PT. Rekayasa Tambang Indonesia (RTI) meets the needs of clients - private and government-owned mining companies - in virtually every sphere of geological interpretation and modeling, mine design and engineering, and mining productivity improvement activities. RTI is a subsidiary company of Mining Engineering Software Development and Technical Assistance (MINER DELTA), a U.S. software manufacturer who provides engineering software for full-service mining design and geological engineering and interpretation, and offering the managerial and technical resources that are vital to solving complex geological interpretation and modeling, mine design, mining optimization, mine scheduling, and dump design and rehabilitation in Indonesia as well as Southeast Asia Region.
The Products
RTI will be offering five distinct products and services. The first is geological interpretation and modeling software systems. This product and service provides the most comprehensive geological database, innovative interpretation tools, advanced modeling techniques and resource reporting for most types of deposits ranging from simple vein, stratiform, and massive deposits, to complex and highly deformed ore bodies. Mine design and engineering software systems will also be offered in addition to mining optimization and scheduling software systems. Lastly, dump design and rehabilitation will perform analysis regarding environmental impact, designing mine waste dump, designing acid drainage, designing ground water drainage, and environmental rehabilitation.
The Market
The total market value for open pit, underground, and quarry mining software technologies has grown at an average rate of 22% over the past five years. Since there is no local engineering software producer in Indonesia, the imported software technologies account for 100% of all open pit, underground, and quarry mining engineering and geological software technologies in Indonesian mining industries. Total imports of mining software technologies totaled £75 million in 2000, 23.7% greater than 1999 levels of £60.6 million, which were in turn 26.3% greater than 1998 imports, valued at £48 million.
Competitive Advantages
The key factors for RTI to create and maintain competitive advantages includes its access to intangible capital (business networks, leadership, talent, entrepreneurs, intellectual property and brand) and advanced technology. These two advantages are interrelated. The "intangible capital" to a large degree is intellectual capital that has been captured by the organization. RTI has been very careful to design systems to capture the human capital that has been developed by the members of the organization. This is indeed a huge advantage because even as some employees are transitory and move on to new companies, their contributions and knowledge are captured by RTI and leveraged by the current employees. This intellectual capital capture then fuels the advanced technology.
RTI is an exciting company that combines advanced technology in the form of software and consulting services serving the mining industry. RTI has forecasted strong revenue numbers for year one, growing steadily through year five. Gross margins will be a high % of sales with net profits improving each year.
1.1 Mission
The mission of RTI is to establish a strong presence in Indonesia to implement all provisions of the MINER DELTA mission statement with the specific mission of becoming the leading mining and geology software and consulting services provider in Indonesia. This will be done by creating customer value through facilitating optimal and efficient operations by developing the best techniques of image analysis. Also, as the commercial arm of the MINER DELTA, RTI will establish a reputation in the mining industry for exceeding customer expectations through exemplary consultative service.
1.2 Objectives
The financial and marketing objectives of RTI are summarized here.
- Healthy sales in the first year, growing steadily through by the fifth year of plan implementation.
- Top drawer average gross margin percent of sales revenue.
- Net income consistently improving each year.
The financial objectives are converted into marketing objectives. If the company wants to earn its targets for gross margin and sales revenue, then it must set a high average profit margin on sales. To achieve these targets, the company will have to set certain goals for customer awareness such as by proactively approaching the prospective client candidates, teaming-up with other technology providers (hardware manufacturers and platform developers), partnering with reputable local and regional mining contractors, and equipment suppliers to reduce competition, improve pricing as well as reducing risks.
Thus the marketing objective might read:
- Achieve targeted sales revenue each year, 2001 through 2005.
- Expand customer awareness over the planning period.
- Reduce competition and risks while lowering price levels by teaming-up with other technology providers (hardware manufacturers and platform developers) and partnering with reputable local and regional mining contractors and equipment suppliers.
1.3 Keys to Success
The key factors for RTI to create a competitive advantage includes its access to intangible capital (business networks, leadership, talent, entrepreneurs, intellectual property and brand) and advanced technology, and its ability to customize its location.
In addition to intangible capital, RTI has a technological advantage with its advanced mining design, scheduling, and geological interpretation programs. Software performance is judged by how accurately the software calculates and produces visibility plots. Other qualitative measures, such as flexibility and ease of use, are important measures that RTI also excels in. To a sustain competitive advantage, RTI will focus on refining and improving the system with future software versions. RTI will continue to research image analysis issues.
The combination of human resources and advanced technology enables RTI to focus on its mission of becoming a customer driven company. Each system will be individually designed and installed by trained personnel. This type of personalized service is only available from RTI; and its ability to operate in a "turn key" fashion is highly valued in its target market. The close personal relationship between customers and RTI is vital to our mission: "to exceed customer expectations through exemplary consultative service."
In order to effectively operate in this fashion, RTI's location in Jakarta situates it close to the core of its target market. Further, RTI's product and services distribution is aided by the locations in the major mining provinces in Indonesia (East Kalimantan, South Kalimantan, South Sumatra, Central Sulawesi). Sales demonstrations, installation and design, service, and maintenance will all be subject to a lower travel cost. As unit sales increase, the distribution cost advantages will be measurable cost competitive advantages. Being close to our customers will provide many intangible benefits: it will help consulting efforts and it will aid in our quest to be customer and market driven, rather than just a branch office, or even a representative of any software manufacturer or foreign consulting firm.
In a typical mine, the most important link in its value chain is clearly the primary activity of operations, to produce more product for a cheaper price. RTI provides value and benefit to its customers by targeting this specific activity in its customer's value chain. The systems generated by RTI for its clients provide a quality assurance activity that monitors operations and is a guide to raising its customer's operational performance.
