Leverage Spend Cube Analysis for Supply Chain Risk Management

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.