By Colin Beaney
Operational excellence in the mining industry is of critical importance because everyone operates in a similar way. The mining company that has complete end-to-end visibility of its natural resource extraction and marketing processes; that understands the importance of HR in asset management; and uses operational intelligence to inform its decisions will be the one to outperform its competitors.
How does enterprise software play an essential role in ensuring not just efficiency but excellence in mining operations?
For a mining organization, enterprise resource planning (ERP) and enterprise asset management (EAM) is crucial to standardize and streamline all core business processes. It is important mining companies are aware of the key areas, which can be enhanced by enterprise software support – from exploration, feasibility and construction to operation, maintenance, regulatory compliance, financial analysis and reporting.
Get Everyone on the Same Page
When integrated across the whole business, this essential enterprise software ensures that different parts of the organization are operating on the same set of data and can streamline, and even automate, the handoff of processes from one functional group to the next. So, if we take the installation of equipment at a new mine site, for instance, the software can trigger the scheduling of preventive maintenance and the purchase of required spares and repairs to sustain that equipment over its lifecycle.
Next, the preventive maintenance activities can signal to a human capital management module the hiring, labor-hour and skills requirements necessary to complete the work. Or alternatively, a decision from finance to wind down operations at a mine can signal to a maintenance department that they can slow down spares and repairs purchases.
This is why enterprise software must provide a single, unified way for an executive team to manage operations spanning multiple geographies in a rapidly changing market environment. Only then will they achieve operational excellence and successfully compete for both revenue and capital investment.
HR and Asset Management Interlinked
The single most expensive and critical business function in mining is the preventive and break-fix maintenance of equipment – above and below ground. Assets below ground are the most challenging. They are obviously harder to get to but mines tend to be located in remote locations, distant from supply chains.
This is where truly effective supply chain management for spares and repairs inventory is critical. But reliably completing planned maintenance work and minimizing downtime due to equipment failure is contingent not just on inventory, but personnel.
This means that ERP and EAM software for the mining sector is essential as it includes embedded human resources functionality to align work that must be done to sustain an asset with the right skills, certifications and labor requirements. This will enable an operation’s human resources team to recruit, train and retain personnel to meet these needs.
Without these asset management and human resource functionalities, a mining organization’s performance will suffer in a number of ways. Common problems could be a lack of maintenance technicians required to sustain the asset, or even cases where maintenance and repair work has been completed by unqualified personnel – leading to enterprise risk and regulatory compliance issues.
Mining Brings Challenging Work Conditions
These dynamics will affect any asset-intensive operation, but in mining they are compounded by the challenging work environment. Transport in the shaft might be available once or perhaps twice during a shift, limiting maintenance technicians to precise windows where work can be performed. If they get to the work site without the requisite tools or materials, it’s wasted time and money, and they will be unproductive until they can get back to a tool crib or parts storage area – which could be hours.
This means that software used in this setting needs to deliver tight integration between the mobile work order used by the technician and spares/repairs inventory. Inventory functionality may also be used to determine if certain tools or materials should be located closer to the site of consumption.
Shared Inventory Spreads the Costs
More advanced inventory logistics functionality may determine if certain long-lead time, high-cost parts can be part of a shared inventory across mine sites. A long lead time item like a spare conveyor drive may be located at one of several mining sites or could be in a central facility within reach of different mine sites. Either way, shared inventory will spread the money tied up in a high-dollar spares across multiple sites.
The right enterprise software will give each mine visibility of shared inventory, enabling one mine to pull from shared inventory and then trigger either a replenishment transaction, an internal depot repair process or both. That part or component is on hand and more rapidly available than if it were ordered from a supplier that may have to fabricate it to order and then ship it over long distances.
Strong Financials Required for Public and Private Companies
Mining companies need to not only realize value on capital investment, but present that value effectively. Many mining companies are publicly traded, and that means they need to meet the rigorous demands of the exchange, often consolidating results in different regions across multiple currencies.
Privately held mining companies face perhaps a greater challenge, as they need to present value in a forward-looking fashion to draw private investment required to make new capital investments and start new projects. This requires a strong financials package, and a project-based solution that can present a forward-looking view of the entire mining project lifecycle, from exploration and planning to decommissioning.
Centralized Management in Decentralized Operations
Mining operations are often geographically dispersed, with active mine sites spanning different countries and potential exploration projects dotting a rugged landscape. This creates two distinct challenges – centralized management of dispersed operations and decision support regarding potential exploration projects or mining starts in geographical context. However, these challenges can be addressed by operational intelligence software like ERP or EAM systems.
These systems are built around a strategic business map, which defines the way that cost and value flow through the different parts of an organization. This graphical representation of the business captures the strategic roadmap to ensure company strategies are available to those who need it and will enable enhanced visibility of key performance indicators.
Empowering People, Empowering Business
Operational intelligence connects people and processes throughout the organization. Connected management cockpits can be created for asset managers, process managers, the CEO – anyone who needs to make decisions based on the latest insight.
The real power of operational intelligence, though, flows from its ability to not only support executive decisions but to operationalize those decisions in the organization. As priorities, goals or business processes in the business map change, that in turn initiates change in the underlying ERP or transactional systems.
Optimization Precedes Excellence
From initial exploration through decades of operations, a fully integrated enterprise software environment will help a mining operation achieve operational excellence by streamlining and standardizing key business processes. It will also ensure that processes are handed off seamlessly between different business disciplines.
Applications that lie on top of ERP not only support mining executive team decisions but push those decisions into the operational layers of the product. Only when optimal business processes are centrally instituted and facilitated by enterprise software will a mining organization achieve operational excellence – then they will be in a position to dominate their competition in the market and keep investors happy.
Colin Beaney is global industry director for energy, utilities and resources at IFS, a global enterprise software vendor that offers project- and asset-driven mining industry software that manages the entire project lifecycle from exploration, construction, operation to retirement – all optimized for remote access.