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Newmont’s Supply Warehouse Brings Efficiency to Its Mines

Published: June 13, 2017 |

[Click image to enlarge]

Warehouse Manager Bilbo Bessert talks about the system used to organize items in the warehouse.

Warehouse Manager Bilbo Bessert talks about the system used to organize items in the warehouse.
[Click image to enlarge]

Everything from toilet paper to oil filters finds its way to various mines across Nevada thanks to Newmont Mining Corp’s central warehouse, and the operation has plans to make the process even more efficient.

Newmont’s warehouse opened in June 2008 and has been about efficiency from the beginning, said Steven Young, the warehouse supervisor.

The original purpose was to consolidate parts and to cut costs on the amount of inventory the region holds, said Warehouse Manager Bilbo Bessert.

“So instead of having a certain part at every warehouse across the state, we could consolidate those, reduce that number and have less inventory value on hand,” he said.

The central warehouse also eliminated some safety concerns since it limited the number of suppliers going on the mine site, Bessert said.

“It’s a lot more efficient from a logistics point of view,” Supply Chain Director Simon Blamires said. “You’ve got everything delivered to the center and then we’re delivering out to the mine sites, rather than having to have all those individual deliveries.”

When the warehouse began operations it was run by Cat Logistics, Bessert said. Caterpillar sold the logistics portion of its business to Neovia in 2012. Newmont discussed operating the warehouse with its own employees and took over the facility Nov. 17, 2014.

Young began working in the warehouse in May 2008 and continued through all the different operating companies. Bessert said when Newmont took over the operation the headcount was reduced from 63 to 58.

“There were some folks who left on their own and then we interviewed everybody else and kept the ones who were qualified,” he said.

Young said there are 11 delivery locations that receive totes from the warehouse.

The delivery locations put an order in with the warehouse when they need supplies or parts, Bessert said.

“We’ll prioritize it, and get it on the schedule for the outbound crew,” he said.

Blamires started at the warehouse in June 2016. He has worked in mining procurement all his working life. He worked for Newmont in Africa for 10 years in a similar position. He left Newmont for about a year and was persuaded to come back and work in Elko.

“It’s been fun,” he said. “The focus, not just within supply chain but within the business, is to try and get costs down. Obviously we have a role to play in that.”

Just like Newmont’s mines, the warehouse runs 365 days a year and 24 hours a day.

The orders are tracked through a computer program and the warehouse has planners, Bessert said.

“That planner’s responsibility is to take the orders as they come in, and print what we call the ‘pick tickets,’” he said. “The goal is to send parts out to the sites three days in advance of what the end users tell us the required by date is.”

The planner puts the packets together and hands that to the outbound supervisor and the outbound team picks the parts off the shelves. Another person validates the parts are correct and then they are loaded in the totes and put on trucks to be shipped out, Bessert said.

Outbound supervisor Amy Mitropoulos said the items are packed based on shape and final destination.

“Leeville can’t take large totes because it has to go down the shaft,” she said.

The warehouse has five crews and four of those work a rotating shift. The fifth crew is a straight day shift. The crews consist of 40 warehouse technicians, five supervisors and two warehouse planners.

OPTIMIZING THE WAREHOUSE

The facility has 180,000 square feet under the roof and another 60,000 square feet in the yard.

“In terms of Newmont, this is probably the biggest single warehouse that we’ve got anywhere in the world,” Blamires said.

Because of the size of the facility, Newmont put a priority on moving items efficiently.

“One of the biggest things that we started when we first took over, and it’s a continuous improvement thing, is actually getting the fast moving items closer to the outbound areas,” Bessert said. “In the past some of the outfits that were running the place had fast moving parts strung out over 180,000 square feet of building.”

Inventory control helped identify the parts that moved quickly on a routine basis. The warehouse staff relocated those items and reconfigured everything inside the building and in the yard so fast-moving items would be closer to the outbound areas, Bessert said. The fast moving parts ranged from ballpoint pens to the filter kits for heavy equipment.

The next step in improving the facility will include radio frequency identification or RFI to automate the system. RFI is similar to a barcode used in retail.

“We’ll become more like Walmart than we are a traditional mining warehouse,” Blamires said.

He said the target date for radio frequency identification is the fourth quarter of this year.

“It speeds up the process and eliminates errors,” Bessert said.

“The margin of human error goes way down,” Young said.

Bessert said the process to follow a part from the time it arrives at the warehouse until it reaches the end user is complicated.

“Currently there’s a lot of manual keystroke entries to make that happen,” he said.

The RFI will take away a lot of mistakes that can be made.

“It’s a bit more than a barcode, because you can actually use it to determine the location of the particular part,” Blamires said.

The new system won’t decrease the amount of people in the warehouse, but rather streamline the work being done in the facility. Bessert said it will bring the warehouse up to speed with technology.

On any given day the warehouse receives items from 40 different vendors, Young said. UPS on average brings 100 to 150 parcels a day, and UPS freight brings about 15 bins, he said.

“Joe, our UPS freight driver, I think a lot of people think he’s a Newmont employee because he is here every day,” Young said.

Not all the items in the warehouse are brought from a great distance since Newmont shares the building with Cashman Equipment. Young said 33 percent of the inbound volume is Cashman materials, so transportation costs are very minimal.

“We just have a big door they bring items through,” Young said.

Another cost saving measure was built into the building — the warehouse has motion sensors connected to the lights. This allows the lights to turn on only when a person is moving in the area and then turn off once the individual has left. Bessert said Newmont is looking at switching to LED lights for more energy savings.

However, many of those lights stay on all day because the crews are always moving and working to put packages together to be taken to the mines.

“We’re trying to get everything on the trucks safely and on time,” Mitropoulos said.

-  By:  Marianne McKown, Elko Daily Free Press

 

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