Managing by Metrics

By Alexandre
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Extract from the article by Dan Headrick originally published in COMPASS Magazine

Growing support for ‘lean’ mining

A growing chorus of industry leaders is calling for more mining companies to invest in lean business processes. The industry’s future, these leaders say, depends on how well mining companies coordinate dynamic information across complex operations.

“It is important for mining companies and practitioners of lean to make a clear distinction between lean thinking and automation,” said Paul Smith, director of Shinka Management, an Australian consulting firm that helps mining companies develop lean business practices.

Adopting new business models

Mining is a volatile business that traditionally operates on boom-or-bust cycles subject to the swings of nature, local politics and share prices. New technology improves production, but industry experts agree it’s not enough. Not just operational practices, but also business models, must be lean to eliminate waste, smooth out the peaks and valleys of production, avoid accidents and adjust to the always-present unforeseen.

“Open pit is easier to automate, but the underground mine is like a mini-city,” said Mike MacFarlane, a 35-year mining industry veteran who, as a consultant, urges companies to think differently. “Every day the road changes; all kinds of complex decisions have to be made along the way. The biggest lever point is engagement with employees.”

Therein lies the opportunity, and it’s not just earth-moving operations that must be managed.

Learning from other industries

Some companies are already working to retool their business models. British-Australian multinational metals and mining giant Rio Tinto Group, for example, launched an industry-first operation at its new Analytics Excellence Centre in Pune, India, to analyze massive volumes of research, productivity and sensor-collected data from the company’s fixed and mobile equipment, aiming to predict and prevent downtime and improve safety and productivity.

“The center will help us pinpoint with incredible accuracy the operating performance of our equipment,” said Greg Lilleyman, Rio Tinto’s chief executive of technology and innovation. Rio Tinto is headed by Sam Walsh, a former auto industry executive and passionate lean business proponent who is focused on mining big data to squeeze greater profits from the business and using computer simulations to predict and plan its future.

Proving the value of lean mining

At the Meadowbank open-pit gold mine in northern Canada, which has recorded 1.2 million ounces of proven and probable reserves since it opened in 2010, Agnico Eagle is demonstrating Walsh’s point. The mine has saved US$1.4 million and increased output by 70,000 troy ounces in recent months, just by managing information more smoothly to achieve efficient dump design.

It’s exactly the kind of outcome Taiichi Ohno, the Japanese industrial engineer and father of lean manufacturing, envisioned in the late 1940s as he observed that communicating information correctly was key to the smooth operation of modern supermarkets in the United States.

Ohno took his ideas back to Toyota and changed the world. Armed with the same concepts and new information tools, the mining industry today has a similar opportunity to transform itself for the future.

Read the full article here

Follow Dassault Systèmes Natural Resources Industry on Twitter: @3DSNR

On the web: 3DS.com/natural-resources/

Sustainable Innovation for Business and the Planet

By Alexandre
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The world’s population is expected to reach 9.7 billion people in 2050. There are already 7.3 billion of us today. This population is also becoming more and more urbanized.

With an increasing population comes ever greater demand for the planet’s finite resources, such as minerals, water, agriculture, forestry, and oil and gas. Along with growing appetite for fuel, food, and inputs into the products we depend on in our daily lives, there is of course also a price to pay – the impact on the environment.

How can we best manage the limited resources we have while ensuring we are being respectful of the most precious thing we have – the home all 7.3 billion of us share? Will increased competition lead to clashes over water resources, or can we find a way to manage them more effectively? Is it inevitable that we turn to outer space to find minerals when we have exhausted them here? Some predictions have commodities such as copper, vital in many consumer goods, expected to be in production decline in less than 20 years.

At the same time questions are being asked the future of Natural Resources and humanity globally, communities are demanding greater social responsibility from the enterprises that operate projects locally. Communities are seeking better environmental management and more insight into how a project will benefit the local citizens over the course of its life.

Businesses are asking the questions about how they can respond to increasing social license obligations and maintain profitability at a time when commodity prices are variable and unpredictable.

Through the world of 3DEXPERIENCE, it is possible to bring all stakeholders together in the virtual world. With this, natural resources projects and their impact on the environment and communities can be simulated and communicated clearly.

The virtual world of collaboration and visualization will bring with it social innovation, uncovering new ways of managing natural resources, improving the efficiency of how they are recovered. This will result in a win-win for people and business as fuel consumption and emissions are lowered, decreasing the impact on the environment and lowering operating costs.

In parts of the world where water is scarce, it would be possible to bring together scientists from anywhere in the world, along with planners, and government officials in the virtual world to find ways of using a limited water supply more efficiently. They could test ideas such as the utilization of alternative types of crops, which were dependent on less water.

The time to start thinking differently about how we manage natural resources is now, not 2050. Populations are growing rapidly, putting pressure on natural resources in even the richest countries. The good news is, many are starting to have conversations now.

Follow Dassault Systèmes Natural Resources Industry on Twitter: @3DSNR

On the web: 3DS.com/natural-resources/

Technical innovations in natural resources

By Catherine
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By Catherine Bolgar

Uranium mine

Natural resources companies, like those in many sectors, are adapting technological innovations developed for other uses. They also are breaking ground themselves.

“The interesting thing is that every industry has something to teach other industries,” says Dan Miklovic, principal analyst at LNS Research, a technology research firm in Cambridge, Massachusetts.

Here are some examples of how natural resources companies have adapted innovations from other sectors:

 

Autonomous vehicles

“Mining was one of the first industries to use autonomous vehicles,” Mr. Miklovic says. “Autonomous mining trucks operate all over the world today.”

Autonomous vehicles, including trains and smart mining systems, allow mines in desolate or dangerous areas to greatly reduce the number of workers needed and to improve safety, especially underground and undersea, he adds.

Autonomous vehicles conduct inspections where it’s too dangerous for humans to go, says Jim Crompton, subject matter expert for Noah Consulting, a Houston division of Bangalore-based technology consultancy Infosys.

 

Military

Drones, adapted from the military, are being used to inspect offshore oil platforms in the North Sea and Gulf of Mexico and may be adopted for land use as well if regulations change, Mr. Crompton notes.

Offshore oil rig drilling gas platformThe oil and gas industry also has adopted the safety culture of military nuclear submarines. “After the Horizon drilling disaster, there was a real strong push to drill wells more safely,” he says. “There can be no accidents in the nuclear reactors in submarines. The framework from the nuclear submarine industry was added to the oil and gas environment.”

In addition, military and intelligence set an example for cybersecurity. “It’s not well known, but oil and gas is probably second to the government and financial services as a target for hackers,” he says. “Some is intellectual property theft. But it can be even more serious. Everything is connected now and someone can change the control parameters and cause a physical accident.”

 

Medicine

Natural resources companies, along with medical imaging, led the way to the development of high-performance acoustic imaging technology to see below the surface, whether of skin or earth, Mr. Crompton says. Companies can model underground reserves in 3D and even 4D, showing the change over time.

 

Manufacturing

Just as manufacturers manage the entire factory as a whole, rather than each critical piece of equipment separately, oil and gas firms increasingly view their operations as a single operation with repetitive functions, notes Mr. Crompton. They drill wells in a repetitive way in order to gain efficiencies and use sensors, control systems and executing systems to monitor the entire operation.

 

Aerospace

As planes fly, sensors on myriad parts capture and transmit data for real-time analysis so that even small maintenance jobs can be handled while the plane is on the ground between flights.

Oil and gas is now doing that on compressors, turbines, pumps and even blowout preventers,” Mr. Crompton says.

Diagnostics have greatly improved to predict if a part is about to fail and cause alarms to sound, Mr. Miklovic says. “What they haven’t done is take the analytics to the next level. They haven’t gone past predicting when failures are going to happen, to telling users what to do to prevent the failure.”

 

Information Technology

Rather than sell a piece of equipment, some suppliers now are selling capability and guaranteeing reliability, Mr. Crompton says, similar to the IT model of “software as a service.” For example, blowout equipment can be leased for a decade with the maintenance included.

RefineryNatural resources companies have employed modeling tools to design distillation towers and cracking equipment, for example, and are now using data analytics to measure how well their models map back to reality, Mr. Miklovic says.

However, they have yet to fully exploit the vast amounts of data they collect, using it, for example, to refine information about rock density, rock hardness and the amount of valuable mineral in the ore to continuously improve production, he says. “Natural resources involve a huge amount of variability,” he adds. “They could do a better job of going back to accurately gauge how well their predictions related to reality.”

 

Logistics

The supply chain for natural resources companies is highly complex, and traditionally companies had warehouses of spare parts. By using sophisticated logistics systems, companies can eliminate the cost of keeping warehouses and stocks of spare parts, while ensuring the supplier can get the right part to the right place at the right time, Mr. Crompton says.

 

Challenges Ahead

A number of technologies are likely to affect the natural resources sector in coming years, from better communications to 3D printing, to better understanding the chemical breakdown of ore as it is getting processed, Mr. Miklovic says.

The challenge the natural resources industry has is it needs to stay current with technologies,” Miklovic says. “Don’t let them get too far ahead because there will be someone in your industry that adopts them quickly.”

 

 

Catherine Bolgar is a former managing editor of The Wall Street Journal Europe, now working as a freelance writer and editor with WSJ. Custom Studios in EMEA. For more from Catherine Bolgar, along with other industry experts, join the Future Realities discussion on LinkedIn.

Photos courtesy of iStock



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