Innovation impacts industries in waves of activity that last for years or even decades, bringing major change to some sectors, and creating entirely new supply chains while destroying old ones. Over the past century or two, these waves have become steeper, bringing change with increasing complexity and speed. Soon the mining industry will be in the midst of a major change as the realities of low-grade ores create a need for new, advanced technologies. This impending coincidence of growing needs and an explosion of suitable but diverse solutions will create an “innovation supercycle.” The mining industry will be challenged to manage new roles and interactions during the design, construction, operation, retirement and remediation phases.
In the past miners were, in a sense, competing only with fluctuating commodity values where the source of their competitive advantage was the quality of their deposits. In the new era of undifferentiated deposits and growing labour costs, miners will increasingly find efficient operations to be an inescapable imperative. Productivity will become much more important, and the source of competitive advantage will shift from geology to technology. Automation alone could turn out to be a way station, beyond which system integration is likely to be the source of further progress.
Systems engineering (SE) formalizes the integration of interdisciplinary components of complex systems to meet the requirements of operators as well as many other affected parties through entire system life cycles. It has become a profoundly important enabler for dealing with rapidly changing technology. SE demands significant upfront effort in analyzing the capability requirements of the whole system across its entire life cycle. Extensive use is made of modelling and simulation to determine how the richly detailed requirement set can best be met. Crucially, this activity continues throughout the system’s life – and so it must – because requirements will inevitably change with time. As the system comes into existence, integration is constantly revisited from a whole-system perspective; this is quite different from managing component interfaces in a front-end engineering design. It ensures that the whole system meets the whole capability requirement for its whole life. The aerospace, defence and, more recently, the information and communication technology, and nuclear power sectors have successfully embraced complexity using formal approaches like SE to bring rigour to solutions, and to ensure that the required system capability is achieved.
The mining sector could use SE tools to understand how candidate technologies can enable profitable extraction of declining ore grades without leading to unforeseen management or maintenance problems, or contributing to future liabilities. Requirements for skills, training, revised procedures and operating interfaces, maintenance capacity, or other contingencies would be identified upfront as part of the innovation cycle. The risk burden, so often a barrier to innovation, would be understood in terms of the whole-system capability and rationally allocated among role players. This would facilitate long-term alliances that reduce the capital investment risks of mining development.
The ability to manage technology risk in a system context is what makes SE ideally suited to the adoption of new technologies. This holds true not only when the system is created, but throughout its life as new requirements or obsolescence demand the insertion of new technologies. Systems integrators practising SE have become good at technology selection, and end users have learned to see the benefits of outsourcing these kinds of decisions even if it puts them at a technical knowledge disadvantage. With this approach, consultants have a critical role to play as trusted partners who can speak with experience about risks and opportunities. SE adoption by the mining industry would also impact equipment suppliers as improved operations and processes interact with developments in automation, capability and operability. Deliberate management of interfaces and interactions at all stages of the life cycle would further strengthen equipment supply chains.
The challenge of the innovation supercycle is clear: using the right technologies to increase mining productivity in the new era of undifferentiated geology will lead to previously unseen levels of complexity. Miners should consider whether SE can help prepare them for this seismic change. Are their supply chain relationships future-proof? Who will execute the systems integrator role? Are investment models ready for increased upfront engineering effort? New alliances that outsource technology risk management and integration functions may be part of the answer.
Andy Reynolds is general manager,
energy, mining and environment
with the National Research Council
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