Metals and mining corporation Vale has a compelling innovation story, having developed a completely new process in just four weeks, according to Helio Mosquim, Vale’s head of IT innovation, who spoke to the audience at SAP Leonardo Live in Chicago back in November 2017. “We set up a plan to innovate in four weeks … and that was an amazing experience,” said Mosquim told the audience.
A recent mining update stated that the mining sector has embraced the introduction of new technologies, which have resulted in significant productivity benefits. Digital strategies [can] reduce variability in the organization, enhance an end-to-end approach, and improve decision-making.
Saving Time by Automating Critical Tasks
Workforce effectiveness was a key challenge for Vale, which has about 110,000 employees – about 22,000 of whom are SAP users, according to Mosquim. Inventory is about $1.6 billion of Vale’s $11 billion annual spend, so the company decided to automate purchasing processes to make them more intelligent.
In a world before automated purchasing, maintenance workers must ask an SAP user to create a purchase requisition before acquiring a new part for damaged equipment, according to Mosquim. This completely manual process often overlooks parts that are already available (perhaps the previous shift ordered the same thing) — and users frequently search through multiple screens before finding the missing information.
These steps often result in a lot of redundant work and wasted time.
“Between 25 to 40 percent of rejections of all the purchase requisitions [occurred] because [the part] was either available on contract or in inventory,” Mosquim said. “And the equipment was out there waiting for the part.”
A “Totally Different Approach” in Just Four Weeks
“We set up a plan to innovate in four weeks,” Mosquim said. “And that was an amazing experience.”
Vale has engaged in a four-week design-led intelligent technologies project with SAP, including the SAP Design unit and SAP AppHaus team. Within a week, we have engaged with the procurement team from Vale to identify the key issue around purchase requisitions.
After the initial exploration workshop, onsite user research, and participatory design workshop, SAP and Vale jointly designed a paper prototype of a new solution, which was implemented by SAP on SAP Cloud Platform using SAP Machine Learning.
“The result was very effective, very impressive,” Mosquim said. “When we saw the totally different approach, we were very confident that it was going to be able to deliver.”
Find Your Key
“We had an opportunity to have a totally new process … we had other managers come in saying, ‘We would like to invest in this innovation,’” Mosquim said. “In the end, we got a little bit from each solution, and we put it in the cloud.”
Design thinking helped Vale quickly prototype and innovate on top of a legacy platform, gaining full access to the cloud. Digital technologies — including Internet of Things and machine learning — could also help mining companies improve safety, optimize site-wide operating systems and more, according to a recent smart mining conference.
“You can only truly achieve a sustainable productivity improvement by adopting an integrated end-to-end business approach from market to mine,” a recent mining update stated.
A design-led approach building on the principles of design thinking and doing could be your key to that success.
Management Assets across a Global Supply Chain
The mining industry is on the upswing, enjoying growth in the U.S., Europe and China, according to a professional services company. Vale has been growing too, investing more than $120 billion during the last decade, and expanding to 27 countries, according to Vale’s Hélio Mosquim.
This growth brought a lot of further challenges, such as managing new assets across the globe, according to Mosquim; intelligent maintenance would help the company increase up-time, boost productivity and cut costs. Supply chain was also a big concern for the Rio de Janeiro-based multinational, which produces iron ore, copper and more.
“Imagine producing ore in the middle of the Amazon, and transporting it all the way to the ports, and going through the distribution centers in Malaysia and Oman — and on to China,” Mosquim said. “Optimizing production, optimizing logistics and shipping … it’s a big challenge for us to optimize the whole chain.”
This story originally appeared in Forbes.com by SAP Brandvoice on November 17, 2017.