Tracking the Trends with Deloitte 2 – Innovation

Deloitte have released a list of the top ten industry trends we can expect in 2015. With a number of challenges faced by the sector this year, it’s important to stay a few steps ahead and pay attention to the indicators. As we all know, the mining industry is cyclical in nature, and despite the ongoing commodities downturn after the mining boom, the upswing is on its way. It's simply a matter of when we will start to see this resurgence.

Australian Mining takes a look at each of these ten tips from Deloitte to see what’s in store through this ebbing year in the mining cycle.

Innovation

Although we already touched on innovation in terms of productivity, that is certainly not the end of the story.

Deloitte predicts innovation will be one of the biggest driving forces in the mining industry in 2015, but it needs to happen in, well, innovative ways.

The traditional forms of innovation, the ones that would immediately spring to mind, generally relate to cost controls, incremental improvements to productivity (shaving off the seconds to scale up the tonnes), or straight up technological improvements.

Remote mining, driverless trucks and other forms of automation are not imaginings of the future any more, and while their development will require a great deal more innovation, there is much more to innovation than research and development around processes and technologies.

Reduction of capital intensity is the most common means of improving business, and we’ve seen this in the mass restructuring of 2014, with divestment of assets, mine closures, and restaffing on lower wages, but what about the reduction of people intensity, or energy intensity?

There is always further to go in reducing the necessary manpower, in streamlining work processes in the pit or underground, and automating.

The reduction of energy intensity certainly requires a great deal more development to help reduce both cost and carbon footprint of operations.

Looking at new forms of incorporating renewables into remote power generation is an area which will be especially important in Australia for reducing power costs in processing and accommodation by utilising increasingly reliable hybrid systems.

But innovation is required in all facets of business, and the only limits are our collective imagination.

Deloitte remarks upon innovative approaches to leveraging supplier knowledge, redefining participation in the energy value chain, and finding new ways to engage in partnerships with stakeholders that can be beneficial and even profitable.

In short, Deloitte thinks mining companies need to overcome its traditional tendencies to conservatism.

‘If it ain’t broke…’ is not an acceptable policy, it presents no way forward. Conventional means of innovation must remain in play, but they can’t be the sole content of the mining trick bag.

One example given is that miners sometimes struggle to adopt technologies which have been made to work at other operations, and in such a case management need to understand that it may not necessarily be a technology problem, but rather an adoption problem which requires some rethinking and restructuring.

Cloud technology, minute to second monitoring of microdata, with the means to micromanage remotely; This is just one example of the kind of innovation that needs industry uptake in order to develop new ways of using the technology.

We already have a few companies in Australia who are concentrating on this new cloud based infotech market.

At a recent meeting in Sydney about new developments in disruptive cloud technology, Kim Benito, Vice President of business management systems company Zuora, talked to Australian Mining about the new subscription based economy.

Benito referred to brainstorming going on at several major OEMs in the US, who she said have seen and acted on the benefits of a subscription based model in heavy machinery hire operated with the flexibility that cloud software portals can afford.

Rather than customers buying their own machines from distributors and paying for servicing, miners could simply rent machines under a system where they pay per tonne of earth moved, which would be monitored real time in the cloud, not only to ensure there were no unnecessary charges, but to ensure fast connection and flexibility in terms of last minute changes and fast emerging requirements.

This kind of innovation can undoubtedly free up precious capital for junior to mid-tier miners to be used for other, hopefully more innovative, means of reinvestment.

The same kind of real-time monitoring could be applied to labour hire in order to make costing of major construction projects more accurate, and increase long term feasibility through knowing exactly how much to pay the contractor per units of work performed, rather than relying on periodical inspections by the client and progress reports by the contractor.

Cloud Awakening founder and CEO Chris Petersen also spoke with Australian Mining about the ways cloud information systems are ripe for new waves of innovation that could completely change the in-house processing of data at the micro and macro levels of business.

“Literally 100 per cent of the companies I’ve come into contact with in the mining industry, that I’ve personally dealt with, all use Excel for asset tracking, and they were working so hard and so fast with such limited overall budgets for personnel, that they grabbed whatever tools they could, often Excel,” Petersen  said.

“So they left themselves in an absolute pickle, not being able to scale their business and leaving it ripe for issues down the line: A company that’s investing hundreds of millions or more on construction, operation and maintenance of a mine all based on a spreadsheet that was built at a single point in time, I could never see that as a viable solution.”

Petersen said Asset-Guru, the proprietary software run by Cloud Awakening, was built to allow companies to scale their business through live tracking of asset growth, which streamlines the data entry process by capturing once, rather than many times and requiring double handling information in the office.

“People are stuck in the office rather than being on site, and mining really is all about what comes out of the ground, so having an iPad-ready application is a no-brainer when it comes to managing this information.”

Cloud computing is one example of a technology waiting to be integrated with others to form the basis of new innovation, in anything from data management to haul truck loading.

Take the Titan 3330 Production monitor, for example: A graphic interface in the excavator cabin shows the operator exactly how much material is in each scoop, measured to prevent under or overfilling of haul trucks.

Sensors on the hydraulics of the excavator record every movement and weight, and using GPS logging maps can be built showing the density of material as it’s dug from the ground.

With information sent live to the cloud, engineers on site or even in Perth can monitor progress and issue commands to alter the input of the vectors involved to achieve desired outcomes.

But there are many more avenues of emerging technology just waiting for leverage: Cyber security, embedded logic, big data, modelling and 3D visualisation, nanomaterials, energy storage, renewable energy conversion, carbon capture and emissions reduction, superconductivity, non-detonating solutions… Even SMS and mobile phone technology is unbelievably underutilised, more often than not due to the reluctance to change policies on the ground, shutting off one avenue for practical innovations yet to be discovered.

All of these sort are ideas born into the market and waiting for the right team to explore and integrate with other practices.

And herein lies the real key, one which has always been the most important factor of innovation: People.

In order to innovate, we need to have ideas, and in order to have ideas, we need good people with the right education, training, and chiefly intuition to conceive and visualise the breakthrough ideas that will take us ever closer to the 22nd century.

These principles must be embedded into the company psyche, to foster the kind of consciousness and environment that allows for such creativity to thrive, but also to have the positive management systems in place to enable leaders to take on board the grass roots ideas had on the ground by workers, who might otherwise be ignored by superintendents with too much on their plate to worry about changing horses mid-stream.

Live reporting at all levels can certainly assist the innovation and idea uptake process at the level of management, providing a more direct connection between the suits in Perth and the high-vizzed workers whose hands are on the levers every day.

It’s about building and being part of an innovation ecosystem, Deloitte says, by polling talent, ideas and insights and having the means to develop and implement.

Deloitte also presented the notion that mining companies need to abandon the traditional urge to test new systems to scale.

Instead new ideas need proof of concept to be developed on a small scale, made to work and then rapidly scaled up, eliminating the risk involved with taking on board new tech.

Above all, companies need to brace themselves for these new operational realities. Open-mindedness and readiness to adapt and change must come at the very start, because without that even the very best idea will never get off the ground.

 

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