Background and challenge
Our client planned to more than double its mining operations with the opening of new mining sites. Prior to this, surface supply chain operations had been outsourced almost in their entirety, with high-level coordination and supervision provided by the company. Top management decided to review and transform this strategy, where necessary, also in view of the considerable business expansion. Out team was asked to transform the surface operations in order to enhance transparency, improve control and reduce logistics costs.
The way to problem solving
The transformation approach was based on four pillars:
- improved logistics processes formed the basis of the transformation initiative. In all processes the goal was to simplify complexity, increase efficiency, introduce robust control and monitoring, as well as end-to-end performance management;
- appropriate logistics organization: a lean and effective organization was developed to guide the company in achieving the transformation objectives. In addition to the transformed processes, insourcing/ outsourcing decisions were key factors in the organizational design;
- introduction of targeted digitization: this encompassed automation in weighing, sampling, inventory/warehouse management, transport planning and telematics, as well as data analytics;
- transformation of logistics procurement strategy to achieve appropriate partner task allocation, partner diversification, setting of service level agreements (SLAs), partner compensation based on performance.
Transformation of supply chain strategy, organization and operations for a world class mining company
Impact
As a result of our work, the transformed supply chain processes are lean, simple and cost effective, ensure resilience and independence form contractors/partners and guarantee full and real time control of inventory, transport and freight forwarding.
The proposed digitization introduces targeted automation, while the new supply chain organization supports robust planning of all supply chain activities and guarantees effective management across the supply chain. Finally, procurement transformation defined clear lots of outsourcing tasks, introduced new collaboration mechanisms with partners, and partner performance management systems.
The proposed digitization introduces targeted automation, while the new supply chain organization supports robust planning of all supply chain activities and guarantees effective management across the supply chain. Finally, procurement transformation defined clear lots of outsourcing tasks, introduced new collaboration mechanisms with partners, and partner performance management systems.
