The ‘Digital Transformation Initiative: Mining and Metals Industry’ survey run by the World Economic Forum in 2017, found that as many as 82% of managers in the mining industry were planning to invest more in automation technology over the next three years, while 28% were aiming for significant investments.
A key finding of the survey was that, up to 2025, $190 billion is the estimated effect of digitalisation in mining. This is in line with what Leslie Willcocks, professor of technology, work, and globalisation at the London School of Economics’ Department of Management, has told Mckinsey: in the very first year after RPA implementation, companies can expect 200% ROI.
Apparently RPA is perceived as “doable” by many executives in mining. Even if we set aside the short-term financial gains and decide to keep our feet wholly on the (present) ground, we should be able to see quite a lot of process types amenable to automation (payroll run automation, payroll variance & standard reports, supplier setup, ABN active check, warehouse receivables, reporting, bank or recon, regulatory reporting, etc.). Application platforms like SAP, Oracle (including NetSuite), Errol, MicroPay, Microsoft AX, Pronto, etc. are able to be automated by robotic process automation.
Mining has been one of the core industrial developments in Australia ever since the 19th century. Australia is a vital mineral, gas, metals and ore supplier and drives various commodity prices in the global markets. As Chris Pash put it at the end of last year, “Australia’s mining sector is moving up again”.
From exploration to production, and maintenance, all sectors of the mining industry were expected to grow throughout 2018. RPA will be able to manage the standard and repetitive processes across mining companies along with increasing accuracy, reducing process rework and lowering transaction costs.
Robotic process automation in the mining industry
Let us now clarify why we claim that robotic process automation is so important for the mining industry. The short answer is that with increasing pressure due to the evolution of the cost — productivity ratio with respect to commodity cycle, the need for alternative competitive differentiators is stringent.
Moreover, back office capabilities like inventory, processing or costing, are essential for asset-intensive industries like mining. And knowing the potential of RPA to improve these capabilities, digitalisation is precisely what is needed to boost competitivity of mining businesses.
When it comes to cost and productivity, it suffices to consider the capacity for growth that automation can bring by increasing value via execution waste reduction. In fact, process automation is by definition a contributor to reducing structural waste.
Relatedly, digital design of new assets supports design waste reduction. According to a recent Deloitte report about the digital revolution in mining, these cost and productivity benefits achievable by means of implementing digital technologies can yield up to 20% improvement.
If we also take into account the increased potential for knowledge sharing, the increased likelihood of expansion by targeting new markets, or the increment of operational safety, the importance of robotic process automation in the mining industry should become crystal clear.
We hope that the arguments we brought so far will not allow any initial skepticism to become a bias with respect to RPA. So let’s now turn towards the practical side of things, and give a few guidelines as to how robotic process automation can be actually used to transform the mining industry, i.e. to change it for the better.
1. Develop a strategy for automation
Start from clear-cut objectives and devise a reasonable, timely plan towards them. Never forget that plans achieve your objectives presumably, assuming that nothing abnormal stands in the way. So start with a pilot, Proof-of-Concept implementation and then flexibly move on to attain long-term transformation.
Afterwards, use of cloud for Enterprise Resource Planning (ERP) might be the way to go for scaling. Make sure you choose a provider based on your goal and available means, but stay flexible and be ready to switch whenever the need arises (due to ‘abnormalities’).
2. Contextualise digitisation in a particular ecosystem
Given the complexity of managing assets throughout their lifecycle, and the corresponding need to keep an eye on lots of remote operations, it is crucial for asset-intensive industries such as mining to implement new technologies collaboratively. Reliable partners as well as trustworthy vendors should be included in such an ecosystem, on the way towards digitisation.
Of course, to this end, integrative capacities are paramount because they allow you to find areas of common interest. By focusing on these areas, you can get greatest value for your investment. Moreover, cloud-based ERP might support knowledge sharing and thus consistent decisions within the ecosystem.