If you’re in the metals and mining industry, like The Doe Run Company is, news that commodity prices have declined to lows not seen since late 2008 and early 2009 is not new. The question is with these low prices, can your company afford new information technologies? I believe the answer is a resounding “Yes!” In fact, I believe companies that want to survive should seriously consider deployment of the following four technologies.
1. “X” as a Service: Whether it’s Infrastructure as a Service (IaaS), Hardware as a Service (HaaS), Software as a Service (SaaS), or a number of other X-aaS, your company is losing ground if it isn’t already using one of these technologies or in the process of moving to one.
a. Managing on-premise data centers is not core to our metals and mining business, and competes with internal resources that are more central to our industry. So why would we maintain the necessary staff to oversee internal data centers that require large capital replacement expenditures every four to six years, and that demand specialty facilities? Moving to IaaS and/or HaaS allows companies to have state-of-the-art facilities and equipment as an expense, smoothing the capital expenditure curve at a cost that is at or below what is likely spent on internal data centers. Furthermore, this option avoids large equipment replacement costs that inevitably seem to be necessary just when the industry tanks.
b. On-premise software applications tend to be expensive and require hard-to-find and sometimes hard-to-retain personnel with specific skill sets. Why not find cloud SaaS solutions for routine applications that are sufficient to get the job done at much lower annual costs? Doing so allows your company to use its highly sought after personnel to manage these solutions, while also freeing them up to work on more strategic projects that are directly tied to your company’s bottom line. You’ll find that retaining top IT talent is easier when they have the opportunity and challenge of working on mission-critical projects.
2. Internet of Things (IoT): Your company has been involved in the “Internet of Things” for a long time, albeit perhaps under a variety of different names, such as process control technologies, instrument controls or operations technology. If your IT team isn’t joined at the hip with your operations technology team, you are missing out on some big opportunities to improve processes, reduce your cost structure and provide some much needed visibility and insight into where you might be wasting time and money.
a. Automated process control equipment in your mining, milling, smelting and refining operations is a key to steady-state operations. These systems have been in place for decades. Integrating process control equipment data and trends with information from the business (IT) side of the house, such as laboratory analysis information, human resource information, environmental data and inventories, can present information to help you improve operations while reducing costs. For example, process control data from a milling operation—when paired with information about the shift operators and the results they obtained—can help you identify best practices. You may find that “institutional knowledge” is flawed when financial results are compared with indicators such as raw material usage, process information and environmental data for a particular product. By looking at data in an integrated fashion, you’ll find ways to improve processes and results that were thought to be “perfected” years ago.
b. Mobile equipment monitoring alone gives your maintenance team crucial information about a particular piece of equipment, and helps them plan routine maintenance before equipment fails. Using that information along with human resource data, inventory information and maintenance cost data for each piece of equipment provides visibility into the most/least efficient operators, assists with maintaining proper inventory levels for repair parts, and helps determine the true equipment costs per hour. Ultimately, this level of insight allows production and maintenance teams to improve efficiency and reduce overall operational costs.
3. Data Analytics Tools: As you might expect, these tools used to be very expensive and required steep learning curves. Today’s dashboards or data discovery tools are now available as an SaaS, meaning companies can get their feet wet in data analytics at a low investment threshold. Best of all, you don’t need rocket scientists on staff to use the technology.
These tools involve what’s called an Extract, Transform and Load (ETL) tool that allows your IT staff to pull data and prepare dashboards based on information from multiple data sources, such as your ERP system, HR system, maintenance system, environmental data system, and process historians in your operations technology systems. By manipulating the data to produce multiple views or dashboards, the business user can see—in a matter of hours—trends and critical insights that might have taken weeks of data analysis to produce in the past. Below are a few ways you can readily utilize these tools (both the ETL tool and the dashboard tool have short learning curves) to improve your business.
a. Equipment Comparisons: Use dashboards to compare equipment cost per hour between individual mines, between competing vendors, and even between various equipment models. Doing so allows you to find the right combination that produces the best overall value for the company.
b. Operational Performance and Efficiencies: Dashboards also can help you visualize production information alongside maintenance information and environmental, health and safety data. Doing so can provide a broader perspective to improve operational efficiencies. For example, you might do a comparison between production, equipment and underground air quality.
4. Drones: Mining and metals companies are typically located in some of the more remote areas of the world. Companies will spend a large amount of capital to build infrastructure, such as roads, to enable manual inspection of pipelines or to provide access for staff to collect water samples at various outfalls for environmental reporting purposes. Why not use a drone to perform those visual inspections or potentially collect water samples? There are probably dozens of other applications where drones could be used more cost effectively than current practices.
Commodity cycles are a given, what is not known is when one will start and when it will end. Rather than “hunkerdown” and simply cut costs, innovative companies are using technology to help them survive. These four technologies just might make a difference in improving your company’s cost structure and helping you survive the present down cycle; preparing you to take advantage of the industry’s next peak.