Today, we are seeing the transformation of many mining companies to move to a manufacturing way of thinking or what we call “Mineufacturing”. The level of maturity in managing variability and costs by the manufacturing industry is the aspiration of many mining companies today due to the pressures of low commodity prices and increased competition.
The manufacturing industry has been faced with decades of continued cost pressures arising from free trade agreements and globalization. Manufacturing operations in first world nations faced going down the drain due to cheap foreign labor and the only way to circumvent this is either by relocating to lower cost regions or to improve their product quality and reduce cost through the use of technology. Mining companies today face the same dilemma except that they don’t have the option to relocate to lower cost regions by virtue of the industry – you cannot move a mine. So are there lessons from the manufacturing industry that miners can use when looking at leveraging technology to remain competitive?
Let’s look at two of the most successful business models in the past 40 years of manufacturing. The terms “Keiretsu” from Japan and “Chaebol” from Korea are good lessons in vertical integration of businesses to gain market efficiencies but it is also here that we can take lessons on how the most successful companies of these industrialized nations operate when it comes to selecting vendors. The key learning these manufacturing giants employed was to establish partnerships with their vendors so that they can achieve a level of trust and transparency so true collaboration can exist amongst an ecosystem of synergistic vendors. This allowed for both customer and vendor to better understand how each other works, removes rivalry, jointly develop capabilities, share information more openly and most importantly, enable all parties to collaborate on joint improvement activities. The trust built through such partnerships mean that vendors are not just trying to meet the contractual commitments but exceed them through mutual motivation to garner further goodwill. Most mining companies today still rely on tendering processes that divorce loyalty from the decision making process. If Mineufacturing were to become a reality, true partnerships with technology vendors must become a strategic imperative in order to for mining companies to undergo the Digital Transformation process that is essential to remaining competitive today.
Schneider Electric and RungePincockMinarco (RPM) realize that Mineufacturing solutions will require innovation across an ecosystem of vendors. As two leading mining solutions vendors, Schneider and RPM have partnered to create a commercially available off-the-shelf software solution to address the need for Short Interval Control (SIC) in mining operations. This closed-loop, near real-time process improvement solution has its roots in the manufacturing industry. Having worked in partnership with mining giants globally, both organizations have combined their expertise and deep industry knowledge to enable SIC today for traditional mining operations. Combining Schneider’s Integrated Planning and Optimization Solution and RPM’s XECUTE product, this partnership offers a platform for innovation to miners looking to evolve their operating models by taking advantage of the Digital Transformation momentum within the mining industry.