Question 1. Consider AMC, an Australian mining company with the following featur
ID: 395776 • Letter: Q
Question
Question 1.
Consider AMC, an Australian mining company with the following features:
1. 2.
The company has its Head Office in Melbourne and has three divisions: Iron Ore; Gold; and Coal. Head Office provides the Administration, Strategic
Planning and Marking. Each Division has a manager that reports to the CEO.
The Iron Ore division has mines at four WA sites S1, S2, S3, and S4 , two port
facilities, A and B and operates as follows:
(i) Sites S1 and S4 each have two operating pits whilst sites S2 and S3 each have four operating pits. Each site has one waste dump.
(ii) Ore from sites S1 and S3 is transported via road to a crusher C1. Crushed ore is stored in an ore stockpile area located near the crusher. The stockpile consists of 10 storage piles, each dedicated to a particular quality of ore.
(iii) Ore from sites S2 and S4 is transported via road to a crusher C2. Crushed ore is stored in an ore stockpile are located near the crusher. The stockpile consists of 6 storage piles, each dedicated to a particular grade of ore.
(iv) Ore from the stockpiles is transported by rail to one of two product assembly areas, one at each of its ports. Here ore is blended into a range of six products P1, P2, ..., P6.
(v) The products are shipped from Port A to three overseas locations: China, Korea and Japan; and from Port B to India and Europe.
The Gold Division has mines at two sites S5, in WA and S6 in Queensland each operating three pits and operates as follows:
(i) Each site has a primary crusher, an ore stockpile and a waste dump.
(ii) The crushed ore from site S5, (site S6) is transported by rail to a processing Plant A (Plant B) that processes the ore and produces gold bars which are
shipped by air to Head Office.
The Coal Division has two mine sites S7, in Victoria and S8 in NSW and operates as follows:
(i) Each site has crusher, an ore stockpile and a waste dump.
(ii) The crushed ore from Site 7 is transported by rail to a Distribution Centre, DC1 which supplies the Australian and New Zealand markets and to a Port
Facility, DC2 that ships to the overseas markets of India, China and Japan.
3.
4.
Cost, production, capacity and demand data are all known.
(a) Construct a supply chain/logistics network that represents the above operation. Clearly label your network.
(b) Briefly discuss three decisions arising in this application for each of the following categories. You must restrict your discussion to the actual application.
(i) Strategic. (ii) Tactical.
(iii) Operational.
(c) Suppose the company plans a significant increase in production of iron ore over the next two decades due to increased demand from India and China. What logistics issues do you think are crucial to the planning of this expansion?
(d) The company is looking at the possibility of adding a fourth division, Mineral Sands to its operations. In particular it is looking at a possible two mine sites in WA, one north of Perth and the other south of Perth. The market analysis shows a solid demand for the potential products. What logistics issues should the company consider in its planning and decision making?
Explanation / Answer
Gold Mining :- Logistic Flow chart
S5 ----> CRUSHER ----> STOCKPILES ----->(By RAIL) PLANT "A" -------> (GOLDBARS) ---> (bY AIR) l HEAD OFFICE
------> WASTE DUMP
S6 -> CRUSHER ----> STOCKPILES ----->(By RAIL) PLANT "A" -------> (GOLDBARS) ---> (bY AIR) l HEAD OFFICE
l------> WASTE DUMP
COAL DIVISION : FLOW CHART.
S7 -> CRUSHER ----> STOCKPILES ----->(By RAIL) DC-1 ---->PORT ---> PORT / AUSTRALIA l NEW ZEALAND
-l-----> WASTE DUMP
S8 -> CRUSHER ---> STOCKPILES ----->(By RAIL) DC-1 ---->PORT ---> INDIA / JAPAN l CHINA
-l-----> WASTE DUMP
(B) i. STRATEGIC : The company has a well planned logictics sites in alignment with the minign sites saving the company cost and time taken for transportation. The Iron ore is transported from the mining sites to the crushing sites by Road saving time.
ii). A Tactical Decision means the company makes decisions that will contribute to the longevity, profitability, and continued improvement of all areas of operation. With reference to the logictic flow chart and the decesion of the company to operate the crushers and stock piles / waste dumps, etc.. the decesion of the company is in line the objectives of the company.
iii) OPERATIONAL :- Planning the process flow separately for all the three products Differently, the company has laid special emphasis on the operation flow of the mining to market process. Its approach has been different for all the three to make them cost and time effective for the company.
(C). for the growing demand if the overseas market of India and China, all the dependency cannot be one site. All the sites need to share the volumes over a period of time. The crusher C2 will have to expand its stock piles to, maybe 10 stock piles.
Sites S1 and S3 currently with 10 stock piles at C1 are supplying to China, Japan & Korea. There is a need to examine, asto can there be any possibility of any expansion in these sites along with the crusher & stock piles.
We need to analyse what grade / quality of Iron ore would be required in these two markets. The focus then can be laid on to increase the production of those qualities of Iron to meet the demand.
Th expansion plan also needs to examine the opportunity of new source of mining considering the increase in the demand for this period.
(D). MINERAL SANDS:- The company must approach the new business venture in the same manner as it has done with current line of business. Mineral sands would require a strong transportation and storage piles network, so the company must consider both the aspects in the operational planning for the business. The existing port facilities can be used to the advantage of the company for the overseas business. The company has to also consider the potential of the local australian markets. In the local markets road transportation could also be utilised more effectively that will save on storage and time.
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