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. 2Public
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
CloudSocial
Big DataMobile
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 ExperienceData 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 ExperienceData 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%
on SAP HANA

Today
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%
on SAP HANA

Today
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
on SAP HANA

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%
on SAP HANA

Today
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%
on SAP HANA

Today
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
on SAP HANA

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%
on SAP HANA

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%
on SAP HANA

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%
on SAP HANA

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.

Customer case: mining company
Summary of validated scenarios
Feasibility
BusinessvalueLowHigh
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

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