Thursday 27 February 2014

Almaty Office, Kazakhstan

-6°C Sunny

Wednesday 26 February 2014

Almaty Office, Kazakhstan

-6°C Sunny

As discussed in previous blogs, there are 4 main strategic supply chain stages during mine life:

1.      During mine development and construction

2.      At start-up

3.      During change management

4.      When performance fails to meet expectations.

We discussed the manpower resources in our last blog on 18 Feb.  In this blog we will discuss the next essential step in Supply Chain design for a new mine: the corporate structure as it relatesto supply.

A number of fundamental questions will be answered concerning supply chain at a very early stage, particularly at most mining companies that rely heavily upon strong and reliable lines of supply and with a strong awareness of the importance of holding inventory in appropriate amounts within the operating and financial guidelines of the company.

Firstly, lines of reporting are key and depending on the type of business, the complexity of the supply chain and the seniority of supply chain management, a decision for supply to report either directly to general management or through financial management.  Wherever possible, lines of reporting will be directly to management, although there may be a case for reporting through Finance.  If so, policy concerning stocking levels and expenditure budgets must be clearly established so that inventory replenishment and essential funding support do not starve operations.  Conversely, it is not recommended that supply department’s customers have responsible for supply to avoid over-ordering, overstocking and malpractice.

A decision will have been reached on financial computer software and will include the need for the capture of purchasing, inventory and stock movements data.  It is crucial that Finance and Supply Departments work together to ensure that processes are agreed, implemented, trained and monitored. 

Many ERP programs include Finance, Supply (Materials), Maintenance and HR modules.  Generally, Finance and Supply/Materials are always implemented; this is a fundamental requirement.  Maintenance may also be implemented (switched-on) and this may link with both Supply module for requisitioning and ordering and with Finance module for work order data reporting purposes (costing).  If HR module is implemented, labour costs may also be included in work order reporting.  However, if software policy is for separate finance and maintenance programs for example (i.e. not ERP), then supply data must always be linked to finance and not to maintenance or other programs.  This is because data required for financial reporting, inventory management and accounts payable processing must be linked otherwise an interface is required which is cumbersome and prone to errors.

All procedures must be supported by detailed manuals in relevant languages.

CBC is able to facilitate this crucial area during the development of efficient mining supply operations.

Tuesday 18 February 2014

Almaty Office, Kazakhstan

-3°C Sunny and hazy (or maybe simply smog)

As discussed in a previous blog, there are 4 main strategic supply chain stages during mine life:

1.      During mine development and construction

2.      At start-up

3.      During change management

4.      When performance fails to meet expectations.

We discussed the first stage in brief on 6 Feb and we will address this stage again later in more depth.

The second stage was initially discussed on the last blog (11 Feb) and in that blog we covered management controls during the setting up stage of supply chain for a new mine.  There are many facets to setting up a new mining supply chain operation and we will address more stages in subsequent blogs as it is too much to bite off at once.  This blog addresses the all-important topic of manpower. 

People are the most important asset in supply chain and choosing the right personnel at all levels is crucial to success.  The adverse effects of poor manpower selection are lower performance and higher costs: get it right and mine supply will operate efficiently and quietly in the background; get it wrong and supply will become a headache that is time-consuming and costly to correct, and meanwhile production is jeopardised, costs mount and dissention sets in.  Recruiting and thoroughly training the right people are therefore crucial.

Employing the right people for the right jobs at remunerations within the company grading and salary matrix is important, as are the essentials of good induction and thorough theoretical and on-the-job training before ‘go-live’.

It is most important to establish the correct manpower structure for your supply chain department and to agree this with the (recommended) Supply Chain Steering Committee (see previous blog).  Each mine is different: a manpower structure in, say, Australia, will be completely different from manpower needs in, say, most African countries.  The structure will be designed by supply management and coordinated not only with Finance and Human resources management but with the support of general management and end users, through the Steering Committee.  Everyone should be on board with the aims and objectives of the supply department well before ‘go-live’.

Once the organisation structure is finalised, a decision is made concerning sourcing potential recruits.  Many countries have localisation policies and once the department is up and running, expensive overseas involvement may be cut to a minimum if recruiting is effective.  If your mine is foreign owned/operated your interests may be best served by employing at least one permanent foreign home-based overseer depending on the size and complexity of your operation, but while setting up and settling in, a greater level of experienced, knowledgeable expertise will be required and this may have to be from higher-cost outsourced experts such as CBC or in-company specialists if they can be made available. 

Job descriptions for each position are prepared and agreed, and at this stage coordination into the company’s grading and remuneration matrix will be finalised prior to the recruitment process.

Once the recruitment process has been defined and implemented for each level of the structure, selection of the best candidates for each position is crucial and will be managed by Supply Chain management, supported by HR.  This process in many places will take months to complete and sufficient time should be allowed to complete the process.

Once candidates are employed, depending on their knowledge and experience, they will be familiarised with processes to be employed and a theoretical induction and on-the-job training program designed for each job category.  All employees will be expected to know the requirements of their position thoroughly from two fundamental perspectives (where applicable), covering both their routine tasks and the actions that are taken to support the electronic processes.  For example, a person responsible for receiving materials will be competent to handle the goods physically and ensure that the correct data reaches the company’s electronic system promptly to enable accurate inventory data and to facilitate payments.

These procedures will be supported by detailed manuals in relevant languages.

We will look at aspects of this in greater depth in later blogs. 

CBC is able to undertake and support this crucial element of setting up for an efficient mining supply operation: from structure, descriptions and recruitment, through training and ensuring the workforce is operating efficiently to the preparation of process manuals.

Tuesday 11 February 2014

Almaty Office, Kazakhstan

Still -14°C, still Sunny

The last blog identified 4 strategic mining supply chain stages.  These are:

1.      During mine development and construction

2.      At start-up

3.      During change management

4.      When performance fails to meet expectations.

The first has already been discussed in the last blog.  More on this can be seen at http://www.youtube.com/watch?v=d71aSAYzrkE

The second also has an animated YouTube presentation covering the fundamentals of setting up a mining supply chain operation:

http://www.youtube.com/watch?v=KXdwWT7VtgA

It also identifies what is fundamentally required for mining supply chain and as such may be used as an aide to adjusting existing supply chain operations although this is covered more fully in our last presentation, which we will address in later blogs.

Materials and services will directly affect the business by up to 40-50% depending on locations.  An efficient supply chain is essential to the harmony of the company, uninterrupted production and must remain within the company’s financial constraints.  It is therefore in the company’s best interests to coordinate the establishment of operational supply chain through a team effort involving the management of:

- Supply

- Human Resources

- Operational Customers (end-users representation)

- Finance

- Management

A Steering Committee comprising of decision-making representatives will aid this.  Supply management remains the driver.

Establishing supply chain effectively has many factors under consideration.  The first of these – manpower – will be discussed in the next blog.

Thursday 6 February 2014

Almaty Office, Kazakhstan

-16°C Sunny

In addition to the YouTube Presentations posted earlier, an overview presentation has now been published:

http://www.youtube.com/watch?v=2Q1cV3EbhQk

Our Facebook page is Chris Brodie Consulting

Our Twitter site is @chrisbrodieconsulting

I will also post blogs from time to time on my Chris Brodie LinkedIn connection:

uk.linkedin.com/in/chrisbrodieconsulting

My last blog identified 4 strategic mining supply chain stages. The first is during mine development and construction.  There are 3 aspects to this. 

1.      Supply Chain participation and contribution during feasibility studies.

Materials, consumables and equipment requirements during operations will cost between 20-50% of operating mine costs depending on the type of operation and location.  Careful strategic consideration is required at this early stage concerning the supply chain vision so that project and operational costs are accurately included.

2.      Supply Chain activity during the construction phase

Whether mine owners decide to handle this phase in-house or employ EPCM specialists, supply is directly affected by scheduling and planning and some long lead-time plant will be purchased very early on.  Materials and equipment must arrive in time for planned construction and a strong project procurement team is required, as well as on site warehousing and handling resources.  There must be no waste at the end of construction, and transferring unused materials and purchases made for later use (project or operations) must be coordinated carefully.  Perhaps Local Content is a requirement.

3.      Coordinating future operating supply chain needs

Identifying wear and spare parts, service kits and critical spares required during operations and may be included at the time of the equipment purchase.  Because simple ‘one-year (or two-) spares lists’ are supplier-generated, the details of these must be reviewed so that any capitalised spares are meaningful.  This is one of the biggest causes of inventory overstocking in future years and is an issue that must be coordinated between projects and operations carefully.  Additionally, harmonised equipment selection will reduce inventory and purchasing needs later on.

Wednesday 5 February 2014

Almaty Office, Kazakhstan

-14°C Sunny

I’m busy setting up my marketing approach through Linked-In, Facebook, Twitter and I plan to massage my business contacts over the next week.  This blog on my website is important too so that I can use it as a medium as it develops – and hopefully grows.

My elevator speech is:

“Although I have been consulting successfully for almost 20 years, I’m taking a fresh approach in 2014 to work on short & medium term mining supply chain consulting projects.  I have created Chris Brodie Consulting for this purpose, see website http://www.chrisbrodieconsulting.com   Pse contact me if you have supply chain projects and pse recommend me if you know of any.”

Short and sweet and aimed at those who know me and what I have been doing in recent years.

So what have I been doing in recent years?  Future blogs will anecdotally review my history from time-to-time.

In the meantime, I just want to re-emphasise what this is all about and what I plan to concentrate on.  Supply Chain in mining is important at strategic stages:

1.       During mine development and construction

2.  At start-up

3.      During change management

4.      When performance fails to meet expectations.

CBC helps at all these stages; I have long experience of these.  We will be examining these in details in future blogs.  Here are three teasers I prepared earlier:

Supply Chain for new mining developments and construction:

http://www.youtube.com/watch?v=d71aSAYzrkE

Setting up supply chain at a new mining project

http://www.youtube.com/watch?v=KXdwWT7VtgA

Performance improvements and enhancements

and Change Management

http://www.youtube.com/watch?v=3XaASCPG58s

Monday 3 February 2014

My name is Chris Brodie and I am a Senior Supply Chain Consultant in the Mining industry.  I have over 40 years of experience in mining supply chain in many parts of the world, so you will know from this that I am one of the ‘Silver Power Brigade’. 

I started consulting in the mid 90’s but found that before too long some of my clients made me an offer I couldn’t refuse and I stayed on projects in Central Asia and Africa longer than is decent to maintain a thriving consulting business. 

In recent years I also ran my own mining supply chain support businesses.  In Almaty Central Asia, my company provided consulting and project services, supplied materials and equipment and represented a number of high profile international mining suppliers.  This went well before the economic downturn, but from 2009, this became more challenging and at the end of 2011, I passed the company on so that I can concentrate on mining supply chain consulting.  Even then, in 2012 and 2013, my (two) projects turned out to be longer-term than planned and at the end of 2013 I decided to change my approach.

As I am far too young and active to think about slowing down, from this year I plan to work on short- to medium-term mining supply chain projects and have created Chris Brodie Consulting for this purpose, see website http://www.chrisbrodieconsulting.com   

PLEASE FEEL FREE TO COMMENT ON THIS SO I CAN IMPROVE IT

I will continue to work in association with a few tried and trusted colleagues, also mostly Silver Power Brigade members.

Now I have prepared the website and started this blog, I’ll go on with marketing though my network over the next couple of weeks.