We are a global management consultancy that delivers exceptional outcomes and sustainable change

Supply chain risk management

Special Series

Leverage Spend Cube Analysis for Supply Chain Risk Management

September 9, 2024 | Operational Excellence

Ensuring effective supply chain risk management is crucial for mining companies. When critical parts delivery from suppliers are delayed and machinery cannot run safely, unexpected shutdowns can set mines back in thousands, even millions of dollars. There is also a delicate balance to maintain; overstocking parts can tie up capital, while understocking can lead to costly operation disruptions without the necessary spare parts for repairs.

The more complex the supply chains, the higher the risk of extended lead times causing delays in delivery of critical parts. Forming contingency plans for these lead times according to historical data of supplier delivery times can minimise the risk of mine disruptions and the associated costs.  

Supplier status tracking and inventory levels of critical parts need to be monitored within a management system shared by relevant departments to mitigate the risk of supply chain disruptions, such as natural disasters and extended lead times – all of which can drastically impact total procurement spend. 

A holistic view of suppliers and categories of spending can help mines ensure supply chain disruptions are avoided as much as possible by anticipating low levels of stock for particular parts. Our specialist mining practice has developed a proprietary spend cube tool, which provides a broad overview of procurement spend by department, types of parts needed, and stock levels. 

 

However, we believe that successful supply chain risk management solutions require not only the data infrastructure and tools to drive change, but the people behind these systems to sustain new ways of working. Sufficient training and performance incentives need to be embedded within mining organisations to support these changes, fostering employee buy-in and sustainable change. 

Renoir Consulting can work with your team to identify and address your mine’s biggest risks and opportunities in your supply chain. By collaborating with your teams, we assist in developing the systems, processes, training and KPIs needed to incentivise behavior change – supporting sustainable results in supply chain optimisation. 

 

Further Reading

Data & Analytics

Special Series

2024/09/10
Optimise Diesel and Tire Usage with Data Analytics

Operational Excellence

Special Series

2024/09/10
Work Order Prioritisation to Optimise Maintenance Workflows

Operational Excellence

Special Series

2024/09/10
Achieve Mine Plan Adherence with Real Time Controls

Organisational Effectiveness

Special Series

2024/09/09
Create a Skills Flexibility Matrix to Set Mine Up for Expansion

Revenue Growth

Special Series

2024/09/09
Boost Mine Profitability with Early-Stage Capital Project Planning