Canadian Mining Journal

Feature

How the pandemic became a catalyst for the mining sector to build supply chain resilience

EY's Iain Thompson and Sherif Barrad outline how process mining can help miners build a more resilient supply chain.



With many mines in remote locations, delays, cancellations and shortages have always been challenges to the supply chain. And while companies have become more adept at managing these disruptions, the impact of COVID-19 across many geographies simultaneously put new pressures on traditional global structures. Resilience is simply not inherent in today’s lean, just-in-time supply chains, which are optimized for cost and concentrated around a few geographies and vendors.

Before the pandemic, most mining companies didn’t always see the need to understand the complexities across their supply chains. And they didn’t always have the data, contingency plans and crisis incident management to do so. The impact of COVID-19 has shone a bright light on these shortcomings. Companies that follow these four steps can help mitigate disruption and develop a deeper understanding of their supply chain risks.

1. Stabilize supply chain operations: Identify and mitigate critical issues identied during the pandemic.

2. Build resilience into the supply chain: Embed scenario planning by engaging in a full risk assessment to identify critical areas and recommend mitigation strategies.

3. Optimize supply chains: Adjust supply chain management to minimize costs from ongoing operations while mitigating the impact of major disruptions.

4. Enhance end-to-end visibility: Use technology tools to develop a virtual model of the whole supply chain network through data-driven decision-making.

While many companies have already embarked on the initial steps of building a more resilient supply chain, the biggest opportunity will lay with enhancing end-to-end visibility. Doing so will require near real-time monitoring and scenario analysis, which can be achieved through use of a supply chain control tower, or digital twin. A digital twin is a virtual replica of the supply chain that covers logistics, inventory and fleet status. The digital twin is then overlaid with global and local events such as geopolitical, pandemic and economic factors.

Digital twins can run simulations that change different variables to visualize the full impact of multiple scenarios, such as supplier insolvency, production shutdowns or shipment delays due to shipping port congestion. It will therefore equip decision-makers with the ability to assess the impact of these challenges and help them identify alternate options. As a result, a digital twin allows organizations to predict potential issues before they happen, removing bottlenecks and improving productivity, making it a “must have” for an efcient and resilient supply chain.

But one of the biggest hurdles for organizations looking to build an effective digital twin is providing the latest and most appropriate data so that decision-makers can run scenario analyses and condently assess how supply chains would be impacted by one or more contingencies.

Process mining

Process mining can help ll that gap by helping companies identify which data is important and how to extract it. It’s a combination of business process management and data mining, and it quanties and visualizes business processes and the data used to execute those processes. It highlights what’s really happening on the ground, instead of what the design assumes.

What’s more, process mining provides greater visibility into the supply chain and a deeper understanding of its global interdependencies. A good process mining toolkit can enable companies to strengthen areas of vulnerability and help make more informed decisions about how to respond when there are disruptions. Besides, process mining is a key enabler in building a supply chain digital twin.

Taking action now to mitigate further impact – including mapping supply chains and stress-testing under multiple scenarios – can help companies understand and address the impact of ongoing and future disruptions.

Iain Thompson is the Mining & Metals Consulting Leader at EY Canada, based in Vancouver. Sherif Barrad is an Associate Partner in the Business Consulting practice at EY Canada, based in Toronto. For more information, please visit www.ey.com/en_ca/mining-metals.


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