Rail Loadout Process Improvements at the Wells Mining Facility

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Rail Loadout Process Improvements at the Wells
Mining Facility
Business Process Improvement ConferenceDenver,
COSeptember 22, 2005
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Contents

• Introduction
• Background Information on Wells Rail Loadout
• Peabody Issues and Results
• Railroad Issues and Results
• Next Steps

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Peabody has been working to improve performance
at Wells during the past few years.
Introduction

• Initial focus was on prep plant to increase
  processing capacity.
• Next focus was on mine performance (Lightfoot 2,
  Rivers Edge) to increase production levels and
  capacity.
• Subsequent focus was on rail loadout to ensure
  that transportation capability could not only
  handle current tons, but keep up with projected
  tonnage increases.

Recent Performance Improvement Projects at Wells
2001
2001-2002
2003-2004
Rail Loadout Project
Prep Plant Project
Mine Project

• Plant availability improved from 75-85 to
  consistently over 90
• Tons processed per day increased significantly

• Capacity utilization increased by about 10
  percentage points to around 70
• Cost decreased significantly, improving market
  competitiveness versus alternative facilities

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Peabody commissioned a project team to improve
rail loadout performance using the HOME TEAM
approach.
Introduction
Project Objectives

• Improve rail loadout procedures, practices and
  processes
• Reduce cost e.g. staffing, equipment, other
• Reduce time to load trains
• Increase rail loadout capacity
• Develop performance measures to track performance
• Improve communication and teamwork
• Improve resource utilization staffing, equipment

HOME TEAM
Home of Mining ExcellenceThroughTeamwork,
Execution, Achievement and Measurement
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The rail loadout project had three steps.
Introduction
Project Workplan
Step 1
Step 2
Step 3
Detailed External Review of Loadout With
Railroad
Detailed Internal Review of Rail Loadout
High-Level Internal Review of Rail Loadout

• Processes
• Issues/Problems
• Impacts
• Cost
• Capacity

• Processes
• Issues/Problems
• Solutions/Actions
• Performance Measurements

• Processes
• Issues/Problems
• Solutions/Actions

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Peabody had specific objectives for collaboration
with the railroad.
Introduction
Project Objectives for Railroad Collaboration

• Utilize fact-based approach
• Implement railroad performance measures
• Provide clear performance expectations and goals
• Establish methodology for tracking performance
  trends on a regular basis
• Improve railroad performance
• Meet tonnage needs at Wells
• Identify and solve problems Get them off the
  table

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Contents

• Introduction
• Background Information on Wells Rail Loadout
• Peabody Issues and Results
• Railroad Issues and Results
• Next Steps

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Capacity at Wells was greatly impacted by the
consistency of train arrivals In 2003, the
frequency of train arrivals varied widely.
Background Information on Wells Rail Loadout
Hours From Train Arrival to Next Train Arrival,
2003
lt12 Hours Between Arrivals
gt24 Hours Between Arrivals
Train Count
Hours
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As a result, the number of train arrivals per day
varied widely.
Background Information on Wells Rail Loadout
Number of Train Arrivals Per Day During 2003
Number of Days
200 Days
105 Days
55 Days
5 Days
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Background Information on Wells Rail Loadout
After train arrival, variability of loading time
was significant. When operations were smooth,
trains loaded in 4-6 hours, but 8 hours was not
uncommon.
Wells Load Time by Train Count During 2003
Number of Trains
Load Time (Hours)
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Loadout delays were due to a variety of problems
about 2/3 were due to internal Wells problems
while 1/3 were railroad-related.
Background Information on Wells Rail Loadout
Time Lost due to Loadout Delays by Problem,
Second Half 2003
Minutes Lost
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On average, changing cuts took slightly less than
one hour. The variance, however, was very large.
Background Information on Wells Rail Loadout
Time to Change Cuts, Second Half of 2003
Train Count
Minutes
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Contents

• Introduction
• Background Information on Wells Rail Loadout
• Peabody Issues and Results
• Railroad Issues and Results
• Next Steps

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The Peabody project team identified thirteen
issues that could be addressed internally.
Peabody Issues and Results

• Train Arrival Process
• Process for handling bad cars e.g. holes, doors
  open, material in cars, no reads, bad data
• No information captured on delays prior to
  beginning of loading process
• Limited information on fax to plant office with
  basic parameters for each scheduled train

• Train Loading Process
• Need to ensure that silos are full, and quickly
  replenished, particularly for larger trains
• Endloader/dozer mechanical issues and
  availability
• Hydraulic system leaks
• Under-/over-loading of cars
• Inability for loadout operators to automatically
  adjust some silo feeders and see/hear all alarms

• General Issues
• Lack of proactive loadout inspection process
• More training for foremen and loadout operators
• Difficult external/internal communication process
  on Sundays
• Software problems (e.g. duplicate cars, edits, no
  reads) slows down train close-out process
• Need for customer information at loadout office
  to address potential questions

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Each of these issues has been addressed, with
examples shown below.
Peabody Issues and Results

• Issue
• Under/over-loading of cars
• Endloader/dozer mechanical issues and
  availability
• Hydraulic system leaks
• Lack of proactive loadout inspection process
• Loading delays

• Results Since Project Implementation
• Trains have been loaded to 99 of capacity
• This has resulted in increased tonnage and
  revenue for Peabody and the railroad
• Mobile equipment availability has been almost
  100
• Hydraulics inspections are conducted on a monthly
  basis
• Leaks have been significantly reduced
• Multiple conveyor inspections are conducted on a
  monthly basis
• Loadout equipment availability has been 98.4,
• Loading delays have been reduced from 43
  minutes/train in July 2004 to 18 minutes/train in
  July 2005

Based on first three weeks of the month
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The project team identified six internal measures
with performance targets, as well as a scoring
system, to track weekly performance.
Peabody Issues and Results

• Internal Measure
• Number of tons
• Tons per hour
• Delays in minutes per train
• Percent of loading capacity e.g. for loading of
  rail equipment
• Equipment availability in
• Loadout
• Mobile equipment
• Completion of belt and hydraulics inspections

• Score (100 Points)
• 10 points
• 18 points
• 18 points
• 18 points
• 12 points
• 6 points
• 18 points

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Contents

• Introduction
• Background Information on Wells Rail Loadout
• Peabody Issues and Strategies
• Railroad Issues and Results
• Next Steps

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Railroad Issues and Results
The project team identified railroad-related
issues that were impacting performance at the
Wells loadout.
Potential Issues to be Addressed by Railroad

• Train Scheduling
• Accuracy of train forecasts
• Number of trains
• Train sizes
• Train Arrival
• Consistency of daily train arrivals and spacing
  to meet tonnage requirements
• Number of bad cars (including repeats)
• Mechanical issues/material in cars/doors open
• AEI tags with no reads and bad data
• Number of loadable empty cars that need to be
  returned due to excessive number of cars delivered

• Train Loading
• Time required to change cuts
• Time required for other loading delays e.g.
  meals, coal spillage, recrews, other
• Availability of accurately functioning
  pacesetters in each locomotive to regulate train
  timing/speed
• Train Departure
• Availability of information for time that train
  is pulled
• Overall Process Improvement Issues
• Notification of train departures from Danville
  and expected ETA at Wells

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The team also identified 13 measures with
performance targets to track railroad
performance, as well as a scoring system to track
monthly trends.
Railroad Issues and Results

• Railroad Measure
• Fulfillment of Wells tonnage requirement
• Number of trains actual versus forecast
• Number of trains that loaded below minimum
• Average hours between trains arrival to arrival
• Average time changing cuts excludes lunch
• Average time from train arrival until beginning
  of loading
• Average time for total railroad delays per train
  includes lunch
• Number of bad cars mechanical/equipment
  problems
• Number of repeat bad cars -- mechanical/equipment
  problems
• Number of cars with no reads or bad data
• Number of repeat cars with no reads or bad
  data
• Number of locomotives with no pacesetter or
  non-functioning pacesetter
• Number of trains for which railroad did not
  provide notification on train arrival

• Score (100 Points)
• 15 points
• 15 points
• 9 points
• 8 points
• 8 points
• 8 points
• 8 points
• 3 points
• 6 points
• 3 points
• 6 points
• 6 points
• 5 points

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The railroad has made improvements in a number of
areas.
Railroad Issues and Results
Percent of Trains Loaded Below Minimum
Tonnage30 Decline from Q1 to Q4 (Since
Implementation)
Number of Trains With No Notification of Arrival
Time63 Decline from Q1 to Q4
May be impactedby curfew changes.
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The train arrival and loading processes have
improved.
Railroad Issues and Results
Average Minutes from Train Arrival to
Loading23 Decline from Q1 to Q4 (Since
Implementation)
Average Railroad-Related Delays Per Train
(Minutes)47 Decline from Q1 to Q4
May be impactedby curfew changes.
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The number of cars with problems has
significantly declined.
Railroad Issues and Results
Number of Cars With No Reads or Bad Data on
AEI Tags80 Total Decline from Q1 to Q4 (52
Decline for Repeats)
Total
Repeat
Number of Cars with Mechanical or Equipment
Problems36 Total Decline from Q1 to Q4 (Repeats
Remain Very Low)
Shipments changed to eliminate private RR cars
which had most of the defects at the end of 1Q05
Total
Repeat
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Railroad tonnage is still not meeting
expectations as shown.
Railroad Issues and Results
Number of Trains Per Month Versus Goal41
Decline from Q1 to Q4 (Since Implementation)
Maybe impacted by curfew changes in the fourth
quarter
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Many of the objectives for working with the
railroad have been achieved, but some are still a
work in progress.
Railroad Issues and Results
Project Objectives for Joint Rail Loadout Effort
Implementation Status

• Utilize fact-based approach
• Implement railroad performance measures
• Provide clear performance expectations and goals
• Establish methodology for tracking performance
  trends on a regular basis
• Improve railroad performance
• Meet tonnage needs at Wells
• Identify and solve problems Get them off the
  table

Completed

Work InProgress
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Contents

• Introduction
• Background Information on Wells Rail Loadout
• Peabody Issues and Strategies
• Railroad Issues and Results
• Next Steps

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Next Steps at Wells
Next Steps

• Continue to coordinate with the railroad on
  opportunities to improve rail and loadout
  performance
• Review measurement and scoring system for
  potential changes
• Wells
• Railroad
• Evaluate the implementation of additional loadout
  improvement projects at other eastern preparation
  plant locations

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Next Steps at North Antelope Rochelle Mine
Next Steps

• The next rail loadout project is currently
  underway at Peabodys North Antelope Rochelle
  mine in the Powder River Basin
• This is a joint project between Peabody, BNSF,
  Union Pacific, and Rail Link (third party
  operator of the loadout train operations)
• BNSF, Union Pacific and Rail Link are strong
  supporters of the effort and have been
  significantly involved since the beginning of the
  project
• Numerous process improvement opportunities are
  currently being discussed which offer significant
  benefits to the mine and the railroads

Expected Mine Benefits
Expected Railroad Benefits

• Increase rail loadout capacity and tons
• Improve rail loadout procedures, practices and
  processes
• Reduce time to load trains
• Develop internal and external performance
  measures to track performance
• Improve communication and teamwork

• Increase traffic
• Enhance train operations
• Reduce cycle times
• Improve resource utilization
• Crews
• Equipment
• Increase coordination/communication with mines
  and loadout operators