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Can mining decode the opportunities of the future

Photographic portrait of Paul Mitchell

3 minute read 28 Jan 2020

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Mining and metals

To achieve sustainable improvements in productivity, mining companies will need to overcome a digital disconnect that has held them back.

To achieve a sustainable productivity improvement, mining companies need to adopt an integrated end-to-end business approach from market to mine. One of the key steps to achieving this is to adopt digital strategies that reduce variability in the organization, enhance an end-to-end approach and improve decision-making.

Graphic on productivity

A digital disconnect in the mining and metals sector, however, has created a gap between the potential from digital transformation and the poor track record of successful implementations. Addressing this disconnect will be critical for mining companies to succeed in the rapidly changing digital world.

The digital disconnect exists, not because of a lack of engagement from the sector, but because of a range of practical issues that continue to challenge the industry.

We explore the potential benefits of digital to help companies exploit the number one operational opportunity in mining — productivity — and avoid the common pitfalls. Understanding these pitfalls will help answer the question: “With so much opportunity, why is the road to digital transformation littered with stalled or failed endeavors?”

The benefits of digital mining enterprises

Digital can create new ways to drive productivity, manage the variability challenges of the sector and pursue commercial excellence. With the right focus on digital, mining and metals companies can:

Optimize plans and productivity rates across any operation and manage variability under any conditions
Understand true end-to-end capability and systems bottlenecks, and support loss elimination
Increase agility and responsiveness to changes in market factors, such as freight rates and customers’ buying behavior trends

Digital mining has been with us for over half a century, and the mining sector has embraced the introduction of new technologies, such as plant control systems, GPS technologies, mobile broadband and automated haulage. Notwithstanding the long journey that digital mining has already taken, the rate of recent development seems incongruous with the perceived opportunity.

“If the benefits truly are so large and game changing, why are the many established technological implementations not delivering on their full potential?” says Paul Mitchell, Global Mining & Metals Leader.

Having a clear understanding of the key elements of past successes and failures is critical to developing a truly transformational digital approach to the productivity challenge.

If the benefits truly are so large and game changing, why are the many established technological implementations not delivering on their full potential?

Common pitfalls driving this disconnect

Take a holistic approach to your improvement process and be aware of these common pitfalls.

Lack of detail on the implementation pathway
Perception of high costs
Unclear accountability and disconnect with the current operating model
Ill-defined business model and business case
Lack of digital education and understanding
Remote decision-making and dissonance with local leadership
Lack of maturity in data systems to support the future vision
Systems and processes not being optimized

Digital Navigator

Our Digital Navigator takes an end-to-end approach to the development of a digital vision, strategy and actionable road map for mining and metals companies.
Read more

Eight questions that can help companies find their way forward

The same rigor that underpins other major change or expenditure initiatives needs to strengthen digital transformation, too. Before embarking on the digital journey, a sober assessment of the way forward is required.

Start by asking yourself these questions:

Do we have an alignment between the digital vision and the business strategy?
How long will it take, and what is a reasonable estimate of cost?
Do we have a clear business case to support the change?
What capability do we need, and how does this compare with our current resourcing?
What are the packages of work, at an appropriate level of detail, required to move from our current state?
What is the level of cultural support, and have we addressed critical elements of the change?
Do we understand how the new digital operating model will look?
Have we tested this with those who understand the operations in depth?

Given the digital disconnect, the right approach to transformation is crucial. The industry does not need another cheerleader but requires a navigator in what is a difficult but highly prospective journey.

Summary

By overcoming the obstacles to digital, the mining and metals sector can achieve sustainable productivity improvements.

About this article

Photographic portrait of Paul Mitchell

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.