Metals and mining accelerates on digital strategy but still trailing in execution

Research from Boston Consulting Group (BCG) has revealed that digital investments made by metals and mining companies fall far short of their potential, with companies up to 40% less digitally mature than comparable industries, such as automotive or chemicals. 

The same findings uncovered to what extent digital boosts performance across metals and mining business value chains. From an environment, safety and workforce perspective, businesses saw up to a 12% reduction in injuries and 70% efficiency increase in role filling. Supply chain and procurement reported a maximum of 30% increased accuracy in short-term demand predictions, while marketing, sales and finance noted overhead cost reductions of up to 30%.

BCG’s Metals and Mining Digital Acceleration Index (DAI) survey – which covered 75 large metal and mining businesses globally – found that just 25% of those surveyed used customised digital solutions. What’s more, while many industries have come to view data as a valuable asset, this does not seem to be the case for the mining and metals industry, with just 10% of industry leaders viewing data as a corporate asset.

A barrier when introducing new technology solutions appears to be that many lack the expertise and knowledge to properly implement digital transformation. Just 15% admit to applying a “systems thinking” approach to their implementation – meaning that the majority of business’ systems lack smart, interconnected internal ecosystems of devices and software that work together to create benefits across the value chain.

Complicating the picture is that nearly 50% of the companies surveyed admit to having siloed physical and digital sales channels and have digitised only individual touchpoints along the customer journey, and 75% of companies still rely on manual or disparate systems for procurement.

Commenting on the findings, Agustín Costa, managing director and partner at BCG, said: “Most metals and mining companies have ambitious digital strategies already in place, but the gap between strategy and execution is significant. We know the benefits are endless when we expedite digital adoption, but it’s evident that many businesses lack the expertise to make the most of these projects.”  

Whilst training and partnerships provide potential solutions to the digital skills gap; 30% of the companies surveyed had no digital upskilling plan at all, and less than 60% had a digital partnership strategy. Despite this, there is progress being made, with 45% stating they have recently begun training initiatives.

Additionally, almost half of businesses continue to rely on manual tools for supply chain visibility, and a similar number (40%) rely on them to tackle sales and operations planning problems. This is surprising given that the same businesses said that digital boosts contract cost reduction by up to 50 % and input price prediction accuracy by a staggering 97%.

The businesses that have overcome barriers - such cultural resistance - to digital transformation can reap significant rewards, from a 20% increase in mining throughput to a 50% boost in procurement productivity and a 30% emissions reduction.

Agustín Costa continued: “We’ve spoken to leaders on the operations side who complain that despite more sensors, data, and upgraded systems, the way they operate hasn’t changed that much. We know that the change they are expecting lie in digital and advanced analytics, and companies who want to see real change by taking the digital vision to action requires fundamental shifts in culture and ways of working. It will take time and can be arduous, but the potential payoff is tremendous. With the right digital and analytics skills and knowledge, companies can design solutions that enhance the way they work while educating all levels of the organisation on the benefits of digital.”