The mining industry, as in the oil industry and some other natural resource industries, the prices of its products do not depend on supply and demand only, as is the case in most industries. This is due to a much more complicated process where economic, political and opportunity factors play a key role in defining these prices.
A great opportunity to increase the profit margin for a mining company is presented with reducing costs through process optimization.
Implementing an SSD that allows recording and hosting data from the mining exploration process, in addition to having the ability to handle different geostatistical mathematical analysis models and obtain a solution from the model presents the opportunity to optimize the exploration process.
On the other hand, it provides the opportunity to broaden the vision of business processes to senior executives.
Economic environment of mining
In the case of the mining industry, as in the oil industry and some other natural resource industries, the prices of their products do not depend on supply and demand only, as is the case in most industries. This is due to a much more complicated process where economic, political and opportunity factors play a key role in defining these prices.
Under these conditions the mining industry does not have much space to play with its profit margin, however, within the company there are two alternatives closely linked to each other to improve its profits and these are through the reduction of its profits. costs and process optimization.
In a mining company there are generally main elements or processes that are: Exploration, Extraction and Benefit.
Each of these processes involves sub-processes with thousands of variables and scenarios, which for the eye and human skills are impossible to take into account and much less control them to make decisions with the speed, accuracy and timeliness that the process and the business requires. That is, man does not have the ability to react to the events that occur every day in the mining processes, however, he has the ability to create the tools on which to rely, such as decision support systems.
Incorporation of decision support systems to reduce costs by optimizing processes
A great opportunity to increase the profit margin for a mining company is presented with reducing costs through process optimization, but what role do decision support systems play in all this? How could processes be optimized with the help of a decision support system?
To answer these questions, let us consider that an SSD (decision support system) supports analyzes that attempt to answer questions such as what to do with a specific problem or an opportunity (Turban, Aronson 2001). However, optimizing a process is an opportunity to reduce costs and is composed of various variables and scenarios, it is precisely there where an SSD comes in to make the analysis of said variables and scenarios (behaviors) and provide the most convenient alternatives to take advantage of that opportunity.
Processes such as mineral exploration imply the management of thousands of data and determining whether the explored areas or areas where the earth is studied through samples and tests - the tests are chemical processes that reveal the contents of the different minerals that make up the sample of the earth- are profitable, that is, the cost of removing that mineral leaves a profit when selling it, implies recording hundreds of data that the hundreds of samples yield, to locate the mineral that is found in a 3D plane on earth, however, it is enough to carry out this record, it also requires a geostatistical mathematical analysis model that carries out the calculations to determine said mineral composition.
The optimization of the mining exploration process consists of implementing an SSD that allows to record and store said data, in addition to having the capacity to handle different mathematical analysis models, carry out the calculation of the analysis model with greater precision and speed and finally that present the solution supporting the decision making of whether the area is profitable for the mining company.
Since a DSS adheres to the decision-making model, which according to Simon (1997) the decision-making process is constituted by three main phases: intelligence, design and alternatives and later the fourth called implementation was added, the opportunity Process optimization is greatly increased and the margin of error is decreased.
The SSD presents the opportunity so that not only experts in the area such as geologists have the opportunity to make the decision regarding the mineral exploration process, but management levels present them the opportunity to broaden the panorama of the entire business and its different processes, as noted by Turman and Aronson (2001) "Support is provided at various administrative levels, from the highest executives to line managers."
conclusion
In these times in which the only constant in this globalized environment is change - it must be reflected that changes happen much faster than a few years ago - ironically in the mining industry, time is money and to the extent mining companies have the ability to respond to this constant is on the average that they can be competitive in the global market, that is why decision support systems play a relevant role in the race for competitiveness.
While it is true that the path to a successful SSD implementation does not involve quick and easy work, the rewards these can bring to the business are well worth the journey.
References
Turban, E., Aronson, J. Liang, TP Decision Support Systems and Intelligent Systems. Prentice Hall, 2001. 6th edition.
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