A 2021 research from Boston Consulting Group (BCG) has revealed that digital investments made by metals and mining companies fall far short of their potential, with companies up to 40 per cent less digitally mature than comparable industries, such as automotive or chemicals.
The same findings uncovered to what extent digital boosts performance across metals and mining business value chains. From an environment, safety and workforce perspective, businesses saw up to a 12 per cent reduction in injuries and 70 per cent efficiency increase in role filling. Supply chain and procurement reported a maximum of 30 per cent increased accuracy in short-term demand predictions, while marketing, sales and finance noted overhead cost reductions of up to 30 per cent.
BCG’s Metals and Mining Digital Acceleration Index (DAI) survey – which covered 75 large metal and mining businesses globally – found that just 25 per cent of those surveyed used customised digital solutions. What’s more, while many industries have come to view data as a valuable asset, this does not seem to be the case for the mining and metals industry, with just 10 per cent of industry leaders viewing data as a corporate asset.
A barrier when introducing new technology solutions appears to be that many lack the expertise and knowledge to properly implement digital transformation. Just 15 per cent admit to applying a systems thinking approach to their implementation – meaning that the majority of business’ systems lack smart, interconnected internal ecosystems of devices and software that work together to create benefits across the value chain.
Complicating the picture is that nearly 50 per cent of the companies surveyed admit to having siloed physical and digital sales channels and have digitised only individual touch-points along the customer journey, and 75 per cent of companies still rely on manual or disparate systems for procurement.
Commenting on the findings, Agustín Costa, managing director and partner at BCG, said:
Most metals and mining companies have ambitious digital strategies already in place, but the gap between strategy and execution is significant. We know the benefits are endless when we expedite digital adoption, but it’s evident that many businesses lack the expertise to make the most of these projects.”
Whilst training and partnerships provide potential solutions to the digital skills gap; 30 per cent of the companies surveyed had no digital up-skilling plan at all, and less than 60 per cent had a digital partnership strategy. Despite this, there is progress being made, with 45 per cent stating they have recently begun training initiatives.
Additionally, almost half of businesses continue to rely on manual tools for supply chain visibility, and a similar number (40 per cent) rely on them to tackle sales and operations planning problems. This is surprising given that the same businesses said that digital boosts contract cost reduction by up to 50 per cent and input price prediction accuracy by a staggering 97 per cent.
The businesses that have overcome barriers – such cultural resistance – to digital transformation can reap significant rewards, from a 20 per cent increase in mining throughput to a 50 per cent boost in procurement productivity and a 30 per cent emissions reduction.
Agustín Costa continued:
We’ve spoken to leaders on the operations side who complain that despite more sensors, data, and upgraded systems, the way they operate hasn’t changed that much. We know that the change they are expecting lie in digital and advanced analytics, and companies who want to see real change by taking the digital vision to action requires fundamental shifts in culture and ways of working. It will take time and can be arduous, but the potential payoff is tremendous. With the right digital and analytics skills and knowledge, companies can design solutions that enhance the way they work while educating all levels of the organisation on the benefits of digital.”