If we are completely honest with ourselves, when we think about digital innovation the resources sector does not naturally spring to mind. One of the many lessons learned from the COVID-19 pandemic is businesses that are more digitally capable will be able to respond quickly and thrive in to the future. At BHP, we have been focused on this for some time, but the recent crisis has provided a timely reminder that we need to accelerate our plans.
We believe the next wave of productivity from our industry will come from digital innovation, including process digitisation, artificial intelligence and automation. As concepts, they hold great potential. But without the right foundations and capabilities in place, we will lose the opportunity to take advantage of the digitised future.
In the immediate future, we are focused on technological advancements such as cloud-based computing and storage, smart analytics to enhance control and decision making, and robotics for the optimised use of mining equipment.
With these in place, the velocity of value delivered to our organisation by digital technologies will increase.
To capture this though we need new skills to complement our deep resources industry knowledge. We need people who might not necessarily come from a mining background, like software engineers and machine learning experts, who can bring new ways of thinking to BHP.
We have set up conditions for them to thrive: today we announced the opening of the first of our ‘digital factories’ in Brisbane, Australia. Instead of having digital projects delivered by multiple parts of our business, the factory will create a unified ‘community of practice’ among technical roles. The new hubs will abandon the traditional hardware-centric approach to innovation and will help us maximise the use of cloud technologies for rapid digital development in an enhanced digital environment.
What does that mean? Let’s look at a practical example at our Coal business where we are launching our first digital factory.
The coal mined from Caval Ridge needs to go through a processing plant. Typically, for every 100 tonnes that enters the plant, around 58 tonnes of sellable product comes out the back-end. In our digital factory trial, we set the team a challenge of improving this yield using just 12 months’ worth of historical data.
They quickly created an algorithm that told us what the optimal setting for the plant was, based on the blend of coal that is coming from the mine.
There is more to do, but this will help us improve our yields and increase the utilisation of our processing facility.
This is the very definition of productivity: a low cost way to markedly improve an output.
In the future, we hope to see much more of this. Our sites are expected to benefit from the rapid deployment of reliable solutions that make their lives easier, minimising variability and unplanned outages. The factory will focus on projects that can be delivered quickly, where minimal onsite infrastructure is required and where the return on investment is many multiples of the initial outlay.
We have started in Coal in Brisbane but we plan to also launch digital factories in Chile, North America and Western Australia. They will partner with our operations to help solve asset-specific problems. Struggling with a well performance issue in the Gulf of Mexico? Speak to your local factory and see if machine learning can provide some insight. Conveyor belt reliability issues in Chile? Let’s see if your ‘digital foreman’ can run some advanced analytics over data from the sensors.
Other industries have shown us that this model works. With the right people and the right operating model set up, I am confident that we can bring an exciting new element to the way we solve operational problems, and in doing so rapidly create real and lasting value for BHP.