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Miners need to embrace the digital revolution
1 March 2017: Mining companies must embed digital thinking into the heart of their business strategy and practices in order to completely transform the way decisions are made across the enterprise, according to a new paper from Deloitte, “The digital revolution – Mining starts to reinvent the future”.
Digital disruption has been changing businesses and in some cases completely altering the entire structure of an industry. This year, digital technology is now set to significantly impact mining,” says Steven Walsh, Deloitte’s National Consulting Lead for Energy & Resources.
“For miners, cost and productivity pressure means that in many cases, the easily attainable savings have gone. Resources companies in Australia and globally are seeing a return to profit and while this is undoubtedly a good news story, miners need to ensure they focus on the next wave of competitive advantages through digital technology.
“Digital application in Mining is maturing rapidly and becoming reliable and affordable. It is no longer only the domain of those who can afford Research and Development - it will soon be expected of every mining organisation. The potential for digital capabilities to create value by reducing waste is massive. For example, eliminating waste by enhancing decision-making and removing design waste by using digital technologies in the design of new assets.
“The digital revolution also represents a terrific opportunity to forge much closer relationships with stakeholders, facilitate knowledge sharing and training, drive new revenue streams, provide access to new markets, and make day-to-day operations safer for employees,” he says.
Deloitte Consulting Partner, Paul Klein adds: “The question for business leaders is how to turn potential benefits into reality. They need to understand and drive this change, using data insights to support effective and rapid decision-making, and leading a more distributed yet connected workforce.
“As the location of work becomes more flexible, this enables a more diverse workforce to become involved in what traditionally would have been considered core mining, requiring new skills and new practices for effective leadership and management.”
The paper envisages the future state digital mining organisation in terms of three key domains:
- Core operational processes – in the future mining value chain, core operational processes will be highly automated and a wide range of digital capabilities will be deployed including autonomous vehicles, drones, wearable technologies, Internet of Things (IoT) technology for real-time data capture, and a digital model of the physical environment, or “digital twin”.
- The “digital mine nerve centre” – the information layer or “nerve centre” of a digital mine will bring together data across the mining value chain in multiple time-horizons to improve planning, control, and decision-making. Real-time data will drive rapid and focused operational improvements, enable ore-body models, mine plans, and financial models to be updated more frequently, and shorten and improve planning cycles.
- Support processes – a lean set of corporate and support processes will be enabled by re-imagined ERP systems on lower-cost cloud platforms, robotic process automation (RPA) to automate repetitive human activities, and artificial intelligence (AI) for knowledge workers. Convergence of the historically separate domains of information and operational technology (IT and OT), and integrated communications networks, will support the mobile workforce across all platforms.
Klein continues: “This vision of the future is not based on theoretical concepts or unproven technologies. It is based on capabilities that exist now and are already being applied within energy and resources businesses, but no organisation is integrating it all yet.”
“For implementation, agility will be key, but it must be combined with ruthless discipline in driving and demanding value from digital initiatives. This means strategies that fail are quickly shelved, while strategies that deliver can be rolled out in phases.”
Walsh concludes: “If mining organisations are not ready for a full enterprise-wide digital strategy and transformation, they can start by automating specific processes or digitising a pilot set of assets. It’s important to deliver solutions focused on business value as quickly as possible, “fail fast, fail cheap”, and learn. It’s time to get on with it.”