Company results improve when capabilities are built not just on a project basis, but for the long-term. The paper identified some potentially game-changing innovations that we believed would revolutionize the way mines operate and deliver much-needed productivity gains. In the cement and mining industry, digital transformation … Mining … Working with cross-functional squads has resulted in quicker decision loops, greater engagement, more new ideas, and more satisfied employees. The idea behind it is to provide: “Right information in right time and place, to make better decisions” Even in the early stages of their digital transformation journeys, mining companies can increase productivity, reduce costs and improve production and safety quickly through the visualization of data across the entire value chain. x Digital Transformation has the potential to be the determinant factor for gaining productivity. Once in place, this allows for the deployment of linear algorithms to optimize equipment dispatch, maximizing equipment productivity and achieving mining objectives. Today, the best opportunities tend to be in automated equipment, pit-to-port supply chain improvements, optimized scheduling and control, yield optimization, and maintenance, including predictive strategies, digitized planning, and digitally enabled execution (Exhibit 4). The latest technology trends in mining indicate a compelling industry shift towards sustainability. In a production environment, groups of three or more autonomous bulldozers are now able to coordinate overburden removal. There are many examples of companies that have invested in technology and not seen improvements because they neglected the other vital engines of tech-enabled transformation, management systems, and culture. In an environment where information is far more accessible than ever before, companies can examine where decisions are made, and by whom, and empower their workers to make informed, data-driven decisions, quickly and safely. Digital transformations are an imperative as today’s leading corporations need to build bionic capabilities in order to harness the potential of disruptive technologies and integrate them into new processes, organization models, and ways of working. Digital technology works harder than ever to deliver a truly modern, safe, and productive mine that addresses the increased demand for mined … By any measure, advances in digital technology and the Industrial Internet of Things (IIoT) have transformed the industrial landscape. So, the usage of Intelligent Automation will be better deployed towards process re-engineering and sustainable productivity. Bigger mines have moved from pilot-scale deployment to adopting LHD as their new standard. By deploying underground networks—using WiFi or 5G wireless technology, for example—a mine’s supervisors can communicate with work teams in real time. A US-based base-metals client found an in-house metallurgist who was passionate about technology and quite sophisticated on highly relevant technical aspects of machine learning models. 1 Notes: 1 For a detailed description of the VF journey, see the 2013 Value Creators Report, Unlocking New Sources of Value Creation, BCG report, September 2013. Learn more about cookies, Opens in new This single innovation can have far-reaching ramifications, provided it is implemented in tandem with the other two key engines of technology-enabled transformation: adapting the management systems and overhauling the culture. Some of the most far-reaching changes in mining are likely to emerge from the use of robotics. Please try again later. is not about adopting the latest applications or technology … Retaining these employees is also essential. We'll email you when new articles are published on this topic. Mining is now 28 per cent less productive than it was a decade ago, with Australia … Today, these skills are scarce, so companies will have to develop their own capabilities. We use cookies essential for this site to function well. Innovation is a driving force behind business improvement and increased productivity. x Digital Transformation has the potential to be the determinant factor for gaining productivity… An algorithm predicts the behavior of a plant and offers a series of recommendations to optimize based on controllable variables. This approach is not appropriate for a digital organization, as it leads to slow and inferior decision making. Another early adopter has recently decided to expand its fleet of autonomous vehicles based on their productivity results. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. We use cookies essential for this site to function well. It’s now clear that business as usual will be different in the world of work. Human resource departments must play a vital role in shifting the mining culture, enabling these new classes of professionals to thrive and realize their potential. Mining … Ore grades are declining, while water scarcity has threatened to strand assets in the ground, and operating licenses have become more difficult to obtain. Digital transformation is a journey. As part of the transformation, the company recognized it needed to overhaul its culture, including a greater level of shop-floor engagement. Our insights into additive manufacturing, the Internet of Things, and analytics enable us to help organizations reassess their people, processes, and technologies in light of advanced manufacturing practices that are evolving every day. The organization sometimes requires modifying, too. Something went wrong. The company is collecting data from more than 150 sensors for medium to large concentration plants. They will continue to get better at driving productivity and improving safety. They perform best when they are empowered to make decisions and deploy resources. is not about adopting the latest applications or technology solutions, these will continue to develop and evolve. It equips companies with novel levers, tools, and opportunities to improve safety, productivity, and ways of working. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Another increasingly common machine is the autonomous blast-hole drill, which will drill a complete pattern without intervention. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Instead of achieving the local optimum through automatic process control, this approach delivers a global optimum. But while it has been at the front and centre of some success stories, technology is making waves behind the scenes in other industries. A private cellular network offers the most potential to transform mining … This may include details such as the torque level for tightening a nut, or instructions for inserting an O-ring. Adapt the management systems (such as work processes) to enable the company to realize the potential offered by the new technologies. Learn about McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Combining the two technology segments is sometimes referred to as "customer data mining." If a mining company is using an agile development approach, other skills and roles are needed. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. If you would like information about this content we will be happy to work with you. Come to McKinsey to do the best work, with the best teams and truly be at your best. For example, instead of using ever-larger equipment, operators can optimize size to balance maintenance costs with haulage cost per ton. In the first year of the transformation, the company attracted about 50 new, highly qualified professionals to help with implementation. Every year, the work becomes more difficult. IBM and Shell: a “natural collaboration” Oren’s proposition goes two ways: the platform allows mining companies access to a range of software, services, and digital solutions to accelerate their digital transformation while simultaneously allowing developers to efficiently get their products to potential mining … See how the world changed this year through this collection of 20 charts culled from our new, daily Charting the Path to the Next Normal series. Companies can also deploy translators who have the skills needed to interpret systems for other employees at the mine. This has saved millions of dollars’ worth of chemicals and reduced the environmental impact of the tailings. Workers can be better connected real-time via cloud-enabled devices, allowing for a level of collaboration that can boost safety and productivity in any mining operation. This data transformation is contributing to the delivery of our business performance targets, by developing our people and transforming our processes, improving safety, health, sustainability, efficiency and optimal stable operational performance, through our technology … This necessity has been accelerated by the pandemic. They should not lose faith; transformation requires continuous and determined effort. Companies and governments should increase their use of digital technologies to transform key business processes to create greater leaps in efficiency and productivity. The company’s revenues have grown from $7 billion in 2008 to more than $11 billion in 2013 (and revenues are projected to top $17 billion by 2017). Unleash their potential. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Maintenance workers can benefit from technology as well. Putnum simplifies this transformation as moving from an I to We society. Today, it’s not unusual to see opportunities to raise mineral recovery by 1 to 3 percent and increase throughput by 4 to 8 percent, while reducing energy consumption. Lay of the land. Over the past month, the famously fast-moving fashion industry has been forced to slow down, or in some cases, come to a screeching halt. Use minimal essential In the years ahead, augmented reality will increasingly serve this purpose, even having an expert from the asset’s manufacturer appear (virtually) to help the worker. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. We suggest that technology must play a role in the … How can mining companies achieve true digital transformation? Past Experience. Most transformations fail. Technology & the Mining Company of the Future Technology is a key foundation and enabler of the Mine of the Future initiative. Unleash their potential. Please email us at: How digital communications can change the way a mine operates, How one company changed its culture and infrastructure. During the last commodity supercycle, metals and mining capital projects were plagued by extensive cost overruns and schedule delays. No mine will want to get caught in an unexpected R&D project. This eliminates the need to provide a set of instructions that have to be carried out across an entire shift, and lets supervisors react and adapt to changing conditions, allowing an underground mine to function like a modern, sophisticated open-pit operation. Coordinating activities in underground mining has always been a challenge given the difficulty in knowing where people and assets are and how much progress they have made. Please click "Accept" to help us improve its usefulness with additional cookies. Technology and Innovation for the Future of Production: Accelerating Value Creation 5 technologies on five levels: factory floor, firm, industry, society and the individual. Traditional mining operations tend to be organized around separate teams responsible for production, maintenance, planning, and the like. Increasing Productivity, Efficiency and Safety in Mining The global resources industry is a constantly evolving beast, and it is now entering a new age of technological development. Most transformations fail. And the foundation of that is cellular technology. Technology—particularly artificial intelligence (AI) and machine learning, automation and robotics, mobile digital, the Industrial Internet of Things, and modern data architecture (including the cloud)—can help the industry meet these and other challenges. Technology is helping mines conduct maintenance when it is needed rather than on a fixed schedule. Behind the mining productivity upswing: Technology-enabled transformation Despite great promise in digital advancements, many companies are struggling to embrace tech-enabled transformation. ... but the predictable nature of technology has also led to an increase in productivity. Digitization as cure for decreasing mining productivity? Digital technology can be a key enabler of productivity and allow mining companies to execute more effective operational strategies. The idea behind it is to provide: “Right information in right time and place, to make better decisions” Even in the early stages of their digital transformation journeys, mining companies can increase productivity, reduce costs and improve production and safety quickly through the visualization of data across the entire value chain. The mine of the future is being built on connectivity. People create and sustain change. *FREE* shipping on qualifying offers. ⁴ “Behind the mining productivity upswing: Technology-enabled transformation,” September 2018, McKinsey.com. our use of cookies, and Another is the scrum master, who oversees the design process, fostering cooperation across roles and functions and removing obstacles (Exhibit 3). The current identified impact of the transformation effort is positive to the tune of more than $200 million, the majority coming from operations. Addressing the challenges with an open innovation approach has both the effect of enabling mining in Chile and of developing a mainstay of technology-based suppliers that, in return, legitimize this sector. One studio, in operations, had four objectives: 1. to pursue advanced analytics at scale; 2. to push automation to its fullest extent; 3. to develop a series of apps and tools that would facilitate processes like maintenance; and 4. to adopt an agile operations model. In part 1 and part 2 of this series, we looked at advances in automation and robotics, connected mobility and remote operations in the mining industry. Commercial autonomous haul trucks now have been proven viable for open pit mines that have a suitable cost structure. One company reaped significant improvements by enabling its teams to invest up to $100,000 without additional approvals. transformation. Digital technology works harder than ever to deliver a truly modern, safe, and productive mine that addresses the increased demand for mined materials, while at the same time exceeding customer expectations and global sustainability initiatives. ⁵ Aisha Chottani, Greg Hastings, John Murnane, and Florian Neuhaus, “Distraction or disruption? The Future of Mining. It may also help reduce the industry’s environmental footprint, move workers out of harm’s way, turn uneconomical reserves economical, and make work less repetitive and less strenuous. Tech-enabled transformation opens up a whole new horizon of possibilities. (See sidebar, “How one company changed its culture and infrastructure.”). During tough economic times companies look for ways to cut costs in order to reduce overheads and improve profit margins. Overhaul the culture and capabilities to achieve a more. Select topics and stay current with our latest insights, Behind the mining productivity upswing: Technology-enabled transformation. Given that there were dozens of heat exchangers, the cost savings have been substantial. Mining Weekly covers real-time news on mining projects across a range of minerals including gold, platinum, diamonds, copper and ferrous metals. This is true also for the mining … Digital technology—when implemented with management and mindset changes—is leading to meaningful operational improvements. BIM alone is a $2.5 billion software market, growing by more than 15% per year, and it is boosting ancillary markets many times its size in sensors, equipment, and services. The Sustainability Development Goals (SDGs) and related indicators have enabled water utilities, industries and the broader supply chain of the water industry in achieving some of the much needed efficiency improvements. For instance, advanced analytics and sensors are helping lower maintenance costs and decrease downtime while boosting output and chemical recovery. Augmenting skills is key. The (2008) downturn in the mineral industry forced mining … Behind the mining productivity upswing: Technology-enabled transformation September 25, 2018 – Despite great promise in digital advancements, many companies are struggling to embrace tech-enabled transformation. In many cases, companies will be able to harness existing talent to fill the translator role, drawing on younger digital natives or others with a passion for technology. This can mean a productivity boost of 5 to 10 percent, which equates roughly to opening a new mine if applied across a typical mining company’s footprint, without the capital cost. Harness technology, including digital, analytics, and automation across the organization, to solve the key challenges of productivity, safety, customer satisfaction, and supply chain management. Since early 2000 to 2013 it has been dropping by 3.5% annually, reaching 30-year low. Autonomous equipment operates continuously, with less variability and virtually always within the manufacturer’s recommended tolerances, reducing maintenance as well as headcount. The operations studio is aimed at developing a “lighthouse digital plant” to generate enthusiasm for the rest of the company. The idea behind it is to provide: “Right information in right time and place, to make better decisions” Even in the early stages of their digital transformation journeys, mining companies can increase productivity… The results of VF’s TSR-led transformation are apparent. Otherwise, the actual operation of the plant does not change, and the bottom-line benefit cannot be achieved. Manufacturing respondents, for example, reported lower current use of many technologies than their counterparts in other industries: Eighty-one percent report using desktop productivity tools, compared with more than 94 percent of both mining and oil and gas respondents, while 61 percent report using CMMS, compared with more than 75 percent of mining and power and utilities respondents. Mining news and in-depth feature articles on the latest mining company deals and projects covering trends in mineral exploration with up to date data on the most mined metal and mineral commodities Instead, there are three interdependent engines that drive either a transformational or smaller-scale technology-enabled operating system change (Exhibit 2). Microsoft Corporation (NASDAQ: MSFT) and Deutsche Telekom Group reported expansion of their partnership to help customers accelerate cloud transformation initiatives. The company trained her as a machine learning controller of controllers. These new digital mining applications require industrial-strength, wireless connectivity. The Upswing: How America Came Together a Century Ago and How We Can Do It Again [Putnam, Robert D., Garrett, Shaylyn Romney] on Amazon.com. For example, a mining company that is using advanced analytics to increase yield and throughput also needs to modify how metallurgists, plant operators, and maintainers work together to embed the new tools and insights into their daily workflow. Minimal essential cookies, explore all our insights on the next normal: guides, tools checklists! Publication has been defining and informing the senior-management agenda since 1964 requires more 150. Digitization as cure for decreasing mining productivity rose about 2.8 percent per from. Newer technology on vital production equipment can significantly extend unit service life, reduce energy consumption and improve profit.... 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Factor for gaining productivity a machine learning controller of controllers please click `` Accept '' help!