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This paper characterizes the important features of electronic commerce (EC) and demonstrates how it is transforming industrial sectors. It reviews how electronic commerce is a business strategy and examines supply chain integration, knowledge management, and human/machine communications. It aims to consider what would be required for a mining company to operate as an electronic business. It attempts to provide a vision of some future electronic mining scenarios.
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Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
1
Transforming the Mining Industry through Electronic Commerce
Laura Mottola, HATCH, Advanced Systems Group, lmottola@hatch.ca, www.hatch.ca
Mike Lipsett, Syncrude Canada Ltd., Edmonton Research Centre, lipsett.mike@syncrude.com ,
www.syncrude.com
Malcolm Scoble, University of British Columbia, Department of Mining and Mineral Process Engineering,
malcolms@unixg.ubc.ca , www.mining.ubc.ca
Key words: Information Technology, Electronic Commerce, Supply Chain Integration, Knowledge
Management, Distance Education, Decision Support Systems, Computers, Monitoring.
Abstract
This paper characterizes the important features of Electronic Commerce and demonstrates how it is
transforming industrial sectors. It reviews how Electronic Commerce is a business strategy and examines
supply chain integration, knowledge management, and human/machine communications. It aims to
consider what would be required for a mining company to operate as an electronic business. It attempts to
provide a vision of some future electronic mining scenarios.
Introduction
Information technology traditionally has been viewed as only a support or operational tool in business. The
advent of the World Wide Web on the Internet, however, has facilitated the creation of electronic
commerce, a more cost effective and diverse way of doing business. Information technology (IT) is
currently the main mechanism for the streamlining of business activities that is now widespread amongst
manufacturing companies seeking to improve competitiveness. Technological change and organizational
restructuring have been observed to bring gains in productivity and market share. The mining industry also
faces similar acute competitive pressures. How can mining adapt information technology and realign itself
as an electronic business?
In order to provide a clearer vision of how electronic commerce would support an operating mine, consider
the following scenario set at some future point in time:
A remote Canadian base metal operation is faced with the imminent breakdown of a major piece of
equipment. The failure has been predicted by an on-board condition monitoring system, which
automatically generated a machinery diagnostic report and maintenance recommendation, whilst alerting
the machine operator of the critical condition. The shift supervisor, the maintenance engineer, and the
production planner automatically receive the maintenance recommendation and the engineer approves the
work request generated by the computer-based maintenance management system.
A query of the maintenance history database reveals that this failure would most likely result in two days of
lost production and that the potential damage to the equipment is such that it could add to the normal repair
time. The machine condition indicates that the failure will occur in three days. The repair procedure lists
the required parts, none of which are warehoused at the site. The regional dealer has been electronically
notified and confirms that all of the parts can be shipped within 24 hours via special carrier except one.
However, a replacement is located in the inventory of a neighbouring mine. Under a parts pooling
agreement, the required part is loaned to the mine and a replacement part is later shipped to the
neighbouring mine. Short-range plans are modified accordingly and other equipment is redeployed to
primary production for the duration of the repair, which is duly planned and tracked through the
maintenance management system. No production is lost, feed grade to the mill is assured, and maintenance
time and resources are kept to a minimum.
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
2
Meanwhile, the original equipment manufacturer is notified of the failure, which is an unusual recurring
problem in this type of equipment. The manufacturer gathers this information from its entire customer-base
to improve the product design and promptly distributes the failure information to all customer sites to
update their respective maintenance history databases.
Thus the operating mine, original equipment manufacturer, dealer, shipping company, and parts pooling
members were all seamlessly linked to the Internet in one integrated electronic business community,
illustrated in Figure 1. Information, products, services and payments were delivered by electronic
commerce via telephone lines, computer networks or other means. In this remote mining scenario the
operating costs were reduced, whilst the quality of products, services and maintenance achieved were
increased.
It is widely recognized that the Internet is a worldwide network of computer networks using a family of
agreed upon technologies and protocols, an intricate and extensive web of communication that links
millions of people across the entire world. However, to capitalize on its connecting power, the Internet
should be viewed as the domain where 21st century electronic commerce will take place, and the mining
and metals industry is no exception.
This paper firstly introduces Electronic Commerce (EC). It then explores some areas in the mining business
that are poised to become more electronic in nature:
Supply Chain Integration,
Knowledge Management and Education,
Human Communications,
Machine Communications.
These areas are treated in terms of technology capability as well as applicability in and outside the mining
industry. The paper attempts to characterize the important features of EC and clarify its associated
terminology, in order to facilitate an understanding of the potential for its implementation in the mining
industry. It aims to demonstrate how EC is transforming parallel industrial sectors and how this might be
considered for the mining industry.
work
performed
resourcing
monitoring
+ telemetry
parts pool
archival
database analysis
tool report &
work
request
planner’s
work package work orders
shipping &
receiving
service
bulletin
inventory
dealer
Mine
Dealer
Parts Pool
Shipper
OEM
shipping
short range
plan
procurement
Figure 1: Mining Electronic Commerce Scenario
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
3
Electronic Commerce
Business Strategy
EC is more than a technology; it is a business strategy, a method for achieving corporate goals and
objectives. It is critical for the support of industry and streamlining of the process of trading with partners.
It includes the use of technology to facilitate Business to Business, as well as Business to Consumer
transactions resulting in improved revenue and/or profits. It requires fundamental changes in organizations,
corporate behaviour, and business thinking throughout the enterprise.
What causes companies to implement an EC strategy? External pressures, such as competitors, customer
demands, collapsing and tightening value chains, and the pressure to compete globally create certain
initiatives whose execution is enabled by EC. These initiatives require tighter, faster, more reliable
electronic links to business partners. This set of business partners, spanning across the entire supply and
distribution chain and connected electronically to the enterprise, form a trading community known as an
Electronic Business (EB) community [EDS 1999].
Business Value
The business impact associated with EC has been found to vary, according to the maturity level of the
enterprise’s EC implementation. The business value impact on a company may arise through four stages:
task automation, addresses intra-departmental efficiency by providing process automation and accurate
information; it does not require re-engineering and delivers reduced costs;
information sharing: addresses inter-departmental efficiency by providing functional automation,
enhanced information access; it requires re-engineering of processes in a functional area and delivers
reduced costs and productivity improvements;
extended enterprise: addresses integrated efficiency by providing improved processes across
enterprises and shared information networks; it requires organizational re-engineering and delivers
reduced costs, productivity improvements, and increased revenue;
virtual enterprise: addresses inter-enterprise integration by providing process improvement and
information networks across enterprises; it requires inter-organization re-engineering and delivers
increased revenue, increased opportunity, and increased market share [EDS 1999].
Technology
Many different technologies are used to implement an EC strategy:
The Internet, with public access, provides an electronic market with limited security;
Intranets, with restricted access, reside behind company firewalls, supporting and enabling intra-
company processes;
Extranets, secure hybrids of internet and intranet technologies with restricted access to the community
membership, support and enable inter-company processes and extend the enterprise beyond its
traditional boundaries;
Value-Added Networks (VANs) or virtual private networks are private communications networks;
Electronic Data Interchange (EDI) is a standard for compiling and transmitting business information
between systems, often over value-added networks;
Electronic Fund Transfer (EFT) is a standard for transferring monetary payments electronically
between enterprises through financial institutions;
Electronic Catalogues are collections of product specifications in digital form;
Electronic Policies and Procedures.
Supply Chain Integration
In the fast moving consumer products business, the market is shifting the value of companies from hard
assets (factories, warehouses, inventory, and fleets) to soft assets (customer information, relationships, and
market insight). The mining and metals industry is very capital intensive and hard asset oriented. Plants,
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
4
equipment, material stockpiles and inventory are the tangible wealth that defines the value of the mining
and metals business. Could it be that, even in our industry, a shift in thinking is required to compete in
today’s transient, low commodity price market? Is a shift in emphasis from hard assets to soft assets even
feasible or appropriate in the resource sector?
EC has the power to dramatically impact the economics of the supply chain of the mining and metals
industry by exchanging physical assets for business information to reduce the overall cost of ownership and
improve revenue. As described in the opening scenario, the maintenance of mining equipment can be
enabled for just-in-time delivery of parts by electronically linking the suppliers into the maintenance
management system and automating the part ordering process. This minimizes the need for keeping part
inventories and frees up capital as well as real estate.
Extended Enterprise
A supply chain is a business system consisting of a collection of enterprises that contribute to the delivery
of a product or service. In an integrated supply chain, information is shared among the member
organizations with the goal of optimizing the performance of the total system [Scovell and Dunbar 1999].
The pivotal point is the buying organization, the enterprise delivering the product or service to the
customer. Integrated supply means focusing on the overall impact of supplier and customer relations on
that enterprise’s operational effectiveness [Shepherd 1994].
The extended enterprise therefore encompasses its core value chain as well as both sides of the supply
chain, i.e. supplier and customer relationships. For example, a mining and metals company should consider
its key suppliers (e.g. chemicals suppliers, energy suppliers, equipment manufacturers, information
technology service providers, contracted labour suppliers, etc.) and major customers (e.g. steel companies)
as strategic partners. As such, they are treated as an integral part of the business by sharing critical
information and best practices that enhance the overall supply chain.
Hence, there exist two sides of the supply chain:
supplier relationships (procurement management)
customer relationships (order management).
Supply chain integration aims to connect these extremities via inventory management into a seamless
information flow enabling the efficient delivery of goods and services.
Procurement Management
In the manufacturing industry, supplies purchased by the company are assembled into a final product. A
distinction is made between non-production supplies used for maintenance, repair, and operation
(commonly referred to as MRO or indirect purchases) and direct purchases (or non-MRO) for assembly
into a final product (e.g. vehicle components).
In the mining and metals industry, supplies are used in the process of extraction and production of the final
product. The nature of the mining and metals business involving the transformation of natural resources
forces the majority of purchases to be indirect or MRO (with the exception of capital expenditures).
Supply Chain Management analyses the spend dollars per category of purchases versus the number of
suppliers used, looking for ways to reduce the overall purchasing bill. With most items falling in the MRO
category, the buyer has more leveraging power to rationalize the supply base and negotiate competitive
contracts with a few key partner suppliers.
In the electronic commerce world, procurement management can be performed in a buyer-controlled
electronic market place where several buyers can leverage their combined purchasing power to obtain the
most value. Intermediary agents (or aggregators) form a buying consortium of companies that are looking
to purchase fairly generic consumables in bulk quantities (e.g. explosives, flotation chemicals, drill bits,
etc.) [Berryman 1998]. Requests for bids may be posted on-line and submissions accepted electronically,
thereby significantly reducing the cost of issuing and evaluating bids. Large companies have been using
Electronic Data Interchange (EDI) over private networks to reduce labour, printing, and mailing costs in the
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
5
procurement process. Automating routine tasks has allowed the procurement staff to focus on negotiating
contracts and building supplier relationships.
Order Management
Managing the customer relationship and the order process directly impacts the revenue stream. The
automotive industry is working toward a scenario where dealerships will be in a position to order a vehicle
as per the customer’s specifications via a web-enabled application. Manufacturing of the vehicle will
commence upon instantaneous receipt of the order and the dealer, or even the customer, will be able to
track the progress of assembly and shipping of the product via the Internet. Automotive companies will no
longer have to build an inventory of finished products to satisfy the demand and customers will be able to
affect the configuration of the vehicle as permitted by the manufacturing process. Cars will be bought and
sold on the Internet through electronic commerce.
Is an electronic market for our mineral and metal products developing quickly? According to McKinsey
[Berryman 1998], the speed with which an electronic market develops for any product depends on the
inefficiency of current transactions and the sophistication of buyers. In our industry, transaction
inefficiency is rather low, whereas buyer sophistication is high. The opportunity for developing an
electronic market place for commodities is likely to be attractive in the near future. Through electronic
commerce, it is feasible to market and sell clearly specified mineral and metal products via the Internet
directly to the client.
It is conceivable that the London Metal Exchange (LME) start trading copper, primary aluminum and
aluminum alloy, lead, zinc, nickel, and tin on the Internet with registered member firms and producers
while respecting regulatory and security issues. The LME already has an excellent web site and is set up to
provide a direct real time price feed to customers through third party vendors [LME 1999].
Knowledge Management and Education
Knowledge Management
Knowledge Management (KM) has recently attracted much attention in the business world. Many
corporations are now claiming to offer knowledge products in the form of value-added goods and services
while others are repositioning themselves as knowledge organizations. But what is knowledge
management and how does it relate to the mining and metals industry as an electronic business? Let us take
a brief look at the concepts of knowledge management and their application to electronic commerce.
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
6
KM Definition
The familiar pyramid model shown in Figure 2 provides an adequate depiction of the hierarchy within the
knowledge management concept.
Data is the underlying foundation upon which knowledge is built. Large quantities of data are processed
through analysis and synthesis to arrive at the essential information which is sought. Information is
commonly shared within organizations and is factual in nature in that it does not provide instructions about
how to use it. People interpret information uniquely to develop knowledge and then naturally apply that
knowledge to improve processes. Knowledge is insightful in that it provides a means to use effectively the
information upon which it is based in order to progress to the next level. Although knowledge is the only
source of wealth that is indefinitely sustainable, it is rarely captured and shared within organizations.
When clusters of knowledge (the personal possession of people) are pulled together and connections are
drawn between seemingly disparate elements, the essence is crystallized and distilled into wisdom.
Wisdom is the upper-most echelon of the pyramid in that it provides foresight based on the collective
experience and insight of people.
Knowledge Management can be viewed as an extension of data management, but, clearly, it is much more.
It is a means to sustain competitive advantage and to grow the business beyond the limitations of physical
assets.
KM in Mining and Metals
The mining and metals industry is highly dependent upon the acquisition and interpretation of data. Until
the mineral resource is extracted from the host rock, every tonne of ore is virtual, that is entirely based on
data. Physical asset valuation is based on information, therefore it is critical that we manage the knowledge
that is acquired within our organizations.
Applications of knowledge management in our industry include the following examples:
Developing exploration databases containing geological, geophysical, and geochemical information
about geographical regions, complete with remote sensing data, satellite images, results of analyses
undertaken, and discoveries made. For example, as a starting point, the Mining Lands section of the
Figure 2: KM Concept
Data
Information
Knowledge
Wisdom
Analysis
Synthesis
Insight
Fact Interpretation
Foresight Distillation
Crystallization
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
7
government of Ontario has created a web-site for accessing mining claims, reports, maps, policies, etc.
(www.gov.on.ca/MNDM/MINES/LANDS).
Packaging feasibility studies and environmental impact assessments as “knowledge documents” that
directly address the concerns of the target audience, i.e. bankers and government officials in charge of
approving financing and mining permits. The pharmaceutical company Hoffman-LaRoche
dramatically decreased the time it takes to obtain a new drug approval from the US government by
repackaging the drug application into a knowledge product which consistently and clearly presented
key information to the decision-makers [Ernst &Young 1998].
Producing a comprehensive map of the knowledge sources in the company for quick reference and
access to qualified people. Engineering consulting firms can build a central repository of professional
resources available to the company, complete with curriculum vitae and cross-referenced with a project
database archive containing documentation, drawings, maps, simulations, calculations, etc.
Developing intranet- and extranet-based discussion databases for sharing best practices and
benchmarking within organizations and the industry, for example, the large tire user group formed by
Canadian surface mining companies.
It is important to remember that knowledge encapsulates insight and goes beyond the mere sharing of
information. For knowledge to be successfully nurtured and transferred it is essential that people document
the added value of their experience and insight. People that feel their position threatened by sharing their
knowledge are unlikely to realize their full potential and contribute to the growth of the organization.
Finally, KM need not be technology-intensive and should not be technology-driven. Although technology
such as the Internet can be a powerful enabler of business processes and organizational transformation, it is
merely a means to implement KM practices on a large scale across and beyond the enterprise.
Distance Education
The ability to re-engineer the mining business process will be very dependent upon the skills and
motivation of both management and the workforce. Our mines are dispersed and the challenges to support
continuing education can be eased by the use of the Internet for Distance Education.
The architecture of Web-based courses may range from simply the access to course notes, to the ability for
online discussion and interaction with multimedia presentations, to direct interaction through video
conferencing. In Canada much of the development of Distance Education technologies is being undertaken
by the TeleLearning Network of Centers of Excellence (www.telelearn.ca), a $13 million initiative based at
Simon Fraser University. This links more than 130 researchers at 29 Canadian universities. Part of the role
of the network is to observe the application of a software package, Virtual U, and the best ways to teach on
the Internet at all educational levels.
Improving the design of Web sites for education is part of the aim of the Network for the Evaluation of
Educational Technology, based at McMaster University (http://socserv2.mcmaster.ca/srnet/evnet.htm). For
example, intense and dreary question-and-answer exercises are to be avoided. Also, students take
responsibility for guiding themselves through a Web site, therefore good courses recognize this "learner
driven" dimension, [Lougheed 1998].
Web-based education offers the ability for personnel at all levels to access the best courses, regardless of
their origin. The mining industry should consider the ability to integrate continuing education into the
workplace so that employees can develop their skills and knowledge under their own control as part of the
working environment. Mine site students from as far apart as the Arctic or the Andes will be able to take
courses under their own control from the most appropriate sources, wherever they originate around the
world. The Mining Schools in Canada are beginning to develop their Web-based continuing education
strategies, but the opportunity should be taken soon to form alliances to provide integrated programs of
courses for the industry. The development of quality courses is challenging and dependent upon the
availability and motivation of good teachers with true specialist expertise. This is an opportunity for
industry and universities to collaborate more intensively.
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
8
Human Communication
Email
Electronic mail (email) is the most common form of business communication using computers, both inside
an organization and externally. It has grown from a text-based electronic memorandum (with a low level of
security), to an electronic courier system, where large attachments of formatted documents, drawings, and
other digital media can be sent between networked computers. Encryption allows improved security
between correspondents.
Groupware
Groupware lets people work together through their computers. “Groupware is software that supports the
creation, flow, and tracking of non-structured information in direct support of collaborative group activity”
[Orfali 1996].
Email is part of groupware. This article was written using a word processor that allows changes by each
author to be tracked. The file was circulated by e-mail, with all changes to the draft highlighted within the
document. This style of collaborative work allows data in a document to be captured and bundled at point
of entry. A document can include text, images, sounds, mail, bulletin boards, faxes, video clips. If it can be
stored in a computer, it can be included in a document.
Groupware also includes multimedia documents (including web pages), workflow, conferencing, and
scheduling. Workflow is the electronic equivalent of a paper trail through a business. In a maintenance
application, a work request goes to a planner. The planner appraises the criticality of the request, gives it a
work order number, and assembles associated documentation (work procedures, sign-off documents). The
maintenance team leader assigns the work to a maintainer, signs off on work completion, and files the wad
of paper. The maintainer may have to find additional procedures should the work scope change. This flow
of information can be achieved electronically, often automatically. Scheduling software keeps track of
time commitments of subscribers, and attempts to reconcile constraints.
Video conferencing is sometimes used to supplement a multiple-participant voice conference call. Until
recently, such a medium demanded dedicated digital telephone ISDN lines or a satellite link to send video
images between conference rooms. Now a video conference can occur with each participant at a computer
connected to a packet-based network (or the Internet). The advantage of this medium is to exchange images
as well as voice amongst conference participants in different locations. More valuable than jerky, grainy
pictures of the other attendees, a video conference can allow a white board diagram to be shared and
worked on by a number of people.
In the mining industry, projects could be worked on concurrently by company teams where the members
are globally dispersed. Thus the optimum team, possibly from a range of associated companies, can be
assigned without necessarily bringing the team together geographically. Technical experts can contribute
without having to leave their corporate office. Project work and data access can be handed off between
team members in different time zones to reduce completion time.
Data Warehousing
Groupware is good at showing how information evolves over time, but not at capturing transactions in real-
time [Orfali 1996]. Data warehousing allows an organization to preserve the quality of its data. Data
quality means ensuring that data in one location is not only accurate, but also consistent with copies of that
data in other locations.
Data marts are small data warehouses used as trial implementations. A data mart typically groups data from
a number of databases in a related business area, and later becomes part of an enterprise-wide data
warehouse. A number of Canadian mining companies are pursuing data warehousing projects [Goddard
1997].
Executive Information Systems (EIS) and Decision-Support Systems (DSS) allow access to a data
warehouse, both to find out what has happened in the organization, and to investigate what-if scenarios.
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
9
EIS/DSS ranges from query/analysis tools through On-Line Analytical Processing (OLAP) to data mining
and agent-based searching. Realistically, a DSS is more valuable to a staff person or line manager making
tactical decisions (based on information) than to an executive making strategic decisions based on less
certain and more qualitative knowledge of a broader situation.
Query/Analysis tools are most useful when they allow easy interrogation of the warehouse (without forcing
you to learn specific commands for querying a database). OLAP lets the user examine multiple dimensions
of data. The power of this access to data is to work through what-if scenarios.
Data mining software tools give some structure to the data to ease the task of wading through many
dimensions of data, using tree structures or other mappings to link data together. The user selects data sets
of interest, which are then graphed for visualization. The graphical user interface allows disparate data to
be displayed in context, giving a uniform interface to heterogeneous data. Web pages link to data at
different places on the network, identified by a unique Internet Protocol (IP) address and file name. These
ways of interacting with information make it easier for someone to see a trend and make a business
decision.
Data mining techniques can also look for relationships amongst data sets that are not visible by eye. The
computer does the work to find a needle in a haystack. Correlation analyses, time series prediction, and
intelligent multi-agent search techniques are all used to automate the process of finding relationships
amongst data.
Web Browsers
Web browsers have become the preferred method for interrogating servers for information. This
information can be in many forms: text, images, sound, video, even interactive virtual worlds.
Web browsers are platform independent; that is, they run the same way on different types of computers.
Browsers use standard protocols over TCP/IP networks to exchange information. HTTP servers send data
in HTML format and in other formats recognized by plug-in applications spawned automatically by the
browser (client). Java allows a server to start a process on the client, which means that other types of
programs can run within the browser environment. This makes Java independent of a given type of
computer, which is an advantage for legacy business information systems, but at the expense of speed.
The usual flow of data is from server to client, but clients also send information back to the server, through
forms or Java applets. The servers connect to databases that log the data; communication with open
databases usually use SQL (Sequential Querying Language) calls.
Data Navigation and Visualization
The challenge of extracting information from mine information systems is not usually one of lack of data.
Bridges to supervisory control and data acquisition (SCADA) systems used to control material handling
and mill processes archive process data in LAN-accessible databases. Data may reside in different
locations on the network: databases, spreadsheet files, and document management systems. At Syncrude,
process and maintenance engineers use spreadsheets tied to the Plant Information System, which update
automatically.
Spreadsheets are good tools for analyzing data. But anyone who has tried to find a related trend in two
columns on different sides of a spreadsheet understands how difficult it is to relate different data. There
may be hundreds of different types of data to compare.
OLAP and data mining permit data navigation. But in a mine, much of the information is directly related to
physical processes and equipment. A computer can provide access to information in the geographical or
geometric context of where it occurs.
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
10
Virtual World
An effective method for seeing the relationships between different types of data in context is to display the
data in a computer-generated representation of the equipment or ore body of interest. A Geographical
Information System (GIS) displays data in context, but it allows little interaction or animation of the
activities being observed.
A virtual world is a map of the mine, and more. It is a computer-generated representation of the mine that
can incorporate any information of interest about the mine that is archived in a database. Example data
types are the ore body delineation, core drilling locations and ore grade estimates, mine geometry survey
data, haul roads, bench layout, drilling and blasting equipment location, fragmentation information,
mucking equipment location and production data, haul truck fleet positions, payload, operator name and
shift number, machine status, time until next maintenance, and time since last refueling.
Different types of data can be included, such as iconic representations of equipment locations, animation of
shovel motions and fleet movements, still images of surge pile height or cracks being monitored in
structures, video clips of mobile equipment and material on conveyors, even sounds of processes. The
virtual world offers a uniform interface to heterogeneous data. Because most of the mine model geometry
does not have to be updated regularly, a virtual world is an economical way to show a virtual environment
over low-bandwidth communication links.
The virtual world updates its display from databases or direct data streams from on-board systems. The user
can interact with the virtual world to zoom in for more detail, and click on objects to pull up additional
information not normally displayed. This representation is a very intuitive user interface; the user simply
flies around or clicks on a location of interest to get associated information. For example, connecting
monitoring equipment over a wireless network to a graphics workstation allows equipment condition to be
monitored and production to be animated in real-time. Figure 3 shows how information about mining
equipment can be displayed in a “virtual mine,” either by zooming in for displayed information of machine
status, or by linking to spreadsheets that track process data. Because the virtual world allows interactions
with the user, one of us has actually operated an excavator remotely using this system [Lipsett 1998].
Figure 3: Mine Status in a Virtual World
Machine
Status
Mill Process
Status
Virtual Mine
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
11
In a mine information application, a full 3D representation may be unnecessary. For a surface mine, a 2D
map with an icon for each piece of equipment and process component is sufficient, and easier to navigate.
Clicking on a machine icon brings up a schematic or other view of the machine, which is then interrogated
by point and click for information of interest.
Virtual worlds are accessible in web browsers with plug-ins for viewing sites in Virtual Reality Markup
Language (VRML) format. VRML does not yet allow for full interactivity, although the standard calls for
such functionality. With improved graphics rendering capability in desktop PCs, virtual worlds will soon be
an effective means for visualizing mining processes.
Machine Communications
Machine communications means computers talking to computers. Such communication may be a
workstation talking to a server within the same organization or across organizations, a data acquisition
computer on a piece of mobile mining equipment sending data to a process data management server over a
dedicated link, or a miner’s handheld computer downloading an electronic maintenance procedure in the
shop.
LAN and Internet connected computers have standards for network communications. Mining suffers from
the “last-mile” problem of getting planning information to workers on equipment, and collecting
production and status information from the mine to make operational decisions.
Surface mining operations for oilsands are becoming increasingly physically removed from the mill
(bitumen extraction plant and upgrader). Economies of scale and expanded production will reduce unit
operating costs, with the result that, per item of production mining equipment, oilsands mining companies
will have fewer staff managing the mining assets. Optimized production and maintenance will only occur
with timely and accurate measurements of machine state. Because fewer people will have to make more
equipment work better at longer distances, there is an increasing need for remote monitoring of mining
processes. Ultimately, some remote operation of equipment will also be done, reducing the need for
operators to travel to the work site.
In underground mining, CATV and leaky feeder communication systems provide high-bandwidth
communication links within the mine. In the harsh environment underground, maintaining the system is a
challenge, but it is possible to have highly reliable communication with the surface. From the surface,
terrestrial or satellite communications allow data transfers to other operations, head office, vendors, and
other providers of goods and services.
Truck and shovel bench mining is the preferred bulk mining method for oilsands: mobile equipment
requires mobile monitoring systems. The present measurement infrastructure is limited to point-to-point
data serving and low bandwidth broadcast of fleet dispatch and alarm codes. Vendors have not offered a
strategy for serving data other than a limited set of specific parameters (identified by them), either through
licensed FM dispatch radio systems or ISM-band, spread-spectrum point-to-multipoint radio systems.
For condition-based maintenance and advanced performance monitoring systems, additional monitoring
systems must be deployed. If a vendor offers a system that is not expandable, then a custom monitoring
system must be developed. Commercial off-the-shelf (COTS) solutions are preferred, as they can be
supplied and supported by a number of technology providers.
COTS mobile computing systems are generally based on TCP/IP protocol, which fits a WAN architecture.
There are three types of monitoring applications:
Temporarily installed data acquisition and analysis computers,
Permanently installed embedded computers that collect a range of data, so significant on-board
processing, and transmit processed results, and
Permanently installed small, embedded systems that monitor a few parameters on an occasional basis,
and communicate only in alarm conditions.
Embedded computers include microcontrollers at the low end, and Intel-based PCs running a stable
operating system (OS) at the high end. For example, Aquila’s AMP system, Caterpillar’s VIMS and CAES
all contain PCs. For simple monitoring jobs, a few sensors can plug into a microcontroller that does simple
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
12
data reduction and logical testing for alarm conditions, and then sends a symbolic (text) message to the
miner who has to take action when a fault occurs. The person receives only the required information in a
timely and accurate manner. Telemetry from an embedded system should be flexible enough to use
different media: direct network connection, public telephone system (modem or cell modem), two-way
pager, or radio network.
When communicating directly with people, the communication method will depend on the receiver’s
preference, and the available bandwidth. A supervisor or inspector reviewing machine status at a desktop
computer can check a form, an annotated schematic or digital image, listen to an anomalous sound file, or
view a video clip. A miner in the field may prefer to get information as a pager message, and email
message, a fax, or even a voice mail message. In this regard, machine communications emulate human
communications.
Figure 4 illustrates how information can be collected automatically, archived for review, and used to
modify operations to suit changing conditions.
Conclusion
Technological change and organizational restructuring have been observed to bring gains in productivity
and market share in other industries. The opportunities exist for the Canadian mining industry to undertake
Business Process Re-engineering through EC. The scenario presented in the opening of this paper is only
one illustration of the possibilities that can be achieved through the implementation of EC in the mining
industry. A further example might have referenced the relationship with a mine's customers and the
opportunity to market mineral and metal products directly via the Internet.
Whatever the application, the following observations appear to be significant when contemplating the
implementation of EC [Kearney 1998]:
Be prepared to introduce novel changes to processes and radically change the way business is presently
conducted in the non-connected environment. EC is a strategy, not a technology implementation.
Figure 4: Machine Communications to Improve Human Decisions
Mottola, L.; Lipsett, M.; Scoble, M.
Transforming the Mining Industry through Electronic Commerce
CIM Bulletin – May 1999
13
Start with a pilot project on a small scale to achieve quick results and generate excitement about the
use of electronic commerce.
The Internet is an enabling technology, providing a forum where people can “meet” electronically to do
business. As business systems become computer-based, business methods are evolving to take best
advantage of this new forum. While computers can automate some business processes and transactions,
humans must still make those decisions that involve incomplete information. EC can only work when there
is effective means for these systems to make someone’s job easier and more productive. Technology is the
easy part of the answer. People still have to use these systems, and they have to understand system
limitations to use this powerful set of business tools well. Trust relationships have to extend beyond the
boundaries of a corporation, as information flow increases. The value of business information as a
commodity of its own will be part of these new ways of doing business. The full impact of EC will only be
attained though a significant investment in both education and technology.
References
1. A.T. Kearney. Digital Pioneers: A White Paper on the Practical Applications of Electronic Commerce,
www.atkearney.com 1998.
2. Berryman, K.; Harrington, L.; Layton-Rodin, D.; Rerolle, V. Electronic Commerce: Three Emerging
Strategies. The McKinsey Quarterly, Number 1, 1998. www.mckinsey.com .
3. Davenport, T.H.; Prusak, L. Working Knowledge. Harvard Business School Press, 1998.
www.hbsp.harvard.edu .
4. Davis, S.; Meyer, C. Blur, the Speed of Change in the Connected Economy. Addison-Wesley, 1998.
5. Electronic Data Systems Corp., Electronic Commerce Services, www.eds.com .
6. Ernst & Young. A Prescription for Knowledge Management: What Hoffman-LaRoche’s Case Can
Teach Others. Perspectives on Business Innovation. Issue I: Managing Organizational Knowledge.
pp.26-33, 1998. www.ey.com
7. Goddard, G. Mining Information Using a Data Warehouse. Proceedings CIM AGM 1997.
8. Guy, C.G. Data Communications for Engineers. McGraw-Hill, 1992.
9. Lipsett, M.G.; Ballantyne, W.J.; Greenspan, M. Virtual Environments for Surface Mining Operations.
CIM Bulletin, January 1998.
10. London Metal Exchange (LME) Web Site, www.lme.co.uk
11. Lougheed, T. Goodbye, Mr. Silicon Chips. University Affairs. pp. 6-10, November 1998.
12. Orfali, R.; Harkney, D.; Edwards, J. The Essential Client/Server Survival Guide (2nd Ed.) Wiley, 1996.
13. Scovell, L.M.; Dunbar, W.S. Integrated Supply Chains, Mine Maintenance Inventories, and E-
Commerce. 101st CIM AGM, Calgary AB, May 1999.
14. Shepherd, N.A. Integrated Supply Management and Supplier Certification. CMA Magazine, April
1994. www.managementmag.com
15. Stewart, T.A. Intellectual Capital: The New Wealth of Organizations. Doubleday Currency, 1997.
16. Tapscott, D. The Digital Economy. McGraw-Hill, 1996.
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The primary aim of this paper is to provide description and interpretation of the implementation of decision support system in enterprise resource processes, especially in SAP which interfaces with a warehouse management system. This study identifies collaborative works in the supply chain and integration information in the value chain. This study examines how a regional distribution center extracts valuable information by utilizing a data warehouse. This study illustrates data mining for knowledge that enables decision-makers to uncover valuable patterns in data leading to effective resource utilization. The application of data mining for knowledge management in a regional distribution center will be highlighted. Single-case study approach is applied in this study to understand the system. This study examines the expectations of data warehousing and its support for storing and retrieving the knowledge. To adopt the system, it is necessary to have corporate culture that supports complex operational activities. This effort provides insight into the interactions of the supply chain, the need for impact evaluation of the supply chain relationships and information sharing. Companies that manage regional distribution centers are expected to implement the system in order to maintain their competitive edge in the global market place.
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