Boosting return-on-investment in resources
What they needed
When a major Australian miner sought to improve the return on its large capital budget for a range of initiatives spanning the next decade, it worked with Elara to understand how to prioritize both the multi-stage initiatives and their selection for delivery into operations as projects.
As an asset-intensive business, the miner is required to sustain a long-term plan of continuous utilization and production, while mitigating adverse events with often catastrophic consequences.
A critical element of its business is regulatory compliance and risk, with on-compliance potentially leading to severe fines and the removal of its license to operate.
The mining business also involves a complex balance of asset operation and maintenance, while delivering changes through improvement initiatives. The lifecycle of these initiatives ranges from iterative early-stage definition to multiple detailed stages before eventual delivery as projects.
Its multi-billion-dollar capital budget included a broad scope of improvement initiatives across maintenance, operational improvement, as well as risk reduction. While a considerable ERP assisted with maintenance and operating information, the current state of analytics maturity for managing improvement initiatives was limited to spreadsheets with ad-hoc analysis.
What We Did
Elara developed a high conviction use case to optimize in the projects space. The process of prioritizing effort during initiative lifecycles and of prioritizing the sequencing of projects were selected as prime opportunities to improve performance.
Elara defined the objectives, target outcomes and degrees of success that gave the solution a measure of operational performance, such as maximizing working cash and minimizing deviation from capital schedules and the likelihood of adverse events.
Activities between the technology business unit, project office, data and analytics, and the operations unit were considered to align on key objectives, decisions, and use of the solution.
Elara then configured a minimum-viable-product solution, which included:
Integration with various business systems, such as spreadsheets and ERP data.
Use of simulation, scenario, and full potential analysis to identify drivers across projects, maintenance and operations.
Use of advanced mathematics to calculate initiative effort prioritization and project sequencing.
Interactive user interface to allow live interaction with the system.
The Outcome
Elara was able to prescribe alternative initiative and delivery prioritization and sequence to improve working cash, use of capital and the likelihood of adverse events.
The solution was able to identify:
23 percent improvement to the net present value of net operating cash
17 percent reduction in the likelihood of adverse events