Decision Making For Higher Profitability in Mining Sector - PowerPoint PPT Presentation

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Decision Making For Higher Profitability in Mining Sector


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Title: Decision Making For Higher Profitability in Mining Sector

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
  • Mining companies and their units work under
    constant pressure to make cost control, improve
    performance , and profitability.

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.

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.

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
  • 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).

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

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

Collaboration Network
  • 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

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
  • Connecting information and people at the correct
  • Accepting and adopting collaboration as the best
  • Encouraging team-based approach
  • Training to embed priority to organizational
  • Measurement of performance and identify area of

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

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

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

  • 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.

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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