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PROSPECTIVE
By
Niraj Kumar
E-mail: nirajkumariitkgp@gmail.com
ABSTRACT: Though concept of ERP is about one decade old and industries like
electronics , chemical, steel manufacturing, cement etc are fastly implementing concept
of ERP ,still mining industry is far behind. This paper is an attempt of conceptual
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facility, and making existing facility more efficient in every period. However attempt in
this direction has increased manifold in last few decades and particularly after the
invention of computers. Consequently, the first business activities to be computerized
were inventory control and purchasing. The need for software specifically designed for
manufacturing operations led to the development of MRP in the early 1970s and
which gave rise to the development of MES (Manufacturing execution systems). Then
came demand forecasting and DRP (distribution requirements planning), Which paved
the way for supply chain management. ERP encompasses both MES and supply chain
internet.
competition are changing at faster rate than ever. Fast and accurate information is the key
for success. In this scenario, companies have to protect their profits and remain
competitive in a crowded market and with sophisticated customers. Like any other
industry, mining industry can�t afford to far behind to these changes and ERP is a tool by
answer certain question like what is ERP, what is need of ERP in mining industry ,what
are benefits of ERP implementation and many more. So in next few section we try to
What is ERP?
people with common objective of making profits. But traditional mining industry is
Machinery Maintenance etc which has very limited interaction with each other and in
many cases isolated with each other. So very limited data are available about a particular
production department require new machinery, but Financial department wants to reduce
purchasing cost. These may lead to disruption of normal functioning of the organization.
But in ERP system , Data related with all the departments of the company are
stored in a central database, so that each department can access it and exactly able to
know what others are doing in no time. Why they are doing it and what are required to
move the company towards a common goal. The ERP system helps to accomplish this
task by integrating the information systems, enabling smooth and seamless flow of
information across departmental barriers, automating business process and function and
thus helping the organization to work and move forward as a single entity. Thus ERP
To apply any new technology or concept in any industry, We must first identify if
there is really a need for that and we can’t adopt a new thing only because others are
doing the same. Important point which identify needs of mining industry presently are
In this age of liberalization for survival, there is urgent need in mining industry to
To ensure high quality or quality of mineral which is required by the customer.
In many cases, high grade ore are depleting and so we have to move towards lower
grade minerals ,whose economic mining is possible only by improved technology and
Most of mining companies in our country are running into loss due to lack of
As gestation period is comparatively high in mining industry, there is urgent need in
Able to adopt new technology of mining in efficient way like telemining (which is
the use of current state. of art technology, including u/g communications,
(which supply information accurate to, the millimeter on the size, shape and location
for all underground working) ,which can be used with a CAD like system showing
Able to use different mining software for exploration, reserve estimation, mine
ERP implementation in mining industry has both direct and indirect benefits. Direct
benefits are reduction in lead time ,greater transparency and fast data transfer,on time
shipment, reduction in cycle time, increased worker efficiency etc to name a few. While
some indirect benefits in terms of better customer goodwill ,helps in increasing customer
base.
Requirements of ERP implementation and problems in fulfilling these requirements
For successful ERP implementation support from all its users from lower level to
higher level is necessary. There is human nature to resist changes and chances of
elimination of jobs is also high. All these are big problems to deal with in developing
In Indian mining industry, at lower level there is illiteracy and also tendency to
obstruct changes at higher level due to many factors. These are the measure obstructs in
ERP implementation.
Existing technology of mining, nature of business being done and hardware, software
and data base management systems infrastructure in the company is largely going to
organization has very little infrastructure ,so it also creates problem in ERP
implementation.
A team of experts is required who can understand the problem of mining industry as
well as pros and cons of ERP, but at present our country is lacking in this area.
There must be willingness in high level of company and also people in management
analysis, before actually going in for ERP implementation. Important cost involved
are:
*Cost in data conversion i.e. cost involved in converting data from traditional
*Other high cost in increasing infrastructure for ERP and using latest technology in
every operation.
management, Sales and Distribution etc. Most significant thing about these modules are
time. To understand it in better way let us take a very elementary example. Suppose a
small coal company receives a purchase order. In the non – ERP environment the order
entry clerk will enter the order details such as quantity of coal, quality of coal, address of
delivery etc. These order details are then passed on to the finished good coal storage
department, Where the in charge of the department checked if coal of required quantity
and quality are available or not. If coal are available, then distribution department load it
in trucks and send it to the customer. The accounts department of the company is also
notified, where bill will be prepared and sent to the customer. If coal is not in stock, then
with time schedule for production and production department after checking with
condition and production might get delayed and help of machinery maintenance
soon as, the order entry clerk enters the order of coal into the system, the system
checks the inventory records and finds out whether coal are available or if the coal are
available, procedures are triggered automatically that will inform people in the sales and
distribution department and finance department. The information will contain the details
of coal to be shipped, the most economic route to the customer and so on. Also, the
system will trigger procedures in the financial modules so that bills are sent to the
(EDT) and the payment are received electronically through electronic funds transfer
(EFT). If coal are not available, the production – planning module makes a production
material that is not in stock is ordered. The supplier is informed and associated processes
happen electronically. The machine maintenance gets the lists of machine required and
ensures that all of them are available. Thus, the production of 14 the coal goes on without
any hitches. An order entered into the ERP system by order entry clerk, triggers a whole
lot of procedures and automatically performs a host of functions. All these processes
After the order is received with a very short period of time, the coal are on their
way to the customer. If coal are not readily available, the customer is informed about it
and is given a delivery schedule. Other than the order entry clerk and people in the
distribution, production and maintenance departments, all the other tasks are done by the
system and that too automatically. In a Non – ERP environment, these tasks could take
days or even weeks to complete. since the ERP system stores all the data in a central
database and since the database is updated by all the modules on a real time basis, the
information available in the database is up – to – the minute. This integration of the
different business function and automation of the business processes and availability
(which is accurate and current) is what makes the ERP system capable of producing
found work of Financial module starts.From economic evaluation of the project to cost
module plays an active role. It links to all departments of organization from Material
& D section. This module is also responsible for cost benefit analysis of each activity
within the organization and also all cash inflow and outflow is done via this departement.
Financial module of a mining enterprise should capable of dealing with special conditions
that exists in mining industry like its Exhaustibility, Remote location, need for heavy
Production is key to any mining industry. All other activities evolved around this.
resources into minerals. Managing of production units starts with planning the total
production system. The planning process for mining operations is very complex and so
incorporating all information is not an easy task in any ERP module. In ideal ERP system
we prefer our production unit to be make to order rather than make – to- stock. However
even after using the latest technology of wining coal it is not possible to follow make – to
order philosophy.
surveying department and data available from exploration, development etc should able
to do geostatistical analysis so that to estimate the quality, quantity with higher accuracy.
It should also responsible for design of workings, equipment selection and able to give
Production scheduling
coal.
production department starts working. This module should able to ensure that all
provisions of Act, regulation etc are followed strictly and safety should given top priority.
Win coal
Give information about exact quality and quantity of coal supplied to sales and
distribution department.
driven industry as many units of mining industry like development ,drilling etc lack
proper advancement. Also there is large scale illiteracy at lower level and largely labour
force in our mining industry is in grip wine, tobacco and worst of all heavy loan taken by
them from private money lenders. Also safety ,health and proper understanding of mine
plans and Act, Rules, Byelaws and Regulations are necessary for efficient functioning of
mining industry. All these factors placed a heavy burden on HR management department
in mining industry. So HR module of ERP is capable of dealing with all these problems.
Apart from that HR management is responsible for new recruitments, Training of existing
as well as new manpower ,small health care provisions for its employees, maintain the
profile of each members of the organization so that management is able to choose best
among them for any specific work. It should also responsible for spreading safety related
propaganda among workers and arranged meeting, outings, foreign trips etc for the
organization. It must also study behavior of the manpower against any specific cause and
Machineries are heart of any mining industry. Any mining industry can’t achieve
excellence with unreliable equipment. In ERP system our target is to obtain quick
Any mining industry has a number of heavy and small machineries like Shovel, Dumper,
Loader, SDL, pump for water drainage ,Winding engine, Various types of fan for
ventilation, ome crushing and grinding plant in case of Metal mines, Gate end box etc.
Successful performance of all these machineries under mining condition is vital for
Maintaining the case history helps in future decision making about machinery,
Reliability study of all machineries under specific condition and based on that
maintenance required and active life time of equipment estimation and suggesting
This department should also help the management in selection of machineries under
given condition by some scientific or engineering method like partial ranking method
maintenance work within the stipulated period ,so that chances of machinery failure
management department has various constraints like availability of space , EOQ etc and
within these constraints our target is to minimize cycle time and overall cost. Also for
each it should calculate economic order quantity and accordingly order should be placed .
over quality of minerals. However, the quality of ores may be different at different
mines or sections in the same mine and by proper mixing the minerals, we can improve
the quality or supply the mineral of desired quality. Also quality department can ensure
the washing or processing of minerals if required and improve the quality of mineral
supply and take advantage over its competitor. The quality management priorities shift
from production planning to production and sales and distribution as well as listening to
components:
Planning the production and after production activities in such a way so as t6o deliver
Inspection of the quality of minerals at various stages after the production and before
the delivery
enough for any mining company to have good mineral quality and enough quantity, but
focus should now on core competencies and closer partnerships over the whole supply
chain. Customers want higher quality of mineral and shrinking lead time. To cope with
this ,mining companies should make a sales and distribution model, which is customer
centric. In mining industry mostly contract handling is the standard practice. Contract is
nothing but agreement with customer. So this require that company must retain the
current customer base at the same time try to expand the existing customer base by closer
interaction with customers like mail campaign. It may led to success or failure. In case of
success , customer do enquiry about the minerals etc and finally orders from cont6ract is
Sales and distribution should have a database with information about total reserves,
required by company and its supplier. With detailed information about how much
quantity ,quality of mineral is send to which customer with their cost, date and time
of delivery, so that all these information are available on time to decision makers of
the company.
route to customer as well as ensuring proper supply of material to the company and
Finally combining all these to obtain result closer to J.I.T. philosophy and to
minimize overall cost. Now take a look on the logical view of sales and distribution
ERP in mining industry cost benefit analysis , project planning and its implementation in
phased manner ,end user training and always adaptability with new technology is
required.
ERP system can help mining company increase its market reach with faster rate ,
improved production and distribution ,processed and more personalized interaction
with customer.
This enables the mining company to have its executive times becoming available for
In Indian mining industry due to lack of understanding by mine managers that
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8 Shuey A. Cott, ‘ Mining Technology for the 21st century,’ E & mj Journal, April -