Good afternoon. I am Dennis Franklin and I’m from CSC.
CSC is a $16 Billion global IT Services company that delivers IT Outsourcing, System Integration, and consulting. We have nearly 100000 staff and offices all over the world.
article in MTA Magazine challenges facing the Mining Industry as it emerges from the global financial crisis, infrastructure constraints, safety, sustainability, human capital, asset reliability, compliance, and of course, Information Technology and its ability to contribute to finding solutions to all of these challenges.
Few people consider Information Technology in these terms but during this talk I aim for only two things
• To get you to see how information technology can help you deal with all or most of these problems, and
• To get you to talk to IT specialists, like those who work at CSC and in your own business, to help you better understand what IT can do to help you get back up to speed, and then to help you do better that you competition at the things that are really important to you.
So I throw out a challenge to those operationally focussed miners among you. I challenge you to name any part of the mining process that does not rely on information technology to make it work, or allow you to manage it. Obviously this is a rhetorical challenge – with only 15 minutes to speak there isn’t time for questions – but I’ll be around after the event .
I contend that there is no part of the mining process where IT of one kind or another is not a fundamental part of the functioning process. And that IT can be a platform for further innovation of mining processes by giving you better ways to measure the process effectiveness, manipulate and optimise the processes, and automate it to a much greater degree than now.
In short, I believe that the mining industry can make much better use of IT than it does today – and that stands regardless of how well or poorly you use it today.
First, I’d like to make some observations on why Miners don’t get IT, and why IT folk don’t get mining.
So why don’t miners get IT. There are a few reasons – Miners are like most non IT people in many industries, they think IT is easy. They think they can do it themselves. They don’t think they need any help. They don’t like the restrictions that IT departments put on them.
All of these positions are wrong. IT is perhaps the most complex activity in the mining process – the complexity of IT networks today mean that anything you do to one part will have consequences on another part. From the point of view of the IT guy, a highly managed environment is a robust environment, and they absolutely don’t want anything in the IT environment to adversely affect the mining operation.
That means that they would like only qualified people to work on the environment – just like you wouldn’t want a plumber to wire up a new building or install insulation, or you don’t want a storeman setting up a blast pattern – the iT folk want to make sure that things are done properly in the IT network.
So IT isn’t Easy, you can’t do it yourself (even if you are an electrical engineer) and you do need help.
On the other side of the equation, IT folk don’t really understand mining. All they ever talk about is MIPS and BLIPS and FLIPS and FLOPS – the jargon levels are just amazing. Also, the very complexity of the environment and their lack of understanding of what miners do means they can’t tell a convincing story about why to invest in a technology initiative.
They say “If you invest in this new technology you will be able to see where every person is on the mine site at any time, as well as know where all of the heavy and light vehicle fleet is in real time. This will deliver more efficient fleet management capability and better safety outcomes”
When what you really want to hear is “By investing $750,000 on personnel tracking you will be able to exclude unqualified personnel from dangerous situations, resulting in a reduction of safety incidents by 60%, lost time incidents by 80%, and reduce the risk of accidental death almost completely. Based on benchmark figures from the last 5 years this means not only a safer place to work, but avoided expenses of over $12million.
Or maybe something like this “By implementing a workflow application to manage warrantee claims on unserviceable equipment, we saved $10 million in the first year by claiming against warrantees where we didn’t before. The project cost $600k and paid for itself in the first month.”
These examples are real and presented in a form that makes sense to the people making the investment decisions - they are explicit about cost and return and the benefits are stated an measurable. To the extent that the IT folk cannot make such an argument and gain investment, then you are losing out, because IT can deliver real financial benefits to mining operations.
The answer here is to find a way to help the IT guys to help you – help them talk your language, and better understand the numbers game. For your part, if you don’t make some effort to listen and understand the IT folk, then you are missing some great opportunities
At this stage, I’d like to make an observation about technology evolution. You have probably all seen graphs that show how long technologies in the past have taken to penetrate the market – The Telephone - 50 years, the computer - 30 years, the mobile phone – 10 years, the internet – 5 years, web 2.0 – two years. These numbers are a representation of the exponential nature of technology adoption. The long cycles from the industrial revolution have to do with how long it takes to put expensive infrastructure in place, more recently the technology innovations use the existing infrastructure. There is also a piece of this which is about increasing population and education standards – more people, smart people think of more new things – and now they are all connected by the world wide web – so knowledge of news things spreads instantaneously.
You need to keep that in the back of your mind as you consider what kind of things you can do to deal with some of the issues that face the mining industry. So I will now touch on some of the challenges that I see in front of you in the next 2 to 10 years. I will warn you in advance that I’ll be using examples of what CSC has done in this and other industries that could be applied to your operations.
Infrastructure Constraints
Clearly infrastructure constraints that see insufficient railway capacity or not enough ports or roads can only be alleviated in the long run by building new stuff. But the lead times in that are significant – it might take 5 years go to woe for a new port to be built – or even a new terminal at an existing port.
In the meantime, technology can assist by helping to better schedule the use of the infrastructure that you have. In Western Australia, some smart rail scheduling technology and a new approach to stockpiling has let one of our clients put $200 million on the bottom line by allowing current production to get to the ports faster and allowing latent production capacity to be liberated. The investment there was less than $20 Million.
In France, a new scheduling system for the rail network is freeing up congestion by allowing schedulers to rework the schedules in real time, avoiding for instance, stacking up trains behind a breakdown, and anticipating when a particular train crew or driver needs to be replaced and having a replacement ready to take over at the place where the exchange needs to happen.
Human Capital
As the industry heats up again, the human capital market will return to being demand driven. So how do you make your company a more attractive place for the best people to choose? One way that is getting a lot of airplay today is running operations remotely. Assuming that people who don’t need to be on site should be able to work anywhere why not set up a remote operations centre somewhere nice (and cheap) – somewhere near nice beaches on the central Queensland coast for instance. It’s a nicer place to live than Mt Isa, and people who settle in such regional communities don’t tend to shift around a lot – they make more loyal workers.
In the event that really skilled workers become hard to come by – like mine planners or engineering managers – then the ROC approach allows you to use less experts to support more operations. All you need is high quality communications.
Asset Reliability
Most mining company’s maintenance regimes are in a parlous state, with break/fix maintenance the norm. This means that breakdowns are unpredictable, and often have operational impacts. How can you deal with that? Firstly get and use the information that is available to you today. Almost all equipment – trucks, shovels, motors, everything includes logic circuits that tell you how they are going. Rarely is this information uses – there is too much of it, where do I store it, how do I look at it? CSC has build and run a number of monitoring systems for satellites. The systems there need to be monitored and repaired remotely, and the systems are now, after 40 years, so sophisticated that they tell you what’s up only after they have been unable to fix themselves. The technologies that contribute to that include some very special communications technologies, intelligent systems that manage those of the issues themselves and some fairly simple business rules for getting people out of bed to deal with bigger problems. 10 years ago when these were built, it was a bit like science fiction but today the technologies are readily available.
Compliance , Sustainability and Security
Over the next few years, Compliance regimes imposed by the government for things like Safety, Sustainability, and Asset Security are bound to be emplaced, or become more rigorous. Any technology that can help you to make your site safer will become mandatory – indeed if you don’t take every effort to stay up to date, then when accidents do occur mining companies will be pursued in the courts and the press. Issues of Sustainability, with much more focus on emissions for the CPRS, monitoring of contaminants, and water use are getting much more public awareness. You need only look at the furore over the high lead reading at Mt Isa to see the way things will go in the future. With uranium mining back on the agenda, public expectations on how carbon emissions are managed, among other things, the mining company of the future will need to be ever more mindful of is “Licence to Operate”.
So how can IT help here. Firstly, I mentioned the ability or people tracking to make sure that you can better manage access in a dangerous workplace. Technologies like RFID, communications technologies that provide ubiquitous connectivity and allow mobile workers to interact with systems from the field will all contribute to a safer and more productive worksite.
Sustainability compliance is all about monitoring performance in the thing you are interested in (fuel usage, water usage, contaminant levels). New intelligent sensors can do this monitoring minute by minute, send the information back to the office and let you know when things are operating outside of your preferred bounds. They will alert you immediately that a contaminant level is rising before it reaches concerning levels and you have time to remediate the problem – before it becomes one.
Security at the site is a big deal. Before long the government will begin to see things like coal and uranium mines as possible terrorist targets. And in my view they are all pretty soft targets as well. So that’s at the extreme end of the spectrum. More low level issues are about controlling who gets in – making sure that you know who they are, they are qualified for what they do etc. This management of the workforce is a well understood issue. In recent projects for mining customers CSC has implemented workforce management systems that focus on controlling access throughout the site based on the individuals training records. In other recent projects CSC has designed, built, and implemented an access management system for the Defence Signals Directorate – a security challenge of the very highest level.
So just as I wrap up, I’ll give you a few tips on how to get better business outcomes from IT
• Treat it strategically – it isn’t easy, you can’t just knock up a spreadsheet any more.
• Take it seriously – if you IT advisors can’t give you a proper business case, make them do it again – but don’t write off the ideas.
• Provide strong input to your IT people so that the systems are designed to do what you want of them
• Focus now on technologies that can deliver automation of operational processes and automation of business processes.
• Go mobile – the case for letting people interact with their supporting systems from the field is compelling
• Understand that not all projects will be big, hairy, and audacious – but lots of little projects can make a big difference.
• If you have trouble communicating with IT folk, help them out by educating them, of choose people who know about mining as well as IT. Take some time to hear them out – they have some great ideas.
• Finally – what I’ve been talking about here is Innovation. You need it, You want it, so plan for it.
So I hope I have convinced you o the two things I started out with. IT is fundamental to your business, it supports more of you business than you probably think, and given the rate of innovation in information technology, it will be the platform upon which you build the new automated operations and business models of the near future. And secondly, I hope I convinced you that in so much as you are not talking about these things with your IT folk, you might be missing out on a lot of value for you business. I urge you to engage them, and if that doesn’t work, come and talk to CSC.
