Mining companies have spent several years ruthlessly reducing costs. On the bright side, this relentless focus is gradually translating into enterprise-level productivity improvements, with virtually all of the significant players targeting billions of dollars in cost savings. The past few years have put tremendous strain on the industry. Demands for efficiency have skyrocketed, while the means to invest in new programs to support such efficiency have often fallen away with prices. New technology trends in the mining industry, in the form of mining software and innovations in water resilience, are offering exceptional opportunities for efficiency gains and are worth investigating for adaptation across the sector. Apart from this, there are several procurement trends that the mining industry has been witnessing in the recent years. Here is a quick look through some of them:
Increased process automation
In the constant push for cost efficiencies and higher productivity players in the mining industry are re-examining processes and how they manage every aspect of their operation. They are also focusing on procurement trends, which include striving for greater visibility to gain an in-depth understanding of how they work and their workflow processes, in particular with contractors. The automation of procurement processes, which is considered as a significant cost saver due to its ability to overhaul the traditional way of managing supplier contracts and operations, is a more efficient way to improve governance, visibility, and control over contracts in real time.
Rising cost-cutting measures
Maximizing savings through procurement has always been of great importance in the mining industry, and this is one of the procurement trends still prevailing in the sector. As it continues to come out of a downturn, many companies in the industry are looking for new and more effective ways to shed costs further to improve operational efficiency in an unstable market. Furthermore, finding new ways to enhance savings through procurement contracts can be challenging in a climate, which leaves many mining companies without the necessary budget to invest in new technologies or resources needed to meet KPIs. Hence, it is advisable for companies in this sector to tap into the expertise within the existing business to improve results.
Supplier relationship management
The change in the economy and ongoing uncertainty around the future of resource prices has caused many companies in the mining industry to look at existing supplier relationships and contracts and reconsider if they are the best option in the current market environment. Also, the cost is not the primary factor influencing companies to seek new suppliers. Companies in this sector are increasingly considering factors such as quality of the products or service as a critical factor. This indicates that, while many suppliers in the mining industry are trying to differentiate themselves currently only based on cost, it is clearly not the determining factor for most and other qualities are considered more critical to business.