IDC’s Emilie Ditton recently spoke with Luis Canepari, VP Technology at Goldcorp on behalf of SAP. Below she outlines their digital transformation strategy and progress. Click here to download the document directly
Leapfrogging the Mining Sector through Digital
Goldcorp is a large gold mining company headquartered in Vancouver, Canada. The company engages in activities across the gold production value chain from exploration, extraction, processing and reclamation. It has six mines, four development projects and three joint ventures in Canada, Central and South America. In 2017 Goldcorp expects to produce 2.5 million ounces of gold. (or stated alternatively: Goldcorp’s production guidance for 2017 is 2.5 million ounces of gold)The future of mining for Goldcorp is about being sustainable, accountable and efficient – enabled by technology choices and strategy. Goldcorp’s strategy is to perform amongst the best gold producers in the world.
The following questions were posed by Emilie Ditton to Luis Canepari, Vice-President Technology at Goldcorp, on behalf of SAP.
- How would you describe Goldcorp’s vision for the future of mining?
- We believe the mining industry has been slow to adopt technology, slow to innovate, creating an opportunity for Goldcorp to leapfrog. Core to our future mining technology strategy and roadmap, is the intent to create the technology foundation that will enable us to leapfrog – in terms of maximizing production, increasing efficiency, reducing waste, increasing safety, and contributing positively to the stakeholders engaged in our business. As a business, Goldcorp thinks about its future mining operations in terms of the net asset value growth opportunity that will result from technology applications and data insights across all parts of our operations. We know that this will mean reshaping the business and optimising all aspects of operations, it will touch everything that we do.
The environment that we are moving to is one that is fully autonomous, electrified, optimized for a smaller environmental footprint that uses less fresh water and energy, and is 100% connected from the beginning. We are making investments now that are moving towards this future. Our future has a heavy focus on sustainability – in terms of power and water consumption, on minimizing waste and on ensuring the communities near our operations continue to see both social and economic benefits as a result of our operations. The operating environment will focus on reducing the movement of materials, in turn reducing the requirement to consume energy and other resources. We are expecting a far greater level of automation than what we see today. Artificial intelligence will be a big component, enabling control rooms to be heavily automated, managing environments where the equipment and processes are automated, such as condition based monitoring that triggers actions directly by the machines, including more predictive and automated maintenance processes, right to scheduling work assignments and our supply chain. We expect to see more of a sharing economy incorporated in mine ecosystems.
- What are the steps that Goldcorp has taken to put the right environment in place?
We started our journey at Goldcorp in 2013. The focus has been around putting the right technology platform in place, and to establish the organizational structure around it to enable to business to operate using consistent approaches and processes, applications and technologies across the different mine sites. One of the key elements to success and our capacity to quickly drive outcomes from these investments is C-level support. Since 2013, the Goldcorp executive and board has been committing resources to create a digital platform for the business. There are several elements to what we have been doing at Goldcorp:
- We invested in a single SAP platform that is the foundational enterprise platform for the organization. The capabilities in place with SAP beyond the core ERP platform include, SAP Fiori mobile apps, SAP Success Factors, SAP Ariba, SAP Fieldglass, SAP Multi Resource Scheduling, SAP EHS, S/4HANA Central Finance, SAP HANA Enterprise Cloud, SAP Treasury and Risk Management.
- A single connectivity backbone has been put in place in our underground mines and pits with WiFi to the face in the mines. This is through the partnership we have had with Cisco for many years.
- We have a cloud first strategy when it is the technically feasible and cost-efficient choice. Cloud products enable faster and more agile implementation, and could services simplify our architecture by reducing the need for complex infrastructure and datacenters.
- We have a centralized IT department whose sole purpose it is to provide support to the mines, ensure the right partnerships are brokered and projects are delivered as planned. My team are relationship managers serving their customers – the mine managers and their teams.
- We have placed a focus on cloud including SAP Enterprise cloud, which means the ability to dynamically support business change with speed and flexibility.
- By about 2015, we determined that we were not effectively harvesting data and properly analyzing it – in particular in relation to improving maintenance costs and outcomes, and yield in the mine, but also in the area of exploration. This meant that we were leaving a lot of opportunities in the ground and we worked swiftly to get the right information to the right people to enable faster, better decisions with key insights on value-drivers for the business.
- We have focused on strategic partnerships, establishing long term partnerships with SAP, Microsoft, IBM and Cisco. These partnerships are about ensuring long term skin in the game for both Goldcorp and the vendors that we are working with.
- How important has SAP been as a foundational technology partner? What are benefits of SAP?
SAP is the enterprise technology and business platform that the operations run on. It is a critical element in the technology foundation that Goldcorp has worked to put in place to enable us to deliver the type of digital operation that we want to be. The software vendor has been part of our technology stack for a long time, and has been an active participant since the beginning of the transformation that we are now on. Around five years ago we decided to invest in the backbone with Cisco and enterprise platform with SAP for the business. The breadth of SAP’s capabilities and applications are critical part of why we chose them to take this role in our transformation. The ability to bring those applications together in a single, integrated platform that has Mining specific components is really important. With SAP we have reinvented the ERP platform across all of our sites.
So, what does – reinventing our SAP platform – mean? We implemented a Global SAP template on HANA for all our sites. Our one system approach, significantly simplified our ERP landscape and optimized the support cost. The capability to have this single enterprise platform that spans across all our business units in multiple countries and over diverse types of mining operations (underground and open-pit) is a critical element of why we have chosen SAP as a key partner.
As part of our strategic vendor strategy, Goldcorp is continuing to work with SAP to create ongoing opportunities to extend the value and the reach of the platform for the business.
- What’s next for Goldcorp?
We want to create opportunities to leapfrog the industry, and more importantly, ourselves. We think, as a leading player in the industry, that Goldcorp must take the lead creating more sustainable, efficient and responsible mining operations that deliver value for all of our many stakeholders, whether those are our investors or members of the communities near our mines. We have built a significant platform from which we can scale and deliver value to our business, so we want to take advantage of that foundation by delivering an industry leading mining operation.
Disrupting with technology is a critical part of this. We have six key technology priorities areas: environmental re-engineering for reduced fresh water consumption, big data and machine learning, blockchain, autonomous mining operations that make our mines safer and more efficient, connected miners and designing greener next generation mines that consume less energy and reduce our carbon footprint. These technologies come together around key processes – maintenance, asset management, safety, long-term reclamation and closure obligations etc that will deliver the net asset value that we are seeking to grow.
We also know that the technology is only part of the story; having the right processes in place to ensure we make the right decisions on an ongoing basis is critical. This is true for how our IT teams operate, but also the decision-making governance processes in place to evaluate opportunities as we set out priorities. So, we are focusing on our innovation process and ecosystems. We are ensuring that we have the right digital governance and approval process in place. Ensuring that stakeholders across Goldcorp’s investment committee, the digital strategy team and the digital transformation team have a stake in the decision-making to ensure that we deliver a balanced portfolio of digital capabilities.
Innovation is not just about what you do internally, but also how you engage with external parties to support a dynamic ecosystem. We want to use our scale to support innovation and opportunities to find new ways of doing things and new opportunities for collaboration between established vendors, startups, academia and government. So, we have committed considerable investments particularly in Canada to be a catalyst for innovation. Disrupt Mining is a global mining technology challenge hosted by Goldcorp that saw153 submissions in early 2017 compete for the opportunity to gain access and funding for disruptive technologies in mining. In 2017, Goldcorp made US$2.5 million of seed funding available to create support for new technology startups.
Goldcorp will continue to build on its role as a leader in the industry playing a critical role to facilitate, accelerate and disrupt innovation in an ongoing cycle of change – both internally and externally.
Emilie Ditton is Associate Vice President for IDC Energy Insights and is the Head of IDC’s Worldwide Mining and Asia Pacific Energy practices. She has been leading IDC’s mining sector research for the last five years and her core research coverage focuses on the evolution of technology strategies of mining and energy companies as they respond to changing marketplaces, the requirement to create operational excellence, and changing customer expectations. Her research has a particular focus on the interplay among technology, people, and processes within the operations of mining and energy companies. She supports clients by looking at maturity, best practices, and technology ecosystem trends.