EY advises mining groups on best route to digitalisation

15 June 2017 Consultancy.uk

Focusing on meshing digital innovation with productivity outcomes, a new report from professional services specialists EY have drawn on a number of ways to improve the outcome of automation in mining.

Over the course of its long industrial history, mining has elevated numerous technologies in its wider value chain. However, while a new digital boom has seen technological advancement in many sectors, EY’s new paper claims the latest wave of digitalisation and automation, according to a new study, has yet to be capitalised upon by the wider mining industry.

Waves of digital transformation since 1950

Since the 1950s, when early development in the industrial space was focused on process control, mining has sought to utilise mathematical optimisation and simulation techniques, as well as the very earliest digital computing, still then in its formative stages.

Later, the advent of Global Positioning Satellite technology in the late 70s was exploited by the industry for a range of tasks from machine guidance to collision avoidance, while expanding digital technologies were deployed to manage fleets and discrete event simulation as well advanced process control. More recent developments include automated haulage and drilling systems along with asset health monitoring technologies, while advanced simulation and optimisation tools enable the visualisation of predictive analytics – which can be used for a range of purposes, including planning and maintenance scheduling.

Preparing for tomorrow’s digital mine today

However, with mining companies investors seeing their median total returns tumble to -17% according to recent figures from The Boston Consulting Group, the sector is seeking new ways to minimise future costs and maximise future profits. Fortunately  the bulk of potential innovation in the industry still to be fully realised, according to a new study from EY, titled “The digital disconnect: problem or pathway?” The paper, which involved 700 participants, points to the vast majority of participants considering, or having already started building digital technologies into their day-to-day business. However, the research also reveals a divide in the digitalisation of wider business processes and business models, with a number of respondents continuing to face practical issues in the implementation of digital technologies into their wider business ecosystem.

The firm found disconnects among a variety of themes related to the application of digital technologies. One issue is a lack of detail on the implementation pathway, with a clear vision not implemented due to a lack of details for practical implementation. There was also a perception professed by respondents that high costs and oversold promises related to IT projects inhibited decision makers from committing financially to such modernization. A lack of clear accountability and disconnects with wider business model also gave them grounds for disengagement, as well as data systems lacking maturity to support the future.

Digital on the organisation agenda

This divide may be affecting the implementation and quality of digital advances at present, however, the vast majority of respondents still stated that they placed prioritized digitalisation on their business agenda. 31% indicated it is already a part of day-to-day business and 31.2% are working toward reaching that point, while 22.7% said that they have potential technologies under consideration and 15.1% responded that it is not on the agenda at all.

The biggest barriers cited by those surveyed included intimidation at the vast amount of available information, the costs involved and the change process required to make the investment cost effective.

Optimisation of digital processes focused on productivity

According to EY, four key goals can be set by companies to improve the outcome of digitalisation efforts:

  1. Optimising plans and productivity rates across any operation and managing variability under any conditions;
  2. Enhancing asset availability and reliability, focused on improving productivity outcomes;
  3. Understanding true end-to-end capability and systems bottlenecks, and supporting loss elimination; and
  4. Increasing agility and responsiveness to changes in market factors, such as freight rates and customers’ buying behaviour trends.

EY Global Mining & Metals Advisory Leader Paul Mitchell further commented on companies’ reluctance to invest in digital innovation, stating that many had experienced failed attempts in the past that were putting them off future attempts, or lacked a clear view of their current capacity for automation.

“It’s navigating this path that is key,” Mitchell concluded as, “companies need to apply the same rigor that underpins other change programs to their digital transformation. Only then will miners achieve the end-to-end process change the sector needs to achieve the next level of productivity.”

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