Client Situation

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.

Transformation objectives included:

• Enhance planning and control of the entire supply chain. Introduce effective management structures and processes as required to accomplish this goal
• Introduce appropriate digitization to streamline logistics operations and improve efficiency
• Rationalize logistics costs
• Strengthen decision making by providing data-centred evidence and robust analytics capabilities
• Enhance company know how and hands on experience in all aspects of logistics.

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.

Impact

The transformed supply chain processes

• are lean, simple and cost effective
• support clear accountability and full transparency
• ensure resilience and independence form contractors/partners
• introduce appropriate outsourcing levels
• guarantee full and real time control of inventory, transport, freight forwarding

The proposed digitization

• supports the transformed processes
• capitalizes on existing systems (e.g. ERP), enhanced appropriately
• introduces targeted automation

The new supply chain organization

• supports robust planning of all supply chain activities
• guarantees effective management across the supply chain

Procurement transformation defined clear lots of outsourcing tasks, introduced new collaboration mechanisms with partners, and partner performance management systems.

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