Delivering Real-Time Business Value for Mining

Delivering Real-Time Business Value for

Mining SAP Business Suite Powered by SAP HANA July 2013 Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

The real-time opportunity

Mining companies must address the key challenges of

commodity price volatility, operational efficiency, and

environment and safety issues. This requires real-time

insight and digitization of the mining enterprise.

Align production (mining and downstream processing) and

maintenance

Manage commodity risk

Manage operational risk


Enabling safe and economic mineral production Align business operations with customer needs

Optimized mine

operations

• Mine operations and performance management to

plan, execute, and control production operations in

mines, crushers, and downstream processing plants

• Efficient asset maintenance for more effective

collaboration between production, maintenance, and

repair operations, as well as spare parts and inventory

management

Efficient sales

and supply

chain

management

• Commodity sales and price risk mitigation to

manage contract-to-cash processes, including

commodity and foreign exchange risk hedging

Operational risk

and compliance

management

• Operational risk management to assess and manage

operational risks involving people, assets, and locations

Energy and environmental resource management to

monitor energy consumption and take corrective actions

to reduce the carbon footprint


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for mining Safe and economic mineral production

Optimized Mine Operations

Asset Portfolio and Project Management

Mine Operations and Performance Management

Efficient Asset Maintenance

Asset Visibility and Performance

Operational Risk and Compliance

Management

Operational Risk Management

Energy and Environmental Resource

Management

Product Safety and Stewardship

Efficient Sales and Supply Chain

Management

Commodity Sales and Price Risk Mitigation

Bulk and Non-Bulk Transportation Management

People and

Talent

Core Human

Resources and Payroll Talent Management

Time and Attendance

Management

Workforce Planning

and Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing

and Contracting

Procurement and Order

Collaboration

Collaborative Invoice

to Pay

Commodity

Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management

IT Strategy and

Governance

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA platform

Application Development

and Integration


Industry value map for mining Safe and economic mineral production

Optimized Mine Operations

Asset Portfolio and Project Management

Mine Operations and Performance Management

Efficient Asset Maintenance

Asset Visibility and Performance

Operational Risk and Compliance

Management

Operational Risk Management

Energy and Environmental Resource

Management

Product Safety and Stewardship

Efficient Sales and Supply Chain

Management

Commodity Sales and Price Risk Mitigation

Bulk and Non-Bulk Transportation Management

People and

Talent

Core Human

Resources and Payroll Talent Management

Time and Attendance

Management

Workforce Planning

and Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing

and Contracting

Procurement and Order

Collaboration

Collaborative Invoice

to Pay

Commodity

Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and

Project Management IT Service Management

IT Strategy and

Governance

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA platform

Application Development

and Integration

Highest real-time

business value

for mining


Today

KPI improvements are high-level estimates and will have to be validated for each customer situation.

Asset portfolio and project management Business value for project management (project system)

Long wait and locking times along business processes hinder project execution and impact flexibility to react to deviations

User acceptance is reduced due to usability issues in handling large project data

Real-time analysis of high volumes of

data for complex, long-lasting

projects or cross-project monitoring is

challenging due to high data volumes

Due to lack of 360-degree real-time

transparency across applications,

deviations in costs, time, resources,

or quality are often seen too late in

the process

Reduced waiting and locking times of

critical transactions along the end-to-

end process, resulting in higher

process efficiency and improved

employee productivity

Planned: Project execution cockpit en-abling project managers as well as project employees to analyze status and progress of one or multiple projects in execution from an end-to- end perspective at maximum speed with real-time data, and to derive and execute actions wherever applicable

Acceleration of project info system

reporting and new project line-item

reporting, delivering faster insights

Early insight into risks and

highlighting of deviations in real time,

enabling timely corrective measures

Cut maintenance, repair,

and overhaul (MRO)

inventory by

28% Increase

Reduce

return on assets by

24%

unplanned downtime

or outages by

18%

With SAP Business Suite on SAP HANA


Today


Mine operations and performance management (1/3) Business value for inventory (warehouse) management

Need for accurate display of actual

stock to react quickly to stock

shortfalls

No up-to-date view of the inventory

situation

Time-consuming inventory

management reporting

Real-time stock insight and inventory

monitoring

Real-time access to complex

inventory management data



New analytical inventory

management cockpit

High-performance inventory management with large volumes of documents

Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing)

Increase inventory accuracy

by

9%

Reduce

Cut

obsolete inventory

by

8%

inventory carrying

cost by

10%



Today


Mine operations and performance management (2/3) Business value for asset planning and scheduling

Maintenance scheduling that

consumes a great deal of time

High amount of master data that

influences performance of data

maintenance

Manual and error-prone process of

preselecting maintenance plans

Potentially missing necessary objects

for maintenance calls

High number of maintenance plans

that must be scheduled frequently,

leading to a weekly scheduling

scheme

Accelerated mass transactions

Instant analysis on top of

transactions

Preselection of plans that significantly

speeds up the process

Real-time analytics on all data

including machine sensor information

Scheduling of all maintenance plans

within a specific time frame

Planning several times a day (instead

of once a week), resulting in

up-to-date scheduling information in

maintenance operations

Faster response times enabling more

accurate maintenance scheduling

Increase return on assets by

10%

Cut

Reduce

MRO inventory by

15%

unplanned downtime

or outages by

8%



Today


Mine operations and performance management (3/3) Business value for material requirement planning

Decisions often based on periodic

material requirement planning (MRP)

runs and outdated information;

process done in batch

Inability to replan quickly if conditions

change due to long runtimes; difficult

to predict inventory coverage for

critical parts

Inability to replan if conditions change

during the planning horizon due to

long runtimes

Faster replanning, allowing more

frequent MRP runs in shorter cycles

Instant reaction to work-order

changes and updates to the supplier

More frequent MRP runs

Allowing for reduction in inventory

and safety stock levels

Enabling faster information flow

toward suppliers so they can react

faster to changed planning conditions

Ability to plan spare parts and MRO

materials without overstocking

Better synchronized material demand

and maintenance and repair planning

Reduce out-of-stocks by

36%

Decrease

Reduce

inventory and

safety stocks by

29%

MRO obsolescence



Today


Efficient asset maintenance (1/3) Business value for inventory (warehouse) management

Need for accurate display of actual

stock to react quickly to stock

shortfalls

No up-to-date view of the inventory

situation

Time-consuming inventory

management reporting

Real-time stock insight and inventory

monitoring





New analytical inventory

management cockpit

High-performance inventory management with large volumes of documents

Higher process efficiency in adjacent procurement processes (such as purchase order or invoice processing)

Increase inventory accuracy

by

9%

Reduce

Cut

obsolete inventory

by

8%

inventory carrying

cost by

10%



Today


Efficient asset maintenance (2/3) Business value for asset planning and scheduling

Maintenance scheduling that

consumes a great deal of time

High amount of master data that

influences performance of data

maintenance

Manual and error-prone process of

preselecting maintenance plans

Potentially missing necessary objects

for maintenance calls

High number of maintenance plans

that must be scheduled frequently,

leading to a weekly scheduling

scheme

Accelerated mass transactions

Instant analysis on top of

transactions

Preselection of plans that significantly

speeds up the process

Real-time analytics on all data

including machine sensor information

Scheduling of all maintenance plans

within a specific time frame

Planning several times a day (instead

of once a week), resulting in

up-to-date scheduling information in

maintenance operations

Faster response times enabling more

accurate maintenance scheduling

Increase return on assets by

10%

Cut

Reduce

MRO inventory by

15%

unplanned downtime

or outages by

8%



Today


Efficient asset maintenance (3/3) Business value for material requirement planning

Decisions often based on periodic

material requirement planning (MRP)

runs and outdated information;

process done in batch

Inability to replan quickly if conditions

change due to long runtimes; difficult

to predict inventory coverage for

critical parts

Inability to replan if conditions change

during the planning horizon due to

long runtimes

Faster replanning, allowing more

frequent MRP runs in shorter cycles

Instant reaction to work-order

changes and updates to the supplier

More frequent MRP runs

Allowing for reduction in inventory

and safety stock levels

Enabling faster information flow

toward suppliers so they can react

faster to changed planning conditions

Ability to plan spare parts and MRO

materials without overstocking

Better synchronized material demand

and maintenance and repair planning

Reduce out-of-stocks by

36%

Decrease

Reduce

inventory and

safety stocks by

29%

MRO obsolescence



Today


Commodity sales and price risk mitigation Business value for financial and managerial reporting

Risk of noncompliance due to

unfulfilled (overruns in) audits

Decision-relevant information not

readily available

Data analysis not supported or

automated

High market volatility that requires

real-time analytics to quickly react on

financial exposures

High cost of finance operations due

to missing central database

No single source of truth available for

exposure determination as of today

Large number of time-consuming,

and non-value-added processes

required to access accurate, up-to-

date information

Flexible data aggregation in SAP

NetWeaver BW, including slicing and

dicing of real-time data

Multiple data layers that allow new

dimensions of forecasting, planning

and simulations such as what-if

analysis and working capital

optimization

Starting point to build analytical applications providing KPIs to CFOs and heads of treasury

Central control of organization – including traceability of business events, which is essential for external auditing

Increase drill-down levels by

5%

Reduce

Decrease

treasury and cash

mgmt costs by

10%

compliance and

risk mgmt costs by

10%



Today


Accounting and financial close Business value for operational and ad hoc reporting

Lack of insight to important company

data, resulting in duplicating of effort,

errors in consolidating data, and

customers sales misquotes

Lack of near real-time information

High cost of IT maintenance cost

High cost of support queries

Costly and time-consuming support

for two separate servers for

operational and ad hoc reporting and

the transactional enterprise system

Simple reporting that takes long

hours to generate

Inability to detect issues and

deviations in time for senior

management to perform exception

management

Common and customer-defined views across CRM, financials, and logistics data enabling faster reconciliation and drill-through and fewer misquotes, thereby increasing productivity

Flexible aggregation and slicing and dicing of real-time data

Tables and views that are exposed to power users for building ad hoc reports for analysis, thereby helping ensure self-service for key user

Reduced support queries, because business can perform first-level analysis before approaching IT

Faster reaction to demand changes

with faster report generation

Ability to provide management with

early insights into deviations and

risks, so corrective measures can be

taken

Productivity increases with

overall time

savings of

30% Lower costs

Reporting

of IT maintenance

33%

runtimes speeded up

98%



Today


Treasury and financial risk management Business value for financial and managerial reporting

Risk of noncompliance due to

unfulfilled (overruns in) audits

Decision-relevant information not

readily available

Data analysis not supported or

automated

High market volatility that requires

real-time analytics to quickly react

on financial exposures

High cost of finance operations due

to missing central database

No single source of truth available for

exposure determination as of today

Large number of time-consuming,

and non-value-added processes

required to access accurate,

up-to-date information

Flexible data aggregation in the SAP

NetWeaver Business Warehouse

(SAP NetWeaver BW) application,

including slicing and dicing of real-

time data

Multiple data layers that allow new

dimensions of forecasting, planning

and simulations such as what-if

analysis and working capital

optimization

Starting point to build analytical applications providing KPIs to CFOs and heads of treasury

Central control of organization – including traceability of business events, which is essential for external auditing

Increase drill-down levels by

5%

Reduce

Decrease

treasury and cash

mgmt costs by

10%

compliance and

risk mgmt costs by

10%



Customer cases

Mining company

SAP HANA platform and SAP Business

Suite powered by SAP HANA

Bulk and non-bulk transportation

management – goods movements and

railcar analytics in real time

Asset visibility and performance

US$2.6 million

benefit over

5 years


Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As starting point, we recommend a performance

and usage analysis of your current system.

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Thank you

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Appendix with detailed customer cases


Customer case: mining company Summary of validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Lo

w

Hig

h

Low High

Annual revenue: US$5 billion

Scenario

(business value)

Transportation

costs

(5% reduction)

Optimized mine

operations

(US$5.7 million)

Phase – deployment road map

1 Short term

Transportation mgmt: real-time railcar analytics

2 Medium term

Asset visibility and performance

3 In evaluation

Other functions – to be discussed in future

discovery workshops

SAP HANA platform: customer-specific SAP HANA products: SAP NetWeaver BW on SAP HANA, high-performance applications (HPAs), apps powered by SAP HANA SAP Business Suite on SAP HANA

Legend

SAP Business

Suite on

SAP HANA

SAP HANA

applications

SAP HANA

Platform

SAP HANA use cases mapped to industry value map end-to-end solutions


Customer case: mining company Summary of validated scenarios

-1.500

-728

1.850

3.000

-2.000

-1.500

-1.000

-500

0

500

1.000

1.500

2.000

2.500

3.000

3.500

2013 Phase 1 Phase 2

Costs SoH Applications Platform

$

SAP HANA platform: Anything built on the platform that is customer-specific – new business processes and business models

SAP HANA products: SAP NetWeaver BW powered by SAP HANA; high-performance apps (HPAs); applications – mapped to

IVM E2E solutions

Currently available functionality (SP0, 1, 2) – 23 scenarios mapped to IVM E2E solutions, and planned functionality(all of the

E2E solutions on the IVM are in scope)

SAP HANA platform

SAP HANA products

SAP Business Suite on SAP HANA

SoH = SAP Business Suite on SAP HANA

Annual benefits, SAP HANA

platform

Annual benefits, applications

powered by SAP HANA

Annual benefits, SAP Business

Suite on SAP HANA

Estimated deployment costs

Total transition cost: US$5 million

Based on actual SAP

customer engagements


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may not be completely validated.

Steel mining – bulk and non-bulk transportation

– goods movements and railcar analytics in real time Mining

Innovation scope

SAP HANA products (HPAs, apps)

E2E solution

Mining – bulk and non-bulk transportation

management

Value potential 4

Feasibility 2

Low High

1 5

Low High

1 5

Business context and goals SAP Transportation Management application powered by SAP HANA for railway transportation

Business challenges No single system for transportation planning and execution; high transportation costs (payments

for external fleet, payments to railways); inability to plan exact dates (or short range) for delivery

to customer; long order to delivery cycle; inability to optimize production stock (in port terminals,

on the way to terminals and customer); inability to increase efficiency in accounts receivables

and payables

Process innovations Whole chain of transportation – from long-term planning through operative planning, execution,

and dispatching and cost analysis, integrated with system of Russian railways and ERP

Contribution of SAP HANA Ability to analyze large volumes of data in memory and make fast decisions

Value drivers/KPIs Transportation costs – decrease cost for external fleet for raw materials transportation (gondola

cars): US$5 million; decrease penalties from fleet operators for idle stand cars: US$0.2 million;

increase fleet turnover (roll cars): US$0.2 million; decrease penalties for idle standing railcars on

the railroad: US$0.03 million; working capital (stock, accounts receivable and payable):

mentioned as qualitative improvements, no value assessment


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may not be completely validated.

Coal mining – real-time railcar analytics Mining

Innovation scope

SAP HANA platform (customer-specific)

E2E solution

Mining – bulk and non-bulk transportation

management

Value potential 4

Feasibility 3

Low High

1 5

Low High

1 5

Business context and goals Company manages thousands railcars every day and needs to know where are they and make

sure they are delivering goods on time

Business challenges Sub-optimal railcar turnover and lack visibility into shipping operations

Process innovations Analysis of high volumes of railcar operations data in real time to speed up delivery, reduce need

for railcars and associated costs

Contribution of SAP HANA Support for real-time analytical capabilities

Value drivers/KPIs Transportation costs

Delivering Real-Time Business Value for Mining

Business

commodity management

project management

infrastructure management

service management

commodity risk

sap ag

business operations

payroll talent management