Digital is a hot topic for most industries. How does “embracing digital” translate in the mining industry?
There are two key ways mining companies should think about “embracing digital.” First, they need to rethink the way IT delivers services by transitioning to consumption-based models—allowing the business to move with speed and agility, and scale services up and down with market shifts. We’ve been talking about this for years and the investments from leading technology players, equipment providers, and mining companies are finally making this model a reality.
Second, mining companies need to build the talent and capabilities required to innovate in this new model. Business leaders are starting to see the cloud as an environment for innovation where they can test their new ideas without expensive capital and long approval/delivery processes. They can leverage the Internet of Things to create projects around big data and machine learning. Following a successful proof of concept, they can scale it fast. If the proof of concept fails to play out, they can shift efforts into building other models or applications to support operations.
Mining companies seem particularly interested in moving to a model of “everything as-a-service.” Why is that?
Mining companies deal with volatility on the pricing side more than just about any industry. Companies that can rapidly flex their cost structure will achieve competitive differentiation by having the lowest cost structure and most responsive operating model to deliver the product. The companies that move as many IT costs from fixed to variable so they can be “turned off and on” with market cycles will have an advantage in the industry.
Taking advantage of this variable cost structure requires well defined operating models and the discipline to scale up and down at speed. Defining the metrics and analytics that will be used to trigger adjustments to variable services will prove to be the linchpin in “as-a-service” success over time.
Given your experience in mining, what strategic and operational priorities do you think are most important for future success in the industry?
With the fall in commodity prices and rising cost pressures, productivity is undoubtedly the number one priority for miners. CAPEX discipline remains high on the agenda as capital intense projects come to a halt as investment has all but dried up.
Strategically, capital projects will benefit from digitizing operational readiness and planning, with project management focusing on tighter controls to manage and measure capital project efficiency. Operations can look to new technology in photo analytics and drones to reduce cost of mine operations, enhance safety and maintain compliance with regulations that focus on sustainability―adhering to environmental constraints like air and water management.
In light of all these technological advances, companies cannot ignore the workforce. Training and communications programs that empower the individuals who are moving minerals and working on processing equipment will certainly separate high performers from peer companies that do not include these workforce-related investments in their capital plans.
Miners continue to face a challenging operating environment with ongoing volatility, uncertainty, and depressed commodity prices. In what ways is Accenture best positioned to help our mining clients survive and thrive during this period?
One opportunity is to leverage the Accenture Digital Turnaround as a Service (dTAaaS) solution, which incorporates contractor and asset tracking technology, mobility applications, tablets and cloud analytics that enable cost reductions, improved contractor productivity and reduced downtime/increased production.
Shutdowns, turnarounds, and outages (STO) are part of every plant’s annual operational agenda and range from small pit-stops (US$10-30 MM) to large complex programs (US$100-200MM+). The STO challenge includes schedule and budget overruns, contractor time on tools, heightened safety risk, discrepancies in contractor billings, and suboptimal asset utilization. Accenture’s dTAaaS solution is built on our digital platform enabling rapid deployment of an end-to-end solution for the following:
Vendor Management: Labor Reconciliation, Equipment/Vehicle Reconciliation, Contracting Improvement
Productivity: Real Time Location Visibility, Planning Feedback/Improvement, Resource Availability
Worker Safety: Site Security, Fatigue Management, Incident Risk Factor Analysis
During you consulting career, you’ve worked for clients across several industries. What is particularly interesting and exciting about mining?
Mining is definitely unique. Mine operations are often located in the most remote and inaccessible areas in the world. Miners are incredibly self-sufficient and resilient workers with a passion to succeed in the most rugged environments. In my experience, mining is one of the most diversified industries because of the need to provide almost all elements of a small town in addition to operating a mine. Creating municipalities in remote geographies enables mining companies to support the families and communities with basic services including food, schooling and water treatment. For me, it is a professionally rewarding opportunity to work in this industry with exceptional leaders mining natural resources under the most extreme conditions.
You have a love of fast cars. Tell us about that passion.
It all started with racing go-karts in college. Since then I have done laps on the Phoenix Firebird Raceway with my 1150cc BMW motorcycle, test drove an R8GT on the Sonoma Raceway and most recently taken ice driving lessons in Seefeld, Austria. Fortunately, my family shares my love of cars and we often enjoy our weekends with beautiful drives through the scenic Arizona highways.