Soft solution for hard problems

Mining companies have turned to business management software to ensure their operations remain profitable. Michael Mills writes.

Many mining companies in Aus tralia were forced to stream line their operations and employ drastic cost-cutting strategies during the past 12 months.

To make this happen, some turned to Enterprise Resource Planning (ERP) software, a popular business tool that has been used across many industries for nearly two decades.

This type of program is designed to help managers control multiple busi ness activities, such as payroll, account ing and supply chain management from a single point.

Pronto Software is one such devel oper of ERP Software.

The company’s product manager for facility management and manufac turing, Erica Molnar, told Australian Mining that the financial crisis had actu ally helped its business substantially.

“Many mining operations have employed our software to help improve and optimise their operations and lower costs,” she said.

“The companies also wanted to speed up the availability of important operations information so they could respond to events and changes much more effectively.”

Bill Cooney, the senior business con sultant of another developer, Infor, echoed this view.

“The bottom line is miners are being asked to do more with less,” he said.

“For example, they are not allowed to buy as much capital equipment, so the operators have to ensure that what they do have is running at its best.”

According to Cooney, the software can be used to mange the networks of physical, financial and electronic infra structure that are needed to make the business a success.

“Obviously, there is more to the mining industry than simply digging a hole and doing something with the mate rial,” he said.

“The systems can help an operator interact and plan with infrastructure and support industries for activities such as shipping and equipment maintenance.”

According to Sage Software com mercial manager of ERP Bernard Ford, mining companies traditionally imple mented expensive specialist software designed to cater to the industry’s unique characteristics.

“ERP software was originally designed to accommodate general businesses, such as distribution and manufactur ing-type companies,” he said.

“Over the last couple of years, the mining industry has realised it is actu ally pretty similar, if not identical, to a lot of traditional businesses.

“The companies recognised they could implement generic ERP systems that were modified to accommodate their specific needs.”

According to Ford, the miners looked at industries that had experienced similar difficulties in the past.

“The companies realised they needed to run these best practice ERP systems to control expenditure and viable finan cial information quickly,” he said.

“There is less emphasis on the old mining-specific processes and more emphasis on controlling procurement against budget, having financial infor mation readily available and optimis ing inventory levels.”

According to Ford, the Sage soft ware can be used to manage a mining operation from start to finish, from the initial exploration, job costing and pro duction right through to the financial accounting phase.

“Many mines are publicly-listed, so they require financial accounting to be produced from a single system,” he said.

“The accounting also has to comply with the various stock exchange require ments around the world.

“So their system has to cater for core financial accounting, occupational health and safety, asset maintenance and the input of statistical data.”

According to Cooney, the Infor soft ware portfolio has a strong emphasis on managing and scheduling the main tenance of assets like capital equipment and plant machinery.

“We have an enterprise asset main tenance management system that is specifically designed to plan service and maintenance and manage the up time of mining equipment,” he said.

“One of the big drivers behind the development of this has been the green aspect. “The mines need to be able to monitor equipment for energy utilisa tion and the output of all sorts of emis sions so they can plan maintenance and service when necessary.”

According to Ford, mining compa nies often require modifications to the workflow facility provided in typical ERP systems.

“This facility is normally used for the procurement of goods and services, but miners also need the ability to issue and track costs down to smallest detail,” he said.

“The mine operator may need to track the costs of explosives, for example, or even a specific stope within a mine shaft.”

Ford said the software could also be used to input and monitor statisti cal data, such as the amount of mate rial mined in certain sites or the dis tance dug into an underground tunnel.

According to Molnar, many mining clients were looking to integrate sepa rate departments and business functions to consolidate the operations.

“One of the software’s strengths is its project costing module, which can be used to manage facilities,” she said.

“For example, the construction industry uses it to manage project sites.

“In this regard, mines are quite similar to construction projects, except they also have smaller projects within.”

Mining companies are increasingly requesting an electronic workflow capa bility, business intelligence availability and system mobility, Ford said.

“The companies want to make req uisitions for a purchase order from any point on the globe and have it directed through to the right destination,” he said.

“They also want to have really accu rate data and business intelligence, so one version of the truth is available at their fingertips.

“This relates to the request for mobil ity, as these operators would like to be able to access and process the data from any location, especially as mobile phones get more intelligent.

“For example, a mine worker could use a mobile phone to input the number of metres dug in a tunnel during a day or a manager could check the company’s financial results from an airport as he alights from a plane.”

Molnar also stated the importance of mobile functionality, as it operates in real-time and can be more cost-effec tive. “The Government is now encour aging a lot of sites to reduce the amount of paper they use. We are developing our systems to be compatible with Per sonal Digital Assistants (PDA), mobile phones and scheduling programs, so that the companies can use less paper,” she said.

According to Cooney, many mining companies are also looking for systems that can operate across multiple sites and plants.

Ford believes the Internet will play an increasingly important role in the future development of the software.

“Despite its age, the Internet is actu ally quite a recent frontier for a lot of soft ware and there are not many packages around that are truly web-native,” he said.

Cooney also thinks the Internet will play a big role, especially as business intelligence becomes more comprehen sive and dynamic.

“Currently, an organisation can measure itself against all sorts of busi ness intelligence information rather than simply look at its budget,” he said.

“It can even compare the divisions of the company against each other as well as against industry standards.

“I can only see this growing in size and scope as time goes on.”

Molnar said in the future, genera tions of software will have an even greater focus on the efficient use of man power and resources.

“As sites get bigger, many mining companies will use less people to do multiple tasks,” she said.

“The software will have to capture more and more information, so that the company is aware of what each person can do working at their full capacity.

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