Creating Value at QIT: The QMM Project

Transcription

1 Creating Value at QIT: The QMM Project November 2007 G. Issid QIT C. Dion HA A. De Mori - HA

2 Introduction Technical challenges -Brownfield expansion -Spans all of QIT -First time applications -New ore/ new slag product -Technical developments -Operational complexity QMM Project Context Management challenges -Strategic project -Marginal ROI Define scope to fit a set budget within performance and schedule

3 Introduction Define scope to fit a set budget within performance and schedule QMM: Goal and Strategy (1) Costs X Project Priorities 1) Costs 2) Performance 3) Schedule (3) Schedule (2) Performance

4 Introduction VA Results: QMM Project (1) Costs 25% savings X Project Priorities 1) Costs 2) Performance 3) Schedule (3) Schedule (2) Performance On target + 5% capacity

5 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

6 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

7 Hatch Manifesto We are an innovative organization committed to helping our clients achieve unprecedented and sustained business results. Our clients appreciate our added value, trust and communications, as well as our ability to transfer our expertise quickly, efficiently and safely on a global basis.

8 Hatch et QIT Une relation de confiance qui dure depuis plus de 50 ans

9 Global Operations 8000 total staff Aug Canada USA Boston, Massachusetts Buffalo, New York New York, New York Millburn, New Jersey Monroeville, Pennsylvania Pittsburgh, Pennsylvania Pleasanton, California San Francisco, California Seattle, Washington Calgary, Alberta Montreal, Quebec Sorel-Tracy, Quebec Sudbury, Ontario Niagara Falls, Ontario Toronto, Ontario Hamilton, Ontario Vancouver, British Columbia 800 South America Antofagasta, Chile Santiago, Chile Lima, Peru São Paulo, Brazil Belo Horizonte, Brazil São Luís, Brazil Europe London, England Moscow, Russia 50 South Africa Johannesburg 950 India Australia Perth Sydney Townsville Whyalla Wollongong China Shanghai Beijing 120 Philippines Manila Singapore Brisbane Gladstone Mackay Melbourne Newcastle 2300 (Yellow indicates regional hub)

10 Hatch Services and Sectors

11 Our history with Value VA at Hatch Analysis VA at Hatch since 1995 QNI (BHP Billiton) Alcoa since 2000 Falconbridge Inco QIT (Rio Tinto) since 1998

12 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

13 Time Bus. Planning Business Planning Front End Loading Phases Project Life Cycle Process (PLP) FEL - 1 Concept. Study Define Options FEL - 2 FEL - 3 FEL-4 Pre-Feas. Study Select Option Feas. Study Develop Project Definition Project Implementation Start-up & Operations % Engineering % Capital

14 Project Life Cycle Process (PLP) Business Planning FEL1 FEL2 FEL3 FEL4 Where? Why? What? Value Added Bus. Case How? When? We do it

15 Project Life Cycle Process (PLP) Business Planning FEL1 FEL2 FEL3 FEL4 Where? Why? What? Value Added Bus. Case

16 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

17 Context-Driven Definition (CDD) Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Engineering Specialized design Vendors Operations Maintenance Info. Systems Dynamic Models Sustainable Development Unit Op. Models R&D Plant Metallurgy Industrial Eng. Tech. Providers Net Utilisation (Operation Technologies) - Operating time - Operating factor (stability) - «Average/ Nominal» Statistical Models Efficiency (Process Technology) - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time)

18 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

19 Project Life Cycle Process (PLP) Business Planning FEL1 FEL2 FEL3 FEL4 Where? Why? What? Value Added Bus. Case Gains from VA: -FEL2: 30-90% -FEL3: 5-30% -FEL4: 5% How? When? We do it

20 VA in Early Project Phases Business Planning Where? Why? Gains from VA: -FEL2: 30-90% FEL1 FEL2 FEL3 FEL4 What? Value Added Bus. Case Operations Maintenance Info. Systems Net Utilisation (Operation Technologies) - Operating time - Operating factor (stability) - «Average/ Nominal» Context-Driven Definition (CDD) QMM Project Dynamic Models Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Project Management Triangle Sustainable Development Schedule Costs Statistical Models Unit Op. Models Performance Engineering Specialized design Vendors R&D Plant Metallurgy Industrial Eng. Tech. Providers Efficiency (Process Technology) - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time)

21 VA in Advanced Project Phases Business Planning Why? FEL1 FEL2 FEL3 FEL4 What? Value Added Bus. Case Operations Maintenance Info. Systems QMM Project Context-Driven Definition (CDD) Dynamic Models Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Sustainable Development Unit Op. Models Engineering Specialized design Vendors R&D Plant Metallurgy Industrial Eng. Project Management Triangle Schedule Costs Performance Net Utilisation (Operation Technologies) Efficiency (Process Technology) - Operating time - Operating factor (stability) - «Average/ Nominal» Statistical Models - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time) How? When? Gains from VA: -FEL3: 5-30% -FEL4: 5% We do it

22 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples

23 Project VA on QMM QMM Project: VA philosophy Phased approach: 1. High Level sessions 2. Detailed sessions by Area or Sub-area Integrated approach: Involve all stakeholders Facilitated sessions VA part of every day s work Decision-driven approach: Integration of value ideas using models Cost:benefit analysis Decisionmaking: steering committee

24 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples CO gas system

25 CO Gas - Existing Low Pressure B5 B6 B4 Central collector E3 E1 E2 High Pressure

26 CO Gas Original scope Low Pressure B5 B6 B5 (reloc) Bx (Nouv) B4 Central collector E3 E1 E2 High Pressure

27 CO Gas Nominal Capacity VA: -Functional analysis -Idea generation -Cost: Benefit analysis -Decision making - Add 3rd system - New building and auxiliaries X Unit Op. Models Optimize efficiency: - Pressure losses - System balance Sustainable Development 66% $ X Efficiency - Reduced pressure losses - Balanced system - Use of existing infrastructures (North system)

28 CO Gas Optimized scope Low Pressure B5 B6 B4 Bx (Nouv) New collector Central collector E3 E1 E2 High Pressure

29 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples CO gas system Furnaces

30 Smelting Furnaces (SF) MW MW MW MW MW MW MW MW SF1 SF2 SF3 SF4 SF5 SF6 SF7 SF8 Incremental Capacity : Add MW

31 Furnace Cost:Capacity Chart $100 $90 Exponential Cost:Capacity ratio $80 - Constraint = 8 existing furnaces Total Cost (Millions $) $60 $50 $40 $30 FEL2 Budget = 29 M$ Optimize Cost:Capacity Curve $70 $20 $10 $0 FEL2 Capacity = SF1-SF8 Nominal Capacity debottlenecking: Incremental Capacity

32 Furnace Cost:Capacity Chart $100 $90 $80 Total Cost (Millions $) $60 $50 $40 $30 FEL2 Budget = 29 M$ Optimize Cost:Capacity Curve FEL3 Budget = 29 M$ (No change) $70 $20 $10 FEL2 Capacity = 2.75 FEL3 Capacity = 3.5 $ SF1-SF8 Nominal Capacity debottlenecking: Incremental Capacity

33 Furnace Cost:Capacity Chart $100 Opportunity to reduce costs for same capacity: $90 $80-29 M$ 18 M$ - 38% Potentential Savings $70 Total Cost (Millions $) $60 $50 $40 $30 FEL2 Budget = 29 M$ Optimize Cost:Capacity Curve FEL3 Budget = 29 M$ (No change) $20 $10 FEL2 Capacity = 2.75 FEL3 Capacity = 3.5 $ SF1-SF8 Nominal Capacity debottlenecking: Incremental Capacity

34 Furnaces VA: -Functional analysis -Idea generation -Cost: Benefit analysis -Decision making Furnaces Utilisation Nominal Capacity X X Net Capacity + 27% Relative + 2% Absolute Same $ Efficiency

35 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples CO gas system Furnaces Iron Ladles

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37 VA: Optimize utilization: -Functional - Scheduling analysis -Idea - Resources generation -Cost: - Availability Benefit analysis -Decision making Iron Ladles Dynamic Models Nominal Capacity - Increase ladle size - Upgrade crane and auxiliaries X Sustainable Development Unit Op. Models Optimize capacity ($): - Benchmarking - Cycle time - Tap size Net utilisation Reduce tapping delays - Increase and reorganize crew - Opex only no Capex X 75% $ Efficiency

38 Ladles Ladles

39 Agenda Agenda QIT-Hatch Partnership QIT-Hatch project definition framework Project Life Cycle Process (PLP) Context-Driven Definition (CDD) VA integration in projects Value analysis applied to QMM project Methodology Examples CO gas system Furnaces Iron Ladles Slag Cooling

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41 VA: -Functional analysis -Idea generation -Cost: Benefit analysis -Decision making Slag Cooling Nominal Capacity Dynamic Models - Segregated slag cars (2 slags) - Dedicated shower lines - Double water systems X Sustainable Development Unit Op. Models Optimize efficiency: - Cycle time - Logistics - Heat transfer 22% $ Net Utilisation X Efficiency - Mix cars using tracking system - Reduced no. Shower lines - Reduced water consumption within existing capacity

42 Conclusion

43 Linear Definition Approach Business Planning FEL1 FEL2 FEL3 FEL4 Operations Maintenance Info. Systems Net Utilisation (Operation Technologies) - Operating time - Operating factor (stability) - «Average/ Nominal» Where? Why? Scope Definition Dynamic Models Scope Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Sustainable Development Statistical Models What? Unit Op. Models Engineering Specialized design Vendors R&D Plant Metallurgy Industrial Eng. Tech. Providers Efficiency (Process Technology) - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time) How? When? QMM Project EPCM Project Management Costs Schedule Performance We do it Market

44 Context-Driven Definition (CDD) CDD Operations Maintenance Info. Systems Net Utilisation (Operation Technologies) - Operating time - Operating factor (stability) - «Average/ Nominal» Business Planning Where? Why? Process Definition Dynamic Models FEL1 What? FEL2 Value Added Bus. Case Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Sustainable Development Statistical Models Unit Op. Models Engineering Specialized design Vendors R&D Plant Metallurgy Industrial Eng. Tech. Providers Efficiency (Process Technology) - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time) FEL3 How? When? QMM Project FEL4 Gains from VA: -FEL2: 30-90% EPCM Goal/ Strategy Project Management Schedule Costs We do it Performance Market Projection

45 Context-Driven Definition (CDD) Nominal Capacity (Equipement technology) - t/h, Nm 3 /h, MW, volume - Number of resources Engineering Specialized design Vendors Operations Maintenance Info. Systems Dynamic Models Sustainable Development Unit Op. Models R&D Plant Metallurgy Industrial Eng. Tech. Providers Net Utilisation (Operation Technologies) - Operating time - Operating factor (stability) - «Average/ Nominal» Statistical Models Efficiency (Process Technology) - Mass yield (Prod/Feed) - Energy efficiency (t/mw) - Logistics (Cycle time)