European Metals and Mining Industry Outlook
Metals and mining companies operating Europe are set to remain in recovery mode as a sluggish recovery in mineral prices keep investment activity subdued. Companies must remain cautious and focus on improving balance sheets to protect themselves from potential price volatility. Sourcing locally and developing the local supply base could be an effective way for companies to increase the security of supply, reduce costs, minimize lead times, and gain more favorable negotiations on accessing resources. Also, they could improve access to capital and provide more competitive access to inputs.
Business Challenges Faced
The client, a leading European company in the metals and mining industry wanted to buy more locally manufactured goods that could match the cost, quality and delivery time expectations while investing in sustainable economic growth. However, the company felt the need to address current barriers to local procurement in host countries. Local suppliers lacked the necessary capabilities and the client required suppliers with sufficient capacity to meet their procurement needs. Also, it was highlighted that procuring specialized equipment was significantly more difficult in-country and finding goods manufactured locally a challenge.
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Our Research Approach
To help the client address the gaps and barriers to local procurement, the experts provided supplier insights to create a local supplier database for the tendering process. They recommended breaking up bids to increase access to local suppliers. They embedded supplier development in the tender process by including key performance indicators in their contracts and tracked the spend of suppliers locally.
Moreover, to drive local manufacturing, the experts identified potential markets for certain products. They analyzed factors influencing the client to buy locally. These factors could be broadly classified into themes such as:
- proactive economic
- proactive social
- reactive economic
- reactive social