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Tag Archives: Mining and Metals
Over the next five years, mining and metals companies are expected to spend between $25 billion to $30 billion annually to maintain their assets.
Largely driven by efforts to improve operational efficiency, reduce downtime, immediately reduce costs, meet sustainability goals, and manage operational risks in an increasingly volatile market, mining and metals executives are motivated to start their asset management transformation now. Delaying this transformation could result in lost competitive advantages, higher operational costs, and increased regulatory or market pressures.
Over the next five years, the mining and metals industry is projected to invest heavily in the maintenance of fixed and mobile assets. Various reports indicate that the industry is expected to allocate a significant portion of its CAPEX to maintaining and upgrading its assets. A substantial part of this investment will be directed toward maintaining critical assets required to meet global demand for minerals essential for the energy transition. In a recent survey conducted by Global Data, 48% of the companies surveyed indicated they plan to increase investments in technologies like AI and IoT sensors for equipment upkeep over the next two years.
Investment in predictive maintenance is becoming a top priority for many mining operations. Companies are leveraging their EAM’s with advancing technologies like Digital Twins, AI and IoT, along with other reliability and planning applications, and significantly transforming asset management and the asset lifecycle. These advancements in technology are expected to reduce maintenance costs by 20-30%.
Mining and metals companies integrating Enterprise Asset Management (EAM), Computerized Maintenance Management Systems (CMMS), AI, and IoT are experiencing several quantifiable benefits, including:
- Improved Asset Reliability and Uptime: Utilizing a combination of AI, IoT sensors and Digital Twins provides continuous real-time monitoring of equipment health allowing companies to predict potential failures before they occur while reducing the reliance on reactive and scheduled maintenance – reducing unplanned downtime and fewer equipment breakdowns, increasing equipment availability and extending asset lifecycles.
- Cost Reduction: A predictive maintenance capability helps avoid costly emergency repairs and reduces unnecessary scheduled maintenance, saving on labor and spare parts. It also ensures that the right parts are available when needed, minimizing overstock and understock issues, which helps reduce capital expenditure tied to inventory. It optimizes the energy usage of equipment by adjusting operational parameters in real-time, leading to lower energy consumption.
- Scalability and Flexibility: Leveraging these technologies together, allows companies to scale their asset management strategies as they grow, adapting to changes in operational needs without significant disruptions. Maintenance scheduling based on asset condition rather than time-based intervals, ensures that resources are used effectively, reducing downtime and improving workflow efficiency. They provide a holistic view of all assets, enabling better coordination between teams while improving “wrench-time” productivity and the execution of maintenance and operational tasks. It delivers a single platform to access real-time data across the entire asset portfolio, improving visibility and control over operations for optimizing performance and recommendations for future operations.
USC partners with your organization and coaches your people to significantly impact performance outcomes and accelerate Operational Excellence
USC brings a tailored, structured, and disciplined methodology, along with a range of tools and techniques we apply collaboratively with client’s personnel. Whatever your challenge, we are the people who work with our clients to find full potential and unlock the hidden value.
USC help to identify waste, redundancies, and ineffective processes, and then rapidly recover the prioritized opportunities, and convert them to improvements in performance and operating profit. Further, our people embed with client teams to develop, enhance, prototype, validate and implement asset management strategies to drive, sustain and perpetuate improvements in asset lifecycles and equipment reliability, while changing how plans, schedules, and work is executed. In short, USC implements measurable, sustainable changes that drive asset performance and financial improvements.
- Increased Wrench Time (up to 25% improvement) – Reducing non-productive time through improved work-order generation and prioritization, maintenance teams spend less time searching for work-orders, tracking down parts or waiting for approvals.
- Reduction in Travel & Downtime (up to 20% time savings) – Optimizing the routing and scheduling of maintenance tasks and reducing travel time between jobs to maximize “time on tools”.
- Faster Work-order Completion (up to 30% efficiency gains) – Reducing delays in task assignment, approval and completion tracking, technicians can move quickly from one job to the next by ensuring all the necessary tools and parts are available at the work site, eliminating delays caused by missing resources.
- Optimized Spare Parts Management (up to 15% time reduction) – Faster access to parts and accurate spare part forecasting reduce time on sourcing, stocking and searching while ensuring tools & parts are available for tasks.
- Better Data-Driven Decision Making (up to 20% longer asset life spans) – Collecting and analyzing needed information provides actionable insights that support planning and allow for more informed and pro-active decision making, often delaying the need for capital-intensive replacements.
USC clients experience measurable operational and financial results that significantly improve both the efficiency and profitability of their operations. Benefits delivered may include a 10-20% increase in overall equipment availability due to reduced unplanned downtime and optimized maintenance schedules and a 10-15% improvement in equipment utilization as predictive maintenance reduces the time equipment is out of service.
USC Helps You Tackle Key Challenges
- Optimize maintenance strategies and increase equipment availability operational output
- Predict asset integrity and reliability needs and improve time on tools
- Mitigate risks through stronger stakeholder partnerships, while removing redundancies in the supply chain
- Overcoming cultural and communication issues with contractors, while ensuring quality expectations
Do you want to understand how prepared your company is to drive needed asset management performance and reliability improvements and what the key focus areas that will contribute to lower operating costs? Contact us today.
It is commonly believed that the project stakeholders have delivered their project commitments once the asset had been successfully commissioned.
Given the fact that recent studies show that 65-80% of large capital projects in the mining and metals industry frequently experience performance issues and fail to meet their budgets and/or schedules, it’s no wonder why executives and owner teams are distracted from envisaging the outcomes beyond the commissioning phase. The stark reality is that a project can only be regarded as a success once the asset sustainably reaches name plate production within the projected timeframe.
Senior leadership needs to focus more on the strategic business case and outcomes of the project and enable the acceleration of operational and organizational maturity growth beyond ramp-up. By focusing on “culture and systems of work by design” earlier in the project development cycle, prior to or during the detailed engineering phase, companies can experience a positive impact on Net Present Value (NPV) while positioning the future operational organization to enhance organizational capabilities and drive maturity growth.
Establishing the needed operational foundation that enables data-driven decision making, operational excellence and continuous improvement during capital project execution and post operational ramp-up, creates a culture that fosters long-term growth, resilience and scalability across the asset. Furthermore, the early investment in designing the “systems of working” with the supporting management operating systems, while integrating with today’s advancements in AI, automation, Digital Twins, EAM, ERP, IoT, robotics and other technologies positions the asset to emerge from the capital project at a much higher maturity stage and set of organizational capabilities. By leveraging the insights and efficiencies these systems and tools provide, mining and metals companies can not only optimize their immediate operations but also position themselves for sustained success in a rapidly evolving industry.
Yes, integrating management operating systems with AI, IoT and other enterprise platforms during capital project execution can have a positive impact on NPV and cash flow. “Systems of Working” help streamline project execution, reduce delays, and improve project scheduling, allowing the company to start generating revenue earlier than expected. Additionally, avoiding project delays reduces the discounting effect on future cash flows. These same systems can help identify and mitigate risks such as supply chain disruptions, equipment failures, and market fluctuations. By reducing these risks, companies can avoid unforeseen costs and improve project reliability.
Systems of working provide the project and operating teams the ability to improve operational efficiency by optimizing resource allocation, reducing downtime, and minimizing waste. Additionally, predictive maintenance supported by enabling technologies, process automation, and enhanced supply chain management can lower equipment failure rates, energy consumption, and labor costs, while helping owners to significantly reduce both capital and operational expenditures. Creating a “Culture by Design” with the supporting “Systems of Work” early in your capital project will directly impact the key drivers of NPV by improving operational efficiency, reducing costs, accelerating revenue generation, and lowering risks.
USC partners with your organization to accelerate Operational Maturity by helping your team create a Culture by Design supported by the needed Systems of Working
Since 1968, USC Consulting Group has been working with clients to address the challenges and avoid the pitfalls when creating cultural change and developing systems of working. While the integration of AI, IoT, MOS, EAM and ERP offers tremendous potential in capital project execution in the mining and metals industry, companies must carefully navigate the challenges. Addressing high costs, technical complexity, workforce readiness, and data management are key to overcoming hurdles. Strategic planning, phased implementation, and ongoing system monitoring are critical to successful integration and maximizing financial and operational benefits.
Mining and metals projects often vary in size, complexity, and location, which means the systems of working need to be scalable and adaptable to different environments. Inflexible systems may struggle to scale up or adapt to specific project needs, leading to inefficiencies and higher costs. Our seasoned consultants help the owner team to ensure compatibility with the project environment and to overcome scalability challenges.
The integration of AI, IoT, MOS, EAM and ERP introduces additional layers of complexity in project management, as these systems require continuous monitoring, optimization, and alignment with project objectives. Mismanagement of complex systems may lead to delays, cost overruns, and reduced system effectiveness. USC Consulting Group understands how your project and operating teams can best utilize the needed information while addressing the unique challenges of the mining and metals sector to ensure smoother execution and in-shift adjustments.
Employees and management may resist the changes required to implement these new systems of working, especially if they fear job displacement or lack understanding of the new ways of working. Cultural resistance can slow down or even derail the integration process, leading to project delays and inefficiencies. Our people bring effective change management strategies, including clear communication, training, and involving employees in the transition, that ease resistance.
Misalignment between project stakeholders can cause challenges. Lack of collaboration between the various teams can result in inefficiencies, process failures, or unmet project and/or operational goals. Ensuring early and continuous collaboration between project stakeholders and operational teams helps bridge the gap while ensuring a successful project completion and production ramp-up.
While the long-term benefits of integrating and implementing systems of working are substantial, measuring these benefits and calculating NPV and ROI can be complex, especially when the results are not immediately visible. Stakeholders may become skeptical if they don’t see immediate financial returns, leading to reduced support for continued investments. USC works with the owner’s team to establish clear KPIs and benchmarks for performance improvements, measure progress and demonstrate long-term value.
USC Helps You Tackle Key Challenges
- Align project and operational stakeholders on the strategic business case and operational outcomes
- Develop a high reliability culture focused on breaking down silos and executing work in a safe manner
- Ensure the right resources are at the right place to minimize lost time – enabling safe and disciplined execution
- Control quality of work at the point of execution by identifying off specification and enabling in-shift correction
- Identify potential roadblocks proactively during mine planning and solve complexity during the planning process
Do you want to understand how creating a Culture by Design can accelerate the future asset to achieve the strategic business case and nameplate performance targets safely?
Want to find out more about how USC can help you uncover the hidden value loitering in your capital projects? Contact us today.
The times they are a-changin.
If there was one song that could best describe the current state of the mining and metals industry, the 1964 classic sung by Bob Dylan sums it up. In just about every way you can imagine — consumer interests, technological innovation, regulatory scrutiny, automotive production, political developments — a variety of forces largely beyond producers’ control are causing businesses to re-examine how they operate.
In some respects, these influences have fueled the sector’s prosperity. For example, metals and mining remains a major contributor to the nation’s economy, adding an impressive $2.5 trillion per year, according to the most recent statistics from the National Mining Association. Additionally, it’s also one of the more high-paying professions, directly employing 419,000 Americans directly and 1.2 million indirectly.
Yet at the same time, many of the successes experienced by producers are raising the stakes for other companies so that they too can remain profitable and avoid being left behind. After all, metals and mining is a competitive, performance-based industry, where only those who truly thrive can survive. The best way of going about this comes from reading the tea leaves and making the proper investments to improve the ongoing supply chain and reduce cycle time.
Here are four forces catalyzing change in the mining and metals industry. Recognizing these influences and making the appropriate adjustments may be the difference between prosperity and insolvency:
1. Automation
For years, economists have described artificial intelligence as the wave of the future. In reality, it’s the here and now. Americans have a love-hate relationship with AI, as a recent poll from Gallup found 77% of adults believe the process improvements endemic to AI as mostly positive. Yet at the same time, close to 60% of respondents in a separate survey viewed it as a threat to people’s jobs.
Metals and mining is certainly no exception to AI’s influence. This industry is steeped in tradition, being one that traces back thousands of years. However, economic realities, employment conditions, and the supply and demand of mineral deposits have impelled producers to embrace AI to improve work processes and output. Many of the activities involved in extraction, for instance, are labor intensive and entail repetitive actions. Thanks to automation, however, some of the grueling work that used to be done by people is handled by robotics.
As referenced in a recent Reuters article, AI adoption has dramatically improved output, rising between 15% and 20% among some companies. If trends continue, the automation market is poised to reach a valuation of nearly $3.3 billion by 2023, according to estimates from Markets and Markets.
2. Natural resource depletion
The Earth is rich with minerals and thanks to enhanced technological capabilities, they’re more easily extractable and locatable. The U.S. is heavily invested in exploration, responsible for around 7% of such spending in 2016, based on estimates from the National Mining Association.
The problem? Other parts of the world are spending much more, including Canada, Australia and Latin America (accounting for the largest percentage at 28%). In fact, were it not for imports, the U.S. mining industry would be unable to contribute many of the metals used for fabrication purposes, such as in fighter jets or catalytic converters.
One of the leading natural resources that isn’t nearly as plentiful as it once was is gold. According to data compiled by Bloomberg, gold discoveries slipped 85% in the 10 years leading up to 2016, and gold reserves are down by double digits tracing back to 2011.
Reversing this trend won’t come easily, but by more fully embracing innovative extraction activities and more targeted utilization of public funds, producers may be able to more assiduously plumb uncharted tracts of land and compete with other countries upping the metals exploration ante.
3. Ubiquity of mobile technology
If there is one thing that has taken the world by storm in recent years, smartphones may top them all. Everywhere you look, people are looking at their phones. Indeed, in the U.S., 81% of the public owns a smartphone, according to figures from the Pew Research Center. In other parts of the globe, ownership is substantially higher, including South Korea (95%), Israel (88%), and Sweden (86%).
The multifunctional element of smartphones wouldn’t be possible without actual elements. As the U.S. Geological Survey so aptly puts it, ordinary minerals give smartphones extraordinarily capabilities, utilizing a sweeping array of deposits that include bauxite, sphalerite and arsenopyrite.
It’s safe to assume that smart device ownership will continue to surge as technologies and consumer interest further develops. But since natural resources are inherently finite, producers must be constantly thinking a few steps ahead to make the most of the minerals available. For example, computer chips at one time were fabricated from primarily 12 minerals. Today, the number is closer to 60, according to the National Mining Association.
Producers must continue their research to further extract the potential available in mineral resources.
4. Resource capacity planning
In a global marketplace, where countries and companies vie for a smaller pie of natural resources available, miners must make capacity planning a central focus of their operations.
The decisions made in this regard are often determined by the realities on the ground. Take steel as an example, which is an alloy of primarily carbon and iron. According to S&P Global Ratings, worldwide steel capacity in terms of utilization is fairly low by today’s standards compared to previous years, operating at approximately 78%, based on the most recent figures available. However, the worldwide steel landscape could be fundamentally altered with the ArcelorMittal acquisition of Ilva, an Italy-based steel developer, which became official in November 2018. Combined, the companies represent a combined 50% market share in flat production for the whole of Europe.
Whether it’s the manufacturing of steel or obtaining the minerals needed to fabricate it, resource capacity planning in the current trade environment is a core component of day-to-day workflow that mining organizations must prioritize.
Change, by its very nature is difficult. Yet it’s life’s only constant and one that mining and metals must embrace to improve output and remain competitive in a global marketplace. USC Consulting Group can help you control the variables by assessing your work processes and charting out a plan for what’s next. We have a 98.2% satisfaction rating from our clients and are confident you’ll be pleased with what we have to offer. Please contact us today.