Eastplats’ Crocodile River integrates Pit to Port using Microsoft Dynamics AX
When Canadian-based, Eastern Platinum Ltd needed an intelligent and holistic ERP solution to streamline its present operations in South Africa, it found Microsoft Dynamics AX to be more than equal to the task. Partnering with local mining and metals processor (MMP) specialists, Axnosis, this mining magnate implemented an end-toend solution that is world-class and fully capable of supporting its long term expansion.
Eastplats may enjoy an enviable geographical position, with key access to primary mineral resources, but its enterprise resources proved equally challenging. The company contributes over 80 percent of its costs to salaries, in-house stores goods or outside goods and services ordered through central buyers. The company outgrew its accounting solution, which was unable to provide the level of accounting control now required in the form of audit trails and restrictions on journal processing. Nor was it able to provide the materials management facilities necessary in terms of workflow and ABC stores management tools.
Inadequate system transaction controls and lack of production visibility at management level also resulted in blunders and less informed decision making. Eastplats soon found itself reliant on outside IT technical support to ease the way through tedious month ends. Reporting was actioned from spreadsheets and no maintenance or production functionality was in place.
When what was originally known as Barplats was taken over by the Canadianbased Eastplats in 2006, an even greater need for governance and accurate management reporting emerged. The new holding company was keen to optimise existing operations.
Increasing production while keeping costs down meant the company could use this improved cash flow and improved market credibility to help finance aggressive expansion programmes. Senior management recognised the strategic need to get a good ERP system in place as part of this improvement drive.
From a sheer technology perspective, the organisation had to move away from the use of dispersed ‘islands’ of processing, all using a variety of mismatched business systems and technologies. This was creating intolerable inefficiencies in the business while making it impossible to generate any accurate or actionable information for the business to operate effectively. The decision was taken to move towards the creation of a central data repository that would allow Eastplats to manage all its mining-related operations, using a single, fully integrated solution.
Together with technology partner and Microsoft Gold Certified Partner, Axnosis, Eastplats began the carefully planned and phased transition, which was rapid and pain free.
“We were impressed with how quickly Axnosis was able to get the system up and running, the workflow, finance, and trade and logistics functionalities were all up and running just three-and-a-half months from board approval. Not only that, but the cost effectiveness was pleasantly surprising. Our investment was only a fraction of that of a rival ERP for an equivalent site.”
- Mike Humphries, formerly Group Financial Manager at Eastplats
The primary objective was to move Eastplats from a situation with numerous unlinked “satellite” solutions (mainly created using Microsoft Excel) to a more sophisticated, stable and secure centralised Microsoft-centred technology using the Microsoft Dynamics AX ERP/EAM running the Microsoft SQL Server®.
The comprehensive solution would encompass several main functionalities: Rock-solid production planning Microsoft Dynamics AX offers Eastplats a complete solution for the management of all critical operations in its business. The management process literally begins at the rock-face, where Microsoft Dynamics AX Production Accounting Module (PAM) provides the vehicle not only to accurately record and measure daily metered face advances and tons broken back, but also to compare this output against the central mine plan. This was achieved in conjunction with expert mine planning systems.
Streamlining stores and procurement Eastplats has now completely centralised its internal buying capabilities, using a combination of the standard Microsoft Dynamics AX Trade & Logistics Solution (T&L), Microsoft Dynamics AX Supplier Relationship Management (SRM), and Microsoft Dynamics AX Workflow. These applications function together to provide comprehensive stores and procurement functionality, with workflowcentric approval cycles for managing the incredibly high volumes of stores requisitions, purchase requisitions and purchase orders generated at the mine.
Slick asset management
To provide the Eastplats with a centrally managed asset register for the management of its fixed, strategic and operational assets across all its sites, the solution employs Microsoft Dynamics AX. Dynamics AX capabilities are further enhanced by the Microsoft Dynamics AX Services & Asset Maintenance (SAM) product, which empowers Eastplats to manage its critical equipment assets effectively.
Microsoft Dynamics AX SAM has played an integral part in deftly shifting the organisation from an environment previously managed via re-active emergency and breakdown maintenance routines, to a suitably regulated and pro-active planned and scheduled maintenance approach. This will eventually encompass all plant and instrumentation assets, all critical engineering assets (including pumps, conveyor belts and the full mobile and mechanised mining fleet), and all critical mining assets. Many of the objects in the equipment asset register are targeted to use the serial number tracking and location tracking functions offered by Microsoft Dynamics AX SAM.
Closing the gap – Despite geography
Mining operations as a rule tend to be geographically dispersed, and Eastplats is no exception with four main sites spread across the Bushveld complex. The physical distribution of system-generated purchase orders, remittance advices and requests for quotation, is performed using built-in auto-e-mail capabilities, able to ensure relevant documents are delivered to the right place, as quickly as practically possible, and without need for any unnecessary human intervention.
Microsoft Dynamics AX Fin (AX‘s standard financials suite) sits at the hub of the solution, offering flexible multi-company and multi-currency financial management capabilities, from basic journal entries all the way through to finally compiled balance sheets and income statements.
Microsoft Dynamics AX Projects and Microsoft Dynamics AX Commitment Accounting (part of SRM), actively link with the AX financials, and together provide the Eastplats organisation with comprehensive facilities for managing capital projects, and the added ability to do almost-real-time measurement of real and committed actual costs back against agreed budgets. Pay costs, which comprise a high percentage of the mine’s total operational cost, will soon be gathered electronically from the new payroll system currently being implemented at the mine. Reporting is now done with data in Microsoft Dynamics AX and is produced accurately and timeously. System controls have eliminated previous unresolved errors. The seamless Microsoft Excel reporting via Atlas proved to be invaluable.
Microsoft Dynamics AX has been able to provide Eastplats with an integrated and centralised, all-in-one solution that now covers underground mining operations, plant, engineering and all of the key administrative support systems used to manage the mine. It has also enabled vastly improved and more efficient centralised buying capabilities, which include rigidly enforceable controls using workflowdriven approval processes for requisitions, purchase orders, requests for quotations, and various other documents and processes. Improved equipment service and maintenance procedures are now being enforced, as the process becomes more proactive. The effect on the company’s bottom line is evident.
“Our reporting has improved dramatically using Atlas XL, Standard reports provide all of the controls required by the various functions within a day or two of month end. The resultant accuracy and speed, along with transaction drill-down capability, has led to increased credibility and the inability of line management to wriggle out of their accountability. The increased cost control has resulted in significant reductions.”
On-line transaction authorisation has virtually eliminated authorisation fraud and reduced substantially unnecessary document handling and data loss. Improved supply chain management capabilities have greatly improved relationships with its supplier base. Buyers have been able to apply increasing control over the procurement function and increase substantially (to 50 percent) the quantity of procurement made via bulk contracts. Accounts payable have improved the accuracy and timing of payments and increased discount taking. Accounts with main customers are kept up to date and differences resolved quickly.
With the introduction of a central and common, open and flexible technology, based mainly on Microsoft products, Eastplats seems eagerly poised for growth.
“The speed of implementation allowed a faster growth path for the company. With the resulting improved business processes and reporting, senior management has been able to look to expanding the business quickly. Also, it has become easy to see the business and system expansion happening side by side”
The solution is also scalable, critical for a company such as Eastplats, with an aggressive business expansion plan in place. There is no doubt that Microsoft Dynamics AX will be able to cater for any growth that may arise. If needed, the solution as implemented at Crocodile River Mine could be ported across to any new sites that come into play over the next 10 or more years as the greater, long-term Eastplats expansion plan is executed. A strong support base is in place in South Africa, both for Microsoft Dynamics AX and for the chosen Microsoft technology base.
Software and services
- Microsoft Dynamics AX Financials
- Microsoft Dynamics AX Projects
- Microsoft Dynamics AX Trade & Logistics
- Microsoft Dynamics AX Supplier
- Microsoft Dynamics AX Services and Asset
- Maintenance (from Dynaway)
- Atlas XL (From Globe)
- Relationship Management (Axnosis)
- Microsoft Dynamics AX Commitment Accounting (Axnosis)
- Microsoft Dynamics AX Production Accounting (Axnosis)
- Microsoft Dynamics AX Workflow (from Crealogix)
- Microsoft® Outlook/Exchange