The Mining Sector (B2B) | I.O.T. Powering The Digital Economy

CNBC investigates how digital innovation is reshaping industries by disrupting existing business and operating models. This episode looks at the impact of digital transformation across the mining (B2B) sector.

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IOT powering the digital economy brought to you by Schneider Electric from cars & trucks to the abrogates used to construct buildings the raw materials to make them come from beneath our feet with other mining sector business would fail but mining is traditionally conservative when introducing innovation technological development in mining is

Moving fast driven by environmental concerns the difficulty of extracting some finite resources and the whims of the global market for metals and minerals but innovation is here where the business likes it or not and those that don’t move with the times will be left behind the whole of the business community has

A stake in the success of mining so in this program I’ll be meeting the business leaders who are changing the way we source the raw materials that make the world tick I’ll visit the world largest mining company to find out what technology they are bringing into their business I’ll speak to the software

Company that’s helping mining companies become more efficient and we’ll find out what the mining industry of the future will look like we’ve been digging stuff out to the ground for tens of thousands of years but now digital innovation is having an impact on the mining industry it’s a

Sector that’s been slow to change working practices but disruptor companies are pushing innovation forward and traditional mining companies are playing catch-up bhp is the world’s largest mining company with their marketing hub here in Singapore being close to their customers in Asia helped reported revenues of more than 38

Billion US dollars and a net income of more than six billion dollars in 2017 Dian Jergens is the chief technology officer at bhp a role she took on in 2016 prior to that she worked in the Chinese automobile industry she liaises with the mines the company assets to roll out innovation and make

The business more efficient we and my team worked very close with our assets our operations to understand their problems understand the business and then marry that what technology because when you take all the history that we have in this industry and technology and then multiply that by that Tier one

Assets we have it’s an incredible opportunity to create the future about add real value what are the challenges that exist in the mining sector today so one of the challenges is the rapid demand and growth around the world as the population increases as the standard of living Rises more and more of our

Products are needed and our challenge is to be a dependable supplier to meet that demand in a changing and growing world and how we using innovation to overcome those challenges well you’d be surprised how much technology and innovation is used in the resource industry if you think about an automotive manufacturing

Line that’s the industry I was in last we actually have a manufacturing line for the resources industry as well so we’re working on it and sensors to more precisely model and understand what’s underground to find and reveal the hidden opportunities and then we load material on to automated

Trucks autonomous trucks with wheels as high as a ceiling that move around 250 tons of material we have almost 50 of these large enormous trucks remotely programmed to go pick up or run a circuit path and either drop it off to a waste or to our processing plants

Absolutely amazing to see these huge trucks running around driverless we use automated drills we load train cars very precisely using lasers and weight Tom meters to get the maximum volume of train or so we use technology across our entire supply chain so clearly you’re having to be very creative when it comes

To you know finding new sources of raw materials how is innovation helping with that well the more that we can understand the ore bodies and or opportunities to find or underground so we’re using machine learning and a lot of other technologies to give hidden insights into what’s under the ground so

That we can efficiently find and extract the material so a lot of what we need to do is bring the physical infrastructure we build cell towers we have trailers that move around to create the bubble over our operations so that we can create that Internet of Things on sites

That normally wouldn’t have any access to technology what about the workforce how are they adapting to all of this innovation in the sector well it is changing where and how we work but in good ways for example our drill operators used to sit out on these huge platforms in the

Middle of our mine sites and it was quite hot very a bit stressful now those operators can sit in offices and watch and operate three drills simultaneously so not only there are the better conditions but there are a lot safer when you compare the way the automotive industry has sort of adapted

To digital innovation and technology with what’s going on in the mining space what would you say I think we’re ahead in some respects if we think about safety systems all the advanced technology routing and monitoring certainly it’s impacting our business in a very very positive way so we’re showing results with these autonomous

Trucks and autonomous trails by the way mining companies such as bhp are investing in the type of innovation that will make the whole production process more efficient but away from the front line of mining software companies are creating products that can directly assist with business efficiency one of

Those companies is sa P and it was formed in the early 1970s in Germany and now creates enterprise software to manage business operations and customer relations in 2016 it had a net income of 3.6 billion euros George Gradle is global lead for mining at sa penis he’s responsible for looking after the

Systems that streamline her mining businesses operate traditionally in mining operations is governed by what I would call mine technical systems specialist systems for the geologists for 3d visualizations of an ore body and things like that lead management systems for tracking vehicles but to link these technical systems to back-end ERP to

Trigger off transactions to visualize what’s happening in our mind this is really what’s needed in the regards of what let’s call it disruption all right now I’m going to know more about the mining landscape that you’re actually working with what exactly you bring into it in terms of innovation if you really

Want to follow production from raw material to the end you need three things to straightened out first of all planning I’m talking about a mind plan which is tightly integrated into a financial plan also detects deviations from the plan in the real time which would be the second factor short interval control and

Thirdly to really follow the flow of the product from the in situ rock into broken rock all the way into the final product and understand the cost that each transformation step in your manufacturing process if you want to call it that way costs you if you have these three points

In place integrated financial and land planning short interval control and tracking of the value flow then you could say you run your mind like a factory si P have simplified the visualization of the whole mining process into a kind of virtual boardroom a key innovation that they are

Introducing to the sector well this is an example of our digital boardroom which we have set up specifically for mining it’s basically a visualization of major key performance indicators of our mine as you would normally would see it in a boardroom what you see here is for

Example KPIs in the space of financials in the space of direct reproduction cost in the area of environment health and safety people safety and then for example also contingent workforce so which is the share of my extended labor that I’m using from my work and in each

One of them you can drill down basically to show the levels of detail and branch down to for example production cost and how does it make it easier for businesses that use this software in essence it’s all about making transparent on what’s going on in operations and give this information in

The real time to the boardroom so it’s the connectivity Internet of Things technology allows us to do that to fit that into a internet analytics platform like our digital boardroom to enhance that with transactional data that we already have in our system gives the port basically a complete picture on

What what’s happening in their operations arguably the approach that sa P is taking is democratizing business opportunities across the sector but it’s doing this against a challenging background of regulation and strict local laws after the break I’ll find out more about that the mining sector has an

Impact on every aspect of our lives but keeping it running smoothly it requires a reliable and efficient technology infrastructure Rob Moffat is president of mining minerals and metals segments at Schneider Electric we caught up with him at an innovation trade fair to get the lowdown on the mining landscape I

Think mining like any other industry has been transforming over the last several years Mining traditionally yes has been a labor intensive industry I think in certain parts of the world that still holds true but in other parts of the world and in progressive mining companies I think you’re seeing a major

Shift in terms of that that’s not purely driven by the desire to reduce your labor force it’s driven by a number of different factors it’s driven by the desire to ensure increased safety statistics across your mine and sites near mine operations and obviously the more that you can reduce people from

Risk areas the better it is technology helps you do that what we’re seeing in our industry is a exodus of skills that have been built up over 20 and 30 years of people working on mines in plants and processing plants etc and that wealth of knowledge and fortunate as people are

Reaching retirement age as we speak and are starting to leave the industry and unfortunately we’re not attracting enough people back into the industry to replace that so there’s this knowledge gap which is developing technology once again helps us address that by you know retaining that knowledge within the camp

And accelerating the onboarding of new people entering in the industry and utilizing technologies which Millennials like to get engaged with I mean you can do induction programs now and safety programs on the new generation of workforce using things like artificial intelligence virtual reality training programs it’s things that they’ve grown

Up with sitting on the couch in front of a TV playing TV games very similar now they come in and the stats have shown that by using technology like that there’s a nine percent increase in retention rate so it accelerates the processes you can get people into interior workforce operating safely and

Operating effectively and operating efficiently the challenges for the mining industry are huge something that Diane Jergens of bhp is all too aware the big goal is to reduce costs and increase efficiencies which sounds great when we say it but is that actually happening it is and it is about cost but

In our industry safety is part of our DNA so as we work to reduce costs it’s equally important that we keep our eye on our focus on safety and safety systems speaking of safety perhaps you could tell us more about what you’re doing in regards to innovation in safety

Because as you said safety is a concern in every sector but you know mining is you know particularly important because it’s a bigger risk for your workforce well it’s helping a lot we talked about those big drill platforms stories tall out in the Pilbara where they run

Autonomously we used to have people on those platforms and during a lightning storm or bad weather you’d have to evacuate give people out of harm’s way but today they’re always out of harm’s way no one’s on the platform so during a lightning storm these automated drills can keep going and people are safe

There’s also big conversations going on you know right now around cybersecurity the use of big data the regulatory environment how does that affect your business well for cyber security it used to be that we had remote operations and that was a good defense but the world’s changing a lot

So we spend a lot of time and effort and talent and ensuring that we stay cyber safe we also work with governments and our local communities STEM skills or science technology engineering we’ve donated over 55 million dollars over the last five years for education so we’re working both on policies and the

Industries but also on developing skill sets for the future cybersecurity is something also troubling George Gradle but he believes that the solution lies in more partnerships if you have it’s a software that controls a vehicle remotely you don’t want to have somebody to take over that vehicle and steer it

Somewhere where you don’t want to want it to be so obviously that’s a complete new security risk and I would call it a new challenge I don’t say there is a solution for everything yet but we definitely with our history have shown that we can keep a secure environment

It’s not something we can do alone it’s it’s actually another important point in that context nobody can do digitization alone in in the in the collaboration between mine technical and ERP level systems it always takes a few partners to work closely together the digital disruptors like s ap are

Pushing forward with their innovation and the adapters are embracing it but mining is an industry vital to world economic growth so what does the future hold I’ll find out more after the break the Internet of Things is a challenging concept for big mining conglomerates with old legacy infrastructure but the

Innovators are on hand to help in addition to traditional business software ASAP are developing interactive tools to assist all business sectors including mining so this is a depiction of our product called visual Enterprise and it’s used for helping the maintenance work essentially it’s how technology in this

Case a 3d visualization can help him perform a task that he may not have performed before it’s describes in a step-by-step fashion how he can dismantle a certain pump and how he can reassemble it and avoids flying in an expert which may have done the exact

Task before but enable to take a day or two until he arrives inside so it’s really a broad way technology helps the maintenance worker these practical applications are becoming an essential tool for engineers in mining but what about new digital innovation such as artificial intelligence and blockchain

Technology I mean I would always be careful to say these new technologies can solve any problem but if you adopt it wisely then I guess you have a good chance we have built an example where this whole shipment tracking process is can can be covered with a technology

Blockchain in current situation when an overseas vessel leaves Brazil goes to China there’s a bill of lading with blockchain you can make this whole process much easier so the unique identification of that specific shipment and the description allows a paperless process businesses are benefiting from the innovation in the mining sector but

What about the society at large how are they benefiting from all this that’s a real tricky question a real difficult question if we make mining more efficient people who work in mining should have safer chops and more long-term jobs because if you do efficient money you can also extend the life of mine

And and secondly the if you mind more efficiency more efficient than the commodity prices can can also stay stable they don’t necessarily need to need to go up society is benefiting businesses are benefiting as well but what about your your company um how does this you know rule out in technology

Impact on your business a victim major change for us and you already see that gradually happening is that our presence it will extend from at a back-end transactional and analytical system into operations and that’s really the expansion of our footprint that we are striving for but obviously we need to to

Reach further into it to visualize really what’s happening in the mind in real time and bring that basically to the digital boardroom to again to show the executives in real time of how their operation is performing for Diane Jergens there are even more exciting opportunities ahead so you have

All these innovation and it’s all exciting where do you expect to see the business go in the short to medium term well you think there’s two areas one is how our operations how we run the business will change and the other is we’ve been talking what that means to

Our people and our workforce on the operations side if you think about that automotive manufacturing plant that we talked about well it runs at 45 seconds every station a new car a new activity happens the same thing has to happen in our manufacturing plant only its thousands of kilometers long between our

Ore bodies and our customers so our future and mining is to have that same integrated supply chain so that is we look for ore and we characterize it we put it on trucks we put it on trains that whole thing is automated and synchronized so that it’s efficient

Because in the end we need to get our products to our customers with the lowest energy lowest water and the highest quality we can do speaking of the consumers how does all of this impact on the way that they will start to do things in the future well our products our commodities are

Used to manufacture other things and the more that we can efficiently produce at a high quality to meet the demand for our rapidly growing world that energy that we use and the efficiency that we bring our products to market influences what they can do and how successful they

Are in the global economy and say five years from now looking at the mining sector as a whole how will all this innovation impact the space well there’s two two ways one is our operations from the time we get or out of the ground till the time we go to our customers

That’s all synchronized running like clockwork but I think the thing I’m really excited about is what it means for our people over time because they’re safer they’re more productive as we move work off-site to different locations we’re training and offering jobs to people who normally wouldn’t be part of this industry and in

Fact we’ve hired over a thousand people onto our team because of that opportunities to stay safe and also to have different value added jobs and what type of technical innovations perhaps the ones that exist in other sectors would you like to see come through in mining well we’re fortunate is one of

The largest resources companies in the world we have deep access to technology in the resource industry but the real key is to look horizontally because we’re also a very large global company and we have access to technology in many markets and many sectors and so we are looking at whether it’s wearables or

Voice activation machine learning looking at what other industries are doing at the same time we’re doing some pretty cool things that we’re cross pollinating outwards as well you have to tell us about that I’d say one of them is our fatigue management systems I mentioned that if you’re driving and you

Get a little fatigued normally what people do is they watch your eyeballs with cameras but what we’re working on is technology that actually looks at your physiology your brainwaves and so we’re on the leading edge of putting devices actually they look like sunglasses so that we can monitor when

You get tired and keep you safe either through haptics motions on your seed or through sounds ese peas digital board room and the remote control centers and autonomous truck fleets that bhp have introduced are changing how the mining industry operates the hope is that this kind of innovation drives greater efficiencies

To help me consumer demand if that’s a success the mining has a great future IOT powering the digital economy brought to you by Schneider Electric

The Mining Sector (B2B) | I.O.T. Powering The Digital Economy

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