Transform Mining with SAP Solutions Business Value with Intelligent ERP

Transcription

1 SAP Value Paper ǀ PUBLIC Transform Mining with SAP Solutions Business Value with Intelligent ERP 2018 SAP SE or an SAP affiliate company. All rights reserved.

2 The Need for an Intelligent ERP System Supporting next practices in mining with intelligent ERP Transformation in the mining industry is occurring at a rapid pace. Changes in technologies, business environment standards, and the need for agility require constant adaptation. Mining companies must be able to respond to rapidly changing conditions yet still comply with all standards. How does a digital core with a true single source of truth help? Mining companies must respond to rapid change A digital core is an IT architecture that offers stability and long-term reliability for core enterprise processes yet also provides the flexibility to adapt quickly to new opportunities, challenges, and regulations. In today s environment, mining companies cannot continue with old ways of working, so they need to change how they operate. This impacts the industry and its IT the backbone of modern business which has to be agile to ensure compliance. Support for mergers and acquisitions is also required to ensure swift adaptation to changing markets. Mine smarter, not harder The ability to respond quickly is an essential part of managing a mining business. To do this, simulation, prediction, and analytical capabilities are important components. For example, this can be the simulation of profitability scenarios to identify the best method of mining or to determine the best time to sell a mine. The Intelligent ERP Generate additional value from data While overall processes in mining do not change much, the speed of business is disruptive. Mining companies need the computing capability to carry out complex algorithms with large data sets to support timely, realtime analysis. The base data comes from sensors that enable precise digital twins of equipment and processes. In a mine, data sets will be available that can be used by machine learning to improve equipment efficiency and availability. This provides more-reliable information for all related processes. For example, mine production output can be planned and executed more reliably. Addressing innovative opportunities In the commodity business, you have to differentiate yourself. Mining companies must improve customer interactions as well as increase operational efficiencies to gain a competitive edge. This impacts every facet of business, including end-to-end (E2E) processes across departments and even company borders. Collaboration and sharing of resources will be part of the new operating models from customers to mine operations. Bringing SAP S/4HANA and SAP Leonardo technologies together as a digital core will result in a more flexible and intelligent enterprise. To achieve next-generation business processes, mining companies need an intelligent ERP solution. For example, machine learning can help in daily business by helping ensure the correct spare part is ordered by using image recognition to identify the correct version. Early adopters have already begun this journey to gain the competitive edge for a top seat in the next-generation mining business. Alacer Gold Mobilization Of executive management 4 months For a rapid implementation of SAP S/4HANA With SAP S/4HANA, we can realize the benefit of real-time access to realtime data to make real-time decisions. We can be more innovative and efficient as we transform our business and prepare for the future. Kim Perry, Vice President of Finance and Information Technology, Alacer Gold Corporation Read the business transformation study. Mitsui Coal Holdings 30 minutes To process and sort end-of-month mining data, down from 2 days 80% Of time in finance now spent on business strategy and data analysis instead of transactional operations These are uncertain times in the coal sector. SAP S/4HANA helps us differentiate from the competition and stay ahead. Craig Howard, GM Finance, Mitsui Coal Holdings Pty Ltd. Read the business transformation study. 2 /

3 Strategic Priorities in a Digital Economy The digital economy is disruptive. Mining companies need strategic priorities that drive transformation. SAP supports a reimagined set of E2E business scenarios to support the strategic priorities of working in a digital environment. Make the business more predictable, sustainable, and safer Advanced predictive analytics and machine learning integrated with real-time information help make vast operational data more actionable. Predict outcomes or exceptions to support the right decision-making, making mining more predictable, sustainable, and safer for the workforce E2E scenario: Predictive maintenance and service Real-time asset health information to reduce costs and risks Collaborate with customers, suppliers, and workers Transform interactions with all stakeholders into an interactive, collaborative, and responsive network to strengthen relationships, digitalize data exchanges, make the business more agile, increase profitability, and digitalize the worker. E2E scenario: Capital portfolio and project management Collaborate with all involved parties for efficient project management Enhance operational and commercial agility Achieve real-time visibility into operations and run a mine like a factory based on advanced planning and execution to increase agility by combining IT and operational technology (OT) along the entire pit-to-customer process. E2E scenario: Real-time planning and execution Achieve real-time operational excellence Increase productivity through automation Digitalize and automate manual processes and focus on value-added processes for employees while automating operations to keep workers out of hazardous environments. E2E scenario: Automated procurement Transform procurement into a seamless process 3/

4 SAP Predictive Maintenance and Service Traditional scenario The SAP Predictive Maintenance and Service solution provides real-time information on the health of assets based on critical values and trends, thereby allowing the most efficient asset maintenance strategies for optimization of cost and risks and improved performance. Time- and usage-based inspection and maintenance Unknown real-time risk of failure and performance No optimization of cost, risk, and performance Time-based inspection planning Inspection Inspection that triggers maintenance Maintenance A new world with SAP SAP Predictive Maintenance and Service for use with monitoring, scoring, and prediction of asset health based on machine learning algorithms Triggering of maintenance orders just in time to avoid unnecessary inspections and improve asset availability Top value drivers: Asset health monitor Reduction in asset service and maintenance costs Maintenance strategies based on anomaly detection, predictive forecasting, and optimization of maintenance strategies Maintenance Reduction in unplanned downtime 4/

5 Capital Portfolio and Project Management Traditional scenario Disconnected departments and limited access to the business network prohibit responsive planning: When plans are not consistently created and shared, information cannot flow quickly. Maintenance and operations are not aligned wasting time and money. When companies rely on a few external partners and communicate manually with business partners, visibility is limited, collaboration is difficult, delays are inevitable, and the risk of error is high. Sourcing Operations Maintenance!! Finance Supplier! Supply chain planning Procurement! DELAY Project contractors!! DELAY Equipment and material supplier DELAY $ $ $ Raw material supplier A new world with SAP One plan that can be shared with all critical resources and partners to achieve visibility, agility, and responsiveness: Collaboration between operations and sourcing, accelerating maintenance completion Insight into future demand for maintenance and procurement, optimizing inventory Alignment of sales, manufacturing, and delivery, improving customer satisfaction Linear supply chains that transform into digital supply networks Simultaneous collaboration with all relevant stakeholders Your company at the center Top value drivers: Finance Customer satisfaction Procurement Operations Supplier Supply chain planning Maintenance Sourcing SAP Integrated Business Planning SAP S/4HANA : Digital Core Live business Contractor Contract manufacturer Collaborative platform SAP Ariba solutions Material supplier OEM supplier Material supplier OEM supplier Reduction in operating and supply chain costs 5/

6 Real-Time Planning and Execution Traditional scenario With timely information from mine planning and execution systems, mining companies can combine operational and financial data to conduct what-if scenarios and trigger actions based on changing operational conditions. Planning outside in spreadsheets Data that needs to be entered and stored in multiple applications No ability to do frequent replanning, due to long processing time Actual data not mapped with plans Download long-term production plan into spreadsheet Do financial planning in spreadsheet Upload financial plan into an application Capture production actuals in multiple applications Enter actuals in spreadsheet and compare with plan A new world with SAP Run planning and what-if analysis in real time Capture operational data at the source Combine operational and financial data for decision-making on the spot Gain real-time operational insights Be more agile and responsive to changing conditions Top value drivers: Integrate mine plan into planning application and do what-if and financial impact planning in real time Real-time insights Capture actuals from various mine operations in real time Faster planning cycles Trigger business processes in real time Gain real-time visibility into changing operational conditions and act quickly Greater agility in managing change 6/

7 Automated Procurement Traditional scenario With SAP S/4HANA as their digital core, mining companies can automate the procurement process by utilizing machine learning to match requisitioning with existing contracts and improve worker effectiveness. Different applications to efficiently manage the procurement process for parts User experience enabled through traditional GUI and Web-based transactions Multiple manual steps resulting in erroneous purchase requisitions and orders Identify need for spare part Use paper-based or Web-based manufacturer catalog to find part number Use desktop application to find existing contract Use separate application to create purchase requisition Abundance of contracts and nonstandardized processes, leading to high rejection rate and delays in procurement process A new world with SAP Mobile application to take pictures of needed parts Machine learning to identify part number Automated creation of purchase requisitions Top value drivers: Worker or sensor identifies a malfunction Increased user efficiency Use mobile app to take picture of needed part Upload pictures and machine learning algorithm identifies part number, rules match the part to a contract, and a requisition is created automatically Better utilization of contracts for better pricing High level of correct purchase orders, leading to faster availability of parts and simplified user experiences Faster availability of parts 7/

8 Deep Dives Along the Mining Value Chain Primary capabilities where value can be achieved through SAP S/4HANA, line-of-business (LoB) solutions, and SAP Leonardo Commodity Supply Chain Mine Operations Operational Risk and Compliance Management Long-term business planning Commodity management Bulk and nonbulk transportation management Project and portfolio management Mining and processing Asset management Environment, health, and safety (EHS) Compliant product lifecycle management Corporate sustainability 8/

9 Commodity Supply Chain Typical Challenges Current State with ERP Capabilities of SAP S/4HANA Capabilities of Cloud-Based LoBs and SAP Leonardo Business Benefits* Inability to include real-time, changing customer demands in planning, leading to outdated and inaccurate plans Slow, manual process to drive sales and operations planning (S&OP) processes No combined business and operations planning Lack of visibility into the E2E supply chain, leading to poor decision support Lack of accurate, up-to-date inventory data, lead times, and procurement timing, leading to an inefficient planning process Lack of live visibility into inventory, reducing throughput Manual calculation and processing of invoices Lack of adequate reporting and operational tools to analyze, review, and control billing Planning runs at preset times with data that first must be consolidated from various systems Material ledger activation available along with functionality of actual costing; however, inventory valuation data exists in multiple aggregated tables No robust analytical tools for billing administrators to have quick insight into ongoing billing process Normal billing running well, but bulk processes considerably slower using traditional relational database Mining-customer demand changes visible without lengthy batch processes Material resource planning cockpit that provides realtime insight into material availability Embedded analytics for ad hoc simulations with realtime data User- and use-case-centric views Material ledger available as a default option with all inventory valuation data, removing redundancies and speeding actual costing (also with multiple currency and valuation methods) due to optimized code based on the SAP HANA business data platform Native SAP Fiori apps to simplify administration of standard billing applications with user-friendly operational tools Rapid and collaborative S&OP, including what-if and scenario planning (SAP Integrated Business Planning solution) Collaboration with logistics partners to improve throughput, reduce wait times, and increase efficiencies (SAP Global Track and Trace solution) SAP Enterprise Warehouse Management application deployed as a stand-alone application for high-volume and highly automated warehouses Collection, mapping, storage, and analysis of vehicle and sensor data in real time, optimizing logistics and improving services with the SAP Vehicle Insights application Use of SAP Cloud Platform to enable highly distributed supply chains with blockchain *Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise. More-accurate forecasts Real-time planning processes to run a mine like a factory Lower overall supply chain planning costs Faster planning cycles Reduction in revenue loss due to fulfillment issues Improvement in rate of on-time, in-full deliveries Compliance in distributed supply chains using blockchain technology Invoices that go out sooner, reducing days sales outstanding Reduced inventory levels 9 /

10 Mine Operations Typical Challenges Current State with ERP Capabilities of SAP S/4HANA Capabilities of Cloud-Based LoBs and SAP Leonardo Business Benefits* Lack of transparency into project resource demands and allocation, leading to project delays as well as low resource utilization Slow access to project and task details, reducing productivity of project management resources Inability to report project costs and procurement data accurately, increasing the risk of uncontrolled deviations and waste Lack of real-time visibility into operational data Lack of real-time view into ongoing maintenance activities and asset performance Complex and nonintuitive user interface for asset management applications Capacity planning, detailed project role planning, and project staffing in a single application Project financial and logistics information that is sometimes inaccurate due to batch load process; drill-down not possible Multitiered landscape consisting of the SAP ERP application and additional ERP component extensions and business intelligence solutions, making it challenging to obtain realtime view of maintenance activities User experience enabled with traditional SAP GUI interface and Web-based transactions Real-time access to resource availability, skill sets, and organizational assignment during project staffing process Direct and accurate access to project financial and logistics information; ability to drill into details for project costs, resource usage, and progress Real-time view for planners into ongoing maintenance activities with the ability to reschedule multiple times a day in order to better plan and schedule maintenance activities and achieve higher efficiency Better user experience enabled by triggering Webbased transactions through SAP Fiori launchpad Easier collection and visualization of operational data on SAP Cloud Platform New user experience with conversational AI and chatbots SAP Predictive Maintenance and Service to increase uptime SAP Asset Strategy and Performance Management application to help define, plan, and monitor the optimal maintenance strategy for physical assets by providing the required level of collaboration and integration as well as the needed data and analytics Collection, mapping, storage, and analysis of vehicle and sensor data in real time, optimizing logistics and improving services with SAP Vehicle Insights *Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise. Reduction in project cost overruns Reduction in capital project management costs Greater agility and faster decision-making in operations Increase in return on assets Decrease in unplanned asset downtime and outages Improved employee productivity Reduced EHS management costs 10 /

11 Operational Risk and Compliance Management Typical Challenges Current State with ERP Capabilities of SAP S/4HANA Capabilities of Cloud-Based LoBs and SAP Leonardo Business Benefits* Difficulty in developing one common view of process risks related to workers, assets, and the environment, resulting in high cost for EHS compliance Limited ability to effectively analyze EHS data to reduce workplace risk Inability to develop proactive safety measures, which leads to low EHS maturity Multitiered landscape consisting of SAP ERP, ERP component extensions, and business intelligence solutions, making it challenging to access a single source of truth for all EHS-related Information Analysis based on past performance, which limits the scope of proactively driving EHS risk reduction Batch processing of data, which increases the time required to analyze EHSrelated information Native integration of incident management and health and safety management as part of SAP S/4HANA, reducing landscape complexity and improving performance New app to identify a risk, perform a quick assessment of risk levels, define needed controls, and specify impacts Embedded analytics based on live data that help EHS practitioners act in the moment SAP Fiori app for recording incidents in an offline mode Environmental data captured through sensors and processed in real time Real-time reporting of EHS risks and controls to CxOs with SAP Digital Boardroom SAP Connected Worker Safety solution to demonstrate compliance at all times and foster real-time awareness of hazardous situations Lower EHS management cost Greater operational efficiency Enhanced compliance at all times Reduction in accident and incident rate Reduction in compliance penalties and fines *Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise. 11 /

12 SAP Strategy Deliver the Intelligent Enterprise Intelligent ERP is the Digital Core of an Intelligent Enterprise Customer Experience Manufacturing & Supply Chain Digital Core Intelligent Suite People Engagement Network & Spend Management An intelligent enterprise can be continuously enhanced by extending business services built on a digital platform to create transformative business value. Data Management Intelligent Technologies AI/ML IoT Analytics Digital Platform Cloud Platform Mining organizations have already begun to transform their business to address current challenges and to be ready for a competitive future. 12 /

13 SAP Portfolio of Solutions for Mining An E2E intelligent enterprise for mining Mining companies must digitalize to grow profits, increase productivity, and reduce costs by simplifying their operations. The value of the digital economy is based on how to serve the customer. Value creation often comes from edge solutions that are based on and coordinated by digital core solutions. It is the platform for innovation and business process optimization, connecting the workforce, the Internet of Things, the supply network, and customers. Digital supplier collaboration Real-time, integrated supply chain planning SAP Integrated Business Planning Operations execution and insights SAP Manufacturing Integration and Intelligence Digital customer engagement Instant collaboration Insights beyond company boundaries Connect shop floor to top floor SAP C/4HANA solutions Network and spend management Customer experience Commodity supply chain Mining and processing Operational risk and compliance management People engagement Big Data and the Internet of Things Provide innovative products and services SAP Cloud Platform Be agile and responsive to volatile markets and demanding customers Finance Allow for visibility into the state of the business at any time Optimize project planning and run operations efficiently SAP S/4HANA Digital core Improve process safety and operational integrity while reducing enterprise operating risk Procurement Automate and streamline complex, high-volume invoice processes and purchasing documentation Manage talent Attract, develop, and retain the right talent Third-party labor Integrate contingent labor to close capacity and skills gaps Network and spend management 13/

14 SAP s Value Proposition for Mining Companies SAP S/4HANA provides mining companies with a proven framework to adopt industry best practices while attaining operational excellence across the full value chain. Strategy enablement Business benefits* 10% 12% reduction in total logistics costs 3% 5% reduction in supply chain planning costs 2% 5% reduced operating costs 1% 2% increased production uplift 2% 3% reduced capital project costs 5% 10% reduced parts inventory 10% 30% reduced unplanned downtime 10% 30% increased personnel productivity Accelerate creation of new business models Enter new markets and industries Accelerate synergy for mergers and acquisitions Run live (SAP Digital Boardroom) Reorganize on the fly Achieve greater speed and agility Run simply (master complexity) Manage risk and ensure compliance Strategy enablement Business benefits Empowered employees Higher productivity with a new, role-based way of working with the responsive, intuitive SAP Fiori user experience (UX) on all devices Role-driven, user-centric processes and self-service business intelligence for user empowerment Actionable insights on unified, real-time data and processes with built-in system suggestions for decision support Empowered employees IT benefits and TCO IT benefits and total cost of ownership (TCO) 10x smaller data footprint >10x faster data backup and restore 7x higher throughput 50% 70% faster operational reporting Faster adoption through the cloud and the SAP Fiori UX Reduced total cost of investment, TCO, and risk through the SAP Value Assurance service packages for SAP S/4HANA *Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise. 14/

15 Customers Are Achieving Value from SAP Solutions Alacer Gold Mitsui Coal Holdings Industry Mining SAP Solution SAP S/4HANA Customer Web Site Click here to read the business transformation study Running as a live business, Alacer Gold is providing enterprise mobility for its workforce to enable better decision-making in an innovative environment using SAP S/4HANA. With SAP technology, Alacer is changing its corporate culture, creating a collaborative work environment, and preparing for future growth. Industry Mining SAP Solution SAP S/4HANA Customer Web Site Click here to read the business transformation study The core business at Mitsui Coal Holdings is to manage the large coal mining asset portfolio in which Mitsui & Co. invests giving it a strong competitive advantage. But poor user experience and limited analytics and planning capabilities of its legacy finance system were a constraint. With SAP S/4HANA, the company now has a world-class financial management solution in the cloud, which provides realtime analytics and has helped to eliminate data consolidation costs and errors. With SAP S/4HANA, we can realize the benefit of real-time access to real-time data to make real-time decisions. We can be more innovative and efficient as we transform our business and prepare for the future. Kim Perry, Vice President of Finance and Information Technology, Alacer Gold Corporation These are uncertain times in the coal sector. SAP S/4HANA helps us differentiate from the competition and stay ahead. Craig Howard, GM Finance, Mitsui Coal Holdings Pty Ltd. 15/

16 Customers Are Achieving Value from SAP Solutions PanAust Industry Mining SAP Solution SAP Business Suite powered by SAP HANA Customer Web Site Click here to read the business transformation study. PanAust realized it needed a state-of-the-art business and technology platform to accelerate the pace of bringing new mining projects online while simultaneously reducing the costs and risks associated with improving its existing systems. Using SAP Business Suite powered by SAP HANA, the company gained the agility to fast-track profitable projects and the ability to support consistent business processes globally that maximize efficiency and drive operational excellence. Ashapura Minechem Industry Mining SAP Solution S/4HANA Customer Web Site Click here to read the business transformation study. Ashapura Minechem is a large producer of bentonite and bleaching clay headquartered in India. The company's goal is to be a world-class enterprise and preferred partner to diverse industries through proactive customer support, innovation, and cutting-edge technology. The company decided to implement SAP S/4HANA. It also hoped to reduce the time and cost required for learning. Ashapura went live with SAP S/4HANA without delays, improved efficiency and productivity company-wide, optimized system configuration and performance, and saved 20% on learning costs. SAP Business Suite powered by SAP HANA gives PanAust a robust and industry-leading platform to integrate existing business units and onboard new ones seamlessly while achieving substantial cost savings across all functional areas. SAP Fiori increased user acceptance and satisfaction, reduced training costs, and provides a powerful reporting and analytics platform. Darren Hadfield, Group Information Systems Manager, PanAust Limited We are grateful for all of the support from SAP Enterprise Support that helped us implement SAP S/4HANA. We look forward to continuing to work with the support experts in the coming month to stabilize the implementation for smooth sailing in the future. Deepak Bhardwaj, Customer Project and Program Manager, Ashapura Minechem Limited /

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