Around our offices at ELRUS we often share and discuss and reminisce about the state of the industry, people we’ve known in the business, the successful and those that weren’t. We started to notice some themes in our observations that we think are important to share and discuss.
The truth is that few of us set out as young people to be in this business. Sure, some of us have a family connection that led us to this industry but for many of us in crushing and screening, a summer job led to a career. We worked in the dust, changed some screens, fixed a few belts and shovelled out a conveyor. Because we were persistent, cared and had some good ideas, we became foreman and moved up, so we could be worried about everything, not just our piece of the process. We learned the business of rocks and became “rock stars”
Another observation we came to is this is a tough business! There is no “Crushing University” or “Gravel College” to go to for a master’s degree in how to make big rocks into small rocks that are the right size and shape efficiently. Additionally, fewer good gravel pits and quarries make meeting increasingly more difficult specifications very difficult. It’s no surprise plenty of people in this business have no hair – we’re trying to make a silk purse out of a pig’s ear.
During our discussions we discovered some common characteristics that define the successful people in our industry – the ones who grew to foreman and then to manager or the contractors who grew while others failed. In our 40 years in this business, we feel the most successful people in this business share most or all of these characteristics.1. They have robust measurement systems and use them to drive improvement
To determine the difference between cost and price as well as knowing throughput and understanding how to improve it, you need facts from measurement systems. At a minimum, the most successful measure:
- Production per day of in spec materials
- Downtime per day/shift/month/year by reason
- Manganese wear life in tons, days and hours
Screen media wear life in tons, days and hours
- Revenue per hour of operation
- Detailed maintenance records
There are many other measurements the successful track to make it easier to analyze operating practices, especially where the quality of feed is variable.
The bottom line is - good measurement systems both support and drive continual improvement of operations and drive profitability in the hands of the right people.
2. They understand that cost and price are different considerations
The price of something is measured by the dollars spent to acquire it. For example, the price of a cone plant is $750,000. Cost is measured over time or units as measures of operations. If the cone plant lasts fifteen years, its capital cost is $50,000/year. If the cone plant will produce a 1,000,000tons in a year for fifteen years, the capital cost is $0.050/ton crushed.
The price of a different cone plant may be $650,000 and it only will last twelve years and thus making its capital cost $54,167/year. If the crusher also produces 1,000,000 tons per year, it’s capital cost per ton is $0.054/ton crushed.
The price maybe lower, the cost/ton produced is higher as is the cost per year.
This same analysis applies to everything from the cost of a crusher to the cost of differing qualities of screen media. You name it, the rule applies. Cost is different than price and the lowest price does not equal the lowest cost/operations or cost/unit.
3. They understand throughput
Throughput is different than production per hour or per day; throughput is dollars on the ground of sellable, in-spec material at the end of a financial period (month/quarter/year).
Operation A is producing an average of 400 tons per hour when in operation. They need to move their spread five times a year and it takes four days per move, thereby losing 20 working days per year to moves.
Operation B is also producing an average of 400 tons per hour when in operation and must move their spread five times per year. Operation B can move and be crushing in two days, thereby losing 10 working days per year.
The difference per season on a ten-hour day is 40,000 tons. At $5.00 per ton, that’s a difference in throughput of $200,000 per year. Over the life of the spread this is significant and pure bottom line as the cost of operations per year in both situations is similar.
4. They implement good ideas
The most successful operators we see are open to ideas, open to examination of how they have their production processes set up and open to ideas around how it could be done differently. These operators are willing to listen, analyze, examine and see if their operations could be more effective.
They experiment and if it’s good, they adopt the idea.
An example from the field:
Crushing >12” rocks in a sand and gravel operation is difficult and expensive. There is also a market for >12” stone for flood repair and mitigation as well as landscaping. We had a client insert a primary sorter into their spread to separate the >12” from the jaw feed.
Over the course of two years, the revenue from the large rock more than paid for the sorter. Importantly, his cost of crushing operations came down. Lower jaw manganese wear, improved production rates led to more dollars on the ground with fewer dollars spent getting the job done.
Good ideas are easy to come by. The people that work for us always have an idea on how things could be done better, and support industries are constantly coming up with new products and services to make operations more effective. The most successful sort out the ideas that make sense, test them out to prove them out. When shown they can work, the successful get them implemented.
Getting good ideas implemented has challenges! It often means being the lone voice in the beginning, facing down habits and opinions of current operating styles and approaches. Getting buy-in from the operations team requires support from management. Sometimes a good idea is a change in operations process. But often it requires a significant investment in production variability or equipment during the implementation It takes courage to go in front of management that may be reluctant to change; for the family business, doing the preparation to face a banker to borrow the money or convince other members of the family that a new idea or different way of operating has merit.
5. They recognize the importance of the work environment
The best in the business have a safe work environment that goes above and beyond keeping the authorities happy. They strive to build workplace environment and culture where great people work safe, grow their skills and contribute to the success of the operation.
Building this workplace culture is not easy or quick and it’s hard to sustain. It means hiring selectively, training and developing people, being open to their ideas and recognizing that as the leader, they are always on display – if they act inconsistently with what they ask of their people, they lose credibility and the trust of their people. We get this sounds lofty for a gravel pit but it’s real.
Do you see areas where you might be able to improve? Contact Us and talk to one of our Product Specialists.
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