Australasian Mining Review

Australasian Mining Review Issue 3.2 2012

Australasian Mining Review

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154 { Mining software } support, and straight through processing. The risks and consequences of inappropriate spreadsheet use are well documented. Statistics from independent academic Raymond R. Panko show that as many as 94 percent of spreadsheets contain errors. These errors often go undetected because spreadsheets are usually created by non-programmers that don't conduct formal, rigorous testing procedures. The scariest part of these errors is that many mining companies function with a completely inaccurate picture of day-to-day operations. Without the necessary data validation and control, errors spread throughout key processes that control hundreds of millions of dollars of inventory, putting the entire company at significant operational risk. Furthermore, these companies are unknowingly putting themselves at considerable compliance risk with regulations requiring corporations to have well-controlled financial reporting systems. If this isn't enough, other spreadsheet-related problems include: Spreadsheets in the Supply Chain: The Hidden Threat M By Steve Maxwell, Director, Coal & Mineral Supply Chain Solutions, Triple Point Technology ining companies are no strangers to advanced technology. Geological models, dispatch, and plant control systems offer sophisticated databases and solutions for asset optimization. But there is one glaring exception: supply chain management for tracking assets from mine to customer. All too often companies rely on a patchwork of generic spreadsheets to manage the tonnage, quality, and value of their coal or mineral supply chains. Ten years ago this spreadsheet dependence was common. But over the years, many companies in industries such as oil and gas, pharmaceuticals, and manufacturing have recognised the inherent limitations of spreadsheets. They have moved on to more sophisticated technology solutions that are designed with the particular requirements of their business in mind. In contrast, firms mining for coal and minerals are often locked into idiosyncratic spreadsheets and obscure macros for tracking, monitoring, and analyzing critical operational processes. In the face of strong demand-driven growth, the negative impact on profits has largely gone unnoticed. Eventually the impact will become clear, either because the spreadsheets reach the limit of their capabilities, errors are discovered internally, or worse, an external auditor finds fault. But at that point it may be too late to rectify the damage done. The underlying problem with spreadsheets is that they provide a comforting illusion of automation, when in fact they are only a small step up from manual processing. The typical spreadsheet is often built as a personal tool by self-taught business users, addressing very specific needs in localized circumstances. Spreadsheets provide none of the benefits of full automation such as enterprise-wide transparency, decision ~ Australasian Mining Review Bi Annual 3.2 { 2012 } ~ Inadequate data capacity: Spreadsheets do not have the capacity to deal with today's data volumes. Lack of integration: Spreadsheets do not provide integrated, timely feedback and communication loops across functions. They offer no opportunity to improve efficiency. Siloed information: Spreadsheets are not designed to be accessible to or used by large numbers of individuals, encouraging siloed information and processes. Hampered business processes: Dependence on inadequate and inaccurate data makes basic business processes such as quality control, trading, scheduling, and reporting difficult. It's imperative that mining and mineral companies replace spreadsheets without delay to mitigate risk as well as effectively manage and capitalize on favorable economic conditions. The biggest names in the industry including Exxaro, Rio Tinto, and Vale have already deployed Triple Point Technology's QMASTOR supply chain management systems, which are specifically designed to optimize and manage an end-to-end coal and mineral supply chain. These solutions empower them to mitigate risk and maximize profits by providing enterprise-wide access to accurate information, automating manual processes, optimizing resource allocation, providing advanced decision support tools, and more. These companies are prepared to successfully manage the expected increases in demand, and are poised to significantly outperform those companies that continue to rely on spreadsheets. Spreadsheet-dependent companies that don't act now to upgrade their rusty tools and processes are putting their businesses at considerable risk. With the global demand for commodities expected to remain strong, these companies are in serious danger and will struggle to deliver profitability, if they survive at all.

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