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Process of Maintenance Management in Phelps Dodge (PS-EMS)

Ral Rojas y Jos Olivares Minera Candelaria rrojas@phelpsd.cl ABSTRACT During 1999 the Mining Area of Phelps Dodge Mining Corporation (PDMC) was operating with most of its mines in the upper end curve of production costs of the copper industry and an immediate term of low prices of the metal was not visualized. These factors threatened the survival of the Corporation; therefore, measures were taken resulting in the closure of some operations of higher cost and reduced production, among others. On the other hand, it was required to initiate a continuous improvement process to control our destiny, to be competitive, to achieve security and maximum satisfaction of our clients, reaching the production goals with lower costs. Considering that one of the higher production costs was generated by the maintenance activity, a synergic team with experts in maintenance, of all the operations was created, which VISION was: Be recognized as Worldwide Leaders in Equipment Management for which the following MISSION was defined: Develop and implement a Dynamic Worldwide Class Process in Equipment Management, that considers the Integration of the Best Practices, Continuous Improvement, Assure the Capacity and Saving of 7% of the Maintenance Total Expenses The basis of the process was developed in World Class Pyramid that sets up four levels: Leadership, Control, Continuous Improvement and Process Re-designing.

ABSTRACT EXPANDIDO The foundation used for this process was developed on the Pyramid of Worldwide Class that establishes four levels, which are: Leadership, Control, Continuous Improvement and Redesign of Processes. Through audit to the maintenance management of the different operations, the Best Practices were identified, which meant the greater contribution associated to the business. These best practices were: Administration of Work Order High Performance, Maintenance Reliability, Contract Management, Warranty Management, Runzheimer and Skills Training Program. For each one of the Best Practices minimum levels were established, that represent the basic requirements that guarantee a Worldwide Class Process. In order to develop this process, a Strategy Process Implementation was structured, determining: Coordinators in each operation, Communication of the Objectives of the Process, Developed of PD-EMS Teams and Development of 90 Days Action Plans to implement the Global Process. Key Factors of Success, for all operations, were defined: Sense of Property of each operation, Suitable Acceptance of the Process, Proper Resources, Reliable Information and Data, Uniformity of Reports, System of Network, Work Team of High Performance, Tracking, Responsibility for Results / Support Process, Feedback / Clients Satisfaction, Standard Process, Decisions Based on Information and Continuous Improvement through 90 days Action Plans. In order to be able to measure and compare the continuous improvement of the global process, Key Performance Indicators were defined (KPI), which were: 1, Assets Efficiency = (Operational Time x 100) / Total Time Indicates: Design as large as the fleet, use of availability 2. Physical availability = (Total Time Maintenance Time) x 100 / Total Time Indicates: Effect of maintenance in equipment 3. Programmed Costs = (Programmed Maint. Costs x 100) / Total Maint. Costs Indicates: Performance of maintenance planning 4. M&R Costs x Production Unit = (M&R Costs x 100) / Produced Units Indicates: Participation of maintenance in production costs 5. PM Compliance = (Number of PM Compliance x 100) / Total of Scheduled PM Indicates: Performance of maintenance 6. Proactive Maintenance = (Proactive Maint. Cost x 100) / Total Maint. Cost Indicates: Effectiveness of maintenance In the same way, KPI for each one of the Best Practices were defined, in order to have an index of performance for each one of them. These indexes are reported monthly

to the PD-EMS General Coordinator, who processes the data and informs to the Presidency and shares the results with Leaders of all the operations. The comparison point, of the improvement of each task, was established through a base line determined by the Base Line of Performance Evaluation obtained through an audit to the Best Practices of year 1999. For the Base Line of Performance Evaluation the following process was determined: 1. Generate a matrix of evaluation with the activities and more representative sub activities of the process that will be evaluated, for example for the Work Orders Administration, were defined 13 critics activities and more than 100 sub activities, etc. 2. In a way to indicate the importance of a process activity, it was generated a factor that varies between 5 and 25, using this last one for the activities of greater impact in the process. 2. In order to evaluate the performance level of each one, of the sub activities of the process, it was defined an index that varies between 0 and 10, evaluating like zero when there is not program or visible process and 10 when there is a program or process of Worldwide Class. The product of the factor by the evaluation index generates a value that represents the level of performance of the activity. 4. Once evaluated all the activities, it is possible to graphic and visualize the activities that require an improvement process. 5. In accordance with the results obtained in this evaluation, the 90 Days Plans for each one of the processes are generated and, this way, a Continuous Improvement Process is obtained. The Methodology used in the Evaluations of the operations, was as follows: A work team is gathered with a maintenance expert of each one of the operations, the structured survey prepared by PD-EMS team is applied, in order to collect data through a series of meetings with the leaders of maintenance, planning and operations of the different areas of the operations, and the consistency and quality of the evaluations was verified through the review of the individual assigned indexes, whenever, between the members of the group existed a difference of 3 points (+/-15%). The answers were analyzed to reach an agreement within the acceptable rank, with the purpose of controlling the variance in the obtained answers. Finally the average of the obtained values is calculated. RESULTS At present, every year an evaluation is made at each every operation in order to measure the levels reached and evaluate the effectiveness of the established action plans for each one of the Best Practices. With this material, it is possible to compare among the areas to find out what new Best Practices have arisen to implement them in the rest of the operations.

Through the implementation of this process it has been possible to increase the management indexes in maintenance, availability, assets efficiencies, MTBF and respond to the compliance of PM and, also diminishing unit costs in maintenance and repair. Concentrator 1,8% 2,2% 16,4% 20.5 -4,1% Crusher 10,8% 7,5% 1,0% 17 -6,8% Trucks 1,6% 4,6% 8 -

Increase Compared to the 1999 base line Assets Efficiency Physical Availability Pms Compliance MeanTime Between Failures (Hrs) Maintenance & Repair Unit Cost

With the increase of assets efficiency in the Concentrator Plant, a saving of 1.0% has been obtained of the total cost of the operation for the year 2003. The greater challenges found in the implementation of this process were, certainly, the resistance to the change, which could diminish gradually with an efficient process of communication and, of course, with the results.

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