Integrating SAP and MineRP – Being in control of your Mine
MineRP and SAP are both platforms for integrated enterprise information. Both carry true information about the same physical entities but seen through different lenses. MineRP provides a full vertically integrated mine plan, whereas SAP carries both financial and logistical elements of the plan with a high-integrity transaction base. By integrating these platforms, it becomes possible to facilitate a fully functional planning system – from life of mine to millisecond if desired. In addition, further integration also allows recording of Mine Development functionality and Ore Management functionality.
The implementation of SAP Production Planning functionality in a mining environment has been done with different levels of success. The biggest disadvantage of these implementations are that you can plan at high granularity, but not execute at this granularity. This causes financial reporting that always looks extremely good, until the end of the month when orders are completed, suddenly slamming the cost centre with costs. The Cost Centre Manager mostly get this report 2 weeks after the end of the month with no ability whatsoever to influence the outcome.
Objective for Integration
The objective is to provide a holistic information system that will enable Mine Line Management to make timely and informed decisions about compliance to plan from all angles, but specifically related to production and related costs.
In other words, line management must know whether a unit is producing to plan and at what cost, given the visibility to make decisions that will improve performance, based on actual measures and at a frequency in tune with the rhythm of the business.
Requirements for Implementation
To implement an integrated platform according to the business requirements, there are three key elements that form the foundation of all business transactions:
Spatial framework and plan
A spatial framework and plan based on the geological, design and survey data for the mine will create the opportunity to determine all the attributes of any given location in a mine. This, in conjunction with the mining method and geological characteristics would allow an accurate assumption of the resources and consumables required to mine that location. This combined data set also allows a view on the resource and reserve status of the mine.
From the spatial data developed above, as well as based on the mining method, the standard bill of planned resources required to mine such a location can be determined. This master data will be valid for both long term and short-term planning forming the basis of all mine planning operations. This data can be extracted from many mine planning packages but can also be natively carried in the MineRP platform.
Using a modern short interval control package like MineRP's Work Manager, all transactions performed at the mine can be recorded automatically or manually based on the processes adopted.
Automation of transactions is key to the success of the system as it will allow you to start recording costs as they occur against a specific task or defined activity, also allowing the costing view of every transaction as it occurs. The next level of automation will be to record the production achieved by automatic means.
Through the implementation of the system at the right level of granularity with master data and automation built on the spatial framework, as a first step one would typically aim to achieve a weekly holistic report, tying all this information together. This will allow decision-making capability with respect to financial, operational and other implications by the appropriate executives in time for corrective action to be implemented.
In an environment where an ERP system like SAP is already implemented, the implementation could be done in digestible steps, based on the readiness and maturity of the mining organisation to implement. Either a top-down or bottom-up approach could be followed. Bottom up is recommended for the simple reason that it could deliver benefits fastest and some sort of planning system exists in most mines.
As a first step, creating the ability of cost recording for useful weekly reporting would be the first objective. This is no mean feat, and, in most mines, this could require up to 3 x three-month sprints to implement. The second step would be to implement automated production recording at the level chosen for reporting. From this, accurate actual reporting will be possible, allowing the manager to be in better control.
The next step would be to refine the mine plan and schedule. Once implemented, it would form a good platform for long term and life of mine planning.
Implementing Mine Development Accounting (Integration to SAP Project Systems) could be done at any stage, depending on requirement. This would allow better amortization calculations throughout the life of the mine.
The implementation of ore-body transactions in the ERP to mirror actual interactions with the ore body could also be done at any stage when information is available. This would increase audit reporting of resource and reserves and could be implemented down to the level where production can drive consumption of reserves, based on the mining model as financial transactions.
MineRP and SAP are platforms that, when implemented together, each contributes to the creation of new integrated business processes that allows holistic management of the mine in much more detail than possible before.
This is dependent on the implementation of the spatial framework with connected master data, allowing automated transaction at low granularity.
The key outcome is a holistic report that will enable a manager to manage the mine when corrective actions can still be implemented, instead of two weeks after month-end which is virtually impossible to do.
The functionality can be implemented in an evolutionary way in different steps to achieve
step-wise business benefits.
Want to take the conversation further? Give me a call!
Ockert van Schalkwyk
M: + 27 83 272 5723