Digital transformation can do a lot to help the Mining industry, such as improving onsite operations and decision making. Design thinking can optimize those improvements — if properly utilized.
“The mining sector has embraced the introduction of new technologies, which have resulted in significant productivity benefits,” professional services firm EY stated in a recent mining update. “But there is the gap between the potential from Digital Transformation and the poor track record for successful implementations.”
Metals and mining corporation Vale has a compelling story of a successful implementation — that only took four weeks. The result was a completely new process, according to Vale’s IT innovation manager at SAP Leonardo Live in Chicago this month.
Management Assets Across a Global Supply Chain
The mining industry is on the upswing, enjoying growth in the U.S., Europe and China, according to EY. Vale has been growing too, investing more than $120 billion during the last decade, and expanding to 27 countries, according to Vale’s Helio Mosquim.
This growth brought a lot of challenges, such as managing new assets across the globe, according to Mosquim; intelligent maintenance would help the company increase up-time, boost productivity and cut costs. Supply chain was also a big concern for the Rio de Janeiro-based multinational, which produces iron ore, copper and more.
“Imagine producing ore in the middle of the Amazon, and transporting it all the way to the ports, and going through the distribution centers in Malaysia and Oman — and on to China,” Mosquim said. “Optimizing production, optimizing logistics and shipping … it’s a big challenge for us to optimize the whole chain.”
Saving Time by Automating Critical Tasks
Workforce effectiveness was another challenge for Vale, which has about 110,000 employees — about 22,000 of whom are SAP users, according to Mosquim. Inventory is about $1.6 billion of Vale’s $11 billion annual spend, so the company automated purchasing processes to make them more intelligent.
For example, maintenance workers used to ask an SAP user to create a purchase requisition before acquiring a new part for damaged equipment, according to Mosquim. This completely manual process often overlooked parts that were already available (perhaps the previous shift ordered the same thing), and finding the missing information required searching through multiple screens.
These steps often resulted in a lot of redundant work and wasted time.
“Between 25 to 40 percent of rejections of all the purchase requisitions [occurred] because [the part] was either available on contract or in inventory,” Mosquim said. “And the equipment was out there waiting for the part.”
A “Totally Different Approach” in Just Four Weeks
Vale only expected to enhance its legacy platform, as opposed to taking full advantage of SAP innovation services. But SAP helped Vale connect APIs directly to its system and use everything in the cloud — and implement it quickly.
“We set up a plan to innovate in four weeks,” Mosquim said. “And that was an amazing experience.”
Vale put its procurement team through an SAP Design Thinking session to sort major pain points. They had a draft prototype by week one; by the following week, they had feedback — and were making adjustments.
“The result was very effective, very impressive,” Mosquim said. “When we saw the totally different approach, we were very confident that it was going to be able to deliver.”
Find Your Key
“We had an opportunity to have a totally new process … we had other managers come in saying, ‘We would like to invest in this innovation,’” Mosquim said. “In the end, we got a little bit from each solution, and we put it in the cloud.”
Design thinking helped Vale digitally transform its supply chain, asset management, workforce effectiveness and more. Digital technologies — including Internet of Things and machine learning — could also help mining companies improve safety, optimize site-wide operating systems and more, according to a smart mining conference last week.
“You can only truly achieve a sustainable productivity improvement by adopting an integrated end-to-end business approach from market to mine,” as the EY mining update stated.
Design thinking could be your key to successfully implementation.
Follow Derek on Twitter: @DKlobucher
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