Digitization in Mining: How to Overcome the Barriers?
It is common wisdom that mining lags other industries in digitization progress. In a study published by Harvard Business Review, the mining sector trailed behind the other industries across all digital transformation metrics, from spending on software tools to digitizing work processes.
There are many reasons for mining’s lag. Some of these reasons include:
Fragmented Value Chain. The mining industry’s value chain includes extraction, processing, storage, transportation, and delivery of material to customers. Each node in this value chain requires different technology sets, workforce skills, and distinctive operational policies. Digitization on the enterprise scale would require efforts made on each of these fronts, meaning larger investments as compared to other industries.
Volatility. The constant volatility in mineral prices, changing levels of capital and operating expenditures, and vulnerability to changes in macroeconomic and political environments in remote locations of mining enterprises make mining executives cautious about long-term investments in technology.
Workforce. While mining industry jobs are well-compensated, they are also among the most demanding in the entire economy due to harsh environmental conditions, strict procedures, and high requirements for physical and mental health. Digitization of work in mining companies where many workers, who are the final users of the digital tools, have been around for decades, requires winning their trust first, which takes time, effort and money.
Last Mile Barriers for Data Access. Data collection and transmission remain a challenge. Mining companies operate multi-vendor fleets with different data protocols, making collecting data on a single platform challenging. Remote locations often suffer from connectivity problems, which limits the access to modern cloud-based technology.
Nonetheless, digitization would lead to the long-term sustainability of the industry. Here are some of the ways to overcome the challenges to digitization in mining:
Learn from the best. Evaluate the current state of the enterprise and assess which innovations across different nodes of its value chain have the potential to create the most value for the business and its stakeholders. Some of the generally available technologies used in transportation, manufacturing and other industries can bring immediate benefits for miners and become a gateway to innovation.
Go with SaaS. While capital investments can be risky, software-as-a-service is the innovation adoption model that can optimize capital investments and reduce financial and technology risks in the long term. At the same time, SaaS guarantees that you have access to the best technology available at the time.
Find the right approach for your team. Identify the values, skills, and competencies your team needs to make the digital transformation successful and cultivate them from the top. A system of rewards, open communication, and creative tools – such as gamification of routine mining processes and safety procedures – can help. As a bonus, you’ll make the company more attractive for the newer generation of employees.
Enable the connectivity. 4-Sight.ai, the equipment-agnostic platform that enables data transfer even when the network is not available may be the right tool to crush the last-mile barriers for data access.
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