Supply Chain Management in the Mining Industry has and continues to lag behind their counterparts in other industries. This is due to a lackadaisical disregard to the entire Supply Chain which is compounded by not imposing the additional controls necessary to contain costs, both hard and soft. Control enhancements have the additional benefit of improvements in efficiency. The reasons are all too human; when business is brisk, cost is not an issue.
This of course hits the bottom line, robbing ownership and investors of profits, decreasing working capital, but even more importantly places those businesses in a precarious situation.
What happens should the Mine hit a period of declining commodity prices?
Can they blanch the hemorrhaging of outgoing cash, inflated inventory levels, excessive labor costs due to higher than needed productivity levels, excessive carrying costs of inventory in the warehouse, inefficiency in processes and systems?
The answer is YES they can, BUT it takes time. Time is money, and both time and money at that point in time; during declining revenues; will be in short supply.
The cost to correct the situation after the fact, under tremendous economic pressures, will be higher in terms of time, stress on employees and the ability to test, correct, and improve changes. In other words, it would be the worst of times, not the best of times to take corrective measures.
Mitigation is always a much more economical process than attempting the same process, but during the response and recovery phases.
SBA * Consulting, with our US military trained Supply Chain Management professionals, our ability to integrate Chief Financial Officers, Chief Operating Officers, Chief Information Officers as well as other C-Level and high level managerial consultants can empower your company to make change, educate your staff, and maintain the process of improvements we together will facilitate.