TAdviser Interview: Vladimir Trapezin, Norilsk Nickel - about technology and mental transformation of the company

Vladimir Trapezin: This year we complete the remained drafts of the Technology Break program and in parallel we start continuation – "Technology break 2.0". Within the first program we set two key purposes: creation of basic technology tools of so-called "hygienic" level without which it is impossible to make all the rest, and transition to a new business status by means of these tools.

We implemented 17 large information systems in the promptest way, practically at the same time therefore at the name of the program and there is a word "break". It allowed the company to create conditions for transition to a new process status. As an example of increase in efficiency it is possible to give terms of preparation of annual production plans. If on preparation before one version of the annual plan from 4 to 8 months left, then now in one month we can create ten. And not just to plan, but also to banish them through a simulation model. It allows to check how production plan we will implement and is effective. In the course of simulation we can count required direct costs according to each scenario and select the most optimal.

Further execution of this plan is controlled on an hourly basis, actually in real time. Collecting telemetry from production, we can analyze why, for example, it is not executed in the set volume and to correct this process.

When in 2014 I came to the company, only 10% of technology signals were possible to be removed without participation of the person. For example, the signals characterizing the capacity of a certain furnace. In such conditions it was difficult to understand and to authentically assess a situation. There were not enough data, and those that were – were false and arrived late. Now about 50% of production information are removed without participation of the person, at the same time data stream rate grew approximately by 50 times, their accuracy increased.

The main projects within the first program are already complete. Part of them was selected in the additional subprogramme – underground infrastructure and scheduling. If to speak about absolute measures, then, as a result of implementation of the first of "Technology break" in three years the quality of saleable ore grew by 6.5%. It means that we ceased to blow up, carry, crush, to melt and utilize 6.5% of dead rock. For this period we saved $44 million on transactions and $12 million capital costs.

Till 2023, by our calculations, the quality of saleable ore will increase to 7.3%. And we plan economy at the level of operating and capital expenditure about $146 million by 2030. And the automatic management system mining operations (AMSMO) which we implement on mines now should help us to provide accomplishment of the production plan of 2020 of 3.7 tons of nickel, 7.4 thousand tons of copper with economic effect in $29 million.

But the main thing not in these digits, and that we created the tools allowing now it is correct to plan. And against the background of end of the first program, in fact "The technology break 2.0" already began. In it 11 subprogrammes, 55 projects.

Vladimir Trapezin: By drawing up the program we at first placed business milestones: to what business status and when we want to come. Them there were about 150. And already on these milestones we began to string technologies, processes which need to be developed. And then on top made "cutting" on projects which should lead us to conceived.

In process we, of course, changed quantitative and qualitative structure of projects several times because in addition to additional study of a necessary business status we understood that, for example, it is not necessary to go such way any more. Technologies changed too, and we changed together with them, selected the most suitable.

So, for example, the choice of a mining-and-geological information system changed several times. It is intended for 3D - planning, design of bedding of ore bodies and access to them.

In some directions we make this break now: we do what to us nobody did. For example, we created a simulation model of the underground mine. In Russia definitely anybody does not have it. And even foreign specialists could not show us anything similar. As a result we went in the way: selected the IT platform which was considered the most suitable for this purpose, found in the market of young specialists who believed that they will cope with a task.

In two years we made a complete simulation model of all our mines which contains all roads, quantitative and detailed qualitative structure of all equipment, infrastructure elements, excavations, etc. As the result - any production plan is not accepted without running in in the simulator. Now we are engaged in patent and security activity of this unique product.

The next step - transfer of that logic which we already acquired on operational planning, to the permanent industrial platform. It is already possible to call it the digital double by whom I mean technology vision and digital instruments. It is, first of all, new production model which works with information support.

It is about creation of the end-to-end planning equipped 3D - vision and all necessary models. The digital double means creation of a complete simulation model of production, including the operational model allowing to plan both production, and repairs, and many other things. And over all this there has to be also a business case.

Whether we will be able to make it on the operating extracting assets? I am not sure. But on future, entered assets it will be. Yet anybody in the industry has no such digital double.

If to speak about political changes in the country, then they concerned the choice of suppliers - we consider the potential risks connected with sanctions. Underground infrastructure, for example, for us was created by the Russian company – Uraltekhis. They, of course, make not everything, but this is the Russian supplier who, for us is transparent and clear. Further, we are also going to select technologies so that it is as little as possible to face sanctions risks.

Vladimir Trapezin: The amount of financing of the first of "Technology break" - about 6 billion rubles in five years, and the same amount is put on implementation of the second program. But it can change: we can request additional financing or, on the contrary, spend less.

Vladimir Trapezin: The most costly, perhaps, – infrastructure projects, in particular creation of underground infrastructure which I mentioned earlier. We equipped all underground mines with the systems of positioning and communication, laid more than 300 km of optical fiber, mounted more than 1 thousand access points of Wi-fi, the system of positioning of the person and transport – loaders, dump trucks and other self-propelled equipment, the system of tracking of rudopotok.

Underground about 6.5 thousand people – miners work for us. They are equipped with the equipment allowing to control their movement in the mine. The same concerns also transport. Now we can see in real time where there is each person, each piece of equipment, etc.

At the same time now we see that Wi-Fi can appear insufficiently, and we look towards LTE and a 5G. We conduct negotiations with such suppliers a telecom of solutions as Nokia, Ericsson, Huawei. Already in the nearest future testing of technologies will take place.

Vladimir Trapezin: We acted with method of "Big Bang": we did those tools which are necessary for support of future state of business in an advancing way. After they appeared, and we were convinced of their working capacity, mental transformation began. Directly on places the corresponding groups were created, the special partner – the consulting company was invited, and creation on mines of the operational centers for production planning began.

It became serious organizational and regular reorganization of our production structures taking into account understanding as now at us in the company production planning should be performed. It led to redistribution of roles and powers. For example, someone answers now not only for some part there is nobody process, but also for result.

Unfortunately, cultural changes go with lag from emergence of new technologies, but, probably, it also is expected. Initially process of production planning was created during an analog era, 80 years ago, and created so that even for lack of information support it was possible to plan and execute. Within 80 years this process was automated. However it is useless to digitize analog process as it is initially designed in such a way that so far, for example, one person will not give something to another, will move further nothing.

Now our task – to be rebuilt in such process where reliable information is always and at distance of one click. Additional efforts are not necessary for its collecting, transfer and authorization. Intermediaries who were in analog process are not necessary too. All this requires mental transformation because many were not ready to such changes.

Employees need to be helped with it. Last year we tried to make brainstorming: collected within the corporate action of heads of all main directions of production and discussed how we will live in a new way. In a format of business game we tried to design future target state. And now it is simpler to us to understand how it can be implemented in practice.

Vladimir Trapezin: One international company competing with us considered that if to make the mine deserted, the number of employees will decrease by only 35%, and the number of necessary skills for remained will exchange for 80%.

The number of people on mines depends on many factors, it is impossible to give average exact digit. On all mines in total at us under the earth more than 6 thousand people daily go down. And requirement will disappear, first of all, in those employees who execute the routine repeating transactions. For example, in the operators performing operations on the simplest algorithms, clicking.

At the same time there are things which cannot be automated completely. Let's say in a case with an electric locomotive – it can move without participation of the person, and from it it is better to do loading and unloading far off, with the assistance of the specialist. It can be the operator managing at the same time several mechanisms.

Vladimir Trapezin: Completely deserted the mine can be made only if it was initially designed under the similar concept. In it new processes, the new equipment, conditions for the movement of pilotless transport, etc. should be put at once. Create the necessary conditions on already existing mines it can appear too expensive and it is economically inexpedient, and somewhere it is even impossible.

However we are going to apply separate elements of deserted production on the operating mines. In "Technology break 2.0" three such projects are put: deserted self-propelled drilling rigs, deserted dump trucks and intra mine elektrovozny transport. On each of them we do complex assessment, including economic. Also we will look on each mine separately where it is applicable.

Vladimir Trapezin: Yes, we borrowed some certain things. The initiative group which on studied processes and plans of industry companies in the different countries, including Australia, South Africa, to Canada, Chile, etc. was created. It was about five years ago. Then we saw that most of them goes quite conservative way. Transitions to a new status at these companies are expected 8-9 years. And we were faced by a task to make break. We understood that we if we make use of the experience got by other companies, will try to repeat after them, then the lag distance from them will remain.

We considered, for example, what technologies of communication are best what it is possible to implement in Russia. To define basic technologies of underground infrastructure, after our trips abroad, we created a polygon to check how different technologies will work under our conditions. We invited 16 different companies from which we 8 responded, and undertook accomplishment of a task as a result of 6 companies. According to the results of testing we selected what most of all suits us.

Vladimir Trapezin: I have no accurate vision yet. At the solution of a question of the one whom to train, it is necessary to take into account the fact that technology life term – about 7 years, and training of the specialist in it – 5 years. The share of the professions assuming accomplishment of routine transactions will be reduced. To the contrary, the share servicing, service and IT specialties will increase. The technologist should become in combination either the supplier of data, or the analyst. The share of vertical functional wells will decrease for benefit of the mixed groups (the technologist, the service specialist, the economist, IT shnik). In the course of training of specialists it is necessary to consider these circumstances.

I think that in 7-10 years all routine transactions will be already executed by robots, and the person will have accomplishment of more interesting, complex transactions: control of solutions, analysis of recommendations, check of performance indicators, prioritization of tasks, development, etc.