Runge to put back 15% into R&D

LEADING mining software, technical training and engineering consulting companies, Runge has announced plans to spend 15% of their annual turnover on R&D projects. The company hopes this will dramatically improve the bottom line for mining operators by up to 7%.

Staff Reporter

Runge's managing director, Tony Kinnane, said this R&D commitment reinforces the company's aim to improve the economics of both existing and proposed mine operations.

In one $2 million project, Runge staff are developing software tools which will allow mining operators to predict the financial cost / benefit of responding to individual customer needs.

"At the moment there are no fast prediction tools available to mining operators who want to know the full financial and opportunity cost of supplying a specific order,” Kinnane said.

"For example, if a customer wants to change the specification of their coal order, then the mining operator may choose to supply the order to keep the customer happy. They may not have the ability to gauge how that decision will impact on the post-order production schedule and revenue."

To combat this industry paucity, Runge are creating new capabilities for their successful XERAS financial modeling package and XPAC scheduling package.

"This R & D work is an evolution, not a revolution. For many years Runge has been evolving in this direction and this R&D shows that we practice what we preach".

The current XERAS product is already a very sophisticated tool. It's a forecasting package which provides activity-based and responsibility-based costing to assist in long-term planning and budgeting for the mining industry.

"Simply explained, a mining engineer could be looking at what cost and processes are associated with producing a combination of products, be they coal, iron ore or metals. Using XPAC and XERAS the engineer is able to predict both physical and financial outcomes of a selected strategy," said Kinnane.

Runge is looking to further expand XERAS' capabilities to create a tool which can effectively evaluate the worth of fulfilling rapidly changing customer needs, plus manage all aspects of the supply chain and predict the impact of changing components in that supply chain. This requires information flow in both directions along the supply chain.

"Mine business planners with our new software will be able to easily react to demands and pressures in the market place. The new XERAS version will accommodate the mine plan to be changed and costed frequently so that mines will know the real cost associated with changes in product demand.

"This means that we are now developing a tool which, for the first time, provides the mining managers with the ability to make business decisions based on sound information - not gut feeling! " Kinnane said.

"They will be in a position to predict and control the financial and budgeting impacts on the supply chain - from boreholes through to ship loading and every action in between," he said.

XPAC and XERAS will provide solutions across all transactions in the supply chain, exploring all links and branches.

Runge cited international research which has indicated that organisations which have the supply chain working at its optimum enjoy 7% greater return in annual profit.

"That's what we want for our customers," Kinnane said.

Runge anticipates that many of their current customers will choose to adapt this innovative new package into their planned systems. Runge is also planning to expand the XERAS customer base globally and believes this new product is one more way of demonstrating Runge's commitment to improving the business of the mining industry.

Runge is also working on another mining first - mine planning software which will include a detailed dump scheduling system.

Kinnane said: "The placement of overburden is often the largest cost component in a mining operation. The software we are developing within XPAC will incorporate dump scheduling into the initial planning to determine solutions for minimising its cost. This will include placement of material waste, transport, and modeling of leach pads and stockpiles, to mention a few features".

By linking the excavation to the dump equipment, productivities can be automatically evaluated and costed. This new software tool will be available as part of the advanced XPAC package, set for release in the second quarter of 2003.

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