Jean-Marc Ollagnier, Resources Group Chief Executive shares insights and opinions on trends in the chemical, energy, natural resources and utilities industries.
Using the Internet of Things, cloud and big data to navigate the downturn
There’s no denying the fact that the mining industry is in pain. We’ve all seen the headlines about the slowdown in Chinese demand, volatile commodities, spiraling costs, ever-stricter regulation, talent shortages, lower ore grades and declining productivity. And while the industry has always faced risks and is used to dealing with commodity price cycles, the global economic uncertainty adds a new sense of urgency.
Above anything else, miners are focused on boosting cost efficiency, enhancing predictability of their operations, and improving worker safety. Technology can be a key enabler to all these things but it requires a strategic long-term investment plan and effective integration of information technology (IT) and operational technology (OT) in order to manage data.
This requires the discipline to take short-term actions for long-term benefits. But data and information, and how they are harnessed to make better and faster business decisions, is going to be the biggest game changer and competitive differentiator for the industry.
Rapid developments across multiple digital technologies, including the Internet of Things (IoT), analytics, cloud and autonomous operations, all create a massive opportunity for the industry to better leverage its data and generate new revenue streams.
The tremendous growth of connectivity, sensors and intelligent devices creates unprecedented possibilities to remotely monitor and control assets, equipment and materials. New cloud platforms can support greater knowledge sharing and collaboration—making information available where it is needed, and shared within and beyond operational teams at a significantly lower cost. Analytics and new mathematical tools can deconstruct vast amounts of information and predict patterns to support better decision making.
However, moving forward requires a new perspective. Rather than seeing technology integration as an isolated development, it needs to be viewed as a movement that offers mining companies the opportunity to transform their business models.
Mining companies that grasp the potential of this are already pulling ahead to become lighter, more agile and more efficient businesses. For example, mining companies that can autonomously track ore along the entire value chain are gaining efficiency improvements of 5 to 10 percent in recovery.
We are seeing one mining company remotely operating seven mines, two ports and a 1,000 kilometer railway. Another is doing the same with 14 mines, three ports and a 1,500 kilometer heavy-haul railway.
Also, in information technology, Accenture is working with Rio Tinto, which earlier this year made a groundbreaking move to run almost its entire IT organization using a consumption-based model. Rio Tinto expects to directly benefit from significant cost savings through increased business agility and cost flexibility, and from continued lower infrastructure prices.
Digital transformation will continue to exert pressure on organizations to integrate their IT and OT. This is not a trend from which companies can choose to opt in or out. It’s also critical for them to understand that designing and implementing an integrated technology operating model is not just a technology challenge – it is a significant business opportunity to capture.
Last month, I attended the launch of Accenture’s IoT center of excellence in Singapore, which is designed to help mining and other natural resources companies to capitalize on this opportunity. The center will employ more than 30 researchers, scientists and engineers with deep experience in industry and technology, including machine learning, cognitive computing, IoT sensor telemetry, advanced machine-human visualization, IoT security and business integration.
The digital race in mining has definitely started and those first off the starting block have a significant advantage.
First published in Forbes magazine.