MineRP Co-Innovation with SAP - round 2 outcome
Last week we reported that we have a contingent of the international SAP co-innovation lab (COIL) organisation to plan out the next steps of the journey we are taking to solve problems in the extractive industries. After a gruelling 4 days, which we ended off with a workshop and cocktail function with selected joint international and local SA clients, we concluded that between MineRP and SAP we have 5 main problems we need to solve to improve mining businesses.
MineRP amalgamates mining scientific information and processes, and tracks the 'state and status of space over time'. We then translate this information into usable information and processes for integration into the 'business of extraction' - well performed by SAP ERP systems.
Back to the problem we jointly defined we want to solve with the next steps of the COIL process.
1.Fragmented Resource and Reserve insight.
We find that throughout extractive enterprises, there are multiple systems and processes accounting for the resource and reserve planning, reconciliation and reporting, for both internal and external reporting and management. Multiple systems, with multiple spreadsheets operated by different departments attempt to keep this important information domain in sync with the business - which is slow and cumbersome to update, change, and thus not a good way to give deep insight up to board level of the Resource and Reserves, that, which ultimately is what the extractive industry does.
2.Planning takes months with multiple versions of the Truth. After choosing the planning metrics, planning starts with CAD drawings by mining engineers. These CAD drawings representing the extraction plan, takes weeks to months. Then, extractions from the CAD drawings goes through multiple manual steps where information is extracted and manipulated from the CAD drawings, sometimes still by hand, then translated to different business domains, used, updated, changed by different departments, until one plan emerges, after months... Required changes to CAD plans after such time are often not linked to the financial plans anymore. And, the sheer volume of work required to do this often does not leave time to model planning alternatives to expected changes to the environment and the ore body.
3. Capex accounting not linked to Ore Reserve Management. In the extractive industries, the CAPEX spent to get to the ore, in mining, often called the 'Ore Reserve Development' process, are difficult to account for properly and periodically. Essentially, all the ore reserve development should be treated the same as one would when building a factory, where the built factory results in a created asset, to be amortised over the same period as the asset, or the 'machine' is expected to work productively.
4. Unplanned work are materially less efficient than planned work. Planning in mining always starts, or refers to a CAD plan, independent of the horizon and level of the plan. But the mine plan as designed, scheduled and sequenced in the mine planning software - although the main plan, is not the only plan. Many of the plans to support the main mine plan, is executed in the ERP system, like the planning for and allocation of the bills of material, engineering crews, the Plant Maintenance to machines and infrastructure. All of these plans are not able to communicate and influence one another in a system, and causes lots of standing time in the extractive industries. Let alone the ability to secure the 'capability' for a specific place, at a specific location, with the right supporting resources, and more importantly planning for the concomitant financial planning and accounting of the actual expenditure... The slogan "run your mine like a factory" will be a design guideline moving forward.
5. Disparate schedules impact Production. Once the above problem is solved, the execution to the different schedules are still represented as disparate schedules to different departments. If we can create visibility of the schedules, and to what extent they are successfully executed, with an ability to override them in a 'Digital Orchestration Centre', we can improve efficiencies of production.
Conclusion: Problems 2 to 5 are targeted with the next steps of innovation between MineRP and SAP. The first problem, 'fragmented Resources and Reserve insight', was the target of the first phase of COIL, solved by the MineRP GeoInventory, and "Inventory Mediation Platform" solutions. More later in next posts. But, in short, look out for the creation of a new integration point from MineRP to SAP, running on SAP HANA, called the "Scheduling Mediation Platform".