Going digital: why innovation is critical for the mining industry
Just like any struggling industry, innovation continues to be a critical element to the mining sector’s recovery and future success. Here’s why:
A recent IDC Energy Insights research survey of 190 miners globally reveals the top strategic objectives of mining operations in 2015 are: safety improvements, automation of assets, mine operations management and control.
From these objectives, the IDC research shows that 69 percent of mining companies globally are looking at remote operations and monitoring centers, 56 percent at new mine methods, 29 percent at robotics and 27 percent at unmanned drones. In fact, 83 percent of global mining companies say their technology budgets will increase or stay the same in 2015.
Whole new world
As prices across commodities continues to fall, impacting everything from cost, asset and debt settings mining companies need to have, the industry is in the midst of a technology transformation. Companies are aligning their focus on new technologies in order to efficiently manage a mine through integrated technologies such as robotics, Internet of Things (IoT), sensors and mobility.
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According to IDC, these technologies can assist companies with their top priority--saving costs. “Mining companies are under more pressure than ever to get more materials from the ground at the lowest possible cost and the highest possible grade. Hence, mining companies are looking for new ways of doing things as profit maximization is the top business concern of mining companies as they work to change the cost and efficiency settings of their operations. This is an environment of change and within that one where the role of technology and its importance to the core activity of mining is becoming a critical enabler for the mining operations – that consistently meet leading financial and production performance metrics.”
The IDC perspective on digital transformation consist of five parts: experience transformation, work source transformation, operating model transformation, information transformation and leadership transformation.
According to IDC, the three of most critical importance for mining companies are Operation Model Transformation, Information Transformation and Work Source Transformation.
The Operating Model Transformation “is a critical focus of investment we are seeing across the mining sector now. Asset management – particularly employing more predictive maintenance approaches to minimize equipment outages and its impact on production performance. Dynamic planning and scheduling is another area that we are expecting to see a lot of movement in the way operating model transformation takes place in mining,” said the report.
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“Second is Information Transformation – to enable utilization of data across operations to create greater value and ultimately to treat data as an asset. Third is Work Source Transformation – not just about having the right skills in place to support the transformation but also engaging and connecting with external stakeholders. This is a process that is starting for many mining companies as we see the importance of innovation and collaboration across senior leadership, IT and operational technology as mining companies seek more effective ways to utilize knowledge across the organization.”
The IDC report states mining companies that have successfully transformed their digital capabilities showcase the following characteristics, and outlines their recommendations associated with each area:
• A willingness to openly experiment with new technology. Work across your organization to create research insights with internal and external stakeholders. Look externally, collect examples and look to other industries for examples of successful approaches across process innovation and technology initiatives.
• A willingness to change the norms of their business model. Data-led insights and automation will only deliver value if there is a culture of change. Be willing to change the established ways of doing things, change work practices and approaches.
• A willingness to make bold bets when the time is right. Mining companies have significant legacy data investments in place already. The investments required to create visibility and control are often challenging and have an associated level of risk. To achieve a significant improvement in productivity, there will ultimately need to be a willingness to take on measured risk. Start with short sharp examples to demonstrate value, and as you work towards larger investments, demonstrate value to stakeholders at each stage. Remember the critical importance of marketing internally to drive support across all stakeholder groups.