Johannesburg, 24 Oct 2008
The Rand Refinery, the world's largest single-site gold refinery and smelter, has used new-generation business intelligence (BI) technology from QlikView to increase production efficiencies and boost its profitability, says CIO Neri Credo.
Refining a commodity as valuable as gold makes for unique business challenges. With just 450 employees, Rand Refinery turns over more than $200 million a week and processes tons of gold worth, at current prices, over R200 per gram. “Our profitability depends on us being as efficient as possible throughout the operation,” says Credo.
The task is made more difficult, says Metallurgical Services Manager Shaun McEwan, by the complexity of the refinery operations. “We need to know, down to the milligram, exactly where the gold is all the time. Every movement is logged as a transaction, so we have around 10 000 transactions a day going through the system. It's not a simple environment - half my job is accounting for the metal.”
In any refining process, adds McEwan, gold gets “locked up” in slag and other wastes, which means it is difficult to account for.
“The tighter the control we can keep over our processes, the lower we can keep our lock-up,” says McEwan. “But we can only achieve that level of control if we have accurate information from minute to minute - it doesn't help to get an assay report half an hour later when the gold is three processes down the chain already. QlikView has given us that level of access to information for the first time.”
As a result, says McEwan, “we reduced our lock-up from a kilogram to less than 50 grams in less than a month - and that was just in one section of the refinery. QlikView has made a significant difference in every section”.
The refinery implemented QlikView in early 2007, having accumulated several years' worth of data for analysis in its JDE enterprise system, because it recognised the need for easier, faster access to information. Reporting previously took days out of every week and the results were inflexible and hard to read.
“We didn't want to make another huge investment in software,” says Credo. “We needed something that could integrate multiple data sources, including JDE and our Lab Information Management System, but also offered low complexity of implementation.”
Credo saw a demonstration of QlikView at a JDE User Group conference and called for a demonstration, which quickly convinced the board to implement the software.
“In two weeks the QlikView team produced a profitability model as a proof of concept that we're still using,” says business analyst David Denton. “Even on our most conservative projections of the resulting savings, that model alone will pay for the entire implementation in 14 months.”
The first model was implemented in March 2007 and there are now 12 in operation, with new ones being developed. “We're getting a lot of requests, so it's very much a question of responding to user demand,” says Credo. “It's one of the very few systems I've seen where people actually come and beg for licences.”
The refinery has 150 JDE users and 64 QlikView users, concentrated in operations and middle management. “QlikView has become indispensable in our operations,” says Credo. “We're updating the model every five minutes. It has made keeping track of the metal far easier.”
The benefits are being felt in other areas as well. Denton says the stores manager expects a saving of at least 5%, and perhaps up to 12%, on purchases.
“QlikView is a good, solid, simplified product that's economical on system performance,” says Credo. “And the people who sell it really know what they're doing. It is one of the most successful IT projects we've had in seven years.”
Financial Director Geoff Millet says the quality of information delivered by QlikView has helped the operation unravel intricacies that were previously not well understood. “It's changing the way we deal with our customers and has helped us to identify and fix weaknesses in the existing systems. We work on extremely thin margins - a tenth of 1% is material to us - so better information from QlikView has helped dramatically.”
From the user's perspective, says McEwan, “QlikView has changed data into information that we can act on. It's decreased the uncertainly in the refining process, decreased the risks involved, saved me about 50 hours of time a month and finally let me sleep at night”.
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