The operations studio is aimed at developing a “lighthouse digital plant” to generate enthusiasm for the rest of the company. The Future of Mining. Used correctly, digitalization can create attractive jobs in safe control room environments, which provide space for the employee’s full expertise and creativity. Company results improve when capabilities are built not just on a project basis, but for the long-term. While there’s something … Given that there were dozens of heat exchangers, the cost savings have been substantial. However, a productivity-led transformation of the economy could enable Saudi Arabia to again double its GDP and create as many as six million new Saudi jobs by 2030. For instance, advanced analytics and sensors are helping lower maintenance costs and decrease downtime while boosting output and chemical recovery. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. This has saved millions of dollars’ worth of chemicals and reduced the environmental impact of the tailings. Learn more about cookies, Opens in new The drivers of this shift towards integrating innovation in mining are many and well known. This has a broad impact on a variety of processes, ranging from road maintenance to how to back into a shovel location. Blog Provides Industrial Engineering Knowledge: Articles, Books, Case Studies, Course … 1 Notes: 1 For a detailed description of the VF journey, see the 2013 Value Creators Report, Unlocking New Sources of Value Creation, BCG report, September 2013. Explore some of the most popular and innovative insights that the McKinsey Global Publishing team brought to you this year. This can mean a productivity boost of 5 to 10 percent, which equates roughly to opening a new mine if applied across a typical mining company’s footprint, without the capital cost. People create and sustain change. Digital upends old models. The company’s revenues have grown from $7 billion in 2008 to more than $11 billion in 2013 (and revenues are projected to top $17 billion by 2017). Something went wrong. The rewards will be far-reaching for companies that commit to it and approach it wisely. Technology-enabled transformation calls for a break from ingrained habits, and a change in mindsets, behaviors, and capabilities. As part of the transformation, the company recognized it needed to overhaul its culture, including a greater level of shop-floor engagement. Digital technology—when implemented with management and mindset changes—is leading to meaningful operational improvements. (See sidebar, “How one company changed its culture and infrastructure.”). What’s more, when we analyzed what lay behind the survey results, we uncovered key factors that are critical to maintaining and improving productivity in hybrid remote/onsite and completely remote settings. Reinvent your business. McKinsey designers highlight the photos and illustrations that helped us tell the visual story of a remarkable year. This may include details such as the torque level for tightening a nut, or instructions for inserting an O-ring. Global mining company Rio Tinto, By any measure, advances in digital technology and the Industrial Internet of Things (IIoT) have transformed the industrial landscape. The current identified impact of the transformation effort is positive to the tune of more than $200 million, the majority coming from operations. In an environment where information is far more accessible than ever before, companies can examine where decisions are made, and by whom, and empower their workers to make informed, data-driven decisions, quickly and safely. One of the most dominant trends we are seeing worldwide is that of technological innovations coming to the fore as companies seek out alternative methods of achieving productive outcomes. Learn more about cookies, Opens in new This is true also for the mining … It has become increasingly realistic to combine off-the-shelf technologies with in-house solutions to create a system that improves transparency, safety, performance monitoring, and overall equipment effectiveness. 19 A measured and agile approach 19 The time to act is now 22 Where to start 22 References 22 Authors 23 Success for mining companies . Most importantly, teams that work in siloes know only what they know; they are isolated from the data that drives innovation. This understanding has to be reinforced through formal mechanisms, and managers must model new behaviors. Sensors collect real-time data from the waste, and the machine learning model calculates the optimal parameters for recovering (for instance) sodium hydroxide, boosting performance above that which operators were previously able to achieve. They will continue to get better at driving productivity and improving safety. The maturity of specific technologies is also a critical consideration. Overhaul the culture and capabilities to achieve a more. One of the biggest logistical challenges mines face is communicating with workers and coordinating operations, especially underground where radio does not work. In a production environment, groups of three or more autonomous bulldozers are now able to coordinate overburden removal. The paper identified some potentially game-changing innovations that we believed would revolutionize the way mines operate and deliver much-needed productivity gains. hereLearn more about cookies, Opens in new Innovation is a driving force behind business improvement and increased productivity. Du ring the super cycle, productivity fell to its lowest rate in more than … These trucks drive themselves between loading and dumping. Of course, harnessing technology also means training employees and hiring new staff with advanced skillsets to fill a variety of new roles. This eliminates the need to provide a set of instructions that have to be carried out across an entire shift, and lets supervisors react and adapt to changing conditions, allowing an underground mine to function like a modern, sophisticated open-pit operation. Mining is now 28 per cent less productive than it was a decade ago, with Australia … For one mining company, autonomous haulage system trucks have yielded a 20 percent productivity increase. Her hobby enabled her to design a high-quality user interface for use in a processing plant. Lay of the land. ⁴ “Behind the mining productivity upswing: Technology-enabled transformation,” September 2018, McKinsey.com. Productivity across the global mining sector is starting to improve. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. PWC's 16th annual review of the global trends in the mining industry confirms an upswing in the mining cycle, which they attribute to rising global economic growth and a recovery in commodity prices.. We use cookies essential for this site to function well. “Behind the mining productivity upswing: Technology-enabled transformation”, McKinsey & Company, September 2018. These are: The many improvements mining companies have achieved by harnessing modern technologies include: At some mines, advanced analytics systems are ingesting all the data in the concentration environment and using it to improve processes. Embracing technology means that individuals who have traditionally not had much need to work together are now highly dependent on each other and need to be organized in a way that allows for this. Making changes to where decisions are made and who makes them requires a change-management program. Workers responsible for pumps now can carry a phone or tablet that knows where the workers are and the assets on which they’re working. Plus, security and infrastructure services can be moved to the cloud, cutting costs while increasing capabilities. A comprehensive digital transformation roadmap is the key to driving change in a coordinated and effective way – whether you are a small company or a multi-national enterprise. This trend is evident across commodities, geographies, and most mining … The transformation began where major initiatives should: a hard look at what wasn’t working, and discussions about ways to not only fix those … tab. Technology will evolve, too, and those that embrace the management and cultural changes central to technology transformation will have the skillsets—and more importantly the mindsets and processes—to evolve with it. Xilinx Senior manager, supply-chain architect, and head of … In this post, we focus on intelligence and data analytics in the mining industry, and integrated technology … Maintenance workers can benefit from technology as well. This working team focuses on a specific process or set of assets — say, a leaching operation — and has a range of skillsets that allow them to make more informed decisions and meaningful changes faster. This data transformation is contributing to the delivery of our business performance targets, by developing our people and transforming our processes, improving safety, health, sustainability, efficiency and optimal stable operational performance, through our technology … The plan is reviewed by the plant supervisors, who adopt the suggestions that make sense and question those that don’t. Workers can be better connected real-time via cloud-enabled devices, allowing for a level of collaboration that can boost safety and productivity in any mining operation. Behind the mining productivity upswing: Technology-enabled transformation Despite great promise in digital advancements, many companies are struggling to embrace tech-enabled transformation. No mine will want to get caught in an unexpected R&D project. Today, these skills are scarce, so companies will have to develop their own capabilities. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Technology and Innovation for the Future of Production: Accelerating Value Creation 5 technologies on five levels: factory floor, firm, industry, society and the individual. Some of the credit for this improvement must be given to the maturation of lean management, lean operating systems, and Six Sigma improvements. Our insights into additive manufacturing, the Internet of Things, and analytics enable us to help organizations reassess their people, processes, and technologies in light of advanced manufacturing practices that are evolving every day. Squads benefit from including or having ample access to coaches, data scientists, programmers, and whoever and whatever else they need to achieve their goals. For example, instead of using ever-larger equipment, operators can optimize size to balance maintenance costs with haulage cost per ton. One metal mine is using advanced analytics and machine learning to develop an “industrial controller of controllers” to drive up throughput and mineral recovery. Addressing the challenges with an open innovation approach has both the effect of enabling mining in Chile and of developing a mainstay of technology-based suppliers that, in return, legitimize this sector. Just as with lean or Six Sigma-driven improvement, companies need to adopt a holistic approach to transformation. We strive to provide individuals with disabilities equal access to our website. Increasing Productivity, Efficiency and Safety in Mining The global resources industry is a constantly evolving beast, and it is now entering a new age of technological development. Please try again later. Harness technology, including digital, analytics, and automation across the organization, to solve the key challenges of productivity, safety, customer satisfaction, and supply chain management. x Digital Transformation has the potential to be the determinant factor for gaining productivity. The mine of the future is being built on connectivity. In the cement and mining industry, digital transformation … Technology suppliers must respond to new demands. For every company, the desired destination will be unique and the path different. The idea behind it is to provide: “Right information in right time and place, to make better decisions” Even in the early stages of their digital transformation journeys, mining companies can increase productivity, reduce costs and improve production and safety quickly through the visualization of data across the entire value chain. cookies, a 2015 paper that predicted a technology-enabled transformation of the mining industry, McKinsey_Website_Accessibility@mckinsey.com. The organization sometimes requires modifying, too. Mining has the critical mass, depth, and sophistication capable of bearing the development of an innovation ecosystem revolving around it. Please email us at: How digital communications can change the way a mine operates, How one company changed its culture and infrastructure. Digital technology can be a key enabler of productivity and allow mining companies to execute more effective operational strategies. One studio, in operations, had four objectives: 1. to pursue advanced analytics at scale; 2. to push automation to its fullest extent; 3. to develop a series of apps and tools that would facilitate processes like maintenance; and 4. to adopt an agile operations model. We estimate this would require about $4 trillion in investment. As the transformation unfolds over time, companies will learn, and their capabilities will grow. The productivity gap in mining has come as a surprise for everyone except those working in the industry. This single innovation can have far-reaching ramifications, provided it is implemented in tandem with the other two key engines of technology-enabled transformation: adapting the management systems and overhauling the culture. Proponents claim that positive results of customer data mining include improvements in prospecting and market segmentation; increases in customer loyalty, as well as in cross-selling and up-selling; a reduction in risk management need; and the optimization of media spending on advertising. Commercial autonomous haul trucks now have been proven viable for open pit mines that have a suitable cost structure. Early applications of autonomous technologies have shown significant gains in productivity, predictability and worker safety. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. This upswing started in the 1920s and continued into the 1960s before the trends reversed themselves. Data scientists are needed to develop sophisticated analytics models to identify improvement levers. Leaders will need to determine which are suitable for application today versus in the near- or midterm future. The digital transformation of E&C creates valuable opportunities for technology suppliers. The idea was to “leave no person behind” when it came to digital know-how and access to relevant tools. An algorithm predicts the behavior of a plant and offers a series of recommendations to optimize based on controllable variables. Adapt the management systems (such as work processes) to enable the company to realize the potential offered by the new technologies. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. Where companies choose to embark on the journey will depend on the maturity level of their process controls and data systems; some companies will need to improve and stabilize their underlying systems. Augmenting skills is key. Today, the best opportunities tend to be in automated equipment, pit-to-port supply chain improvements, optimized scheduling and control, yield optimization, and maintenance, including predictive strategies, digitized planning, and digitally enabled execution (Exhibit 4). Digital technology works harder than ever to deliver a truly modern, safe, and productive mine that addresses the increased demand for mined … Digital transformations are an imperative as today’s leading corporations need to build bionic capabilities in order to harness the potential of disruptive technologies and integrate them into new processes, organization models, and ways of working. How can mining companies achieve true digital transformation? 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