime, and with cutting the portion of their maintenance-and-repair budget spent on unscheduled repairs from 50 percent down to 30 percent. That means more productive time and more controlled costs. Any equipment user can learn something about how high-quality PM moves money to the bottom line from the Phelps-Dodge experience.

Late in 2001, Phelps Dodge's (PD) situation looked dire. Worldwide, median copper production was 60 cents per pound, but PD's costs were north of 75 cents (in a world where people get excited when the price of copper hits 90 cents per pound). Company management set a target to reduce production costs to 60 cents.

Using technology to improve processes is one of PD's key strategies. The company relies heavily on alternative refining processes such as solvent extraction and electrowinning. The Bagdad mine in Arizona is home to the first commercial, high-pressure concentrate leaching plant, which came online in April 2003.

Also since April, Bagdad operations managers began monitoring performance data produced by the on-board computer systems on mobile equipment through Caterpillar's wireless Minestar management system. PD is using the complete Minestar suite of management applications that include computer-aided earthmoving, haul-road monitoring and dispatching, and drill management.

Minestar's reports of machine health are crucial to the maintenance program. The system constantly communicates to the mine manager all the key status parameters such as voltages, fluid pressures and temperatures.

PDs nine other mines manually download equipment's on-board data. Operations people rely heavily on cycle counts to refine operator performance. Again, machine-status data drives the maintenance program.

"Preventive maintenance is the key to a haulage fleet's success," says Ron Williams, haulage maintenance superintendent at PD's Morenci mine, "and PM compliance (percentage of maintenance completed on schedule) is how we measure PM success."

In 2000, PM compliance at Morenci was 80 percent, and equipment availability was in the 78-percent range. Since then PD has revised its corporate maintenance program four times (all mines use the program), each time adding things that were important to machines working in the mines' unique environments.

Morenci hit 100 percent compliance by the end of 2001, and availability had crept up over 82 percent. By 2003, availability had climbed to 89 percent. Similar results have been coming in from all the PD sites.

"Buy-in from operations was the key to getting compliance," says Williams. "The operations super made 100 percent PM compliance a priority."

Morenci's truck fleet averages 450 to 480 hours between oil changes. Careful trial during the 1990s confirmed that the trucks could safely work 500 hours between basic preventive-maintenance stops. The standard 500-hour service is made up of seven equally important steps.

  1. A mechanic goes out into the field a week before the truck is due for service to interview the operator, download data from the on-board computer, take oil samples, and inspect the machine. If any parts other than the usual maintenance supplies are necessary to fix a problem, he fills out a part order. This is what PD calls the Pre-PM.
  2. When service is due, the truck is brought into the shop and washed.
  3. Standard lubricant preventive maintenance is conducted, including changing engine oil and filters and running kidney-loop filters to clean up hydraulic oil and differential oil.
  4. There's a complete mechanical inspection according to Caterpillar recommendations, plus elements that PD has added.
  5. Anything uncovered during the inspection is repaired.
  6. A welder goes over the truck to do any necessary welding preventive maintenance or repairs.
  7. They complete any planned component replacements or repairs.

This basic PM is completed in eight to 10 hours.

"The Pre-PM is the most effective way to start this process because it puts the mechanic together with the operator," says Craig Sircy, haulage manager at Morenci. "Nobody knows how that equipment is working better than the operator.

"Pre-PM inspections aren't as detailed as the inspection they do when the truck is in the shop—they're just looking for surprises," Sircy adds. "It's part of the effort to alleviate parts-ordering delays. We have the mechanic's part order, and we can look at the oil-analysis results to see if we'll need anything else. That gives us at least four days to put together everything we need before the truck comes in for service."

Phelps Dodge implemented the Pre-PM inspection in 2000, when the mean time between unscheduled downtime was about 35 hours. It has risen to 71 hours. The ratio of dollars spent on scheduled maintenance to dollars spent on unscheduled has also improved. It was about 50 percent, but now scheduled maintenance is approaching 80 percent.

The PM program is just one process among many that PD has refined, and the cumulative effect has been dramatic. By 2003, the company's production costs had dropped to 68 cents per pound.

"Sixty cents looked like a different galaxy to me two years ago," says Hunter White, president of PD's Safford Project. "Now we're getting close to the goal, and we can see paths to reach 60 cents."

Ron Williams
Ron Williams,
Haulage maintenance superintendent.
Ron Williams, Haulage maintenance superintendent.
On a Phelps Dodge Pre-PM, mechanic Kevin Kelly (right) interviews truck driver John Melendrez a week before scheduled maintenance.
Gary Anderson, mechanic, downloads data from a trucks' onboard computer as part of a Pre-PM. He will also sample oil so that there's time to respond to problems before the truck comes into the shop.

Headquarters: Phoenix, Ariz.

Specialty: Copper, molybdenum mining

Equipment Value: $1.2 billion

Fleet Makeup: 575 units; primarily shovels for loading, Cat 793 haul trucks, D10 and D11 dozers, motor graders, other support equipment

Market Range: 10 mines; seven in southwestern U.S., one in Peru, and two in Chile

Chip Watch

About two years ago, Phelps Dodge started zip-tying computer chips to parts and components whose life and warranty status had been hard to track. The chips, called I-Buttons, are programmed with a part number and the in-service date for hose assemblies, batteries, slack adjusters and the like. When a technician replaces a tagged component, he retrieves that information using his hand-held computer. The Phelps Dodge equipment-management software will alert him if the part is still under warranty. Component life is captured, too. Now they schedule replacement of these parts before the historical limit of their life.

I-Buttons are credited with reducing small-assembly costs by 15 percent, and they've played a major role in doubling PD's mean time between unscheduled downtime.