The Intelligent Mining Enterprise

Indranil Som (indranil.som@sap.com)

Digital Transformation & Value Advisor - Industry Value Engineering, Mining, Metals and Mill Products, SAP India

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The Digital Era is evolving into the Intelligent Era

The genesis of today’s digital era can be traced back to the beginning of early 1960’s when
mainframe computers followed by PC made their advent. That was the era of the Industrial
Automation, which was ushered by the enabling technologies of that time – transistors and
silicon revolution, large scale mainframe computing and plant floor automation. The Industrial
Automation era was followed by business process automation, as PC adoption became more
widespread, broadband internet became more accessible and companies started adopting ERP
and business process technologies. From early 2000’s, with the ubiquity of mobile and
smartphone, cloud computing and social networks and big data started to become mainstream
towards the latter of the decade, the age of digital transformation had commenced.

The digital era is now evolving into the intelligence era, as digital transformation gives rise to the
intelligent enterprise. While the intelligent enterprise has become the latest buzzword in the
industry, yet few seem to be able to articulate what it really means and why it matters. Simply
said, an intelligent enterprise effectively uses data assets to achieve desired outcomes faster,
and with less risk. Using next generation intelligent technologies like Machine Learning and
Artificial Intelligence, Internet of Things and Blockchain, businesses are improving operations
and achieving game-changing outcomes by using intelligence derived from their data to deliver
better customer service, streamline their processes, better leverage employee talent and create
new business models.

Employees in an intelligent enterprise can automate complex processes such as invoice and
payment matching, often freeing them up to do more forward-thinking and insightful work. For
customers, AI, chatbots and voice technologies anticipate their needs, create personalized
customer experiences, and deliver best-in-class, proactive customer service.

Intelligent Enterprises differentiate through three key capabilities:

 Visibility - the ability to collect and connect data that was previously siloed, and
recognize unseen patterns
 Focus - the ability to simulate the impact of potential options, and direct scarce
resources to the areas of maximum impact
 Agility - the ability to respond faster to changes in the marketplace or the business and
pivot business processes towards the right customer outcomes

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Strategic Priorities of the Mining Industry

The journey of digital transformation in the mining industry is at its early stages. While leading
companies are active, a recent survey has shown that only 6% of mining companies have
included technology as part of their broader strategic plans. Digital transformation is essential
for economic reasons: to stay in business. The result is a more agile, more profitable business.
Companies that embrace the digital world and execute on their digital strategy are growing
shareholder and stakeholder value.

In this situation, where new technology opportunities are huge and continuing business as usual
is not an option, it is essential to focus on the right strategic priorities to drive digitalization
across the business.

 Make Mining more predictable and safer – Advanced predictive analytics and
machine learning help predict failures or exceptions to support the right decision making,
thereby making mining more predictable and safer for the workforce.
 Collaborate with suppliers, customers and workers – Collaboration among
stakeholders will strengthen relationships, digitalize data exchanges, and make the
business more agile and profitable.
 Enhance operational and commercial agility – Enable real-time data access by
combining IT and operational technology throughout the entire pit-to-customer process.
 Increase productivity through automation - The mining industry will increase the level
of automation to make work safer, enable a more predictable outcome, and increase
productivity.

Embracing the opportunities offered by new technologies and addressing the four strategic
priorities will be fueled by running efficient business processes like as follows:

 Smarter mine modeling: real-time calculation of mine models and combining with
financial data to improve accuracy and enable adherence to plan
 Real-world sensing of operational data: improved planning accuracy and decision
support
 Predictable operations: more-accurate predictions enabled by machine learning
resulting in better and faster decisions
 Sustainability: less energy to achieve the targeted quality level
 Advanced analytics: real-time analytics and decision support to improve operational
efficiency

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Leading Mining Companies are becoming Intelligent Enterprise

By applying intelligent technologies such as the Internet of Things (IoT), artificial intelligence
(AI), machine learning, and advanced analytics, leading mining companies transform into event-
driven businesses. Event-driven businesses automate repetitive tasks, enable employees to
focus on higher-value tasks, and allow companies to invent new business models and revenue
streams by monetizing data-driven capabilities and applying core competencies in new ways.

The intelligent enterprise enables employees to focus on higher-value outcomes and to invent new business models
and revenue streams

To become an intelligent enterprise, companies are optimizing existing processes for more
efficiency or reliability, extending current business processes beyond efficiency gains to
capture new sources of value and transforming the company’s value chain or business model
to capture new revenue streams.

The Australian mining company Rio Tinto, has revealed its next IT-driven business
transformation – to create its first ‘intelligent’ mine, where all assets are networked together and
capable of making decisions themselves in a micro-second. Likely successor to its decade old
‘Mine of the Future’ program, the intelligent mine would be established with leading edge
technology, including automated trucks, drills and trains but also for the first time, systems
connecting all components of the dynamic schedule, from the customer right through to orebody
planning.

Rio Tinto is assessing over 100 innovation opportunities which would make the first intelligent
mine. One such initiative is digital twinning by building a replica digital plant that collects all the
data on the plant from design, build, commissioning and operation and allows work to change
through augmented reality. Rio Tinto’s digital twin would be a living model which is linked to a

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data lake with a number of pieces of static and dynamic information contained within. From a
field or remote location operators will have access to this data, and coupled with analytics and
machine learning, will drive business related outcomes in a shorter time and with greater
accuracy.

Digital Innovations Driving the Intelligent Enterprise in Mining

Here we take a look at some of the technology innovations which is helping mining enterprises
in their journey to become an intelligent enterprise.

Revolutionize Asset Management with Global Collaboration

Various groups involved in the management of capital assets have specific goals and
requirements. Asset operators want to minimize capital investments, operational overhead, and
risks. They prefer to buy the services provided by equipment rather than the equipment itself.
Original equipment manufacturers (OEMs) want to increase revenue growth and sharpen
competitive advantage with bundled products and services. And service providers want to offer
value-added services enabled by technological innovations. Each of these groups can benefit
from a simplified collaboration model.

Now imagine a single cloud-based Internet of Things linking all the equipment in an ecosystem.
Visualise a host of applications running on this collaborative platform to simplify maintenance
and enhance cooperation for complex tasks. Envision built-in analysis that inspires innovation
for managing assets as a service or redesigning them based on performance. This is the Asset
Intelligence Network, the next wave of asset management innovation by bringing the asset
ecosystem partners onto a single cloud-based collaborative network platform.

A host of applications can be built to help miners and OEM’s to,

 Install a digital twin in their enterprise asset management (EAM) system to represent
each physical machine
 Standardize equipment management through asset master data and spare-parts
information available for update from the network
 Streamline maintenance through access to the latest task lists and service bulletins on
maintenance strategies
 Achieve collaborative design and execution for complex installation or maintenance
procedures

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  Institute collaborative network services for managing equipment, collecting asset
performance analysis and feedback, and fostering usage-based design enhancement

Foundation for a successful, global, single network of assets enables collaboration between equipment
manufacturers, service providers and mining enterprises

At BASF Ludwigshafen, over 200 production plants are connected to each other by over 2,850 kms
of pipeline and 230 kms of rail. The concept of asset intelligence network would help BASF to
establish a fully integrated and centrally managed, single source asset information repository,
which ensures efficiency of its engineering and maintenance processes throughout the asset
lifecycle. Dr. Andreas Wernsdörfer, Senior Vice President, Technical Site Services Ludwigshafen,
BASF says, “A more integrated digital approach with our business partners would allow us to
easily access the latest and current information when and where needed, leading to quicker and
better decision making and in consequence higher asset effectiveness”

Streamlining Purchase Requisition Process with Machine Learning

Current purchase requisitioning process are often manual in nature, with decentralized
information distributed across files and systems. Incorrect parts number entry or lack of visibility
to inventory of the concerned part often leads to inaccurate PO’s being raised which causes a
lot of rework and a longer than required PR/PO lead time and that results in excess of spare
parts inventory being held.

Machine Learning based image recognition algorithm, integrated with a back-end ERP
application can help the maintenance technician to identify the material number of any spare

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parts that needs replacement by taking a picture of the part. In case there is no internet
connection in remote mining sites, the technician could just take the pictures from the parts and
complete the purchase requisitioning process later. Once the part is identified, the application
will connect to the back-end system and find which is the correct procurement procedure for that
material, whether contract or purchase requisition, and complete the purchase requisitioning
process autonomously, also verifying whether this part had been already requested in the
previous shift or whether it exist in any nearby deposit.

This ‘Virtual Purchase Requisitioner’ helps simplify and add efficiency to the purchase
requisitioning process, since it helps complete the process in an almost touchless manner. This
will result in a reduced PR-PO lead time and in a reduced spare parts inventory, which will
translate in a reduction of working capital and increased labor efficiency.

Virtual Purchase Requisitioner mobile app that supports an intelligent purchase requisition process

Global mining company VALE, re-imagined its purchase requisitioning process using Machine
Learning based picture recognition to identify the correct part number. Using an innovation
framework based on Design Thinking techniques, VALE defined a reimagined requisitioning
process that was delivered on a simplified user interface application, accessible from any device,
which helps the user complete the process end-to-end without the need to login to any backend
system. This has helped reduce the overall time from raising a PR till the part arrives and freed up
resources for different other tasks

Innovate Fleet Operations with Vehicle Insights

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Mining enterprises need to manage large fleet of vehicles at their mine sites, which are often
remote locations and spread over huge area. As operational cost of these vehicles in terms of
fuel and maintenance constitute a signification part of the cost of operations, cost effective
management of these fleets becomes extremely critical. Fleet management involves,

 Vehicle tracking - most basic function of fleet management and is either GPS based or
based on a cellular triangulation platform, which provides visibility to the location of the
vehicles at any point of time
 Mechanical diagnostics - advanced fleet management systems connected with onboard
computers gather information on distance traversed, fuel consumption, vehicle health
like tyre pressure, temperature etc.
 Driver behavior – The data provided by the tracking system and onboard computers,
along with wearable sensors provides detail on driver behavior to enhance safety on the
road

Using a cloud-based Platform-as-a-Service model, Vehicle Insights application helps in

collecting, storing, analyzing, and processing telemetry data. The platform enables to collect
data from the vehicle fleet and use it to drive business and improve performance. By collecting
data about driving habits, maintenance, and wear and tear, one can generate accurate, timely
analytics and insights like tracking vehicle positions, routes and conditions in real time, enable
geofencing, alerting in case of deviation from pre-defined routes, monitor driver behavior and
create fleet scorecards.

Leveraging the concept of Internet of Things, Vehicle Insights enables real-time capture of information to drive
greater efficiency in fleet operations for mining industry

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Using Vehicle Insights application, Asia Pulp & Paper manages both own and externally
contracted truck fleet, and truck rates based on performance linked KPI’s like on-time delivery,
unloading time, number of trips etc. Trucks are fitted with different GPS devices but the
How SAP is enabling Mining Companies to become Intelligent Enterprise

SAP strategy to deliver the Intelligent Enterprise using the three components of Intelligent Suite, Intelligent
Technologies and Digital Platform

In today’s digital era, customers need a strong suite of applications, a data-centric platform, and
technologies such as machine learning, IoT, analytics to orchestrate the process end-to- end.
This is where the Intelligent Suite comes in. The Intelligent Suite is centered around the digital
core of SAP S/4HANA, the latest intelligent ERP system. The digital core is significantly
enhanced by other pillars of the suite - customer experience, manufacturing and supply chain,
people engagement, and network & spend management – by applications that have intelligence
embedded to truly deliver on the business priorities. The Digital Platform facilitates the
collection, connection, and orchestration of data as well as the integration and extension of
processes in the integrated applications. Intelligent Technologies like Machine Learning,
Artificial Intelligence, Internet of Things and Big Data analytics enables customers to leverage
their data to detect patterns, predict outcomes, and suggest actions.

The Intelligent Mine leverages the best of digital technology and Internet of Things (IoT) cloud or
on-premise platforms to connect the mining value chain from mine to market and from sensor to
boardroom. Data is consolidated from siloed databases such as fleet management, dispatch,
historians and ERP solutions. Once consolidated, powerful analytics can be run to provide

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operational intelligence and trend analysis—all visualized on tablets, smart devices, desktops
and in operation centers. This enables users to better understand the operation and embed
productivity improvements through dynamic planning and scheduling, dynamic dispatch, and
blending, based on customer order and market economics.

Conclusion

The mining industry is slowly evolving from a traditional push system to a truly market-led
supply chain. Companies are working on strongly integrating its mining assets, underpinned by
data analytics and real time data visualization, to be able to better anticipate customer orders
and market shifts and adjust operations accordingly that enables an agile response to market
demand. Few companies are also experimenting with machine learning and predictive analytics
to anticipate market conditions and enable better decision making. The systems of tomorrow,
would learn to adapt and change a schedule based on past experience and lessons learning
and also integrate customer needs. These systems would have the power to assess multiple
scenarios to make a decision instantly. These systems would understand in a microsecond how
to manage an unplanned event by assessing past experiences and would use market
intelligence to ensure value over volume. Artificial Intelligence and big data tools would be
supported by decision support and automation tools. Large mining companies are undertaking
trials of “augmented asset health tools”, which use cognitive technology to predict problems.
The next step from predictive maintenance, this would help predict a potential maintenance
issue and then being able to check on the asset condition through augmented reality.

The future of the mining industry is in intelligent mining. But this is about a broader organization
transformation and not just about technology alone. The journey to Intelligent Mining would
require transformation in more dimensions than technology. Intelligent mines will impact the way
decisions are made, the new skills mining companies would require, how one engages with the
workforce and the community in which companies operate and how to optimally utilize natural
resources.

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