MRO Magazine

Data Drill Down: Teck Resources unearths stronger asset performance with ERP


July 13, 2011
By PEM Magazine

Vancouver-based Teck Resources operates six metallurgical coal mines in British Columbia and Alberta. The desire to coordinate workflow among them and manage inventory efficiently had the coal division looking for enterprise resource planning (ERP) software that would allow production to grow in a cost-efficient manner.

To help the world’s second largest exporter of sea-borne steelmaking coal update its finance and inventory management tools, Teck reviewed a range of ERP packages before determining that Microsoft Dynamics AX was the best fit for its change management goals. Today, Teck is using Dynamics to realize a host of benefits; the company now manages its inventory more efficiently, has improved workflow between its six coal sites, and has increased customer satisfaction.

Teck Resources is Canada’s largest diversified mining, mineral processing and metallurgical company, and is a leading producer of copper, steelmaking coal, zinc, molybdenum and specialty metals, with interests in several oil-sands development assets. The company is committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. This includes 13 mines in Canada, the U.S., Chile and Peru that the company owns or has interests in.

To achieve its goal of business expansion for the coal business unit, the company needed to first update its information technology systems to improve collaboration across six mining locations. Teck’s strategy was to gather the information from all its locations into a single platform; these six locations historically have been autonomous, and internal operations were fragmented due to the lack of information control and low levels of communication between them.

“With more than 3,500 employees, Teck’s coal operation wanted to improve staff productivity and business performance by establishing common processes across all sites, having one view of our operating picture and abandoning our legacy systems as they were hindering growth,” said Chris Coupal, director of information systems and business solutions with the coal business unit.

For Teck, the performance of its coal mining equipment is affected by a number of financial, operating and maintenance-management issues. Staff at Teck is tasked with managing maintenance forecasting and scheduling, but the aging systems did not fully support these functions, which made it difficult to accurately track and monitor asset and inventory data across all sites. This non-integrated environment was proving not only too labour-intensive to manage, but also resulted in operational inefficiencies and couldn’t adapt to the company’s changing business requirements.

“We had six independent sites running on six independent copies of software and a legacy mainframe that was more than three decades old. This inflexible environment hampered the ability to quickly access data to make timelier, holistic business decisions, which in turn, required individuals and manual processes to attempt to make up the difference,” Coupal said. “As a result, we made the decision to implement a new, single-business management solution that would standardize our processes and help improve our asset management, procurement and inventory processes in real-time.”

The company needed a more centralized management environment that was reliable and could improve interactions with suppliers and customers based on planned maintenance activities. The challenge was to fully join its databases and strengthen its maintenance, materials management and financial areas to increase focus on planning and forecasting, and increase access to more current, more complete data — enabling timely decision making, as well as reducing the operating processes time.

One factor that determined if  they would pick Dynamics AX was definitely which solution could be more seamlessly integrated into its existing Windows IT-based environment.

In order to execute the implementation of Dynamics AX with the maintenance, repair and operations (MRO) module, Teck chose to work with the Vancouver office of reseller Eclipse based on the partner’s global experience specific to the mining industry.

“Eclipse was able to mobilize quickly and brought a keen understanding of … MRO, mining and maintenance to the table, which really helped make this implementation a success,” Coupal said.

The complete rollout to all operations was finished in November 2010. Using Dynamics AX, Teck has established a centralized store for financial, asset and materials information and has standardized on common operating procedures among sites on the Dynamics AX system.

“Using Dynamics AX allows us to manage as one organization instead of as six independent ones, so I would say it’s a competitive advantage. As an example, we have had vendors who knew more about the inventory we held in stock at our sites than we did because our systems were siloed,” Coupal said. “We’ve been able to streamline vendor transactions because we now have an integrated system and an asset maintenance planning perspective. This enables material forecasting, allowing us to have a single purchase order for future requirements from a vendor instead of six, or often many more.

“The flexibility of Dynamics AX has enabled us to custom develop a lightweight production statistics module that keeps track of our production details. It’s being used to drive our finance, material and our maintenance functionality based on production volumes in the mining pit,” Coupal added.

Teck is using Microsoft Dynamics AX to realize a host of benefits. The company is implementing more mature asset management processes, now manages its inventory more efficiently and has improved workflow between its six mining sites.

“I think when you look at mining historically, the view was to allow a mine to just run autonomously and leave it at that,” Coupal said. “But we have taken the approach to have the six operations operate as one team, with common processes, one view of our information, and opportunities to centralize support functions. As a result, Dynamics AX is enabling our company to be more competitive.” The company has recently created a finance shared service group and a material shared service group that can perform planned procurement for all six sites.

“Having a single view into our information has been very powerful. Now, there’s one view across all the sites, and if a site has a new piece of equipment, planned approaches to maintenance, critical spares, etc., all locations have visibility into this information and can share or allocate resources as needed,” Coupal said. “This allows our managers at all levels to see the same view and to make decisions with better information.”
Today, employees can have real-time access to data and reports with current and historical information; this helps to reduce operational costs and boost Teck’s decision-making process.

“We are now getting to the point where we can manage our maintenance forecasting and our maintenance scheduling across all sites. We’re performing collaborative processes across six sites instead of independently at six sites which helps streamline our processes,” Coupal said.

Teck has been proactively using technology to transform its infrastructure. The company is taking advantage of the Dynamics AX platform to ensure that all transactions are processed in real time for just-in-time reporting. Getting the six sites to operate as one allows the company to better leverage and better coordinate resources, ensuring that Teck maintains its competitive industry edge.

“Dynamics AX has been a key part of our new change management strategy to provide us the ability to create one view into our company. We can now ensure that our purchasing processes are on behalf of all sites and they’re more aligned to our needs,” Coupal said. “Overall, this helps us be more strategic and competitive moving forward.”

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