Remote operating centers in mining: Unlocking their full potential

As mining companies seek to mitigate the impact of the COVID-19 pandemic and act to safeguard employees, some have started to relocate around 15–20 percent of their on-site workforce by setting up “control towers” to facilitate remote working (especially for non-frontline roles like subject-matter experts). This is helping the industry develop more resilient, responsive, and flexible operating models suited to an increasingly uncertain environment. Now, however, companies are rapidly advancing their capabilities for remote means of working and collaboration. As expected, executives have a renewed interest in remote operating centers (ROCs) that build on remote working capabilities to unlock additional value, such as enhancing decision making by integrating functions across the value chain. Although not a new concept, ROCs present an opportunity for mining companies to reimagine and reform the ways they operate as remote working becomes imperative to ensuring value and sustainability.

Varied ROC landscape

ROCs harness technology to ensure safe, reliable operations from a centralized location. However, the maturity and sophistication of these collaborative workplaces varies based on the capabilities available within the mining organization. Some companies have implemented cloud-based systems that aggregate site data into a single data lake that can be accessed, analyzed, and visualized for decision support, creating a “room of screens”; other companies manage and actively control plant automation systems, fleet management systems, and remote-controlled machines from the ROC. The most sophisticated companies manage all these functions on a larger geographic scale, covering the value chain from end to end, optimizing post-processed ore logistics and port facilities used by multiple mine sites within a region, with regional parts and supply warehouses monitored across multiple assets for supply-chain optimization. The larger span of control of such operations helps to maximize best-practice benefits across site assets to drive operational improvements such as predictive maintenance among similar mine fleets.

Generally, companies focus on a combination of four value levers (Exhibit 1). We found that companies implementing ROCs tend to concentrate on a subset of these levers, although the most successful implementations capture value across all.

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Observations from reviewing ROC implementations in mining

When we analyzed the challenges organizations must overcome to capture full value, we were surprised to find that companies generally do not see the technology development or investment costs for ROC implementation as major pain points. As one CIO told us, “The technology is the easy part.” Numerous options for communications and data management exist, allowing mining companies to effectively implement and control applications that would normally be installed on site from a remote location.

Yet, only a few companies have demonstrated an ability to capture the full value potential in a ROC. Our research unearthed a common theme underpinning the root causes for this failure—insufficient emphasis on and investment in developing a robust change-management strategy and subsequent implementation. Two typical scenarios are discernable across the industry:

1. Leaders do not set clear expectations of bottom-line impact from ROCs. Leaders typically position ROCs as an experimental showcase or proof of concept for technical capabilities—or worse, as a strategic initiative to “check the box” on adding remote operations to their toolkit. The hope is that once built, the ROC’s capabilities alone would convince the operations team to adopt it. However, this approach signals a lack of priority, management sponsorship, and commitment by the organization to the program. While, technically, such ROCs are implemented and functional, they drive limited to no value (see sidebar “ROC successfully delivered as proof of concept sits idle”).
2. Leaders position the ROC with limited authority within the organization. We found that successful implementations deliberately consider the changes the ROC has on the organization, the operating model, and the reporting structure. While defining the ROC as advisory to the frontline operations team is necessary and intended to help adoption, capturing value requires evolving ways of working to encompass new capabilities enabled by the ROC. Without a new mandate, a new way of working, and a new decision making structure, the ROC staff will struggle to capture the frontline team’s attention. And, although the ROC is implemented and functional, it never reaches full potential for value. Without a conscious focus on organization, a ROC can be counterproductive, creating redundant organizational structures, reinforcing silos, and alienating the central and site teams from each other (see sidebar “Full performance potential lost through failure to transform organizational structure”).

Key factors for success when implementing ROCs

Success stories tell us that capturing the full potential of a ROC involves shifting to a new way of working. Leaders need to set an aspirational vision early on, setting out what the future operating model will look like. Five principles emerge when thinking about how to create value through ROCs, and each of these principles needs to be tailored specifically to the organization when applied.

1. Define a clear and compelling business case around the value creation for the organization. Defining a business case should involve robust analysis of all potential major value pools, including reduced travel costs, better emergency and incident response, improved productivity, and integrated, technology-enabled decision making. The analysis should cover the following key aspects:
   • The ROC should elevate decision making so it integrates input from functions across the value chain. The ROC fundamentally changes daily tasks and culture by enabling a seamlessly integrated planning process, breaking up silos that have existed for decades. Effective integration requires that the ROC covers business-as-usual operation, operational risk, and business continuity, as well as safety and emergency responses. The center can serve as a catalyst to capture benefits such as frequent and rapid plan optimization, including real-time (even shift-to-shift) responsiveness to correct deviations. Importantly, using integrated information for site-level value management versus silo-based production and cost information alone can generate substantial EBITDA¹Earnings before interest, taxes, depreciation, and amortization. impact. Calculating that value involves mapping value sources across the mining value chain (Exhibit 2), which can be the largest and most difficult value pool to capture.
   • Experts and leaders supporting multiple facilities should reduce travel spend on items such as transportation, lodging, and meals. Clear expectations, tracking, and accountability for travel spend following ROC set up will ensure the value is captured.
   • Productivity improves when critical resources are co-located. The organization should explore the benefits realized over the medium to long term generated by combining teams, enabling experts to effectively support multiple areas, reducing on-site activities, and so on.
   • Remote monitoring of process parameters and operation of equipment can offer improved emergency and incident response. This requires integration of multiple functions—such as pit and dispatch operations, and health, environment, and safety (HES)—via the ROC. Both setup and expected impact should be tailored to the specific requirements of the site or organization.
2. Take a robust approach to organizational integration and change management. A robust approach requires a carefully crafted change-management strategy, detailed organizational design with defined spans of control, and a detailed implementation plan. It must be executed by a strong, proactive leadership team committed to unlocking the full value at stake in a sustainable way. The process entails addressing common challenges along with the fears and emotions of the operations team during the transition. A robust approach that addresses all four dimensions of change management—role modeling, reinforcement with formal mechanisms, talent and skills development, and understanding and conviction—and is tailored specifically to the organization will prevent it from leaving value on the table (see Exhibit 3 for examples of some quick wins). In addition, it enables a smooth transition to the new operating model and long-term acceptance by the on-site operations team.
3. Ensure the organization is set up to attract and nurture the best industry talent to drive long-term performance and growth. Attracting, retaining, and developing the best people is a key ingredient for innovation. Selecting a favorable geographic location for the ROC coupled with building a company culture that allows top talent to thrive will create an attractive long-term proposition for employees.

4. Create the technology backbone of the ROC through technology stack and facilities integration. While technology development is not typically a major pain point, careful consideration must be given to data and systems reliability, location of primary physical storage infrastructure, and design of back-up systems. Software integration at the ROC is as important as integration of human functions. Building a single source of truth is essential to enable the integrated decision making, transparency of information, and accountability needed to improve operations. In addition, a robust cybersecurity approach supported by a cyber-risk management and governance structure is critical to protect the ROC from potential threats. These decisions can impact connectivity, bandwidth, and latency, each of which must be sufficient to enable the ROC to effectively control on-site operations in real-time: for example, adjustment of plant processing parameters or remote control of mobile equipment and process optimization tools, such as machine-learning algorithms.

   With the right technology foundation, the ROC can function as the analytical center of excellence, setting data standards, creating and updating analytical optimization models, building analytics capability, and driving partnerships to codevelop solutions aligned with the new planning process for optimizing site-level profit. Such actions can move the organization toward new ways of thinking about hierarchy, decision rights, and ways of working.

5. Understand social, environmental, and legal impacts. Appropriate strategies must be developed to ensure all stakeholders are properly mapped, the scope of change resulting from implementing and setting up the ROC determined, and corresponding mitigation plans put in place. Those aspects were not considered by most organizations we surveyed; however, it undoubtedly deserves a place in any ROC strategy as a source of value for society as a whole and for potential risk mitigation.

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Mining companies around the world are preparing to switch from crisis mode to establishing ROCs as the next normal for their operations. A collaborative, remote-working model, centered around a ROC-based architecture, can help companies capture the value of co-locating high-performing cross-functional teams to drive end-to-end decision making based on truly integrated information systems. Even beyond the very real need to build resilient operations that can thrive in times of crises, this can help create a smarter, safer, more productive, and more enjoyable workplace for future generations of digitally enabled mining workers.