Greater Visibility Across Mining Supply Chains Will Reduce Supplier Risk

 

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Greater Visibility Across Mining Supply Chains Will Reduce Supplier Risk

 

In Partnership with NETSTOCK

Published: 28th March 2022

 

Global supply chains can continue to experience disruptions from global pandemics to freak accidents such as the Suez Canal obstruction by the Ever Given, natural disasters, and ongoing trade wars. Companies are caught right in the middle, but with agile processes and the right technology, companies can effectively navigate the impacts of these disruptions, reducing risk factors and setting their business apart from their competitors. 

For mining companies to meet rising demand for resources, being prepared and proactive in navigating future events requires visibility across your mining supply chain. Given supplier volatility and the remote locations of mines, mining companies often experience stock-outs and long delays from suppliers due to inadequate inventory management systems. 

 

Increased supply chain visibility starts with mining your data

Given the complex nature of an average mining supply chain, from having the right equipment to mine to extracting, processing, and then distributing the end product via ship or rail often to different locations, very few companies in the mining industry have end-to-end supply chain visibility. With poor quality data and the lack of upstream information, mining companies find it challenging to plan and forecast their inventory accurately. 

 

Accurate data will equip your business to: 

  • Monitor your overall inventory levels and ensure you don’t experience stock-outs or incur excess stock
  • Identify trends in your supply chain
  • Respond to anomalies in the procurement process 
  • Plan various ‘what if’ scenarios to measure the impact of each
  • Measure how well your suppliers perform
  • Improve your customer service levels

Establishing a dedicated team to ensure your data is consistently accurate and updated as well as investing in the right software will help you create actionable insights to make intelligent inventory decisions for your supply chain.

 

Manage supplier risk: Measure how well your suppliers perform 

Suppliers are one of the most critical links in the mining supply chain, providing the necessary machinery, equipment, and parts to mining operations. Suppliers also face disruptions, and their delays in supplying the right stock on time and in full can add costly delays to your mining project. With mining taking place mostly in remote locations and the end product needing to be transported to its final destination, measuring how well your suppliers perform is a game-changer for your business. 

 

Tips to reduce extended lead times with your suppliers: 

  1. Working with existing data, measure how well your suppliers perform. Identify reliable suppliers, those who deliver on time and in full. 
  2. Review the suppliers who are unreliable and potentially look for alternative suppliers. 
  3. With an accurate list of high-performing suppliers, you can potentially negotiate better terms and conditions based on the sales forecast. 
  4. Develop good relationships with your suppliers. Some mining projects last for many years, but it’s essential to keep the communication lines open and honest. 
  5. Share your forecast with your suppliers. The more your suppliers understand your demand, the more prepared they can be. If a supplier has delays in supplying a product, they can give you enough time to plan an alternative option. 
  6. Always reconfirm the lead time with the supplier. Disruptions can happen quickly. You will then have a line of sight of all the products affected by that particular supplier. 

 

Review your inventory planning and processes further reduce the effects of lead times by: 

  • Classifying your inventory and having a clear idea of your essential stock items will help you know which suppliers to review. 
  • Increase departmental collaboration. Demand planners should know what stock is needed to support upcoming sales and marketing campaigns.
  • Hold the right level of safety stock based on the supplier’s volatility. 
  • Understand how the supplier’s minimum order quantity (MOQs) will impact the replenishment cycle. 

 

To discover how NETSTOCK automatically measures supplier performance and provides actionable insights to optimise inventory successfully, register for the NETSTOCK and Scope Systems Mining industry webinar, Drive smarter inventory decisions on Tuesday, 5th of April at 10 am AWST.

Register here: https://netstock.zoom.us/webinar/register/WN_K-v-UTxuSyixvhunHaKXAQ

 

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