by Bharat Goenka
The Metals & Mining industry is dominated by century old behemoths like BHP Billiton, Alcoa, Noersk Hydro, etc. Against these Goliaths, we at Vedanta, see ourselves as David – always on the lookout of new ways to create disruption in the market place. Technology, when intelligently integrated with your business model, can be a big disruptor and source of unconquerable competitive edge – so, can Vedanta be the Amazon of Metals – can it make the big elephants of Metals & Mining dance to its techno tunes?
There is a dynamic shift in approaches adopted by companies to sustain increasing profitability and a competitive edge. Having thrived during the boom of the 2000s and then survived the global financial crisis of 2008, mining companies are now competing for growth in the next stage of the industry’s development. A wide array of industry participants—diversified global majors, national champions seeking to go global, commodity specialists, and juniors aiming for the big league—are all looking to increase their presence on the global stage.
With the price of commodities standardized by the market, efforts should be made to increase profitability by focusing primarily on maximizing the output from operations and reducing the unit cost of production and transportation of minerals. The quality and nature of ore extract is governed by the cost and techniques used for mining. Business leaders have been constantly working on the companies’ core capabilities suitable for optimizing operations thereby minimizing costs.
While digital technologies offer a gamut of solutions and distinct benefits, employing the most relevant technology that suits the company’s business model is most crucial. From defining the facets of digitization, to bringing the concept into reality, both strategically and operationally, there is a need to inculcate digital algorithms into organizational planning. Collaborative practices adopted by multiple stakeholder groups lead to the realization of these achievements.
With this thought in mind, exactly a year ago, we launched Project Suhana (Hindi word meaning pleasant) with a pun on S4Hana. There is enormous value stuck across the value chain as we convert Mud to Metal or as the small Bauxite rocks mined in Odisha reaches as Aluminium Billets to Extruders in North America. Technology needs to play an integral part of the business chain. Adoption of cloud-based solutions like SAP S/4 HANA is a first step towards simplifying the business processes and re-engineering them towards value creation. It enables companies in cutting down the processing time, driving one version of truth ubiquitously available, multi-skilling employees, seamless interaction with customers and end to end visibility on supply chain.
The metal industry aims to improve efficiency, productivity, adaptability and sustainability of the supply chain system and their integration within agile business models and processes. For example, a company which is able to track the Quality (not just the traditional Quantity) of Minerals (like Coal) from the Mine Top to the Boiler (from the Shovel to the Socket) will be able to create value that can only be envied by its traditional competitors.
Successful digital transformation is not only limited to emergent technology but also governs several other factors that are critical for achieving success. Aligning enterprise goals and organizational strategy with digital intervention, enabling a technology mediated workforce, ensuring the existence of a well-defined operating model and facilitating the culture of innovation across various teams while communicating clearly defined implementation goals are some of these factors that determine the fate of a successful digital transformation journey.
Intelligent enterprises embrace information technology, process automation technology and communication technology to create value across the supply chain. They also adapt intelligent user-centred design concepts like SAP Fiori 2.0 that focuses on how employees work and provide business benefits catered to the data collected. It helps increase transparency, customer satisfaction and productivity by ensuring faster and direct access to relevant information.
So, with “Project Suhana” our safar (journey) has started - the quest is on for a technology that can disrupt the Metals and Mining space – the industry desperately needs new techno tunes!
- The writer is Chief Financial Officer, Aluminium and Power, Vedanta Ltd