Transform Mining with SAP Solutions · The Need for an Intelligent ERP System Mining companies must...

Transform Your Mining Organization into an

Intelligent Enterprise

Achieve Value with Intelligent ERP

SAP Value Paper | PUBLIC

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Overview Strategic Priorities E2E Scenarios SAP Value Proposition ReferencesSAP Strategy

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The Power of Intelligent ERP

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Enable process simplification and automation with intelligent ERP solutions. Leading mining companies transform their business to adopt rapidly to changing conditions.

Transformation in the mining industry is occurring at a rapid pace. Technology changes and evolving environmental standards require constant agility and adaptation. Mining

companies must be able to respond to rapidly changing conditions yet still comply with all standards. How does a digital foundation with a true single source of truth help?

Mining companies have started to shift from a mainly engineer-to-order business model to a repeatable and scalable configure-to-order model, using individual customer

engineering requirements to become nimbler in serving a more demanding customer base. Furthermore, mining companies are seeking revenue opportunities by offering

equipment as a service.


Enhance and Extend Next-Generation Processes with Intelligent ERP

Embedding intelligent technologies into SAP S/4HANA® is a key value contributor to enable intelligent mining enterprises. The principle of an intelligent enterprise is to automate,

extend business processes, or even transform the entire business model. Intelligent technologies such as collaborative artificial intelligence, robotic process automation, and

machine learning are the foundation of an insight-to-action-driven enterprise. Leading mining companies have already begun the journey toward becoming an intelligent enterprise.

Increase Sustainability StandardsCommunities, investors, and governments are expecting more than just following the bare minimum requirements to keep the license to operate.

Companies develop a holistic view for monitoring environmental conditions, becoming sustainable,

and engaging proactively with stakeholders to keep the social license to operate.

Run the Mine Like a Factory

The ability to respond quickly to changing conditions is an essential part of managing a

mining business.

Simulation, prediction, and analytical capabilities are important components to decide how to

improve productivity. Measuring plans against actuals in real time allows quick adjustments.

Raise Customer ExpectationsIn the commodity business, you have to differentiate yourself. Mining companies must improve customer interactions to gain a competitive edge.

Adopting the supply chain to changing customer demands and providing direct channels with

customers to make doing business easier are becoming essential.

Utilize Collaboration PlatformsReal-time information exchange with vendors, customers, and workers is essential for the intelligent mining enterprise.

Mining companies use direct collaboration to run efficiently from procurement to sales and project

execution.

Alacer Gold

With SAP S/4HANA, we can realize the benefit of real-time access to real-time data to make real-time decisions. We can be more innovative and efficient as we transform our business and prepare for the future.

“

Kim Perry, Vice President of Finance and

Information Technology, Alacer Gold Corporation

Read the business transformation study.

”

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Enterprise mobility Of executive management and field personnel

Drive Business Value with Intelligent ERP: SAP S/4HANA Customer Stories


4 months For a rapid implementation of SAP S/4HANA

https://www.sap.com/documents/2017/10/a8d6f952-da7c-0010-82c7-eda71af511fa.html

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Mitsui Coal Holdings

These are uncertain times in the coal sector. SAP S/4HANA helps us differentiate from the competition and stay ahead.

“

Craig Howard, GM Finance, Mitsui Coal Holdings Pty Ltd.

Read the business transformation study.

”

Drive Business Value with Intelligent ERP: SAP S/4HANA Customer Stories


30 minutes To process and sort end-of-month mining data, down from 2 days

80% Of time in finance now spent on business strategy and data analysis instead of transactional operations

https://www.sap.com/documents/2018/03/7c2aa441-f67c-0010-82c7-eda71af511fa.html

The digital economy is disruptive. Mining companies need strategic priorities that drive transformation. SAP supports a reimagined set of end-to-end (E2E) business scenarios to

support the strategic priorities of working in a digital environment.

Strategic Priorities in a Digital Economy

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Make the business more predictable, agile, and productive through

automation

Advanced predictive analytics and machine learning integrated with real-

time information help make vast operational data more actionable. Predict

outcomes or exceptions to support the right decision-making and make

mining more predictable, sustainable, and safer for the workforce.

E2E scenario: Predictive maintenance and service – Reduce costs and

risks with real-time asset health information.

Collaborate with customers, suppliers, and workers

Transform interactions with all stakeholders into an interactive,

collaborative, and responsive network to strengthen relationships,

digitalize data exchanges, make the business more agile, increase

profitability, and digitalize the worker.

E2E scenario: Capital portfolio and project management – Collaborate

with all involved parties for efficient project management.

Focus on customer needs

Differentiation in a commodity business is essential. Getting intelligent

insights into customer interactions, needs, and requirements and

providing a frictionless experience to interact with customers through

multiple channels deliver value to your customers and your mining

enterprise.

E2E scenario: Real-time planning and execution – Achieve real-time

operational excellence.

Mine responsibly and sustainably

Moving from reactive to proactive and predictive sustainability measures

is a key factor to secure the social license to operate. With real-time

monitoring and assessment of direct working conditions, risks, and assets

such as tailing, you gain full insight into operational issues to increase the

safety of your workers and the environment.

E2E scenario: Automated procurement – Transform procurement into a

smooth, frictionless process.


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Make the Business More Predictable, Agile, and Productive Through Automation

*Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with line-of-business and cloud capabilities. As each enterprise is at a different level

of maturity, our recommendation is that you work with SAP to determine the value proposition for your enterprise.

Predictive Maintenance and ServiceWorking equipment is one of the most important value drivers in mining operations. A high utilization and availability rate has a direct impact on revenues and profits. It is

essential to avoid unexpected downtime. To optimize availability, SAP S/4HANA helps predict asset failures so you can initiate maintenance activities before equipment breaks

down and long outages occur.

Top value drivers*

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▪ Time- and usage-based inspection and maintenance

▪ Unknown, real-time risk of failure and performance

▪ No optimization of cost, risk, and performance

▪ Use the SAP® Predictive Maintenance and Service

solution for monitoring, scoring, and predicting asset

health based on machine learning algorithms.

▪ Trigger maintenance orders just in time to avoid

unnecessary inspections and improve asset

availability.

Inspection that triggers

maintenance

Time-based inspection

planning

Inspection Maintenance

Time-based inspection

planning

Maintenance

Maintenance strategies based on anomaly

detection, predictive forecasting, and optimization

of maintenance strategies

3%–10% Reduction in asset service and maintenance costs

5%‒15% Reduction in unplanned downtime

Traditional scenario

A new world with SAP

10%–15%Increase in percentage of projects on time

and within budget and scope

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Collaborate with Customers, Suppliers, and Workers



Capital Portfolio and Project Management Projects in mining can be complex, with many parties involved. Collaborate directly on a shared plan to achieve visibility, agility, and responsiveness while accelerating completion.

Top value drivers*


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Disconnected departments and limited access to the

business network prohibit responsive planning:

▪ When plans are not consistently created and shared,

information cannot flow quickly. Maintenance and

operations are not aligned, wasting time and money.

▪ When companies rely on a few external partners and

communicate manually with them, visibility is limited,

collaboration is difficult, delays are inevitable, and the

risk of error is high.

Material

supplier

Contract

manufacturer

Contractor

Material

supplier

OEM

supplier

OEM

supplier

SAP Ariba® solutions

Collaborative platform

Live business

SAP Integrated Business Planning

for Supply Chain solution

SAP S/4HANA as a digital foundation

Operations

SourcingFinance

Procurement Supply chain

planning

Maintenance

Supplier

Project

contractors

Equipment

and material

supplierDelay

$$$

DelayDelay

Raw material

supplier

Operations

Supplier

Sourcing

Procurement

Maintenance

Supply chain

planning

Finance

! !

!

You can share one plan with all critical resources and partners to

gain visibility, agility, and responsiveness:

▪ Collaboration between operations and sourcing, accelerating

maintenance completion

▪ Insight into future demand for maintenance and procurement,

optimizing inventory

▪ Alignment of sales, manufacturing, and delivery, improving

customer satisfaction

▪ Linear supply chains that transform into digital supply networks

▪ Simultaneous collaboration with all relevant stakeholders

▪ Your company at the center

10%‒20% Reduction in audit cost


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Focus on Customer Needs



Real-Time Planning and ExecutionTrue customer centricity means understanding the ultimate end consumer and how their behaviors are changing – and then making every business decision based on this insight.

Mining companies can maintain close customer relationships with a focus on long-term value based on a 360-degree understanding of their customers, starting with detailed insights

into their requirements and needs. Mining companies can also interact smoothly with their customers on a constant basis through multiple channels, from Web to direct, including

Internet of Things (IoT) connectivity.

Top value drivers*

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10%‒20%Increase in customer satisfaction

2%‒10% Increase in revenue from new products and services


▪ Run planning and what-if analysis in real time

▪ Capture operational data at the source

▪ Combine operational and financial data for

decision-making on the spot

▪ Gain real-time operational insights

▪ Be more agile and responsive to changing

conditions

Identify the need for a

spare part

Use a paper-based or

Web-based manufacturer

catalog to find the part

number

Use a desktop application

to find the existing contract

Abundance of contracts and

nonstandardized processes,

leading to a high rejection rate and

delays in procurement process

Use a separate application

to create a purchase

requisition

Collect all relevant

marketing data in an

optimized tool set

Receive an inquiry for

customer information

Access a 360-degree view

of all customer-related

information, such as

history, complaints,

shipments, and quality

Improve the customer relationshipOffer products

and services

based on customer

intelligence



▪ Planning outside of spreadsheets

▪ Data that needs to be entered and stored

in multiple applications

▪ No ability to do frequent replanning due

to long processing time

▪ Actual data not mapped with plans

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Mine Responsibly and Sustainably



Automated ProcurementMining companies are under increasing pressure to comply with public, investor, and government demands on environment, safety, and governance criteria. Navigating and

complying with these often-contradictory requirements are becoming increasingly challenging. Mining companies can start by automating the collection of environmental data

and making it more easily accessible. They can build a reporting framework to be used as the basis for inside and outside communications.

Top value drivers*

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▪ Different applications to efficiently manage the

procurement process for parts

▪ User experience enabled through traditional GUI

and Web-based transactions

▪ Multiple manual steps resulting in erroneous

purchase requisitions and orders

▪ Mobile app to take pictures of needed parts

▪ Machine learning to identify part numbers

▪ Automated creation of purchase requisitions

Various unconnected

systems and databases,

unstructured data not

managed fully

Extraction of data into

spreadsheets, filing of

paper documents

Complex workflows,

disconnected processes

Main focus on meeting

minimum legal standards

Reporting mostly out

of spreadsheets

Bringing together operational

data (real-time monitoring,

maintenance, legal and

industry standards, audit

results) with experience

data (community input)

Automated workflows with

clear responsibilities

Central reporting and

analysis for holistic

tailing management

Execute, monitor and communicate

consistently based on real-time

information

High legal costs for

noncompliance, trust issues

from other stakeholders

Real-time Insight

Faster Planning cycles

Greater agility In managing change



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SAP Strategy – Deliver the Intelligent Enterprise

BUSINESS TECHNOLOGY PLATFORM

INDUSTRY CLOUD

BUSINESS NETWORK

INTELLIGENT SUITEAPPLICATIONS

TECHNOLOGY

BUSINESS

PROCESS

EXPERIENCE MANAGEMENT

SUSTAINABILITY MANAGEMENT

Across all functions

Intelligent enterprises run agile, integrated business processes and use advanced technologies such as artificial intelligence, machine

learning, and the Internet of Things.

They apply leading-edge industry best practices and work together to build flexible value chains. They evaluate and act on customer,

partner, and employee sentiment, and they understand and manage their environmental impact. This makes them resilient, successful,

and sustainable.


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SAP S/4HANA Provides New Capabilities to Enable the Strategic

Priorities of Mining Companies

SAP S/4HANA

Innovations

Make the

Business More

Predictable, Agile,

and Productive

Through

Automation

Collaborate

with Customers,

Suppliers,

and Workers

Focus on

Customer

Needs

Mine

Responsibly

and Sustainably

▪ Maintenance safety and permit to work

▪ Analysis and timely handling of potential environmental issues by monitoring

a wide range of environmental data

▪ Asset operation and management

▪ Geographical enablement framework

▪ Material resource planning cockpit that provides real-time insight into material

availability, including detailed options to resolve issues

▪ Analysis of delivery performance

▪ Incident management

▪ Health and safety management

▪ Environment management

▪ Commodity management

▪ 360-degree view of customer

▪ Order and contract management

▪ Sourcing according to sustainability

and social responsibility standards

▪ Change management

Economic Value Added

Increased profitability (revenue and costs)

Optimized usage of capital (working capital and equipment)

▪ Demand-driven replenishment

▪ Extended warehouse management

▪ Transportation management

▪ Portfolio management

▪ Project management

▪ Collaboration with manufacturers,

operators, and service suppliers

across the network

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SAP S/4HANA provides mining companies with a proven framework to adopt industry best practices while attaining operational excellence across the entire value chain.

Strategy enablement

▪ Accelerate creation of new business models

▪ Enter new markets and industries

▪ Accelerate synergy for mergers and acquisitions

▪ Run live (SAP Digital Boardroom)

▪ Reorganize on the fly

▪ Achieve greater speed and agility

▪ Run simply (master complexity)

▪ Manage risk and enable compliance

Empowered employees

▪ Higher productivity with a new role-based way of working

through the responsive, intuitive SAP Fiori® user

experience (UX) on all devices

▪ Support for role-driven, user-centric processes and

self-service business intelligence for user empowerment

▪ Actionable insights into unified, real-time data and

processes with built-in system suggestions for decision

support

Business benefits*

▪ 2%–5% reduction in total logistics costs

▪ 5%–30% reduction in supply chain planning costs

▪ 3%–10% reduction in asset maintenance costs

▪ 3%–5% optimization of capital expenditure

▪ 5%–15% reduction in unplanned downtime

▪ 5%–30% reduction in environment, health, and

safety penalties and fines

▪ 10%–20% reduction in inventory carrying costs

▪ 2%–10% reduction in HR costs

▪ 5%–30% reduction in finance costs

IT benefits and total cost of ownership (TCO)

▪ 10x smaller data footprint

▪ >10x faster data backup and restore

▪ 7x higher throughput

▪ 50%–70% faster operational reporting

▪ Faster adoption through the cloud and the

SAP Fiori UX

▪ Simplified landscapes

▪ Native integration

▪ 20% reduction in TCO

IT benefits

and TCO

Business

benefits

Strategy

enablement

Empowered

employees

SAP’s Value Proposition for for Mining Companies




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Macmahon

Industry

Mining

Supported by cloud solutions from SAP, we’ve implemented several major new

initiatives that have played a significant part in turning our business around,

tripling our revenue and almost doubling earnings before interest and taxes.

“

David Van Den Berg, Chief Technical Officer, Macmahon Holdings Limited

”SAP solutions

SAP S/4HANA Cloud,

SAP SuccessFactors®

solutions, SAP Cloud

Platform, SAP Cloud

Platform Integration Suite

Customer Web site

www.macmahon.com.au

Click here to read the business

transformation study.

To meet changing customer requirements, mining contractor Macmahon Holdings

Limited wanted to improve business agility by increasing visibility across its

operations. The company established a unified business operations platform based

on SAP S/4HANA Cloud and SAP SuccessFactors solutions to provide a single

source of truth across all its markets. As a result, decisions are now based on real-

time information, enabling the contractor to respond faster to help customers address

new challenges.

Customers Are Achieving Value with SAP Solutions


http://www.macmahon.com.au/en-au/

https://www.sap.com/documents/2020/04/c2f42094-8e7d-0010-87a3-c30de2ffd8ff.html

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Hochschild Mining

Industry

Mining

SAP S/4HANA Cloud gives us a digital foundation with the agility, availability,

and security we need. The expert guidance from SAP and our partner Seidor

was critical to enabling project success and meeting time and budget goals.

“

SAP solution

SAP S/4HANA Cloud

Customer Web site

www.hochschildmining.com



With decades of experience in the Americas, Hochschild Mining PLC, a leading

producer of precious metals, has a tradition of corporate responsibility. To further its

mission for sustainable production while supporting goals for growth, the company

wanted to improve its efficiency and responsiveness in a competitive environment of

fluctuating metal prices. Hochschild also wanted to digitalize and integrate operations

in the cloud to improve key business and financial processes and enhance the user

experience for employees.



Edward Alarcon Ninapaytan, CIO, Hochschild Mining PLC

”

http://www.hochschildmining.com/en/home

https://www.sap.com/documents/2019/12/20f36941-787d-0010-87a3-c30de2ffd8ff.html

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Alacer Gold

Industry

Mining

With SAP S/4HANA, we can realize the benefit of real-time access to real-time

data to make real-time decisions. We can be more innovative and efficient as we

transform our business and prepare for the future.

“

SAP solution

SAP S/4HANA Cloud

Customer Web site

www.alacergold.com



Running as a live business, Alacer Gold Corporation is providing enterprise mobility

for its workforce to enable better decision-making in an innovative environment using

SAP S/4HANA. With SAP technology, Alacer is changing its corporate culture,

creating a collaborative work environment, and preparing for future growth.



Kim Perry, Vice President of Finance and Information Technology, Alacer Gold Corporation

”

http://www.alacergold.com/

https://www.sap.com/documents/2017/10/a8d6f952-da7c-0010-82c7-eda71af511fa.html

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Mitsui Coal Holdings

Industry

Mining

These are uncertain times in the coal sector. SAP S/4HANA helps us differentiate

from the competition and stay ahead.

“

SAP solution

SAP S/4HANA Cloud

Customer Web site

www.mitsui.com



The core business at Mitsui Coal Holdings Pty Ltd. is to manage the large coal

mining asset portfolio in which Mitsui & Co. invests – giving it a strong competitive

advantage. But a poor user experience and the limited analytics and planning

capabilities of its legacy finance system were a constraint. With SAP S/4HANA, the

company now has a world-class financial management solution in the cloud, which

provides real-time analytics and has helped to eliminate data consolidation costs and

errors.



Craig Howard, GM Finance, Mitsui Coal Holdings Pty Ltd.

”

http://www.mitsui.com/

https://www.sap.com/documents/2018/03/7c2aa441-f67c-0010-82c7-eda71af511fa.html

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Daming Mining

Industry

Mining

The advanced management capabilities in SAP S/4HANA Cloud best address

our needs for customized production. Its powerful ERP function also allows us to

better integrate operations and finance to successfully digitalize our mining

operations.

“

SAP solution

SAP S/4HANA Cloud

Customer Web site

www.miningcircle.com



A leader in mining and processing of ferrous metal and mineral resources, Xinjiang

Daming Mining Group Co. Ltd. is capable of producing more than one million tons of

iron ore annually. As the business grows, so does the need for refined management.

To solve complex issues in management with advanced technology, Daming Mining

needed a new generation of solutions to support end-to-end digital operations. The

goal was to set an example for digital transformation of the mining industry across

the region.



Xu Ming, Chairman, Xinjiang Daming Mining Group Co. Ltd.

”

http://www.miningcircle.com/en/index.do

https://www.sap.com/documents/2019/11/c830ae3b-727d-0010-87a3-c30de2ffd8ff.html

Studio SAP | 70206enUS (20/08)

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Transform Mining with SAP Solutions · The Need for an Intelligent ERP System Mining companies must...

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