Implementation of Simulators at Sandvik Chile – “Practice Makes Perfect”

Abstract

With a current financial crisis and a tough competitive environment, all units and departments within the companies have to keep up with the market and its demands. Every time Sandvik sells a machine to a mining company, the buyer faces the fact that they normally have to educate their operators from scratch. This, implicitly, means a period with high risks of failures and mistakes. Training with valuable equipment for the first time implies risks of damaging the equipment, regards to the lack of knowledge of how to use it. It will also imply a danger to the coworkers. With an occupied machine, the time that this machine actually could be put into real use, is also being lost.
Therefore, Sandvik was interested in investigating a possible implementation of simulators, which can create an almost perfect working-environment for mine operators. This would allow the operators to get a better perception and awareness before they actually realize their job in real life.
Given an implementation, which is the best way to do this? What will this require? Are there any favorable/advantageous models that could be applied to the process? In the end, what would be recommended?
Purpose: The purpose of this thesis is to describe, analyze and evaluate the possible implementation alternatives for simulators and strategic business models, suitable for Sandvik Chile. Furthermore ways of proceeding and developing educational programs will be presented.
Methodology: The thesis has been conducted through investigating the different ways to implement simulators within the company. This, by collecting data and information from Internet, books, sources within Sandvik Chile and by having direct contact with universities, companies, foundations etc. A thorough economic evaluation and calculation were conducted, to support assumptions and conclusions, based on gathered information, data, interviews etc. This, in form of advanced budget proposals for all the relevant options. Business and implementation models was studied and presented.
Conclusions: A competitive atmosphere requires competitive measures. An implementation of simulators is in line with Sandvik´s mission and objectives to increase the focus on the after-market. The current users of simulators are satisfied with the results and have also been able to reduce initial costs, damage, down-time etc. They have also been able to increase their productivity and can strongly recommend simulators.
Strategies like mobile manufacturing, mass customization, focused factories, flexible manufacturing, or customer relationship management are being seen as viable weapons in today’s competitive landscape. These approaches follow a new view of value generation, based on a strong integration of the customers. Their objective is differentiation by understanding better each customer’s needs and in this way, increase customer loyalty. The goal is not to create value for customers but to mobilize customers to create their own value from the company’s various offerings. In a proposed value constellation business model, Sandvik will together with three other actors shape an integrated and close collaboration – the government, a university/institute and a mining company.
By implementing the new business model Sandvik could create new relationships, obtain new knowledge and technology, take
part of more funds and financial support, but more important – increase the possibility to sell more machines. Sandvik would also have entered a new kind of market – they will not just only sell the product but also, even more, “help the customer all the way”. That is also why the implementation of simulators is important. This is another step in the process of offering help and services to the customers. Hopefully this step brings up the customer value and will strengthen the relationship and collaboration between the customers and Sandvik.
By doing all this, SMC would show the market, its clients, competitors and stockholders that they can expand, enter new markets and put an even bigger focus on the customers. These are actions that probably would increase the value of the goodwill and reputation, given that Sandvik now consolidates its trademark, position and one of their slogans - “Service in action”.

• author: Sandberg, Jacob
• supervisor: Ola Alexanderson
• organization: Production Management
• course: MIO920
• year: 2009
• type: M1 - University Diploma
• subject: Technology and Engineering
• keywords: Simulators, Implementation, Sandvik Mining and Construction, Standard Rate Per Day, Payback, Proposed Implementation Period, Net Present Value, Benchmarking, Value Constellation, Service in action.
• other publication id: 09/5338
• language: English
• id: 1978360
• date added to LUP: 2011-06-16 16:12:46
• date last changed: 2011-06-20 12:41:15