tough times require collaboration - je… · tough times require collaboration dr. jeffrey j. dawes...

TOUGH TIMES REQUIRE COLLABORATION

Dr. Jeffrey J. Dawes

President & CEO

Komatsu Latin America

October, 2015 Komatsu Confidential Propietary

WHO IS KOMATSU?

:: JAPANESE COMPANY

:: FOUNDED IN 1921

:: LEADER IN THE MANUFACTURING OF EQUIPMENT FOR

CONSTRUCTIÓN MINING FORESTRY INDUSTRIAL

:: PRESENCE IN 146 COUNTRIES

:: SALES FY 2014: US$17 BN

:: MORE THAN 41,000 EMPLOYEES

CURRENT SCENARIO

US$/mt

US$/bbl

Chile is the main copper producer in the world. The following slides refer to copper, yet the analysis could be extrapolated to other commodities

COMMODITIES PRICE TREND 2008 - 2015

Current price

COPPER

Source: Central Bank of Chile

Outside our control

We need to concentrate here

Source: Cochilco 2015

COPPER: COST ESCALATION 2005-2014 Industry average

COST BREAKDOWN

Mine

Comminution

Flotation

Smelter

Refinery

Source: Cochilco

COPPER C1 COST %

As a mining equipment supplier, our efforts are focussed mainly on this portion of the total cost

Mine

COPPER C1 COST %

Drilling

Blasting

Loading

Haulage

Auxiliary equipment

Administration

Crusher & belt conveyor

Haulage is the largest component cost

MINING COST COMPOSITION %

We need to focus on making our customers more competitive, not only by lowering maintenance-related costs and providing better availability, but also by lowering operational costs and helping them get better overall performance from our equipment.

HAULAGE COST – WHERE TO ATTACK?

19,8%

15,3%

19,6%

11,3%

8,5%

24,7%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

Total Cost 930E-4

Lube

Fuel

Tires

Operator Cost & training

MARC Variable

MARC Labour

Capital

Our main focus is to

become more competitve here

Only about 2.5% of C1 Cost

However,close to 50% of the haulage cost is not Komatsu-related

Figures based on recent TCO analysis for a fleet of 930E-4 trucks in Chile

COST PER TON

TOTAL COST OF OWNERSHIP Role of Equipment Supplier & OEM

Cycle time Payload Availability Utilization Operation

TCO User / Owner

Tons Production

= $/ TON

Design Manufacture Operate Maintain Dispose

Advise Service Contract

Eq. Supplier

Advise

OEM

Equipment Supplier

14%

21%

5%

32%

28%

Equipment (1.0) Repair & Maintenance (1.5)

Tire Cost (0.4) Fuel Cost (2.3)

Operating Labour Cost (2.0)

830E Life Cycle Cost @Australia (60,000Hrs)

SCOPE OF $/TON COST REDUCTION

= = Production Cost ($/Ton)

Operating Cost ($/Hrs)

Production (Ton/Hrs)

Tire Cost Fuel Operating Labor cost

Maintenance & Repair cost

Availability

Utilization

Job Efficiency

Cycle Time Payload

Machine cost

Cost Reduction

Increase Production

Customer and Komatsu can improve jointly

14%

21%

5%

32%

28%





SCOPE OF $/TON COST REDUCTION Komatsu Direct Involvement

= = Production Cost ($/Ton)



Tire Cost Fuel Operating Labor cost


Availability

Utilization

Job Efficiency

Cycle Time Payload

Machine cost

Cost Reduction

Increase Production

Customer and Komatsu can improve jointly

CI ACTIVITY

= = Production Cost

($/Ton)



-9.1% -9.1%

-9.1%

Job Efficiency Cycle Time Payload

Cost Reduction

Increase Production 14%

21%

5%

32%

28%





SCOPE OF $/TON COST REDUCTION 10% cost reduction on repair & maintenance is only equivalent to 2.5% of LCC

Customer and Komatsu can improve jointly Machine cost

-1.4%


-2.1%

LCC REDUCTION

Tire Cost

-0.6%

Fuel Operating Labor cost

-2.8%

-3.2%

Availability

-9.1%

Utilization

-9.1%

China Coal Energy CI Project Page20 / 27

1 :: IDLING

ADVICE

ADVICE Stop the engine as much as possible. Do not leave the engine idling during waiting times or breaks.

Switch off

AVOID UNNECESARY ENGINE IDLING.

2 :: DRIVING

ADVICE

ADVICE Drive with coasting.

KEY POINT No fuel is consumed by releasing the acceleration pedal and

applying the engine break while driving.

Initial speed 30 km/h

1 :: NORMAL DRIVING Fig.1

Fuel is consumed as the accelerator pedal is depressed.

The retarder brake begins to work.

Stop Point

Fuel Cutoff

FUEL IS CONSUMED UNTIL DUMP TRUCK STOPS.

2 :: COASTING Fig.2

Stop Point Initial speed 30 km/h

Fuel Cutoff

A DRIVING TECHNIQUE ENABLING A COASTING DISTANCE CREATED BY THE INITIAL SPEED THAT CAN HELP SAVE FUEL.

Beginning of coasting No fuel is enjected for this portion of running

ADVICE

(1) :: DRIVING AT A CONSTANT SPEED Fig.1

3 :: DRIVING

ADVICE Drive at a constant speed. Do not accelerate and decelerate frequently

KEY POINT

Running at a constant speed

(2) :: FREQUENT ACCELERATION AND DECELERATION FIG.2

Driving Speed

Constant Speed

Up and down in Speed

Deceleration Acceleration

Distance (or Time)

DRIVING AT A CONSTANT SPEED TO MINIMIZE VARIATIONS IN RUNNING SPEED LESS FUEL CONSUMPTION

REPEATED ACCELERATION AND DECELERATION REDUCES FUEL EFFICIENCY.

Acceleration Deceleration Acceleration

4 :: DUMPING

ADVICE Make sure to carry out dumping at a lower engine speed!

CARRY OUT DUMPING AT A LOWER ENGINE SPEED POR LESS FUEL CONSUMPTION!

LCC REDUCTION – FUEL ECONOMY

In coasting mode, the feature saved fuel by up to 28%.

FUEL CONSUMPTION IMPROVEMENT :

LCC REDUCTION – FUEL ECONOMY

• Compare two trucks with Fuel saver and without fuel saver.

• Coasting ratio is approx. 30% of total cycle time.

Reduce the engine idle speed from 1600rpm to 1200rpm while the truck is coasting or in retard mode in order to reduce fuel consumption. Apply ‘ The fuel saver feature’ to save fuel.

GOAL OF THIS CI PROJECT :

VALUE OF THIS CI PROJECT :

Fuel saver savings

7.07 litre/hr.

Saving per year 38,126 litre/truck

Total Savings

(Considering 18 trucks)

US$1.143million

Program S - STANDARDIZATION

PROCESOS DE SOPORTE - SOPORTE INTERNO

PROCESOS DE SOPORTE - MEJORA CONTINUA

CONFIABILIDAD

PROCESOS DE SOPORTE - CONTROL

CLIENTE

PROCESOS

DE INICIO

I NI CI O DE

CONTRATO

KOP- P- 202

DEFI NI CI ÓN ESTRATEGI A DE

MANTENI MI ENTO

KOP- M- 008

ESTI MACI ÓN

RECURSOS

KOP- P- 138

DEMANDA

COMPONENTES Y

REPUESTOS

KOP- P- 138

DEFI NI CI ÓN

DE

PROCESOS

KOP- P- 138

GENERACI ÓN PRESUPUESTO DE

MANTENI MI ENTO

KOP- P- 139

PLANI FI CACI ÓN

MANTENI MI ENTO

KOP- P- 138

CLIENTE

SOPORTE CORPORATIVO

EJECUCI ÓN DEL MANTENI MI ENTO

KOP- P- 118 KOP- P- 035

KOP- P- 036

EJECUCI ÓN DE I MPREVI STOS

KOP- P- 130

GESTI ÓN GARANTÍ AS

KOP- P- 104

ESTADO

DE PAGO

PLANIFICACIÓN DEL MANTENIMIENTO PROGRAMACIÓN DEL MANTENIMIENTO

GESTI ÓN

RECURSOS

I NTERNOS Y

CLI ENTES

KOP- P- 1117

GESTI ÓN

COMPONENTES Y

REPUESTOS

KOP- P- 117

CONSOLI DACI ÓN

PROGRAMA

MENSUAL

KOP- P- 117

GESTI ÓN BACKLOG

PROGRAMADO

KOP- P- 112

I DENTI FI CACI ÓN

DE ACTI VI DADES

A REALI ZAR

KOP- P- 117

PLANI FI CACI ÓN SSOMA&C

KOP- P- 131

PLAN OPERACI ONAL

KOP- P- 002

PLANI FI CACI ÓN DE CAPACI TACI ÓN

KOP- P- 142

GESTI ÓN SUBCONTRATOS

KOP- P- 140

MANTENCI ÓN DE EQUI POS DE SERVI CI OS

KOP- P- 135

ADMI NI STRACI ÓN

KOP- P- 142

LOGÍ STI CA, BODEGA Y PAÑOL

KOP- P- 143

EJECUCI ÓN PROGRAMA SSOMA&C

KOP- P- 131

RECURSOS HUMANOS

PROCESOS DE

CIERRE

CI ERRE

CONTRATO

KOP- P- 201

MAPA DE MACROPROCESOS

GESTIÓN ADMINISTRATIVA

ANÁLI SI S DE

FALLAS

KOP- P- 134

GESTI ÓN DE

CONFI ABI LI DAD EN

FAENA

KOP- P- 147

GESTI ÓN DE PROYECTOS

KOP- P- 151

MEJORAMI ENTO CONTI NUO

KOP- P- 136

CAMPAÑAS Y

GARANTI AS

KOP- P- 104

AUDI TORI AS DE

PROCESO

KOP- P- 137

AUDI TORI AS ESTRATEGI A

DE MANTENI MI ENTO

KOP- P- 041

CONTROL GESTI ON

FAENA

KOP- P- 145

CONTROL DE

PRESUPUESTO

KOP- P- 155

GESTI ON DE NO

CONFORMI DADES

KOP- P- 153

ADMI NI STRACI ÓN POOL

COMPONENTES

KOP- P- 132

SOPORTE POOL

COMPONENTES

KOP- P- 133

ELABORACI ON DE

PROCEDI MI ENTOS

KOP- P- 000

ADMI NI STRACI ÓN

PUBLI CACI ONES

KOP- P- 010

ESTANDARI ZACI ÓN

KOP- P- 038

DOCUMENTACI ON

TECNI CA

KOP- P- 040

PROCESOS OPERATIVOS

Mapping the macro-processes related to maintenance of the fleet Operation Manual for MARC Contracts

Vital Signs Project (Komtrax Utilization)

Program T - TECHNOLOGY

Monitor de Condición Tribología

New on line system for Components Status and tracking

New Procedures for Components Management

Exchange of 24V components

Maintenance guidelines (>60% complete)

Document management system

Improvement of work instructives

• Diagnostic time reduction. • Event driven backlog process • Improve Backlog effectiveness • Integration with GE and Cummins

Program E - EFFICIENCY

Indirect Workforce Optimization Improve maintenance data and Reporting Automation

LCC REDUCTION – STEP PROGRAM

Program P - POOL

Manual de Operaci%C3%B3n de Contratos Rev. Final Dic. 2014.pdf

DTSA “DT-HILOAD”® or Light Body is a high efficiency dump body for trucks that is the state of the art technology and arguably the most important component of a mining truck.

• The “DT-HILOAD”® body is made based on a flexible, curved design, than minimizes the requirement for structural cross members.

• This innovative design minimizes the use of structural steel, and therefore, empty body weight.

• The Light Body uses wear steel as a structural part of the floor of the body, thereby increasing useful life as the body is more resistant to impacts and abrasion.

Characteristics

CI INITIATIVES – PAYLOAD MAXIMIZATION

“I made a decision to buy a Fuel Efficient Body” (Manager Engineering Department)

CI INITIATIVES – PAYLOAD MAXIMIZATION

VR

VR

DANTOTSU Service

Solutions

Understand the

customer’s needs

Define strategy to meet customers’ requests

Improve Cost Competitive

ness Lower TCO

Design Innovative &

Flexible Solutions

Brand Management

Be able to help customers lower

their costs, proactively – BE PREPARED

FOR LOW CYCLES

Be able to provide new solutions for

new market conditions, in good

or bad times – SUPPORT THE

CUSTOMER

Customer satisfaction

A MODEL FOR CUSTOMER SUPPORT: DEVELOPING UNRIVALED SERVICE SOLUTIONS WITH TCO IN MIND

• Standardization • Technology –

Systems • Efficiency • Pool

• Training • Know-how • Financing

• Rental • Interchange • REMAN • Flexible labour

Wide contracts offering

WORKING WITH OUR STAKEHOLDERS

EMPLOYEES

COMMUNITIES CUSTOMERS Shared Added Value

SHAREHOLDERS

WHO ARE OUR STAKEHOLDERS?

The traditional stakeholder, we are all aware of the importance to keep the owners happy.

EMPLOYEES


SHAREHOLDERS

OUR STAKEHOLDERS?

EMPLOYEES


SHAREHOLDERS

We´ve talked today about how we can work together with our customers to generate and share added value.

OUR STAKEHOLDERS

EMPLOYEES


SHAREHOLDERS

Our employees are our most value asset, we work hard to keep them safe, train them properly, and retain them.

In Latin America where certifications (both national and international), are non existent, and technical training levels are poor, it is our additional responsibility to provide these basic educational needs.

OUR STAKEHOLDERS

EMPLOYEES


SHAREHOLDERS

OUR SOCIAL LICENSE TO OPERATE

In Chile and the other developing countries of Latin America, the distribution of wealth is far from adequate and as a result, as responsible corporate citizens we are obliged to assume our responsibilities in this regard, much more so than in more developed countries.

We have to leave behind something more than just a big whole in the ground, and the pre-requisite amount of taxes paid.

We have also worked in conjunction with our clients on this very important issue

OUR STAKEHOLDERS

CSR – WORKING WITH OUR CLIENTS

DISASTER RELIEF TORRENTIAL RAINS AND LANDSLIDES – MARCH 2015 In March 2015, torrential rains in the semiarid areas of Northern Chile resulted in devastating landslides.

WORKING TOGETHER – CLIENTS AND SUPPLIERS

One of our major mining clients in Chile, the

Caserones mine, owned by Lumina Copper (Mitsui), is located at the head of the Copiapo valley, which was the epicentre of the damage.

The mine was shut down, we could not work as a result, and their were almost 500.000 people directly effected between the mine in the upper reaches of the valley, to the town of Chañaral in the coast, passing by the city of Copiapo on the way.

This is a true example of shared added value, the mine had to reopen, Komatsu had to get back to work, and to do that, we had to help the people who were immediately effected.

OUR INVOLVEMENT 1. Machinery: 11 Komatsu machines free of

charge for 2 months for the purposes of :

General clean-up in the township of Los Loros, and re-channelling the river;

Machines for the Fire & Rescue Service for the purposes of locating missing persons.

2. Corporate Volunteer Program Company volunteers from all over Chile travelled

to the affected areas, mainly Los Loros, to help with the clean-up, concentrating mainly on the schools so the children can get back to school, a very important step following any major disaster.

3. Summary of support in Los Loros

VOLUNTEER HOURS 799 hours

TOTAL VOLUNTEERS 78 people

BENEFICIARIES OF KCC SUPPORT IN LOS LOROS

1800 people

TOTAL MACHINERY HOURS 3,423 hours

A program which started in 2011 for the reinsertion of young offenders

These young people are taught basic social skills and work ethics, and offered employment within the Komatsu Group of companies in Chile

A major difference between this program and other similar programs is the level of involvement of Komatsu employees in the rehabilitation program

The program has received recognition in Chile for its innovative format, and success ratios with regards to re-incidence.

In the Antofagasta Women's Prison, Komatsu has installed a repair facility for electrical coils and all the staff at this facility are inmates of the jail, except supervision;

The inmates have a formal work contract with Komatsu and when they have served their time, they come to work at our facilities in Antofagasta.

To date we have 12 employees working at at our facilities in

Antofagasta from this program.

CET PROGRAM – for female adult offenders REINVENTARSE – for young offenders

CSR – WORKING WITH OUR COMMUNITIES

CSR – WORKING IN THE REGION

RECONSTRUCTION in HAITI BACKGROUND In January 2010 a devastating earthquake hit

Haiti, one of the poorest countries in Latin

America, leaving more than 200,000 dead,

300,00 injured and 1.4 million homeless.

One of the schools which was destroyed, was

home for 600 girls.

In a novel partnership between private

industry (lead by Komatsu), an NGO America

Solidaria, and the Chilean Government,

efforts were pooled to rebuild the school.

Board of Directors

Technical

Committee Advisors Advisors

Architectural

Firm.

Communication

Agency

School Fundraising

Team

Fundraising

Team

Advisors

PROJECT ORGANIZATION CHART

Project Director

Executive Committee

Social &

Education

Committee

Communications &

Fundraising

Private –

Public –

State –

All -

Planning &

Reporting

Each of the 3 parties brought their unique and complementary talents to the project :

America Solidaria – As an ONG living and

working Haiti, they provided the invaluable logistics support to enable people to come and go and live in Haiti.

The State – The Chilean Government were fundamental in resolving the administrative and bureaucratic problems to enable the project to go ahead.

Private Industry – Our operating knowledge and experience ensured that the school actually got built, on time, on budget and to specification.

This model of tri-partisan cooperation has been recognized internationally as a novel and extremely effective model for achieving “shared added value”

PROJECT PHASES

To avoid any reoccurrence in the future, the new school was built to the latest anti-seismic specifications.

PHASE I INFRASTRUCTURE + FURNITURE

To ensure the success of the project beyond the construction phase, a 3 year educational program was developed and financed.

PHASE II EDUCATIONAL PROGRAM – 3 YEARS

CSR – WORKING IN THE REGION

EMPLOYEES

COMMUNITIES

CUSTOMERS

Shared Added Value

SHAREHOLDERS

OUR STAKEHOLDERS

THANK YOU

tough times require collaboration - je… · tough times require collaboration dr. jeffrey j. dawes...

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