SAP® FOR MINING

STRATEGIES FOR SUCCESS

THE WORLD IS SHRINKING

“It’s essential that mining companies prepare for growth

in every way possible, from improving operational
efficiency to maximizing the scalability of IT systems.”

Kristian Steenstrup,
Research Vice President, Gartner Inc.
 WHERE DO YOU GO FROM HERE?

FINDING YOUR PLACE

As a mining company, you play a critical role in building the world’s physical infra-
structures. But to succeed, you must maintain stability and focus in the midst of the
ever-more-challenging realities of supply and demand. Supply can be volatile, with
world minerals markets in constant fluctuation. Meeting demand can be frustrating.
And today’s fastest-growing markets may be in danger of overheating.

At the same time, in many ways the world is getting smaller. You can reach for new
resources on the other side of the globe, and you can open a new sales office in a
matter of weeks – even if it’s located a continent away from your closest location.

Information technology can help you track trends, monitor production, and solidify
partnerships. But it can help your competitors do the same thing. To thrive in
tomorrow’s smaller, but faster-paced world, you’ve got to tie information technology
to your strategic objectives.

In pursuit of these objectives, mining firms are looking beyond standard practices to new
business strategies that promise solid business results. But what strategies and practices are
right for your company? And what are the best solutions for facilitating them? To answer
these questions, companies rely on insights and advice from industry thought leaders.

STRATEGIES FOR SUCCESS

To relay what industry experts are thinking, SAP Strategies for Success explores the
most recent strategies, solutions, and best practices for each of the more than 25 major
industries served by SAP.

Each brochure in this series reflects the views of independent observers, analysts,
and other domain experts in a specific industry. Take a closer look at these strategies,
practices, and tools in the pages ahead, and consider how they can help your business
achieve profitable growth.
H I G H LY T A R G E T E D S O L U T I O N S . . .
SAP® SOLUTIONS FOR THE
MINING INDUSTRY
The SAP for Mining solution portfolio
helps mining companies master busi-
ness processes along the entire asset-
centric and customer-centric value
chain. SAP for Mining provides a num-
ber of tools to help you optimize these
processes.
One tool is the solution map shown on
the next page. Built using input from
customers and industry analysts, plus
the technical expertise SAP has acquired
through extensive business experience
and research, SAP solution maps
are multilevel blueprints of processes
defined for a particular industry.
They help you visualize, plan, and
implement a coherent, integrated, and
comprehensive information technolo-
gy solution. They also show how vari-
ous processes are covered, including
the processes that SAP and its partners
support. With solution maps, you
quickly understand business solutions
and the business value they can bring.
The solution map for the mining
industry is available at
www.sap.com/industries/mining/
businessmaps.epx.
 WITH THE TOOLS TO SUPPORT THEM

MINING INDUSTRY SOLUTION MAP

Suppliers & Capital Project Mining Processing Transportation Marketing Customer &
Contractors Management Service
Providers
Business Planning
Corporate Risk Management
Budgeting & Forecasting

Supply Chain Management

Supply & Demand Planning
Transportation Scheduling
Transportation Execution

Contact-to-Cash
Commodity Contract Management
Assay Handling & Invoicing

Operations Management
Mine Planning
Production Planning
Production Execution & Control
Quality Assurance

Operational Compliance
Safety & Incident Management
Emissions Management

Enterprise Asset Management

Capital Investment Management
Preventive & Breakdown Maintenance Management
Decommissioning

Supply Management
MRO & Service Procurement
Strategic Sourcing

Enterprise Management & Support

D R I V E G L O B A L S U P P LY C H A I N F L E X I B I L I T Y

ENSURE GLOBAL VISIBILITY

ACROSS YOUR SUPPLY CHAIN
Today’s increasingly complex global What SAP Offers
contracts are placing added burdens on SAP® solutions cover the entire value
supply chain management for tradi- chain of mining companies, from ore
tional mining companies. Transporta- production and processing to final de-
tion is more costly than ever before, livery of products to customers. Supply
and customers or raw materials may chain planning functionality integrates
come from any part of the world. To be demand planning, distribution sched-
prepared, you’ve got to know the exact uling, and shipping scheduling, which
state of your supply chain and the help companies achieve higher visibility
workloads of your mines and related into the planning process. Also, power-
operations. ful analytics help companies perform
fast analysis of supply chain buying
What Analysts Recommend trends.
Industry experts note that leading min-
ing companies employ sophisticated
demand forecasting techniques that
integrate supply-chain and production
business processes within their extended
enterprise. Integration delivers faster,
more accurate insight into aggregated
supply operations and production-
capacity potential.

PREPARE FOR JOINT VENTURES
The world of mining has changed dra-
matically in the last years, as entire new
populations spike demand for bulk and
finished products and political changes
can affect supply and demand. Estab-
lished companies are finding that, in
many cases, joint ventures with local
companies, and the associated capital
projects, are prerequisites to gaining
access to new supplies – or to reaching
new customers in developing markets.
EXTEND YOUR MARKET BY PARTNERING
What Analysts Recommend
Industry experts note that successful
joint ventures require the integration
and transparency of information
among partners. The most successful
companies consider their IT and
business applications to be as valuable
as their raw materials and are using
IT to track and manage the many legal
complexities that can accompany
international ventures.
What SAP Offers
SAP solutions improve productivity,
increase insight, and deliver advanced
flexibility and adaptability for accelerat-
ing business strategies by integrating
self-service and role-support function-
ality with analytics, human capital
management, financials, operations,
and corporate services functionality.
IMPROVE OPERATIONS MAN AGEMENT
MAXIMIZE INFORMATION CONSISTENCY
Today, many mining operations have
little real-time visibility into their pro-
duction and maintenance information.
Managers are forced to make decisions
based on incomplete and inconsistent
information. A company can even
lose its ability to react quickly to market
changes or to ramp up production
quickly in response to high demand.
Better access to consistent information
is what’s needed.
“Using SAP solutions, our managers
can see – in real time – what their
current costs are and how these
figures compare with what’s in
their budgets.”
Tony Craner, IS Superintendent,
Queensland Alumina Limited
What Analysts Recommend
Leading companies are consolidating
ERP functionality, bringing together
the information generated by disparate
systems into a single “version of the
truth,” which is then shared among
different departments. This increases
managers’ confidence, improves infor-
mation visibility, and greatly benefits
collaborative business processes.
IMPROVE MAINTENANCE PLANNING
With current high prices of raw materi-
al commodities, even a minor halt to
production can cause a major impact in
profits. Many mining companies are
forced to perform “breakdown” main-
tenance more often than necessary.
When a breakdown occurs, the truck,
trailer, or other equipment may have to
come out of service – and stay out of
service – until the appropriate techni-
cian is available, or the correct parts
delivered. This can slow production
and fuel higher costs. Improved main-
tenance planning can help alleviate
this problem.
What SAP Offers
SAP solutions support the entire pro-
duction process, including production
planning, the actual mining process,
and subsequent processing steps such
as beneficiation, smelting, and refining.
At the same time, the analytics func-
tionality of SAP software ensures that
applications and analytics access the
same data and information.
What Analysts Recommend
Leading companies are able to focus
more on preventative and predictive
maintenance, where proactive schedul-
ing minimizes the time and costs of
maintenance and greatly reduces break-
downs. To do this, they integrate main-
tenance processes with production,
and they take advantage of new tools
for reliability-based equipment moni-
toring. Notifications and inventory
analyses are delivered to maintenance
and production managers in real time,
so they can make informed, immediate
decisions.
What SAP Offers
With enterprise asset management
solutions from SAP, mining companies
can optimize asset condition and per-
formance at the lowest possible cost.
Companies can manage capital expen-
diture, reduce operating costs, improve
asset utilization, and collaborate
with engineering and maintenance
contractors.
 MAN AGE REGUL ATORY COMPLIANCE

MANAGE ASSETS EFFICIENTLY

To succeed in this industry, mining
companies must keep their mines and
other assets operational over long peri-
ods of time and in harsh natural condi-
tions. Maintenance must be applied
with precision to mines, equipment,
production facilities, and other capital
assets. Yet many companies don’t keep
up-to-date maintenance information,
so they may delay in replacing unpro-
ductive assets or act too quickly to up-
grade still-vital assets, which can lead to
cost inefficiencies. Mining companies
need a better way to manage assets.
What Analysts Recommend
Industry leaders make automated asset
management a central part of enter-
prise IT and regularly monitor – and if
necessary, reset – value estimates for
key physical assets. This way, they can
repair, maintain, and even dispose
of retired assets in the most efficient
manner.
What SAP Offers
With the SAP NetWeaver® platform,
companies can employ analytic dash-
boards and other tools to evaluate
“The mySAP™ ERP
Corporate Services
solution has enabled us
to implement a modern
safety management
concept that is directly
linked with the busi-
ness processes in our
core information tech-
nology solution.”
Claus Peter Weber,
Head of Employee Health
and Safety,
Deutsche Steinkohle AG

and monitor the status of assets and

to plan for maintaining, procuring,
and building new assets.

MANAGE REGULATORY COMPLIANCE

ISSUES
For mining companies, environmental
safety and other regulatory concerns
are as crucial to successful operations
as are meeting supply and demand. A
week- or month-long shutdown caused
by regulatory violations can make the
difference between profit and loss and
can wreak havoc on public confidence
and shareholder performance.
What SAP Offers
SAP solutions help businesses produce
products more safely, protect customers
and communities, and provide safe
workplaces that reduce risks to
employees. Also, SAP offers leading-
edge solutions for emissions monitor-
ing and reporting applications.

What Analysts Recommend

Analysts and other industry observers
say that leading companies do more
than simply respond to regulatory
concerns – they anticipate and manage
them. Furthermore, they often take
the lead on social responsibility by
improving and maintaining business
transparency.
PROMOTE ADAPTABLE BUSINESS PROCESSES

DISTRIBUTE DECISION MAKING

More than ever, today’s global market
conditions demand that mining com-
panies often make business-critical
decisions at the local level, without
waiting for review by managers who
might be six time zones away. For dis-
tributed decision making to succeed, a
company should have sufficient local
information and intelligence in place
but must also ensure that this intelli-
gence is consistent with the company’s
central information.
What Analysts Recommend
Industry experts note that leading
mining companies employ ERP systems
that share central information resources
and are also integrated with local ERP
and other business applications. This
way a local manager looking at an ap-
plication’s analytical dashboard knows
that the underlying information is
consistent and up-to-date with the
company’s central ERP repository.
What SAP Offers
The mySAP ERP solution and the SAP
NetWeaver platform permit integration
across different companies, business
processes, and IT systems. SAP software
includes advanced analytics and report-
ing functionalities that let companies
identify precisely where they incur pro-
duction costs or miss key performance
indicators. This enables companies
to make better decisions about how to
respond to changing conditions.

BEGIN THE TRANSITION TO SERVICES

From networking to production
planning systems, new technologies
have enabled major structural changes
in the mining industry. Many activities
can now be handled remotely without
the need for on-site personnel, and
many routine transactions can be han-
dled by automated workflows. But to
take advantage of these changes, min-
ing companies must be able to adjust
and modify their business processes
quickly, which can be difficult if
processes are “hard wired” into a
company’s IT infrastructure.
What Analysts Recommend
Companies that employ best practices
are making the transition to software
that can perform services, enabling
broad-based integration and communi-
cation with wide variety of applications.
The result – the services infrastructure
is completely responsive to the compa-
ny’s business processes, even if they are
regularly changing.
What SAP Offers
SAP NetWeaver is the integration
platform that gives mining companies
an infrastructure to support SAP and
non-SAP software. It is the technical
foundation of Enterprise Services
Architecture, the SAP blueprint for
service-oriented architecture.
SAP NetWeaver powers SAP xApps™
packaged composite applications,
which will deliver significant innova-
tion in business processes in the years
ahead.

“SAP technology has brought us increased integration

of our IT systems, which has given us one set of
integrated business processes across all sites using
SAP software. This gives us up-to-date information
that makes our employees more efficient.”

Peter Dean, General Manager of Business Systems, Zinifex

 ARE YOU READY?

STRATEGIES AT A GLANCE
Four Business Models to Adapt Today
• Drive global supply chain flexibility
• Extend your market by partnering
• Improve operations management
• Promote adaptable business processes
TURNING PROMISE INTO PRACTICE
INDUSTRY-STANDARD PRACTICES
VERSUS INDUSTRY-LEADING PRACTICES
Trends show that many organizations are moving away from traditional practices
and adopting forward-thinking “leading practices” to support profitable growth
in key areas.
Supply Chain Management
Asset Management
Distributed Decision Making
THE ROAD AHEAD
The business processes and information
systems throughout your company
were developed over decades, and many
of them are undoubtedly considered
entrenched. Reengineering them to
take advantage of industry-leading
practices won’t happen overnight and
will require strong commitment at the
highest levels. This is especially true
when it comes to integrating processes
across departments and divisions.
Industry-Standard Practice
Lack of integration slows planning and
responsiveness to changing conditions
Assets are underutilized and breakdowns
impact plant efficiency, hindering performance
Major business decisions are taken at central
locations, slowing actions at local levels
The good news is that organizations
that take a proactive approach can
expect the following rewards:
• More effective global performance
• Effective asset management and
utilization
• Better positioning for joint ventures
• Better, more actionable decision-
making abilities
Industry-Leading Practice
Integrate supply chain and production
business processes with those of extended
enterprise partners
Proactively plan for maintaining, procuring,
and building new assets
Local managers use analytical dashboards
to view information that is consistent with
the company’s central ERP repository
“This integration changed
the way the company
thinks and is managed.
We are in a better position
to measure the production,
maintenance, and labor
costs more precisely.”
Marcelo Siffert,
CIO, Samarco Mineração S.A.

EMERGING TECHNOLOGY AND TRENDS
Leading companies in the mining
industry are already benefiting from
both new and evolving technology
advances.
Collaborative Technologies
Through portals and collaborative
hubs, companies will streamline com-
munications and collaboration among
extended-enterprise partners. Portal
technology will also increasingly be
used to push information internally
and enhance employee interaction.
Mobile Computing
In the field, mining companies will in-
creasingly rely on mobile technologies.
These include radio frequency identifi-
cation devices or equipment sensors,
which help companies track products
in transport, as well as intelligent mo-
bile applications that automate field
services and other remote applications.
Analytics Dashboards
The use of new tools such as dash-
boards will improve the way equipment
performance and cost per ton can be
easily analyzed.
Reverse Auctions and Other
Web-Based Innovations
Online bidding on contracts is becom-
ing prevalent as vendors enter into
reverse auctions. Other Web technolo-
gies are emerging for use in mining
exploration, production, and internal
knowledge sharing.
Top companies focus on these industry
trends.
THE FUTURE LOOKS BRIGHT . . .
Demand Outpacing Supply
Global commodity demand is growing
and is forecasted to rapidly increase in
many developing nations. Demand for
commodities like coal and metals in
developing parts of Asia is expected to
double in the coming quarter century
and will be a primary driver for world-
wide growth.
Environmental and Social
Responsibility
Companies recognize the long-term
implications of ignoring environmental
and social concerns. Consequently,
industry leaders are making calculated
decisions to improve their standing in
terms of the environment and their
communities, to obtain the competitive
advantage of favorable treatment from
regulatory bodies and the investment
community.
Business Transparency to
Comply with Government
Regulations
Compliance with government regula-
tions, primarily environmental laws
and worker health and safety issues,
plays a crucial role in the financial
well-being of companies engaged in
mining. These regulations and laws
vary by geographic region and country.
In general, environmental, health, and
safety regulations are becoming more
restrictive. In addition, governments
play a role in enforcing fair trade within
the industry.
WHEN YOU CHOOSE THE RIGHT PARTNER
A COMPLETE SET OF
MINING INDUSTRY SOLUTIONS
SAP continually interviews industry
thought leaders to identify the biggest
challenges and trends facing mining
companies. This knowledge, combined
with our customer experience world-
wide, has led to a set of solutions for
the mining industry that can support
organizations of any size, in virtually
any location.
Through SAP for Mining, SAP offers
the mySAP Business Suite family of
business solutions, the SAP xApps
portfolio of packaged composite appli-
Throughout the world, companies including these experience
the benefits of best practices from SAP solutions:
• BHP Billiton, Australia
• Codelco, Chile
• Comalco, Australia
• DeBeers, South Africa
• Deutsche Steinkohle AG, Germany
• Hunosa, Spain
• Impala Platinum, South Africa
• KGHM, Poland
• Kumba Resources, South Africa
cations, SAP solutions for small and
midsize businesses, mining-specific
applications, and dedicated cross-
industry applications. SAP software is
powered by the SAP NetWeaver plat-
form, the open integration and appli-
cation platform that aligns people,
information, and business processes
across technologies and organizations.
And SAP backs up its world-class
solutions with 30 years of providing
strategic support and services to help
companies achieve business objectives
and maximize return on investment.
• Minsur, Peru
• Queensland Alumina Limited,
Australia
• Rio Tinto, Australia
• Samarco Mineração S.A., Brazil
• Sasol, South Africa
• Somincor, Portugal
• Zinifex Limited, Australia
For additional information on how SAP solutions can help your
company operate more efficiently and profitably, please visit:
www.sap.com/mining.
 www.sap.com /contactsap

50 076 678 (05/10)

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