Mining companies and other end-users of plant and equipment are constantly looking at ways of reducing their costs while maintaining the productivity and integrity of their assets – and frequently look to supply chain cost cutting in doing so.
However, there are potential work health and safety (WHS) risks in solely focusing on cost (eg using non-genuine parts) at the expense of asset integrity and personal safety – and owners, managers and operators of plant and equipment fleets need to be fully aware of these.
Australia’s harmonised WHS laws require companies with management or control of plant and equipment to ensure, so far as is reasonably practicable, that plant is without risks to the health and safety of any person.
This requires companies to undertake a risk management approach to asset integrity including a cost benefit analysis that compares risks against costs (the so-called ALARP or "as low as reasonably practicable" principle).
In addition, company directors and senior managers must exercise due diligence to ensure asset and people safety.
Directors and senior managers in particular face individual criminal prosecution should cost cutting result in safety incidents. A risk management approach to asset integrity is therefore of key importance in a market downturn.
The process for achieving asset integrity and personal safety must commence with sound procurement practices, underpinned by strategic engineering decision-making.
Many safety incidents in Australia and overseas have resulted from deficiencies in ensuring the integrity of assets, or poor or inadequate systems to ensure the integrity of assets.
Investigations into major incidents have been critical of decisions which appear to be based solely on cost cutting resulting in equipment failure – either from deteriorating plant or poor selection of parts and components.
Optimising productivity and minimising unnecessary costs while at the same time achieving compliance with health and safety standards requires careful investment in processes and procedures.
Proper maintenance planning will maintain – or even increase – productivity while also ensuring plant and equipment is free from risks to health and safety.
Maintaining or even extending the life cycle of plant and equipment through careful procurement of parts and components is just one example of the delicate balancing act between cost reduction and safety – and highlights the need for a risk-based approach to asset integrity.
For example, the design and expected behaviour of wear parts in a particular piece of plant or equipment, which may be also dependent on the application or operating conditions, requires access to detailed information about the part’s integrity and likely performance across a range of operating conditions and applications.
Extending the life of wear parts is another important element of asset management, and information about the design, maintenance and likely wear time is critical in a risk-based approach to maintenance planning.
In the absence of accurate information from suppliers, miners must conduct their own risk assessments of wear parts in order to plan maintenance, and generally maintain asset integrity and personal safety.
Original equipment manufacturers (OEMs) have a legal duty to ensure that the plant and equipment and associated spare parts supplied by them are designed and manufactured to be without risks to health and safety.
Reliance on the technical information provided by OEMs is an efficient way of reducing the need for the individual risk assessments that would be necessary in the case of using non-genuine or untested non-OEM spare parts when planning maintenance.
Components with higher reliability, whether they be OEM or non-OEM, are preferable since reliability is closely linked to asset integrity and safety.
This is especially the case when a particular spare part is critical to the safety and efficient operation of a piece of plant or equipment.
In summary, ensuring you receive the highest quality information and assistance from your suppliers is the best way to ensure effective maintenance planning based on sound engineering decisions, and helping to mitigate against asset failure and potential safety incidents.
Issues to consider
When making any alterations to original plant and equipment, including using non-OEM parts, consider the following issues:
1. Maintenance tolerances
2. Engineering design
3. Preserving warranty
4. Machine performance and productivity
Plant and equipment owners, end-users, managers and operators must always take care to ensure compliance with WHS Regulations and Safe Work Australia’s Code of Practice for "Managing Risks of Plant in the Workplace".
WHS regulations mandate that maintenance of plant be carried out in accordance with manufacturer's recommendations. In turn the code emphasises the importance of inspection and maintenance of plant and equipment – including identifying and understanding wear parts’ fatigue rates.
*Karl Luke is Partner, Employment & Safety at Thomsons Lawyers.