24 May SECURING THE SUPPLY CHAIN IN 2022 AND BEYOND
It’s no secret that Covid-19 has had a huge impact across the world. Its effect on the global supply chain is no exception. As the world begins to recover from the pandemic, the question arises – what does the post-covid supply chain look like?
Driving Supply Chain Efficiency, Mitigating Uncertainty
According to Lance Baldwin, Vice President Supply Chain at Minopex, a DRA Global Company, most mining houses require supply chain solutions that offer low, sustainable cost inputs with minimal interruption to operations (if any).
“The key objective that we’re seeing across the board is the desire to mitigate risks without tying up debt capital, and while ensuring operational continuity,” adds Baldwin. Minopex’s Supply Chain team is continuously implementing process solutions as it seeks to meet these objectives, by:
- Opening sound lines of communications
- Developing relationships to ensure constant and reliable alignment
- Recognising supply chain as a strategic imperative in the company
- Aligning solutions to the clients’ requirements
- Designing mechanisms to increase productivity and reduce costs, both internally and externally
To drive the supply chain of the future, Baldwin adds that three key strategies must be implemented:
Maintaining increased communications and interventions with suppliers, ensuring long lead and scarce items are delivered on time; and
Ensuring vendor manage Inventory (VMI) and keeping consignment stock; and
Creating reporting dashboards, giving clients access to real time supply chain information.
“With these imperatives in mind, the digitalisation of the supply chain is ensuring we’ve got platforms in place to support these initiatives, increase service levels to customers, and empower efficient supply chain management,” says Baldwin.
Overcoming the Biggest Supply Chain Challenges of 2022
In Baldwin’s experience, the biggest supply chain challenge that clients are facing at present is security of supply. “Largely thanks to Covid, the world’s suppliers are playing catch-up and often cannot meet demand. The second most common challenge is having debt capital tied up in inventory.”
Despite competing for supply with mining giants the world over, Baldwin believes focusing on relationship building and communication addresses the security of supply challenge. This strategy includes:
- Maintaining constant contact with suppliers to monitor the effects of trends and macro-economic environmental factors on supply (think covid, Ukrainian war, global shifts, local shortages, etc.)
- Keeping excess stock for interim periods, where required
- Leveraging relationships to maintain status as a preferred customer
In terms of overcoming the second challenge, Baldwin confirms that tying up debt capital in inventory ultimately leads to lost opportunity cost, additional interest paid, redundancy and obsolescence, and stock write offs.
“This goes straight through to the bottom line and impacts the business negatively,” he adds. “With various new inventory optimisation systems, such as NetStock, we’re optimising inventory, reducing inventory holding, controlling obsolescence, and keeping the costs as low as possible without impacting on operations.”
To achieve this, and more, supply chain must:
Be seen as a strategic function, involved from the proposal stage
Follow proper operational readiness preparations (where possible), ensuring the site is geared up properly to service end users
Greener, Future-Forward Supply Chains
Baldwin anticipates the rise of the “green supply chain” – or decarbonisation of the supply chain – to be one of the top trends to watch. The other is digitalisation.
“The focus on the triple bottom line and social operating licenses will ensure sustainability and environmental protection. Vertical integration, encouraging suppliers to meet decarbonization targets will go a long way to achieve the green supply chain,” concludes Baldwin.
For more information about Supply Chains, please contact Lance Baldwin at email@example.com.