Vale, the world’s third-biggest mining company, is implementing a single manufacturing execution system to replace 17 production management systems used at its operations in Brazil. The solution is expected to generate savings of more than $70 million by 2020.
by Yun Zeng, Breno Bregunci
Vale has grown in recent years primarily through acquisitions, taking on more and more mines and processing facilities for different minerals, such as iron, copper, nickel, coal, manganese and phosphate. Today, Vale is the global leader in the iron ore business with 38 sites operating in Brazil alone – that includes 22 mines, 11 pelletizing plants as well as a railroad network and ports. The result of these acquisitions has been different cultures, concepts, processes, KPIs and systems – with 17 applications running to oversee production. That made it difficult to manage and compare operations, and a great deal of effort was needed to maintain and evolve solutions. Getting timely and reliable information also proved to be a challenge. Naturally, with all these systems in place, technology costs were high.
Standardization, it was decided, was the way to go. But which solution? “Ahead of the project we compared different concepts and even piloted them,” explains Jonas Ruis Chagas, Mining Systems Project Manager at Vale. “After careful consideration, we opted to go with the Chemtech concept,” Chagas continues. The fully owned Siemens subsidiary Chemtech was contracted to develop and commission a manufacturing execution system (MES) for Vale's sites in Brazil. Development was kicked off in 2014, with implementation starting in 2016.
Called Vale Production Management-Mining (GPV-M), the MES is a highly tailor-made solution aligned with Vale's specific needs. The system guarantees comprehensive transparency along the entire value chain and at all facilities, from the mines to the railway and port facilities. GPV-M implementation is in line with Vale’s policy to cut costs and optimize the margin from the productivity increase. “GPV-M is one of the foundations of our digital strategy, which aims to establish a platform that will allow Vale to reach new heights of productivity through the combination of new technologies and processes,” says Janio Souza, IT Innovation Manager at Vale.
GPV-M is one of the foundations of Vale’s digital strategy.Janio Souza, IT Innovation Manager at Vale
Results already apparent
Since work commenced in October 2016, implementation has been completed in some 20 units of the planned 38. The remaining facilities are set to follow during the course of 2017. To date, more than 20 million tons of iron ore have already been shipped using the newly commissioned GPV-M. “Chemtech has been a truly competent partner. The success of the project has been down in large part to the close cooperation between customer and supplier,” sums up Chagas.“ Now we can compare more easily the performance of our units, thus identifying process improvement points to enable increased productivity,” adds Marcelo Baltar, Ferrous Information Manager at Vale.
In concrete terms, operating performance indicators from across all sites can be compared to one another. To ensure simpler, more flexible operation, all communication interfaces as well as user interfaces have been standardized. The system is capable of processing up to 1.2 terabytes of real-time data and serving a thousand users simultaneously.
The system can process up to 1.2 terabytes of real-time data.Jonas Ruis Chagas, Mining Systems Project Manager at Vale
Compared to older systems, GPV-M boasts shorter downtime as a consequence of the more modern and robust technology. The increased agility and the reduction of unproductive hours are obtained by the higher level of integration with automation systems that provide immediate and reliable data, besides requiring less manual work (for example, typing) and being more intuitive for operators.
Another great advantage of the single system is that it allows the standardization of concepts and indicators in different units of the company. All operational expertise of these units will be gathered in a digital database, facilitating the replication of the best practices and internal benchmarking. The decision process becomes more dynamic and competitive. If that isn’t enough, the expected cost savings are particularly impressive.
The change to GPV-M brings three major financial gains. One is the IT cost reduction with the maintenance and evolution of different systems and platforms. By 2020, these cost savings are expected to reach $19 million. The second gain is the avoided cost to business due to the reduction of operational impacts caused by system downtime. And lastly, relevant gains are expected with more labor productivity and a reduction of unproductive hours of the assets, supported by improved usability of the system and greater availability of information for decision-making. These two operational gains are estimated to have a value of $53 million, also by 2020.
Though it will take a few years to know the exact cost savings, they are significant. As GPV-M is the intellectual property of Vale, in the future it will be possible to keep extending the solution and develop new functions from the analysis of generated data and of other technologies. And that will bring further savings. Another great aspect of the open structure is that it will allow GPV-M to expand in step with Vale’s growing requirements, making it a truly future-proof solution.
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Picture credits: Siemens AG