Former General Electric chief executive and author Jack Welch famously said, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” That’s what is motivating industry leaders who are talking about Australia’s mining and resources sectors being on the verge of a productivity boom.
Despite dramatic falls in commodity prices and recent waves of cost cutting, investment in innovation and technology continues unabated.
In fact, technology innovation itself is one of the external changes currently driving rapid internal change in resources companies. With fewer staff, resources companies have to become more productive. New technology enables that to happen but that doesn’t make it easy to do. I think all of us in the industry will be challenged to match or exceed the extraordinary rate of change we are seeing right now.
Beyond drones and driverless trucks, where and how is this innovation going to occur? Here are some key technologies with the potential to transform the way we mine and extract resources and which Australian resource companies must embrace to become world leaders in efficiency and productivity:
- Connectivity / the Internet of things – Technological innovations like driverless trucks are only possible with high-speed data communications. This is also driving the Internet of things, where every device and piece of equipment will generate data and need to be connected.
- Big data / artificial intelligence – Mining and resources companies will not only capture massive amounts of information about their operations, they will also have to improve data quality, integrate their business intelligence systems, and apply machine learning algorithms to make better decisions in real time.
- Wearable technology – While some operations will be automated or coordinated remotely, many tasks will still happen onsite. The productivity and safety of field workers will be improved many times over by wearable devices that monitor their working environment and connect them to systems and expert staff thousands of kilometres away.
- Augmented reality – Not only will remote workers sitting in offices thousands of kilometres away control on-site equipment and walk, drive or fly through models of the real thing, workers in the field will have new augmented reality tools giving them the equivalent of X-ray vision to enhance their productivity.
- Agile enterprise information systems – With new technologies constantly coming on stream, mining and resources companies need enterprise information systems that can rapidly integrate new technologies and make use of new data to create a single source of truth and drive efficiencies throughout the enterprise.
Let me give you a few examples. Resource companies face constant problems losing track of assets which are taken off site. This may be simply for repairs but if the move is recorded manually and not visible in the company’s information system, it causes delays. With location sensors embedded in mobile assets, however, alarms can be automatically raised whenever they are moved off site, or when the numbers of a particular resource fall below the required level.
Wearable technology like Google Glass can improve the productivity of service technicians by allowing them to work hands free while referring to service manuals, engineering diagrams and other resources. If they get stuck trying to fix something, they can patch in remote engineering support who can see what they can see to advise them. There is also the potential for jobs to be recorded, with previous repairs recalled and replayed. Similar technology could allow heavy equipment operators to make their own repairs. Instead of having to shut down a crane in a quarry when the hoist mechanism stops, for example, an expert could be patched in to see if a simple repair could be effected onsite.
The combination of wearable technology and augmented reality means that a wide range of tasks previously requiring skilled on-site staff can be broken down into on-site and remote components. Skilled resource workers will be able to extend their careers with jobs that no longer require travel to inhospitable environments.
This brave new world is not without its challenges. The scenarios above are all viable today but there still some reluctance to invest in new technologies that are expensive to implement, untested in real-world environments, and with an uncertain return on investment.
Resource companies also face challenges getting high-speed data communications to all the locations where they operate. At least 75 per cent of the Australian landmass is still not covered by any mobile telecommunications network and investments in new national communications infrastructure like the NBN are concentrated in populated areas.
Last, but certainly not least, resources companies are already full of standalone “best-of-breed” technology systems. While useful up to a point, unless they are integrated to create a single source of truth for the enterprise they cannot be used to make better operational decisions in real time.
The current wave of technological innovation carries the same dangers. Without a flexible enterprise information system capable of quickly and cost-effectively integrating new technologies, only isolated efficiency improvements will be achieved. And without a system that can consolidate information across business units and projects, it will be difficult to measure the exact impact that new technologies are having.
You can’t improve what you can’t measure, as they say, and it’s near impossible to calculate the return on investment.
Rob Stummer is managing director, Australia and New Zealand for global enterprise applications company IFS. He holds a Masters in Information Technology from Melbourne University and has consulted to many of Australia’s Top 500 companies.