Business Challenge

The mining industry client was facing challenges in identifying the most cost-effective blend of counter-measures to save themselves from a potential loss in the coal production category.

About the Client

One of the fastest growing mining industry firms, employing over 1500 professionals across various economies. Their main objective is to enhance value for stakeholders by discovering, acquiring, developing, producing, and marketing mineral resources profitably, especially in the segment dealing with coal production.

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Engagement Overview

A leading firm in the mining industry, specializing in the coal production category, was looking at developing a cost model for realistic apportionment of costs incurred for each product and sub-products that are part of the operation. To do so and to enhance business efficiency, the client approached SpendEdge to help them leverage cost benefit analysis based solutions. A detailed quantitative analysis of various cost factors within the supply chain network was carried out to identify the indirect and direct spend categories.

Benefits of the Engagement

The cost benefit analysis engagement helped the mining industry client to understand the economic impact of inappropriate business decisions. The developed cost benefit analysis model helped them control indirect costs and save themselves from a potential loss. Our cost benefit analysis experts worked as an extension of the firm to uncover major opportunities for improving their sourcing strategies by controlling indirect and direct spend.

Importance of Cost Benefit Analysis in Procurement

Whatever is the size of your organization, it is essential to analyze cost and inventories. Moreover, as businesses become larger, their sourcing needs become more complex, making it a necessity to analyze maverick spend, delivery times, and cost elements across the supply chain. Cost benefit analysis also helps firms to make the best use of their suppliers and their capabilities. 

Moreover, as procurement increasingly shifts focus from profit margin expansion to that of a strategic enabler of business growth, procurement leaders can maximize benefits by leveraging cost benefit analysis and making appropriate business decisions on sourcing strategies.

Our Findings

Procurement, being an essential aspect of your business, is necessary to undertake cost benefit analysis to ensure you make the best use of your hard-earned money. Leading mining industry players are now looking at employing cost benefit analysis to deliver breakthrough business value.

Every business decision today is greatly impacted by cost benefit analysis. Such is the importance of cost benefit analysis in identifying business risks and analyzing spend categories. However, it is up to the individual firm to decide and incorporate this capability failing which you run the risk of wasting valuable time and money by taking on unprofitable tasks.

What will the mining marketplace look like in the next five to ten years? That’s still an open question. Get in touch for expert insights.