FMG, resources & remote logistics

Mining for continuous improvement

The customer

Fortescue Metals Group (FMG) was founded in 2003. Today, FMG is the world’s fourth largest iron ore producer and produces 170 million tonnes of iron ore per annum. Fortescue owns and operates integrated operations spanning three mine sites in the Pilbara, the five berth Herb Elliott Port in Port Hedland and the fastest, heavy haul railway in the world.

Our services

Linfox partnered with FMG in 2010 and provides a broad range of transport and warehousing solutions. Linfox provides airfreight transport, linehaul and pick-up services to deliver general freight, dangerous goods, and oversized and heavy items, including major machinery and engines. Linfox provides storage and off-site receipting services for FMG at Linfox’s Hazelmere resources supersite in Perth, undertaking kitting and staging services to deliver items directly to end users. Storage solutions are also provided for FMG at Linfox’s Bullsbrook storage facility.

The challenge

In 2014, Linfox conducted a continuous improvement (CI) project to reduce inbound supply chain costs, and speed up the average delivery time for inbound materials to the mine sites.

The current state at the time was 100+ hours at offsite receipting (OSR):

  • 50 hours travel time + 48 hours at the mine site to process to end user
  • Total 210+ hours to process goods to end user at mine site.

Spare parts were exposed to the elements and often found unfit for use, causing inventory write-offs and costly site stoppages.

The solution

To support and strengthen FMG’s supply chain, Linfox introduced a range of continuous improvement initiatives to enhance efficiency and profitability in FMG’s business and drive value for both parties. A lean organisation structure was implemented to meet FMG’s priorities around quality, accuracy and availability requirements. It is structured to enable growth at an incrementally lower cost.

A range of initiatives were introduced:

  1. Consolidating deliveries into a single inbound processing centre.
  2. Increasing trailer utilisation through measuring the deadweight and cubic metres of the inventory prior to shipment to mine sites at the offsite receipting facility. Increased use of mezzanine deck trailers suitable for the resources industry inventory items.
  3. Setting up a regional pick-up and delivery (PUD) hub in Newman to service all mine sites in the region and improve distribution productivity.
  4. Monitoring the offsite receipting live productivity daily and weekly via performance dashboard.
  5. Establishing a process flow chart and improving standard operating procedures (SOPs) of warehouse distributions and offsite receipting
  6. Increasing undercover storage of vital spare parts and an inventory inspection regime to ensure items are fit-for-purpose when required.

The results

The measures put in place improved the timeframe from suppliers delivering to the offsite receipting facility to the mine sites to just 80 hours. A focus on trailer optimisation reduced the number of trailers in use by 30 units per month. Inventory and associated costs were reduced by consolidating spare parts and undertaking a critical needs analysis.

Hazelmere storage solution

Linfox’s Hazelmere facility was purpose-built in 2012 to service FMG and other mining customers. The 80,000-square metre site includes a state-of-the-art master control centre that allows FMG enhanced visibility of its operations.

From the client

“FMG and Linfox share an entrepreneurial spirt that has enabled us to work together to implement new processes and push ourselves to achieve excellence. An open working relationship is key to ensuring that we work as one team with determination and focus to reach our goals.”

Michael Hogg,
General Manager Resources and Industrial West