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Chronicles of the Annual Capital Productivity Meeting

Sala Tánica

This is what it was like at the Annual Capital Productivity Meeting that was organized by RMES Analytics on August 22nd and which was about Digital transformation in Mining Asset management.

Adolfo Arata

Adolfo Arata

To begin with, we were welcomed by Adolfo Arata, director of RMES Analytics and the masters’ program in asset management of the Pontifical Catholic University of Valparaiso, who told us about the relevance of the productivity issue. Citing figures from the World Economic Forum, he told us how mining productivity in Chile has declined in the last ten to fifteen years and how digital transformation can help us to recover and improve productivity levels. However, he cautioned that technology is not everything:

“We have realized that the problems associated with technology are fundamentally linked to organizational culture.”

 

 

Digital Transformation, Mining’s New Frontier

Gonzalo Restini

Gonzalo Restini

This challenge was brought up again by both the roundtable panelists and the speakers that followed, starting with Gonzalo Restini, director of FMA Industrial, one of Chile’s most successful mining services companies and selected by the Endeavor network as the one with the largest Global Footprint.

Speaking from his (academic and) personal experience in retail, finance, mining, media, and technology, warned that disruption would reach mining and to be careful not to fall behind.

“[Mining] is the industry that talks about innovation the most but does the least.”

In addition to the focus that mining has on production and how expensive mistakes can be, he suggested that this delay might be due to people’s internal resistance and risk aversion. However, he highlighted the great potential and growth opportunities that the country still has and Antofagasta in particular.

“The world of technology does not wait”

 

Productivity challenges in Chile

Alfie Ulloa

Alfie Ulloa

Next up, Alfie Ulloa, who has worked over 4 years at the National Productivity Commission where government-mandated studies are conducted, presented some alarming results concerning the state of the country’s productivity.

Companies seem to be falling behind in terms of digital transformation and the State even more so:

“[If the State] does not understand technology, if it is not a user of technology, it will be unable to regulate technology.”

Mining was not immune as was demonstrated by a benchmarking study done in collaboration with RMES Analytics. Again, this was at least partly due to not leveraging existing technologies:

“Access to technology in our country is no different than in others. It is the use of that technology that differs.”

However, there is hope if the gaps between the best and the worst companies in Chile are closed.

 

Then the cycle of conversations between experts from the academic and business world began, starting with the round table on Industry 4.0 in Mining Productivity.

Industry 4.0 in Mining Productivity

Future trends in industry 4.0

Dr. Luca Fumagalli, director of the Industry 4.0 LAB of the industrial engineering department and School of Management of the Politecnico di Milano, opened the table with an introduction to the subject.

He stressed the important role that universities have as they train the engineers that will be making company decisions in 2030:

“We need to see what vision they need and the training that they need for it.”

And training in change management, and not just technical training, is crucial:

“Industry 4.0’s real revolution is not technology, but changing how decisions are made.”

 

Machine Learning for value creation in mining

Agustín Costa, partner and managing director of the Boston Consulting Group then demystified machine learning and spoke of its potential in creating value at different stages of the mining chain:

“Machine Learning does not require you to predefine how equipment, or a system, works. It learns it from the data, allowing it to give much more accurate information on where it is optimal to operate.”

However, he cautioned that these systems are not a panacea that magically solves throughput optimization issues, but:

“a tool to assist, but not to replace engineers or metallurgists.”

 

Mining 4.0

Dr. Javier Ruiz del Solar of the Advanced Mining Technology Center and the University of Chile then spoke about “Mining 4.0” and its impact on workers’ productivity and safety.

After a call to increase collaboration between different sectors, he stressed the importance of digital transformation and automation, which are the drivers of the current revolution, and just how much remains to be done in their implementation:

“Out of 61 unitary underground mining operations worldwide there are only 5 that have been automated.”

 

Applying analytics to build trust between maintenance and supply

Fabián Gutiérrez then shared BHP’s experience in using analytics to foster collaboration between workers, regardless of their position or area, in order to change the corporate culture, particularly in supply.

Again, speaking of the importance of collaboration he proposes that:

“Maybe it’s time to start sharing data with our suppliers and the rest as well. That way we can maybe move from data to better decisions.”

 

 

Mining requires a common language to meet the challenges of Industry 4.0

Juan Jara, technology officer of Fundación Chile’s InteropMining program, which is focused on helping to solve mining’s interoperability problem, then spoke of the need for a common language between mining and technology.

“Why can’t we innovate in mining? A typical example is because there are information silos. There are processes that do not share their information within the same mine.”

 

First roundtable

José Benguria, technology planning specialist, company director, mentor, and professor of the University of Chile then moderated the debate section where the following questions were discussed:

  • Critical success factors for making industry 4.0 a reality in mining productivity
  • Mechanisms to be able to cope with change and successfully address digital transformation
  • Initiatives to successfully address digital transformation
  • What to do at the training level so that future professionals are disposed towards digital transformation
  • Data standards and interoperability
  • The impact and need for digital transformation in support areas
First round table on industry 4.0 in mining productivity

First roundtable on Industry 4.0 in mining productivity. From left to right: José Benguria (moderator), Agustín Costa, Luca Fumagalli, Juan Jara, Javier Ruiz del Solar, and Fabián Gutiérrez.

“In the end change is 10% algorithm, 20% technology, and 70% change management.” – Agustín Costa

Panelists of the industry 4.0 in mining productivity round table

Panelists of the industry 4.0 in mining productivity roundtable.

Digital Transformation in Asset Management

Carlos Turina, manager of a benchmarking project on digital transformation in asset management for BIP xScience and RMES Analytics, kicked off the second roundtable on digital transformation in asset management.

This mining specialist emphasized that, while many problems today have technological solutions and advanced technologies exist, there is still a long way to go:

“We are at a stage where expectations are high, but it has been really hard to translate those efforts into added value for the business.”

And while there is a lot of potential in the new tools being created to support asset performance management (APM), it is crucial to adequately prepare those who will integrate the mining world and will need to be:

“people who know the process very well, but who also know how to use analytical tools.”

 

Digitization in predictive maintenance

The important role of innovation and development was certainly taken up by Dr. Viviana Meruane, director of the mechanical engineering department of the University of Chile and the Innovation in Advanced Manufacturing program.

The academic highlighted the potential of new technologies and particularly Deep Learning for transforming predictive maintenance in mining:

“The next step is to bring this scientific research system into the real world.”

 

Digital transformation

Mauricio Ithurbisquy, Colbún operational support manager, followed by sharing from his vast personal experience in aeronautics, mining, and energy.

He warned how important it is to collaborate and to keep up to date with new technologies and ideas to survive:

“Solutions are born from work teams, that is the big difference today. New problems have to be faced with new people and ideas. If we do not stand up to this challenge, we will be out of the market.”

 

Maintenance digitization

Juan Quispe, asset maintenance and operational excellence corporate manager, followed by sharing how the digitalization of asset management has become a part of Antofagasta Minerals’ strategy and of the risks of not adapting.

Concerning the implementation of RMES Suite as the corporate software for managing asset productivity, he shared how:

“Change management and not technology has been our main challenge.”

 

Digital Transformation in Asset Management

In keeping with the theme of change management, Rafael Ahumada, reliability superintendent at Doña Inés de Collahuasi Mining Company, added how important it is to get everyone to understand and internalize both the concept and the value of process digitization:

“The only concept that people tend to understand when it comes to digitization, automation, etc., is unemployment. And what we must explain is that this is not the case. What we must explain is that if the company benefits, everyone benefits.”

 

Embracing Artificial Intelligence

Finally, Alessandro Volpe, xTech Big Data & IA Center and BIP xScience data science manager said that, unlike what many companies claim, only 15% are active in their digital transformation with artificial intelligence. Why? He proposed several reasons that according to him come down to the most important one that is culture:

“the culture that must be taken into account […] with these kinds of applications [is] that it’s not a linear process, it’s an iterative process that requires some time and some competence and some failure in order to be successful in the future.”

 

Second roundtable

These individual presentations gave way to another debate that was moderated once again by José Benguria tackling questions on:

  • How to turn what few know and are capable of into something transversal
  • Data security and algorithm security
  • Real examples of machine learning or deep learning in mining
  • How to incorporate a mining digitalization strategy
Second round table on digital transformation in asset management

Second round table on digital transformation in asset management. From left to right: José Benguria (moderator), Carlos Turina, Vivana Meruane, Juan Quispe, Rafael Ahumada, Alessandro Volpe and Mauricio Ithurbisquy.

“How can digital transformation take hold in a company? I think it’s when people who are next to a machine see the benefit in using it.” – Mauricio Ithurbisquy

Panelists of the roundtable on digital transformation in asset management

Panelists of the roundtable on digital transformation in asset management.

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