In July of this year, Teck announced an acceleration of RACE21™ and set an initial target of $150 million in annualized EBITDA improvements to be achieved by the end of 2019.
Initiatives to be implemented in 2019 primarily relate to the expansion of programs in three areas:
- predictive maintenance
- mining analytics
- processing improvements
Examples of initiatives being implemented and their estimated EBITDA value can found in “Connecting the Dots”.
Supporting Cost Reduction
RACE21™ is a business critical program that is improving efficiency and productivity across Teck, and supporting Teck’s competitiveness broadly, regardless of market conditions.
RACE21™ initiatives will continue to be implemented across Teck and done so at the lowest cost and with execution discipline.
RACE21™—Key Terms to Know
Agile (Agile Digital Transformation)
Digital transformation through continuous innovation; based on the principles of launch, learn and relaunch
Data science that uses high-level methods and tools to focus on projecting future trends, events and behaviours
The simulation of human intelligence processes by machines, especially computer systems. These processes include learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions) and self-correction
The Cloud is the term used to describe data centres—warehouses of hundreds, sometimes thousands, of computers that store and process data—that can be accessed over the internet
Collected information. Big Data is the large volume of data a company collects on a day-to-day basis. Data analysis refers to the process of evaluating data using analytical and statistical tools to discover useful information and aid in business decision-making.
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization)
EBITDA is a measure of a company’s profitability. To annualize EBITDA (or Annualized EBITDA) means to convert a short-term calculation or rate of EBITDA into an annual rate of EBITDA. For example, to annualize one month of EBITDA, one would multiply this by 12 or to annualize three months of EBITDA, one would multiply this by four.
The understanding and knowledge gained through data analysis
A branch of artificial intelligence based on the idea that systems can learn from data, identify patterns and make decisions with minimal human intervention
Maintenance that monitors the performance and condition of equipment during normal operation to reduce the likelihood of failures
Devices that monitor, detect, collect and respond to some type of input from the surrounding physical environment
RACE21™: Why the Right Time is Now
Before we take a closer look at RACE21™, consider the following imperatives for change:
- The technology being implemented under RACE21™ already exists and has proven effective.
- The timing is right for Teck to become a world leader in digital innovation.
- Industries that fall behind are being disrupted by companies quick to innovate.
- Digital innovation makes it possible to move to a new, integrated operating model that will unlock significant economic value and competitive advantage.
Now let’s take a look at the individual streams within RACE21™:
We are modernizing Teck’s technology foundation.
Why? Teck’s core systems are being modernized to allow for connectivity, automation and the use of analytics applications. Some of the core systems being modernized include wireless site infrastructure, data platforms, security infrastructure and information technology capabilities.
We are accelerating our automation and robotics program.
Why? Teck is accelerating the autonomy and robotics program to create a transformational shift in safety by having fewer people in high-risk environments. Automation and robotics will also reduce per-tonne mining costs with smaller fleets and enable implementation of advanced analytics to drive cycle time improvement and predictive maintenance.
We are developing a digital platform for sensing and analytics.
Why? There are currently many disparate systems across Teck that capture valuable data, which, in many cases, sits unused in databases. By linking systems across Teck, we’ll create a collaborative digital platform with powerful computing tools for sensing and analyzing information in real time. A ‘connected’ digital platform will also provide dynamic and predictive modelling that will reduce variability across our operations, leading to dramatic improvements in throughput and recovery.
We are designing a future operating model to empower our employees.
Why? Employees will be critical to the success of RACE21™ and, as a result, we’ll be reimagining what it means to work at Teck and redesigning how we upskill/reskill, attract, train and retain the workforce of the future.