Decision Making For Higher Profitability in Mining Sector

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Decision Making for Higher Profitability in
Mining Sector

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Problems of Mining Sector

• Key Issues In mining industry decision makers
  and stakeholders are spread over geographically
  broad, diverse area, and varied time zones. The
  difficulty in aligning all the stakeholders and
  decision makers over necessary data at
  appropriate times makes decision making a
  challenging task in mining industry.
• The mining industry is incurring on average 25
  cost over-run over budgeted cost. This cost
  over-run not only impacts profits of the company,
  but also puts the purpose of feasibility study in
  question.
• Mining companies and their units work under
  constant pressure to make cost control, improve
  performance , and profitability.

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Key issues..

• Most of the efforts taken to improve financial
  performance by different companies have been
  proved ineffective due to the operational
  profitability killers that centre around some key
  areas of the system.. These profitability killers
  are characteristics of traditional system and are
  strong enough to resist decision making.

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Profitability Killers in Mining Sector

• Geographic Separation By nature mining is a
  global industry. The industry expends according
  to new discovery of new reserves across the
  globe. As a result of this, the decision makers
  and subject matter experts are widely dispersed
  both geographically and in terms of time zones.
  This wide dispersion makes the decision making
  process slow.
• Functional silos Operators, in order to more
  efficiently discharge their responsibilities,
  divide individual works into different sub-units
  and assign responsibilities to different sub
  teams. These sub teams concentrate on their own
  works and do not bother about how their
  performance can impact other functional teams.
  This lack of cooperation results in missed
  opportunity, deferred project completion, and
  cost over-run.
• Individualistic approaches In the production
  phase of a project, many operational units create
  their own approaches to the whole system. These
  approaches remain non-aligned, and prevents best
  practices throughout the organization. The lack
  of best practices diminishes efficiency and
  erodes profitability.

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Profitability killers..

• Gap in demand for and supply of experts with
  specialized knowledge Demand for experts is high
  enough, but they are inadequate in supply. Many
  companies depend upon handful of experts for
  different projects across the world. This huge
  gap in demand and supply creates financial and
  logistical handicaps for the organizations which
  can create bottleneck in delivering project in
  time.
• Lack of reliable data Obtaining reliable data
  and presenting the same to the decision makers in
  time is a big problem for mot of the mining
  companies. Huge amount of money is being spent in
  collecting, collating, and presenting data, but
  most of the company complain that mot of the
  decisions are taken without adequate reliable
  data (Wipro 2017).

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Collaborative Decision Environment (DCE) Model

• When the decision makers make informed decision
  on the basis of reliable and timely delivered
  data, the decision should be cost and time
  effective. This can be done by proper utilization
  of the technologies and initiation of decision
  making process. This need in the decision making
  aspect has driven the companies adopt the model
  where decision is taken in collaborative
  environment (Hernanandez, Lyons, Zarate and
  Dargam 2014).
• The building equation of the model
• Right Information Right Connections Right
  Time Right Decision

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Profitability Killers

• Geographic Separation
• Functional silos
• Gap in demand for and supply of experts with
  specialized knowledge
• Lack of reliable data

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Collaboration Network
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Weighting

• The model should be such as to eliminate the
  bottleneck that arises due to geographical
  dispersion. This s the most significant
  bottleneck faced by mining industry.
• The second important bottleneck is the functional
  silos, then comes availability and presentation
  of reliable data.
• Then the individualistic approaches and gap in
  demand and supply should be taken into account

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Constituents of CDE Model

• Technology
• High quality video conferencing
• 3 dimensional data displays
• visualization and integration portals
• Physical and/or virtual environment conducive to
  
• Synchronize activities of the workers with work
  processes.
• Connecting information and people at the correct
  time
• Accepting and adopting collaboration as the best
  practice
• Encouraging team-based approach
• Training to embed priority to organizational
  objectives
• Measurement of performance and identify area of
  improvemnt

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CDE Process

• Identify Enable the stakeholders and the
  management understand the business process in
  objective way so that the processes or roles not
  functioning properly could be identified
• Enable The organization establishes
  infrastructure to connect information and people
  in timely manner
• Collaborate Develop cooperation so that problems
  identified in step 1 can be addressed
• Maintain Installation of systems to measure
  performance in an ongoing process

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Benefits of CDE

• CDE eliminates all the profitability killers and
  improves profitability.
• The issues of geographical separation are
  resolved by technology
• Specialized knowledge can be made available
  without much physical travel
• Individualistic approaches are eliminated by
  introducing common processes, systems, and roles
  in the organization
• Reliable data can be generated and presented
  through automation

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Result of CDE

• 5 reduction in costs
• 15 decrease in trouble shooting time
• 6 increase in production
• 2 reduction in production losses
• (Wipro 2017)

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Conclusion

• In todays competitive business scenario, the
  mining industry must be flexible to changes in
  the decision making process in order to increase
  profitability and meet increased market demand.
• Decision making process in the collaborative
  decision environment would result in better
  forecasting and project management, which would
  in turn improve profitability.

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Conclusion ..

• The profitability killers identified cannot be
  eliminated by traditional decision making
  processes. By eliminating the profitability
  killers CDE increases return on investment.
• CDE implementation is new in mining projects but
  it is highly effective in removing function al
  silos at the beginning of a project.

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